2023 (7) TMI 152 - AT - Central Excise

CENVAT Credit - exclusion clause in the definition of input service as defined under Rule 2(l) of the Cenvat Credit Rules, 2004 - renovation or repair of the factory premises - laptop insurance - HELD THAT - The authorities below have specifically noted that the assessee has not provided any contract/ work order/ agreement with the service provider to identify the work done on behalf of the appellant. The appellant has only annexed certain copies of the invoices, which were not figuring in the annexure to the demand notice and the other invoices were found attached with the appeal though such invoices of the service provider were part of the annexure enclosed to the demand. The appellant has during the course of hearing submitted a compilation including several agreements as well as invoices of various companies. The matter needs to be reconsidered by the original authority. Therefore, it would be proper to remand the matter back to the Adjudicating Authority, who may examine the case in the light of the documents which may be submitted by the parties and the definition of input service , which comprises of three components, namely, the means clause, the inclusion clause and the exclusion clause. Appeal allowed by way of remand.

Summary

Issues involved:
The issue in the present appeal relates to the availment of cenvat credit on input services which are considered ineligible due to exclusion clauses in the definition of input service under Rule 2(l) of the Cenvat Credit Rules, 2004.

Comprehensive Details:
1. The appellant, engaged in manufacturing various products and providing services, availed cenvat credit on input services including expenses related to renovation or repair of factory premises and laptop insurance.
2. Show cause notice was issued for recovery of wrongly availed cenvat credit, interest, and penalty. The Adjudicating Authority affirmed the notice, leading to an appeal before the Tribunal.
3. During the hearing, the appellant argued that the authorities did not consider the inclusive part of the definition of input service, which includes services related to modernisation, renovation, or repairs.
4. The authorities noted that the appellant failed to provide necessary documents to identify the work done by the service provider. The appellant later submitted additional agreements and invoices, prompting the Tribunal to remand the matter back to the Adjudicating Authority for reconsideration.
5. The Tribunal emphasized the need to examine the documents submitted by the parties in light of the definition of 'input service,' highlighting the importance of distinguishing between modernisation/renovation/repair activities and construction work.

Conclusion:
The Tribunal set aside the impugned order and remanded the matter back to the Adjudicating Authority for further consideration, emphasizing the broad scope of modernisation, renovation, or repair activities and the need for proper documentation to support cenvat credit claims. The appeal was allowed by way of remand.