2017 (8) TMI 60 - AT - Central Excise

CENVAT credit - various input services - commercial & industrial construction service - rent-a-cab service - security agency service - site formation and clearance service - Earth moving service - demolition service - club & association service - denial on the ground that the said services are not confirming to the definition of input service contained in Rule 2 (l) of the CCR, 2004 and those services have no nexus with the manufacture of the final products by the appellant - Held that - Under the unamended definition of input service effective upto 31st March, 2011, there were no restrictions provided for non-consideration of construction service as input service. Such embargo was created only with effect from 01.04.2011 by N/N. 3/11-CE-NT dated 01.03.2011, wehrein construction service was specifically excluded from the definition of input service. Thus, the credit taken on commercial and industrial construction service prior to 31.03.2011 should be available for cenvat benefit - With regard to the credit availed after 01.04.2011, the appellant submits that the said services are in relation to repair, renovation of existing machinery, which are specifically finding place in the inclusive part of the definition w.e.f. 01.04.2011. However, on perusal of the case records, I find that authorities below have not specifically discussed the period, during which the cenvat credit was availed by the appellant. Thus, the said factual aspects have to be verified by the original authority for proper appreciation of the facts. Rent-a-cab service - Held that - appellant relies on the decision of the Tribunal in the case of CCE, Delhi Vs. Pricol Ltd. 2015 (12) TMI 1486 - CESTAT NEW DELHI to state that rent-a-cab service should be considered as input service for the purpose of cenvat credit. However, for ascertaining the period of availment of cenvat credit, the matter has to be verified by the original authority, since no observations were made with regard to such aspect in the original order. As regards the security agency service, the issue is squarely covered by the decision of the Tribunal in the case of Aluminium Powder Co. Ltd. Vs. C.C.E., Madurai 2015 (8) TMI 1234 - CESTAT CHENNAI . Thus, respectfully following co-ordinate Bench decision, I am of the view that the cenvat benefit on such service can be extended to the appellant. As regards the other services namely, site formation & clearance, excavation and Club or Association Service, the authorities below have not addressed the issue as to whether the said services should be considered as input service for the purpose of cenvat benefit - in respect of the disputed services, except security agency service, the original authority should verify the period during which the cenvat credit was taken by the appellant. the matter is remanded to the adjudicating authority to decide the matter afresh after affording due opportunity of personal hearing to the appellant - appeal allowed by way of remand.

Summary

Issues: Denial of cenvat credit on various taxable services

Commercial & Industrial Construction Service:
The Department denied service tax benefit on services like commercial & industrial construction, rent-a-cab, security agency, site formation, Earth moving, demolition, and club & association services, stating they do not meet the definition of input service in the Cenvat Credit Rules, 2004. The appellant argued that credits availed before 31.03.2011 should be allowed, citing unamended rules. The Tribunal found that construction service was only excluded from the definition of input service from 01.04.2011, so credits taken before that date should be valid. However, the period of availing credit needs verification by the original authority.

Rent-a-Cab Service:
The appellant claimed that the entire credit for rent-a-cab service was availed before 31.03.2011 and should be considered an input service. Referring to a Tribunal decision, the appellant argued for credit eligibility. The Tribunal agreed that the period of availing credit needs verification by the original authority for proper assessment.

Security Agency Service:
The appellant contended that the issue was settled by a Tribunal decision and should be eligible for cenvat benefit. The Tribunal agreed with the appellant, extending the cenvat benefit on security agency service.

Site Formation & Clearance, Excavation, Club or Association Service:
The authorities did not address whether these services qualify as input services for cenvat benefit. The Tribunal directed the original authority to verify the period of availing cenvat credit and eligibility for these services, except for security agency service.

Conclusion:
The impugned order was set aside, and the matter was remanded to the adjudicating authority for a fresh decision after giving the appellant a hearing opportunity. The appeal was allowed in favor of the appellant regarding security agency service. The Tribunal disposed of the appeal accordingly.