2018 (3) TMI 990 - AT - Central Excise

CENVAT credit - construction service - denial on the ground that construction service was specifically excluded from the eligible input service w.e.f. 1.42011 by an amendment - Held that - Admittedly, the construction services commenced and were provided much before even the amendment was introduced on 1.4.2011 if at all, a small portion of service could have been rendered after 1.4.2011 - the amendment carried out w.e.f. 1.4.2011, has no implication in the present case, as the services have been availed and paid for prior to the said date. The credit was availed on 30.04.2011 by itself cannot be the reason for denial. This much has been clarified by the Board also vide their circular dated 29.04.2011. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Eligibility of the appellant for cenvat credit on "construction service" post an amendment to the rules on 1.4.2011.

Analysis:
The dispute in the present appeal revolves around the eligibility of the appellant for cenvat credit on construction services post an amendment to the rules on 1.4.2011. The appellant had engaged a construction company for civil construction works, and the issue pertains to the service tax credit availed on these services. The Revenue contended that construction services were excluded from eligible input services post the amendment, thus disallowing the credit availed by the appellant on 30.04.2011. The Revenue's stance was supported by a Circular dated 29.04.2011, emphasizing that services not completed before 1.4.2011 were not eligible for credit.

The appellant argued that the construction activity had commenced before 1.4.2011 and was completed prior to the amendment date. They highlighted that the invoice for the construction service was raised on 25.03.2011, payment was made on 28.03.2011, and the service was certified by an Architect on 26.03.2011. The appellant contended that even if a small portion of the service was rendered post the amendment, substantial evidence proved that the majority of the service was provided and paid for before 1.4.2011.

The Tribunal analyzed the facts presented and noted that the construction services were indeed availed and paid for before the amendment date. The Tribunal emphasized the evidence provided, such as the invoice date, payment date, and certification date, to support the appellant's claim. It was observed that the amendment on 1.4.2011 did not impact the appellant's case as the services were predominantly rendered before the exclusion of construction services from eligible input services. The Tribunal also referenced a Board circular dated 29.04.2011 and a previous Tribunal decision to support their findings.

Consequently, the Tribunal found the Revenue's order unsustainable and set it aside, allowing the appeal in favor of the appellant. The Tribunal's decision rested on the factual analysis that the construction services were predominantly provided and paid for before the amendment date, rendering the credit availed by the appellant valid despite being claimed after the amendment.

This detailed analysis of the judgment showcases the legal intricacies involved in determining the eligibility of cenvat credit on construction services post an amendment to the rules, emphasizing the importance of factual evidence and timelines in such disputes.