2018 (2) TMI 1171 - AT - Central Excise

CENVAT credit - input services of Commercial and Industrial Construction Service - whether the services in relation to setting up of marketing office of the appellant-factory received prior to 1.4.2011 but the credit distributed and availed on the basis of Input Service Distributor (ISD) invoice during November 2011 is entitled for CENVAT Credit as an input service under Rule 2(1) of CCR? Held that - the documents produced by the appellant on record clearly establishes that the construction service was obtained prior to 1.4.2011 and it is only distributed by the ISD in November 2011 - credit cannot be denied - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
- Whether services related to setting up a marketing office received before 1.4.2011 but with credit distributed and availed post 1.4.2011 are entitled to CENVAT Credit as an input service under Rule 2(1) of CCR.

Analysis:
The appellant, engaged in manufacturing activities falling under Chapter 24 of the Central Excise Tariff Act, 1985, availed CENVAT credit on input services, including Commercial and Industrial Construction Service. The dispute arose when the authorities denied CENVAT credit on these services, claiming they did not fall within the definition of input service as per Rule 2(1) of CENVAT Credit Rules, 2004. The central issue in the appeal was whether services received before 1.4.2011 but with credit distributed post that date were eligible for CENVAT Credit. The appellant argued that the services were procured before 1.4.2011, supported by an invoice dated 15.12.2010, and cited a CBEC circular to support their claim.

The appellant contended that the impugned order wrongly denied CENVAT credit based on the amended definition of input service post 1.4.2011. They highlighted that the services were obtained before the cut-off date, as acknowledged by the Commissioner (A), and should not be disqualified for credit. The appellant referenced several decisions supporting their position, emphasizing that the construction service was acquired before 1.4.2011 and only distributed later by the ISD in November 2011.

Upon reviewing the submissions, material on record, and precedent cases, the Judicial Member concluded in favor of the appellant. The Member found that the documents presented clearly demonstrated that the construction service was procured before 1.4.2011, aligning with the CBEC circular's clarification. Relying on the cited decisions, the Member held that the credit could not be denied and set aside the impugned order, allowing the appeal with consequential relief, if any.

In summary, the Tribunal's judgment overturned the denial of CENVAT credit on services related to setting up a marketing office, emphasizing the importance of the procurement date over the credit distribution date in determining eligibility. The decision aligned with established legal principles and precedents, ensuring the appellant's entitlement to the credit based on the factual and legal analysis presented during the proceedings.