2018 (5) TMI 1560 - AT - Central Excise

CENVAT credit - common input services - Manpower Supply Service Legal Service Professional Service Transportation Service etc. and used the same for manufacturing as well as and trading activities - Rule 6(3) of the CCR 2004 - Construction Service - Held that - the imported raw materials received against advance license and had been transferred to their other units hence does not involve any but stock transfer of goods Therefore it cannot be construed as trading sale. Consequently Rule 6(3) of the CCR 2004 is not applicable - credit allowed. CENVAT credit - Construction Service used in the repair and maintenance work in the factory premises - Held that - the issue is covered in the case of M/S ION EXCHANGE I LTD VERSUS COMMISSIONER OF CENTRAL EXCISE CUSTOMS AND SERVICE TAX SUARAT-II 2017 (12) TMI 151 - CESTAT AHMEDABAD where it was held that After amendment to the definition of the input service a clarification issued by the Board vide Circular No 943/4/2011-CX dt 29.4.2011 dt 29.4.2011 where-under regarding credit of service tax paid on construction service as an input service used in modernization renovation or repair it has been clarified that the said services being provided in the inclusive part of definition of input service are definitely eligible to credit - credit allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Demand of &8377; 33,33,794 under Rule 6(3) of CCR, 2004 for trading sales.
2. Admissibility of credit on 'Construction Service' used for repair and maintenance work.

Analysis:

Issue 1:
The appellant availed Cenvat Credit on various services input and faced a demand of &8377; 33,33,794 under Rule 6(3) of CCR, 2004 for trading sales. The appellant argued that the imported raw materials received against an advance license were transferred to their other units, constituting a stock transfer rather than trading sale. The Chartered Accountant provided evidence to support this claim, including sample invoices and a certificate from the statutory auditor. The tribunal found merit in the appellant's contention, noting that the transactions between units were not sales but stock transfers. Consequently, the demand under Rule 6(3) was deemed unsustainable and set aside.

Issue 2:
Regarding the admissibility of credit on 'Construction Service' used for repair and maintenance work, the appellant contended that Service Tax paid on such services should be eligible for credit even after an amendment to the definition of 'input services'. The appellant referenced a previous judgment by the tribunal in the case of Ion Exchange India Ltd vs CCE&ST, Surat, to support their argument. The tribunal agreed with the appellant's position, citing the precedent set in the mentioned case. As a result, the impugned order was set aside, and the appeal was allowed.

This judgment by the Appellate Tribunal CESTAT AHMEDABAD, delivered by Dr D.M. Misra, Member (Judicial), provides a detailed analysis of the issues raised by the appellant and the Revenue. The tribunal carefully considered the arguments presented, examined the evidence provided, and relied on legal precedents to reach a decision that favored the appellant on both issues.