2018 (8) TMI 533 - AT - Central Excise

CENVAT Credit - input service - whether appellant is entitled for CENVAT credit in respect to the construction services of residential building for the staff - Time Limitation - Held that - Though the appellant have raised the issue of limitations before the Commissioner (A) who has not given any finding as regard the time bar of the demand. Since the issue of limitation is a mixed question of facts and law, the Commissioner (A) was supposed to give finding. The Commissioner (A) has not dealt with this issue. It is in the interest of justice that the matter should go back to the Commissioner (A) for deciding the issue of limitations - appeal allowed by way of remand.

Summary

Issues Involved:
Whether the appellant is entitled to CENVAT credit for construction services of a residential building for staff.

Analysis:

1. Entitlement to CENVAT Credit:
The appellant argued that the construction services for building the residential quarters for staff are related to the overall manufacturing activity, enhancing production efficiency. Citing various judgments, the appellant contended that the credit should be allowed. The demand for the credit was raised through an audit, and the appellant claimed no suppression. However, the Revenue argued that the construction was for personal use, not linked to production, and thus, the credit denial was justified. The Tribunal noted the absence of a finding on the limitation issue by the Commissioner, emphasizing that the matter should return to the Commissioner for a decision on limitation. Consequently, the Tribunal refrained from ruling on the merit of the credit entitlement, remanding the case for further consideration.

2. Jurisprudence Reference:
Both parties relied on multiple judgments to support their respective arguments. The appellant cited cases like The Lakshmi Vilas Bank Ltd. vs CCE, M/s Mahindra Ugine Steel Co Ltd. vs CCE, and others, while the Revenue referenced cases such as CCE vs. Gujarat Heavy Chemicals Ltd. and Infosys Ltd. vs CST, Bangalore. These citations aimed to establish precedents favoring or opposing the appellant's entitlement to CENVAT credit for construction services.

3. Limitation Issue:
The Tribunal highlighted the failure of the Commissioner to address the limitation aspect, underscoring that the issue of limitation involves both factual and legal considerations. Due to this oversight, the Tribunal deemed it appropriate for the matter to be returned to the Commissioner for a determination on the limitation issue. The absence of a ruling on limitation prompted the Tribunal to refrain from making a decision on the substantive issue of CENVAT credit entitlement, keeping the matter open for further review.

In conclusion, the Tribunal's judgment focused on procedural deficiencies regarding the limitation issue, necessitating a remand to the Commissioner for a determination. The substantive issue of the appellant's entitlement to CENVAT credit for construction services remains unresolved pending the Commissioner's decision on the limitation matter.