2021 (11) TMI 833 - AT - Central Excise

CENVAT Credit - input services - Works Contract Service used for Repair of their factory premises - inclusion part services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises - HELD THAT - It is obvious that a exclusive part can only exclude what is otherwise included in the inclusive part, therefore. If anything is covered in the exclusive part it remains excluded irrespective of the fact that the same was specifically included in the main definition or the inclusive part. This is so because the exclusive part comes at the end of the definition and not before the inclusive part. Appeal dismissed.

Summary

Issues: Denial of Cenvat credit on services for repair of factory premises, demand of interest, imposition of penalty.

Denial of Cenvat Credit on Repair Services:
The appeal was filed against the denial of Cenvat credit on Works Contract Service used for repairing the factory premises. The appellant argued that the definition of input service includes services used for modernization, renovation, or repairs of a factory, which should entitle them to the credit. However, the AR relied on the impugned order. The Tribunal examined the definition of input service, which includes services used in relation to repairs of a factory premises. The Commissioner (Appeals) noted that while repair and maintenance services are included in the inclusive part of the definition, construction or execution of works contract for a building or civil structure are excluded. The flooring of premises, being part of a civil structure, falls under the exclusion, even if done for repair purposes. The Tribunal agreed with the Commissioner's interpretation, emphasizing that the exclusive part supersedes the main definition and inclusive part. Therefore, if a service is covered in the exclusive part, it remains excluded, regardless of being included in the main or inclusive parts. Consequently, the appeal was dismissed.

Interest and Penalty Issues:
The judgment primarily focused on the denial of Cenvat credit for repair services. The appellant did not contest the balance of demand, indicating that the primary dispute was over the credit for repair services. The Tribunal's decision to dismiss the appeal suggests that the denial of credit on repair services was the central issue in this case. The judgment did not delve into specific details regarding any interest or penalty imposed, as the primary focus was on the denial of Cenvat credit. Therefore, the interest and penalty issues, if any, were not extensively discussed in the judgment.

Conclusion:
The judgment by the Appellate Tribunal CESTAT Ahmedabad, delivered by Hon'ble Member (Technical) Mr. Raju, addressed the denial of Cenvat credit on repair services for factory premises. The decision highlighted the interpretation of the definition of input services, emphasizing the exclusion of construction or works contract services for civil structures. The Tribunal upheld the Commissioner's ruling, emphasizing that the exclusive part of the definition overrides the inclusive part. The judgment did not extensively cover issues related to interest and penalty, as the primary focus was on the denial of credit for repair services.