2019 (3) TMI 179 - AT - Central Excise

CENVAT Credit - maintenance and repair service - denial on the ground that the purchase order shows that the service provided is that of civil work - Held that - Perusal of the definition as it stands after 01.04.2011 makes it clear that definition s first part includes the words services used in relation to modernisation, renovation or repairs of factory . The second part has the exclusion part wherein it states that the service portion in the exclusion of works contract and the construction services in so far as they are for construction of execution of work contract of a building or civil structure or a part thereof is excluded - It becomes clear that the services as that of maintenance and repair and any civil work related to maintenance and repair falls under 1st part of the definition and the services for civil construction and the work contract for civil construction are in the second part i.e. the exclusion part of the definition. The several works have been executed by the service providers i.e. M/s. Shivaji Traders & M/s. R S Fabricators. There are several invoices involved in the appeals and each invoice has variety of work done/ services provided by the provider - the invoices itself are sufficient to bifurcate both the nature of the services based whereupon the adjudicating authority below could have quantify the amount for the services obtained qua repair and maintenance of the appellants premises and qua the construction therein. Appeals remanded to the adjudicating authority itself for properly bifurcating the services eligible for inputs than from the services, which are not eligible for being classified as inputs - appeal allowed by way of remand.

Summary

Issues:
- Classification of services for cenvat credit eligibility based on invoices.
- Proper bifurcation of services for quantifying amounts eligible for credit.

Analysis:
1. The judgment addresses two appeals concerning the same appellant and issue regarding cenvat credit eligibility. The appellant, engaged in manufacturing, availed services from M/s. Shivaji Traders for maintenance and repair, but the Department contended the services included civil work. The demands, interest, and penalties were confirmed by adjudicating authorities and appellate bodies, leading the appellant to appeal to the Tribunal.

2. The appellant argued that the services were solely for repair and maintenance, citing relevant invoices. The appellant relied on legal precedents to support their claim. On the other hand, the Department highlighted that the services included civil work like laying bore-well and RCC, making them ineligible for cenvat credit. The lack of bifurcation by the appellant led to the proposed demand being confirmed.

3. The Tribunal analyzed the definition of input service post-April 2011, distinguishing between services for maintenance/repair and those for civil construction. Reviewing the invoices from M/s. Shivaji Traders and M/s. R S Fabricators, the Tribunal found a mix of eligible and ineligible services. It noted that the appellant failed to provide bifurcation, but the invoices themselves could guide the classification.

4. Consequently, the Tribunal remanded both appeals to the adjudicating authority for proper bifurcation of services eligible for credit. The authority was instructed to quantify the amounts only for services strictly related to civil construction, excluding repair and maintenance services. The judgment allowed the appeals by remand, emphasizing the need for accurate classification based on the nature of services provided.

5. In conclusion, the Tribunal's decision focused on the meticulous examination of invoices to determine the eligibility of services for cenvat credit. By emphasizing proper classification and bifurcation, the judgment aimed to ensure fair treatment and accurate quantification of amounts eligible for credit, ultimately providing clarity on the issue at hand.