2019 (9) TMI 67 - AT - Central Excise

CENVAT Credit - input services - case of appellant is that the original authority has not verified the true usage of the input service - HELD THAT - The appellant has produced the invoice wherein it is clearly mentioned that the service was pure labour and did not involve goods. Copies of the invoice are also on record. Further the service tax challan of the vendor also shows that the tax paid was under Erection, Commissioning and Installation Service. Further the Service Tax Returns filed by the vendor also shows that those returns were filed under Erection, Commissioning and Installation Service and the copies of returns are also on record. Further, the Department has not been able to establish that the input services availed by the appellant falls under Construction Service/Works Contract Service. Extended period of limitation - HELD THAT - The appellants have availed the cenvat credit in the month of April 2012 and May 2012 and has informed the Department with a letter along with Cenvat Register on 18.06.2012 and the said cenvat credit was noticed by the audit and audit report was issued on 19.12.2012 whereas show-cause notice was issued on 07.11.2014. Further the appellant has produced on record the acknowledgment of RPAD whereby he has informed the Department and also shown in the returns filed by him which clearly shows that there is no suppression on the part of the appellant with intent to evade payment of duty - the appellants have produced all the copies of invoices, challans and returns and also produced the copies of acknowledgment vide which the Cenvat Register was submitted to the Department on 18.06.2012 - Thus, the entire demand is barred by limitation. Appeal allowed on merits as well as on limitation.

Summary

Issues:
Appeal against rejection of cenvat credit on ineligible input service, categorization of service, time-barred demand, suppression of facts, applicability of extended period of limitation.

Analysis:
The appeal challenged the rejection of cenvat credit amounting to Rupees 13,28,482 on ineligible input service by the Commissioner (Appeals). The appellant, engaged in the manufacture of Sponge Iron & TMT bars, claimed the credit for Erection, Commissioning, and Installation Service, while the Department categorized it as Construction/Works Contract Service. The appellant argued that the service was pure labor without goods, supported by invoices and service tax challans. The appellant contended that the demand was time-barred, as credit was availed in 2012 and disclosed to the Department promptly. The appellant also cited a previous tribunal decision to support their claim for cenvat credit on the service in question.

The Tribunal considered the submissions and evidence presented by both parties. It noted that the service availed by the appellant was labor-intensive and did not involve goods, as evidenced by invoices and tax challans. The Tribunal found that the Department failed to establish that the input service fell under Construction Service/Works Contract Service. Citing relevant precedents, the Tribunal held in favor of the appellant regarding the eligibility of the service for cenvat credit. Additionally, the Tribunal addressed the issue of the extended period of limitation, noting that the appellant had duly informed the Department about the credit availed, thereby ruling that the demand was time-barred. The Tribunal emphasized the importance of proper documentation and disclosure by the appellant to avoid any allegations of suppression of facts.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal on both merit and limitation grounds. The demand for cenvat credit was deemed barred by limitation, and the appellant was granted consequential relief. The decision was pronounced in open court on 13/08/2019.