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TMI Blog2021 (7) TMI 1383X X X X Extracts X X X X X X X X Extracts X X X X ..... ks contract services/construction services, hence, excluded from the purview of definition of "input service" under Rule 2(l) of the CENVAT Credit Rules, 2004 ("Credit Rules"). SCN dated 16.5.2017 3. In the above factual background, a Show Cause Notice dated 16.5.2017 was issued to the Appellant proposing to recover the alleged inadmissible CENVAT credit amounting to Rs. 39,33,062availed on services which were in the nature of construction services and does not qualify as input service as defined in Rule 2(l) of the Credit Rules. The demand was raised by invoking extended period of limitation under Section 11A(4) of the Central Excise Act, 1944, alleging that the Appellant had intentionally suppressed the availment of irregular credit with an intention to evade payment of duty, which would have otherwise gone unnoticed, had the audit was not conducted. 4. The Appellant vide its letter dated 9.10.2017 filed a detailed reply refuting all the allegations in the SCN submitting, inter alia, that services relating to repair and maintenance of factory falls under the inclusion portion of input services defined in Rule 2(l), and thus entitled to Cenvat credit. Further, the CBEC Circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice..............used in or in relation to the manufacture of final products" of the definition of input service. It is submitted that even post the amendment in definition of input service w.e.f. 01.04.2011, the "means clause‟ continues to remain as same. The "means clause‟ of the definition is very widely worded and words such as "directly or indirectly‟ and "in or in relation to‟, further expand the scope of the definition. Reliance is paced on the decision of CCE v. Rajasthan State Chemical Works, 1999 (55) ELT 444 (SC) and Union Carbide India Ltd. v. CCE, 1996 (86) ELT 613 (Tri-LB). 9. Further, it is urged that what has been excluded w.e.f. 01.04.2011, is the construction services and works contract services when used for specified purposes i.e. construction or execution of works contract of a building or a civil structure and laying of foundation or making structures for support of capital goods, as mentioned in sub-clauses (a) and (b) of exclusion clause (A) of Rule 2(l). Besides these two categories of services, no other service is excluded from the purview of input service definition as far as clause (A) is concerned. In the present case, the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the definition of input service w.e.f. 01.04.2011, credit on services used in relation to modernization, repair and renovation would still be admissible. 14. Further, it is urged that in the present matter, Cenvat credit has been denied on the ground that the services are not covered under the definition of input service in Rule 2(l) of the Credit Rules. Therefore, the appellant in the table below has demonstrated the nature of services/activity along with the usage of services duly supported with relevant case-laws: Sl. No. Services in question Usage of service Supporting Case-laws 1. Floor repair and dismantling work Appellant availed services for repair of floors of different manufacturing sections, which included dismantling of the existent RCC (reinforced cement concrete) in patches which required repair, shifting of the resultant debris and finally, fixing of the floor-patch. Ion Exchange Ltd. vs. CCE&ST, Surat-II - 2017 (12) TMI 151 - CESTAT Ahmedabad; Bharat Oman Refineries Ltd. vs. CCE - 2019 (2) TMI 746 - CESTAT New Delhi; Sanofi India Ltd. vs. CCE - 2018 (10) TMI 1320 - CESTAT Ahmedabad; 2. Pipe-fitting/Fixing, dismantling and fabrication A major ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey repairing etc. Lenovo India Pvt. Ltd v. CCE, 2017 (52) STR 63 (Tri.-Chennai); Apcotex Industries Ltd. v. CCE & ST, Raigad, 2019 (7) 681 - CESTAT Mumbai Cadila Healthcare Ltd. v. CCE & ST, Vadodara-I, 2018 (2) TMI 545 - CESTAT Ahmedabad India Cements Ltd v. CCE, 2018-VIL-426-CESTAT-CHE-CE; Allen Career Institute v. CGST, CC&CE, 2018 (7) TMI 337 - CESTAT NEW DELHI; Knoah Solutions Pvt. Ltd. v. CCE&ST, Hyderabad-IV, 2016 (44) S.T.R. 628 (Tri. - Hyd.); 15. It is further urged that in the entire proceedings, it has nowhere been disputed that such services were related to repair and maintenance. Rather, the Ld. Assistant Commissioner agreed that services relating to modernization, renovation and repairs of a factory falls under the "inclusive‟ part of input service defined under Rule 2(l) of the Credit Rules. 16. Further, for illustrative purposes, attention is invited to Bill No. 37 dated 19.5.2014 issued by KKV Builders, wherein it is clear from mere perusal that the same pertains to labour charges only, without any material/works contract/construction etc. Similarly, Bill No. 1, dated 02.04.2013 was issued for fixing of roof-sheet and perusal of the invoice cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the submissions made by the litigants, must be set aside, being a non-speaking order: Kranti Associates Pvt. Ltd. & Anr. Vs. Sh. Masood Ahmed Khan & Ors. - 2011 (273) ELT 345 (SC); General Security & Information Services vs. Commissioner of CGST & C. Ex., Kolkata - 2020 (372) ELT 553 (Cal.); 21. Further, he urges that in Para 19 of the OIO dated 30.8.2018, the Assistant Commissioner has confirmed the demand under Section 73 of the Finance Act, 1994, whereas no such proposal was made in the SCN. Further, in the operative portion of the OIO, the Assistant Commissioner has confirmed the demand under Section 11A of the Excise Act which reflects complete non-application of mind, and thus the OIO dated 30.8.2018 upheld by the Ld. Commissioner (Appeals) is liable to be set aside. THE SCN IS VAGUE AND INCOHERENT AND THUS, CONFIRMATION OF DEMAND BASED ON SUCH SCN IS UNSUSTAINABLE 22. It is urged that the SCN was issued proposing demand of CENVAT credit on one-line assertion that the Appellant had availed inadmissible credit on the subject service, referring to the audit conducted by the Department.The SCN was issued without examining the nature and use of the subject service and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extended period of limitation is not invokable and penalty is not imposable. Since demand is not sustainable, penalty is also not imposable, and interest is not recoverable. 28. In view of the above, it is humbly prayed that the impugned order passed by the Ld. Commissioner (Appeals) is not sustainable and is liable to be set aside, and the appeal filed by the Appellant may be allowed in full, with consequential relief. 29. Ld. Authorised Representative for the Department reiterates the findings in the impugned order. 30. Having considered the rival contentions, I find that the appellant has carried out repair and maintenance work. There is no specific disallowance under Rule 2 (l) with respect to repair and maintenance work. The specific disallowance is only with respect to the new construction undertaken by the assessee. 31. In this view of the matter, I hold that the appellant is entitled to cenvat credit on repair and maintenance services received for repair and maintenance of plant and machinery, in the factory premises. Accordingly, the impugned order is set aside. The appeal is allowed. The appellant is entitled to consequential benefits in accordance with law. [Operat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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