2018 (2) TMI 1672 - AT - Central Excise

CENVAT credit - Construction Service - Held that - on perusal of which it is noticed they are for repair of plant and building. It cannot be said that the repairs of the plant are ineligible for Cenvat Credit as definition as Input Service excludes availment of Cenvat Credit in respect of the construction of new factory premises - Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Eligibility to avail Cenvat Credit of Service tax paid on 'Construction Services' during November 2009 to December 2013.

Analysis:
The appeal was directed against an order passed by the Commissioner (Appeals) regarding the eligibility to avail Cenvat Credit of Service tax paid on 'Construction Services' during a specific period. The issue revolved around whether the Cenvat Credit could be availed for service tax paid on construction services, which were considered works contracts of building based on the definition of the Input Service under Rule 2(l) of the Cenvat Credit Rules, 2004. The appellant contended that the services were for repair and renovation of the factory premises, supported by a certificate signed by a Chartered Accountant. The First Appellate Authority rejected the appeal solely on the ground that Construction Service was not eligible for Cenvat Credit.

Upon careful consideration of the submissions and perusal of records, it was found that the services provided were indeed towards repair of compound walls of the factory at various places in the chemical plant. Sample invoices produced during the proceedings indicated that the services were for repair of the plant and building, not for the construction of new factory premises. The First Appellate Authority's findings supported the appellant's claim, and it was noted that the issue was similar to a precedent in the appellant's favor. Consequently, the impugned order was deemed unsustainable, leading to its setting aside and allowing the appeal.

In conclusion, the judgment focused on the interpretation of the Input Service definition under the Cenvat Credit Rules in the context of availing credit for Service tax paid on construction services. The decision highlighted the distinction between construction activities and repair services, ultimately leading to the allowance of the appeal based on the specific nature of the services provided for the repair and renovation of the factory premises.