2016 (10) TMI 186 - AT - Central Excise

Recovery of inadmissible Cenvat Credit - Service Tax paid in connection with the service of erection of Kachaha shed for storage of input material during monsoon - Held that - I do not see any reason for not allowing the benefit of credit as the services received by them as the said service is definitely related to the manufacturing activities and covered by the definition of input service as contained in Rule 2 (l) of Cenvat Credit Rules 2004. - Decided in favour of appellant

Summary

Issues:
- Appeal against demand notice for inadmissible Cenvat Credit and penalty
- Eligibility of Cenvat Credit for Service Tax paid for erection of temporary shed during monsoon

Analysis:
1. Issue 1 - Appeal against demand notice and penalty:
The appellant filed an appeal against the demand notice issued for the recovery of inadmissible Cenvat Credit of a specific amount along with a penalty. The Commissioner (Appeal) confirmed the demand notice and imposed a penalty of an equal amount. The appellant's appeal was rejected, leading to the current appeal before the tribunal.

2. Issue 2 - Eligibility of Cenvat Credit for Service Tax paid for shed erection:
The appellant argued that they are eligible for Cenvat Credit of the Service Tax paid for the erection of a temporary shed during the monsoon period near their factory premises. The appellant contended that since the shed was used for storing raw materials related to their manufacturing activities, the Cenvat Credit should be admissible. They supported their argument by referencing various judgments, including the Kitec Industries case.

3. The Authorized Representative (AR) reiterated the findings of the Commissioner (Appeal) in support of denying the Cenvat Credit to the appellant.

4. After considering the submissions from both sides and examining the records, the tribunal focused on whether the appellant was entitled to the Cenvat Credit for the Service Tax paid in connection with the erection of the shed during the monsoon. The tribunal found no reason to deny the credit as the service received by the appellant was directly related to their manufacturing activities and fell within the definition of input service under the Cenvat Credit Rules 2004. Consequently, the tribunal set aside the impugned order, allowed the appeal, and provided for any consequential relief as per the law.

5. The judgment was delivered by Dr. D.M. Misra, Member (Judicial) of the Appellate Tribunal CESTAT AHMEDABAD. The legal representatives involved in the case were Ms. Harpinder Sandhu, Advocate for the Assessee, and Shri N Satwani, Authorized Representative for the Revenue. The decision was made after hearing both sides and reviewing the relevant records, ultimately granting relief to the appellant regarding the eligibility of Cenvat Credit for the Service Tax paid for the shed erection.