Tribunal allows cenvat credit pre-2011, finds demand time-barred

The Tribunal ruled in favor of the appellant, holding that the cenvat credit on construction services was admissible as input services before 1.4.2011. The Tribunal found the demand for alleged inadmissible credit to be time-barred, as the appellant had disclosed all details in their statutory records with no wilful suppression. The impugned order was set aside, and the appeal was allowed with consequential relief, as the order was deemed unsustainable in law.

---

---

Issues:
- Admissibility of cenvat credit on construction services
- Allegation of availing inadmissible credit
- Scope of input services prior to 1.4.2011
- Time-barred demand for alleged inadmissible credit

Admissibility of cenvat credit on construction services:
The appellant, engaged in manufacturing various products, availed service tax credit for construction of a shopping complex outside the factory premises. The appellant argued that the construction was within the factory compound and all expenses were borne by them. They provided relevant documents and records to support their claim, but the adjudicating authority failed to consider these facts. The Tribunal found that construction services were considered input services before 1.4.2011, making the credit admissible at the time.

Allegation of availing inadmissible credit:
The impugned order confirmed a demand alleging inadmissible credit availed by the appellant. However, the Tribunal noted that the department did not consider the appellant's statutory records, including TR-6 challan and ER-1 returns, which reflected the credit availed. The order went beyond the scope of the show cause notice, as it focused on the credit not being related to the manufacture of the final product.

Scope of input services prior to 1.4.2011:
The appellant argued that the demand was for a period prior to the amendment to Cenvat Credit Rules, which excluded construction services from the definition of input services. The Tribunal agreed that the demand for the period 2007 fell within the scope of services used in relation to business activities at that time.

Time-barred demand for alleged inadmissible credit:
The show cause notice for the alleged inadmissible credit was issued invoking the extended period, but the appellant contended that all details were disclosed in their statutory records and no suppression occurred. The Tribunal found the demand to be time-barred, as there was no wilful declaration or suppression by the appellant, and all records were available to the department.

In conclusion, the Tribunal set aside the impugned order, ruling in favor of the appellant due to the admissibility of the credit, lack of suppression of facts, and the demand being time-barred. The order was deemed unsustainable in law, and the appeal was allowed with consequential relief.

---