2015 (12) TMI 213 - AT - Service Tax

Waiver of pre deposit - commercial or industrial construction service - Service Tax paid on the rents for hired warehouses outside the factory for storage or raw material as well as finished goods - Held that - As regards the credit taken in respect of Commercial or industrial construction service, it is not disputed that the said service was utilized for setting up the factory and therefore it was covered under the definition input services prior 1-4-2011 as is evident from the definition of input service contained in Rule 2(l) of Cenvat Credit Rules, 2004 - entire credit relating to commercial or industrial construction service is clearly admissible. - As regards Cenvat credit of Service Tax paid for rental service the appellants have stated that they owned, and were responsible for, the goods upto the warehouse from where the finished goods were cleared/sold and therefore in terms of Section 4(3)(c)(iii) of Central Excise Act, 1944 such a warehouse was the place of removal. As per the above definition, input services used for storage up to the place of removal continued to be covered under the definition of input service. Therefore, the Service Tax paid on rent is also available as credit. - Decided in favour of assessee.

Issues:
1. Admissibility of Cenvat credit for Service Tax paid on commercial or industrial construction service.
2. Admissibility of Cenvat credit for Service Tax paid on rents for hired warehouses.
3. Interpretation of the definition of input service in relation to Cenvat credit eligibility.

Admissibility of Cenvat credit for Service Tax paid on commercial or industrial construction service:
The appellants had taken Cenvat credit for Service Tax paid on commercial or industrial construction service used for setting up their factory. The tribunal noted that prior to 1-4-2011, such service for setting up the factory was eligible to be considered an input service. Referring to the definition of input service under Rule 2(l) of Cenvat Credit Rules, 2004, the tribunal found that the credit related to commercial or industrial construction service was clearly admissible. The definition included services used in setting up, modernization, renovation, or repairs of a factory, among other activities. Consequently, the tribunal held that the entire credit relating to commercial or industrial construction service was admissible.

Admissibility of Cenvat credit for Service Tax paid on rents for hired warehouses:
The appellants also claimed Cenvat credit for Service Tax paid on rents for warehouses outside the factory where raw materials and finished goods were stored. They argued that they owned and were responsible for the goods up to the warehouse from where the finished goods were cleared or sold, making the warehouse the "place of removal" as per Section 4(3)(c)(iii) of the Central Excise Act, 1944. The tribunal considered this argument and found that input services used for "storage up to the place of removal" were covered under the definition of input service. Therefore, the tribunal concluded that the Service Tax paid on rent for warehouses was also eligible for credit.

Interpretation of the definition of input service in relation to Cenvat credit eligibility:
The tribunal examined the definition of input service in relation to the eligibility of Cenvat credit. It was noted that the definition encompassed services used in various activities such as storage, procurement of inputs, accounting, auditing, and transportation up to the place of removal. By analyzing the specific circumstances of the case and the provisions of the law, the tribunal determined that both the Cenvat credit for commercial or industrial construction service and the Service Tax paid on rents for warehouses were admissible as input services. Consequently, the tribunal waived the requirement of pre-deposit and allowed the appeal in favor of the appellants.

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