2018 (11) TMI 619 - AT - Service Tax

CENVAT Credit - input services - repair and maintenance of the hard surfaced container yard installed in the ground located within the yard - Held that - No new construction activities were carried out by the service provider, in order to fall under the exclusion clause provided in the definition of input service in Rule 2 (l) of the Rules - Since the activity of repair is specifically finding place in the inclusive parts of the definition, for consideration of the service as input service, the benefit of Cenvat Credit cannot be denied to the appellant - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of Cenvat Credit Rules, 2004 regarding input services for repair and maintenance activities in a container depot operation.

Analysis:
The case involved a dispute over the availing of Cenvat Credit by an appellant engaged in container depot operations for repair and maintenance services of a hard-surfaced container yard. The department contended that the services were used for construction, which was excluded from the definition of input service under Rule 2 (l) of the Cenvat Credit Rules, 2004. The matter was adjudicated against the appellant, leading to penalties and demands. The Commissioner (Appeals) upheld the decision, prompting the appellant to file an appeal before the Tribunal.

The appellant argued that the services were solely for repair of the existing hard surface and not for new construction. The advocate referred to the definition of input service under Rule 2 (l) to support the claim that repair and maintenance activities qualified as input services. On the contrary, the Revenue reiterated the findings of the impugned order.

After hearing both sides and examining the records, the Tribunal found that the appellant had not constructed a new platform during the disputed period but had undertaken repair, maintenance, and renovation activities on the existing hard-surfaced container yard. By reviewing documents and photographs submitted by the appellant, the Tribunal concluded that no new construction had taken place, and the repair activities fell within the inclusive definition of input service. Therefore, the benefit of Cenvat Credit could not be denied to the appellant.

Consequently, the Tribunal did not find merit in the impugned order and allowed the appeals in favor of the appellant by setting aside the decision, emphasizing that the repair activities qualified for Cenvat Credit under the applicable rules.