2019 (10) TMI 366 - AT - Central Excise

CENVAT Credit - input services - Civil Works - Rule 2(l) of CCR, 2004 - HELD THAT - The original authority has analyzed each and every input service and has passed a reasoned order by holding that all the services availed by the appellant fall in the definition of input service and none of them are in the nature of civil construction only. Further, without giving any reasons, the Commissioner (A) has wrongly come to the conclusion that all the services availed by the appellant are in the nature of civil construction only. Further, all the services fall in the definition of input service as contained in Rule 2(l) of CCR, 2004 and do not fall in the services which have been specifically excluded. Further, the invoices for the impugned services referred to maintenance and repair of the plant and do not refer to construction of a building or a civil structure or laying of foundation etc. which are specifically excluded from the definition of input service . The order passed by the original authority is restored by allowing the appeal of the appellant with consequential relief, if any - appeal allowed.

Summary

Issues:
- Appeal against order allowing appeal by Department and setting aside Order-in-Original regarding CENVAT credit availed on input services for Alloy steel and non-Alloy steel manufacturing under Chapter 72 of CETA, 1985.

Analysis:
- The appeal was filed against the order passed by the Commissioner (A) allowing the Department's appeal and setting aside the Order-in-Original related to the availed CENVAT credit on input services for Alloy steel and non-Alloy steel manufacturing. The Department proposed to recover the credit availed on ineligible services, leading to the initiation of proceedings. The original authority dropped the proceedings, but the Department appealed, resulting in the Commissioner (A) allowing the appeal and setting aside the original order.

- The appellant argued that the impugned order was not sustainable in law as it failed to properly appreciate the facts and the law. The appellant contended that the original authority had verified the invoices and usage of input services, providing reasoned findings for allowing the CENVAT credit. The appellant emphasized that the services availed were not related to construction but were in the nature of Site Formation, Excavation, Earthmoving, and Demolition services. The appellant highlighted that the Commissioner (A) did not provide detailed reasons for concluding that the services were in the nature of civil construction only.

- The Learned AR defended the impugned order, leading to a thorough consideration of submissions and material on record by the Tribunal. The Tribunal found that the original authority had correctly analyzed all input services, concluding that they fell within the definition of 'input service' and were not solely related to civil construction. The Tribunal criticized the Commissioner (A) for reaching a different conclusion without providing adequate reasons. It was established that the services availed were within the definition of 'input service' as per Rule 2(l) of CCR, 2004 and did not pertain to excluded services like construction of buildings or civil structures. Consequently, the Tribunal held that the impugned order was not legally sustainable, reinstating the Order-in-Original and allowing the appellant's appeal with any consequential relief.

- The Tribunal pronounced the operative portion of the Order in Open Court on 14/03/2019, thereby resolving the appeal in favor of the appellant based on the detailed analysis of the input services and their eligibility for CENVAT credit.