2017 (11) TMI 1720 - AT - Central Excise

Tribunal grants CENVAT credit for construction services within factory premises post 1.4.2011

The Tribunal allowed the Appeals, overturning the Orders-in-Appeal by the Commissioner (Appeals I), Central Excise, Customs, Vadodara II. It held that ... CENVAT Credit - whether CENVAT credit of the service tax paid on repair and maintenance service at their factory premises after 1.4.2011 is admissible or otherwise? - Held that:- This Tribunal considering the scope of amended definition of ‘input service’ under Rule 2(l) of the Cenvat Credit Rules, 2004 and the Board’s Circular issued pursuant to the said amendment, in Ion Exchange (I) Ltd’s case [2017 (12) TMI 151 - CESTAT AHMEDABAD], held that construction service relating to repair work inside the factory premises would continue to fall within the meaning of ‘input service’ under Rule 2(l) of the Cenvat Credit Rules, 2004 - Credit allowed - appeal allowed - decided in favor of appellant. Issues:Admissibility of CENVAT credit for service tax paid on repair and maintenance service at factory premises post 1.4.2011.Analysis:The judgment pertains to two Appeals challenging Orders-in-Appeal passed by the Commissioner (Appeals I), Central Excise, Customs, Vadodara II. The central issue revolves around the admissibility of CENVAT credit for service tax paid on repair and maintenance service at the factory premises after 1.4.2011. The Appellant's advocate argues that the service received was for repair and maintenance work inside the factory, supported by relevant invoices. Reference is made to a previous Tribunal ruling in the case of M/s Ion Exchange (I) Ltd., which allowed credit for construction service used in repair and maintenance work post 1.4.2011.The Advocate for the Revenue reiterates the Commissioner (Appeals)'s findings, emphasizing that post 1.4.2011, construction services are specifically excluded from the definition of 'input service,' thereby rendering the Appellants ineligible for credit on repair and maintenance services at the factory premises. Upon review, the Tribunal examines the amended definition of 'input service' under Rule 2(l) of the Cenvat Credit Rules, 2004, and relevant Board Circulars. Citing the precedent set in the Ion Exchange (I) Ltd. case, the Tribunal concludes that construction services related to repair work within factory premises fall within the ambit of 'input service.' Consequently, the impugned order is set aside, and the Appeals are allowed with any necessary consequential relief as per the law.