2019 (10) TMI 318 - AT - Central Excise

CENVAT Credit - input services - construction, repairs, extension works etc in the mining area - HELD THAT - This Tribunal in their own case WESTERN COALFIELDS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE NAGPUR II 2019 (5) TMI 1346 - CESTAT MUMBAI while considering the admissibility of CENVAT Credit availed on support structures of roof holding the mines, interpreted the scope of civil structures and observed that the roofing in mine offers protection from the possibility of mud shifting in the area. Therefore, it hardly conforms to the expression of civil structure . Thus, the ventilation stopping area and isolation stopping area cannot be called as civil structure, accordingly, CENVAT Credit availed by the Appellant on the input/input services cannot be denied.

Summary

Issues:
- Admissibility of CENVAT Credit on input services related to construction in mining area.
- Interpretation of 'input service' as per Rule 2(l) of CENVAT Credit Rules, 2004.
- Appeal against the order passed by the Commissioner (Appeals) confirming denial of CENVAT Credit.

Analysis:
The appeal in question was filed against the order passed by the Commissioner (Appeals) concerning the admissibility of CENVAT Credit amounting to ?1,19,95,161/- on various input services utilized in the mining area for the production of 'Coals'. The Appellant contended that the credit of ?4,21,267/- availed for items like isolation stopping area and ventilation area within the mines, mandated by the Mines Act, should not be denied. The Appellant argued that the construction in question did not fall under the definition of 'civil structure' as per the amended definition of 'input service'. The Appellant relied on a previous Tribunal order to support their claim. The Revenue, represented by the learned A.R., supported the findings of the Commissioner (Appeals).

The Tribunal, in its analysis, referred to a previous case where the admissibility of CENVAT Credit on support structures in mines was considered. It was observed that structures like roofing in mines, which prevent mud shifting, do not qualify as 'civil structures'. Applying the same reasoning, the Tribunal concluded that the 'ventilation stopping area and isolation stopping area' cannot be categorized as civil structures. Consequently, the CENVAT Credit availed by the Appellant on these input services could not be denied. The Tribunal modified the impugned order to allow the appeal to the extent of granting the CENVAT Credit on the mentioned input services.

In conclusion, the Tribunal's decision focused on the interpretation of 'input service' under the CENVAT Credit Rules, 2004, in the context of construction activities in the mining area. The judgment emphasized that certain structures within the mines, essential for safety and operational purposes, do not fall under the definition of 'civil structures', thereby entitling the Appellant to claim CENVAT Credit on the related input services.