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TMI Blog2022 (8) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... - CESTAT AHMEDABAD] , the facts were similar to that of the present case where the party had undertaken modernization and expansion of their facility, where it was held that The service provider has classified the services under ECIS and not under Construction Service and paid service tax under the head of ECIS. The ECIS Service independently not covered under the exclusion clause therefore, for this reason also credit cannot be denied. There is a catena of case laws wherein, it was held that the classification of service cannot be disturbed or challenged at the end of service recipient particularly for denial of cenvat credit. Once the classification is finalized at the service provider end, the same cannot be altered at the service recipient end. The Appellants have correctly taken credit of service tax paid/borne in respect of all services which were used for the Coke Oven Project as part of the modernization/renovation plan of the existing plant/factory - Appeal allowed - decided in favor of appellant. - Excise Appeal No.76215 of 2016 - FINAL ORDER NO.75435/2022 - Dated:- 4-8-2022 - SHRI P. K. CHOUDHARY, JUDICIAL MEMBER AND SHRI P. ANJANI KUMAR, TECHNICAL MEMBER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repair of the factory which was included in the definition of input service . 6. However, the submissions made by the Appellants were not accepted by the ld. Commissioner and, vide common Order-in-Original dated 10-03-2016( the impugned Order) he confirmed the full demand along with interest and also imposed equivalent penalty. Hence, the present appeal before the Tribunal. 7. We have heard both the sides and also perused the appeal records. 8. Shri A.K.Prasad, the learned Advocate for the appellants assailed the impugned order on the following points. 8.1 The dispute in the present case relates to the period from 01-04-2011 to July, 2015. The provisions relating to Service Tax law underwent substantial changes w.e.f. 01-07-2012 with the introduction of the Negative list . The definition of input service as well as works contract service also underwent changes. However, the instant show cause notices have been issued relying only on the definition of input service as well as works contract service w.e.f. 01-07-2012. Therefore, since the Appellants were never put to notice with reference to the definition of input service and works contract service as appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used in relation to modernization, renovation or repairs of their factory. The fact of which may kindly be verified by the ld. Adjudicating authority by causing verification in this regard . Though these submissions were recorded by the ld. Adjudicating authority in the impugned order, it was neither verified, nor rejected nor rebutted by him. 8.6 In the following cases it has been held that all services received, whether works contract, construction, or otherwise, would be covered by the definition of input service so long as they are covered by the inclusive part of the definition:- (i) Kakinada Seaports Ltd vs CCE, ST and Cus, Visakhapatnam-II [2015 (40) STR 509 (Tri-Bang)] (ii) Carrier Airconditioning Refrigeration Ltd vs CCE, Delhi-IV [2016 (41) STR 824 (Tri-Chan)] (iii) M/s Bombay Market Art Silk Cooperative (Shop Warehouse) Society Ltd vs CCE ST Surat-I [2022-TIOL-444- CESTAT-AHM] (iv) M/s Reliance Industries vs CCE ST, Rajkot [2022- TIOL-359-CESTAT-AHM] (v) M/s Outsource Partners International Pvt Ltd vs CCT CE, Tiruvananthapuram [2022 (58) GSTL 354 (Tri- Bang)] 8.7 In Board s Circular No 943/4/2011-CX dated 09.04.2011, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services. In this regard it is submitted that there is no requirement under the law to inform the department about the specific nature of the service on which credit has been taken. 9. The learned Authorised Representative referred to the definition of input service and submitted that there is no change in the coverage of definition of nput service both before and after 01.07.2012, though the text of the definition may have changed. He also submitted that since works contract service was excluded from the definition of input service , credit could not be taken in respect of any service tax paid on works contract services. He also referred to the sample invoices relied upon by the adjudicating authority and submitted that since WCT (Works Contract Tax) had been deducted in all the three sample invoices of the contractors, it clearly indicated that the services provided were all works contract services . 10. We have examined the rival submissions. For better appreciation of the issue involved, it would be appropriate to reproduce the definition of input service . 11. Definition during the period: 01.04.20011 to 30.06.2017 2(l) input service means any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lanation For the purposes of this sub-clause, the construction of a new building which is intended for sale, wholly or partly, by a builder or any person authorized by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or the person authorized by the builder before grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force) shall be deemed to be service provided by the builder to the buyer; (zzzh) to any person, by any other person, in relation to construction of complex. Explanation For the purpose of this sub-clause, construction of a complex which is intended for sale, wholly or partly, by a builder or any person authorized by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or a person authorized by the builder before the grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force) shall be deemed to be service provided by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of inputs or capital goods and outward transportation upto the place of removal; but excludes, - (A) service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for - (a) construction or execution of works contract of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or (B) services provided by way of renting of a motor vehicle, in so far as they relate to a motor vehicle which is not a capital goods; or (BA) service of general insurance business, servicing, repair and maintenance, in so far as they relate to a motor vehicle which is not a capital goods, except when used by - (a) a manufacturer of a motor vehicle in respect of a motor vehicle manufactured by such person; or (b) an insurance company in respect of a motor vehicle insured or reinsured by such person; or (C) such as those provided in relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity. 15. The expression works contract was defined in the Finance Act,1994, wef 1.7.2012, in Section 65B(54), as under: (54) works contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such property; 16. We find that the definition of nput service has an inclusion clause and an exclusion clause. The intention of the government could never have been to cover certain services in the inclusion part and at the same time cover them also in the exclusion clause. The cases cited by the learned advocate for the appellants support this view. The expression modernisation, renovation or repairs of a factory was appearing in the definition of inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definition of input service. This clearly shows that any service relating to modernization, renovation of the existing factory is admissible as input service which is the direct case of the appellant (emphasis supplied) 18. In the above decision reliance was placed on the earlier decision in the case of Ion Exchange (I) Ltd. Vs. Commissioner of C. Ex., Cus. S.T., Surat-II [2018 (12) G.S.T.L. 302 (Tri. - Ahmd.)] wherein it was held as under:- 8. A plain reading of the said provisions makes it clear that service utilized in relation to modernization, renovation and repair of the factory are definitely fall within the meaning of 'input service' even though; construction of a building or civil structure or part thereof has been placed under exclusion clause of the said definition of 'input service'. After amendment to the definition of the 'input service', a clarification issued by the Board vide Circular No. 943/4/2011-CX, dated 29-4-2011 whereunder answering to the questions raised on the eligibility of credit of service tax paid on construction service as an 'input service' used in modernization, renovation or repair, it has been clarifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract if used for repair and renovation of existing factory, the same falls under inclusion clause of definition of Input Service, accordingly, the Cenvat credit is admissible. The impugned order is set aside and the appeal is allowed. 21. Further, the Board itself in Circular No. 943/4/2011-CX, dated 29-4-2011 has clarified as under:- 4. Is the credit of input services used for repair or renovation of factory or office available? Credit of input services used for repair or renovation of factory or office is allowed. Services used in relation to renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, are specifically provided for in the inclusive part of the definition of input services. 22. In view of the above the Appellants have correctly taken credit of service tax paid/borne in respect of all services which were used for the Coke Oven Project as part of the modernization/renovation plan of the existing plant/factory. 23. The impugned order is, accordingly set aside and the appeal allowed. (Pronounced in the open Court on 04. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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