2015 (5) TMI 498 - AT - Service Tax

CENVAT Credit - Construction services - nexus with the manufacturing activity - Held that - inclusive part of the provisions of Rule 2(1) of CCR, 2004 provides for availment of cenvat credit for setting up, of modernization, renovation or repairs in the factory premises and all the services mentioned hereinabove are only related to these services. In these circumstances, I am unable to understand why the appeal has been filed by the Revenue before this Tribunal. As the learned Commissioner (Appeals) has examined the issue in detail and thereafter concluded that all the services are services of inclusive part of the inputs services as per Rule 2(1) of the Cenvat Credit Rules, 2004. Therefore, I hold that respondents are entitled to take cenvat credit on construction services and also do not find any infirmity in the impugned order and same is upheld. - Decided against Revenue.

Summary

Issues:
- Appeal against allowing input service credit on construction services under Cenvat Credit Rules, 2004.

Analysis:
The appeal before the Appellate Tribunal challenged the decision of the learned Commissioner (Appeals) to allow input service credit on various construction services claimed by the respondents. The Revenue contended that the services availed by the respondents did not have a direct nexus with the manufacturing activity, as required by Rule 2(1) of the Cenvat Credit Rules, 2004. The impugned order had denied the Cenvat credit, imposed a penalty, and confirmed the demand along with interest. However, the learned Commissioner (Appeals) examined the issue in detail and concluded that the services fell under the inclusive part of "input services" as defined in Rule 2(1) of the Cenvat Credit Rules, 2004.

Upon consideration, the Appellate Tribunal noted that Rule 2(1) of the Cenvat Credit Rules, 2004, allowed for the availing of Cenvat credit for services related to setting up, modernization, renovation, or repairs in the factory premises. The Tribunal found that all the services claimed by the respondents fell within the ambit of the inclusive part of the provisions of Rule 2(1) and were thus eligible for Cenvat credit. Consequently, the Tribunal upheld the decision of the learned Commissioner (Appeals) and dismissed the appeal filed by the Revenue. The judgment emphasized that the services provided by the respondents qualified as "input services" under the Cenvat Credit Rules, 2004, and there was no basis for challenging the allowance of Cenvat credit on construction services.