2018 (12) TMI 1094 - AT - Central Excise

CENVAT Credit - input services - construction services post 01.04.2011 - Held that - The construction service was received in connection with setting of Effluent Treatment plant with the existing factory, however, the fact whether it is for Repair, Renovation, Modernization or for setting of the new plant has not been verified, therefore, for this purpose i.e. construction service is of Repair, Renovation, Modernization or new construction needs to be remanded to the adjudicating authority - appeal allowed by way of remand.

Summary

Issues Involved:
Whether the appellant is entitled to Cenvat Credit for construction services post 01.04.2011 as per the amended definition of Input service.

Analysis:
The appellant claimed entitlement to Cenvat Credit for construction services related to the modernization of the existing factory. The appellant's counsel argued that the construction service was received in connection with the construction of a refining plant as part of the factory's modernization. Reference was made to the judgment of TVS Motor Company Ltd Vs. CCE 2017 (11) TMI 29-CESTAT-CHENNAI to support the claim.

The Revenue, represented by the Additional Commissioner, reiterated the findings of the impugned order. However, upon careful consideration of the submissions from both sides and a review of the records, it was observed that while the construction service was related to setting up an "Effluent Treatment" plant within the existing factory, there was a lack of verification regarding whether the service was for Repair, Renovation, Modernization, or setting up a new plant. As a result, it was deemed necessary to remand the matter to the adjudicating authority for further examination.

The presiding Member noted that if upon verification, the adjudicating authority determines that the construction service is indeed for Repair, Renovation, or Modernization of the existing plant, the credit would be admissible as per the inclusion clause in the definition of Input Service even after 01.04.2011. Consequently, the appeal was allowed by way of remand to the adjudicating authority for a fresh decision on the matter.

In conclusion, the judgment highlighted the importance of verifying the nature of the construction service in relation to Repair, Renovation, or Modernization of the existing plant to determine the admissibility of Cenvat Credit as per the amended definition of Input service post 01.04.2011.