2019 (10) TMI 407 - AT - Central Excise

CENVAT Credit - input services - services received by the Appellant relate to setting up of an industry or for repair, renovation and modernisation of existing factory - scope of exclusion clause after amendment to the definition of input service prescribed at Rule 2(l) of CENVAT Credit Rules, 2004 after 01.04.2011 - HELD THAT - Since the evidences could not be placed before the learned Commissioner (Appeals), no findings in this regard could be recorded, analyzing the documents/evidence by him. It is prudent to remand the matter to the Adjudicating authority to examine all the evidences now placed before this Tribunal in the de-novo adjudication to ascertain whether the claim of the Appellant that the services received relates to maintenance, repair, modernisation, renovation etc or otherwise - Appeal is allowed by way of remand to the Adjudicating authority.

Summary

Issues:
1. Eligibility of CENVAT Credit on input services used in fabrication.
2. Interpretation of the exclusion clause in the definition of 'input service'.
3. Requirement of evidence to support the nature of fabrication work undertaken.

Analysis:
1. The appeal challenged the denial of CENVAT Credit on input services used in the fabrication of structures based on an exclusion clause in the definition of 'input service' post an amendment to Rule 2(l) of CENVAT Credit Rules, 2004. The demand notice sought recovery of availed credit during a specific period. The Appellant contended that the fabrication work related to modernization, renovation, and repairs in the factory, which they argued were not excluded from the definition of 'input service'. The Tribunal was referred to a previous judgment supporting this position.

2. The Revenue, however, argued that the Appellants failed to establish, with evidence, that the fabrication work undertaken indeed pertained to modernization, renovation, or repairs of the existing factory. The Appellant, during the proceedings, referenced relevant invoices not presented before the Commissioner (Appeals). The central issue revolved around determining whether the services received were for setting up an industry or for repair, renovation, and modernization of the existing factory. Due to the absence of crucial evidence before the Commissioner, no conclusive findings were made regarding the nature of the services received.

3. After hearing both parties and examining the records, the Tribunal decided to remand the matter back to the Adjudicating authority for a fresh adjudication. The purpose was to allow a comprehensive examination of all evidence now presented before the Tribunal to ascertain whether the services in question indeed related to maintenance, repair, modernization, renovation, or had a different purpose. The Tribunal emphasized that all issues were to be reconsidered and kept open for further determination by the Adjudicating authority, ultimately allowing the appeal by way of remand.