2018 (6) TMI 1212 - AT - Central Excise

CENVAT credit - input services - appellant had engaged the services of M/s. Chettinad Builders (P) Ltd. and M/s. Navanirman Technobuild India Pvt. Ltd. towards construction of various structures and buildings, laying of foundations and making of structures for support of capital goods in the factory premises and construction services in the residential colony and availed cenvat credit on the services tax paid - principles of Natural Justice. Held that - The appellant has produced various work orders issued to M/s. Navanirman Technobuild which are the subject matter of present dispute and the perusal of these various work orders, copies of which are annexed with the appeal memorandum, shows that the scope of work relates to supply of DG sets operator with required tools for O&M work like fuel filling , coolant top-up, start & stop of DG set, battery checking etc. in the Kallur factory - the Commissioner(Appeals) has not considered all these documents and the invoices produced by the appellant in support of his submission that the services availed by the appellant are integrally connected with the manufacture of final product of the appellant and all the services even after the amendment in the definition of input service fall in the definition of input service because the same has not been specifically excluded. Since these work orders and the invoices issued by the service providers have not been specifically considered by the Commissioner(Appeals) while disposing of the appeal, the matter requires re-examination - appeal allowed by way of remand.

Summary

Issues:
- Appeal against Order-in-original upholding CENVAT credit rejection
- Applicability of input service definition under CENVAT Credit Rules, 2004
- Allegation of suppression and invocation of extended period
- Interpretation of judicial precedents and legal provisions

Analysis:
The appeal challenged the Commissioner(Appeals)'s decision affirming the rejection of CENVAT credit availed by the appellant, a cement manufacturer, for services not falling within the input service definition. The appellant engaged services for construction and maintenance, leading to a show-cause notice for recovery. The appellant contended that the impugned order failed to consider material evidence and judicial precedents, arguing that the services were integral to cement manufacturing. They cited precedents like Ultratech Cement Ltd. and relied on decisions such as Kalyani Steels Ltd. to support their claim that the services were essential for their business.

The appellant emphasized that the services from M/s. Navanirman Technobuild were for crucial activities like fabrication, erection, and operation of machinery, falling within the input service definition. They disputed the invocation of the extended period, asserting regular compliance and non-suppression of facts. The appellant presented work orders and invoices to substantiate their claim, which the Commissioner(Appeals) allegedly overlooked. The Tribunal found that the work orders demonstrated the necessity of the services for the manufacturing process, requiring a detailed examination by the original authority.

The Tribunal concluded that a remand was necessary for a thorough verification of the services' utilization and alignment with the post-amendment input service definition. Noting the Commissioner(Appeals)'s oversight of crucial documents, the Tribunal set aside the impugned order, allowing the appeal by remand for a comprehensive review. The decision highlighted the importance of considering all relevant evidence and legal precedents in determining the eligibility of CENVAT credit for services utilized in the manufacturing process.