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of <h1>High Court supports Assessee's CENVAT Credit claim for Railway Siding construction, affirming eligibility under tax rules.</h1> <h3>Commissioner, Central Excise, Customs And Service Tax Versus M/s Vimla Infrastructure India Pvt. Ltd.</h3> Commissioner, Central Excise, Customs And Service Tax Versus M/s Vimla Infrastructure India Pvt. Ltd. - 2018 (13) G. S. T. L. 57 (Chhattisgarh) Issues:1. Entitlement to CENVAT Credit for a service provider.2. Interpretation of the definition of 'Input' and 'Input Service' under CENVAT Credit Rules, 2004.Issue 1: Entitlement to CENVAT Credit for a service provider:The Revenue appealed against the Tribunal's decision denying CENVAT Credit to a service provider. The appellant argued that the respondent, engaged in providing services by constructing Railway Sidings, was not entitled to CENVAT Credit as it was not involved in manufacturing activities. The appellant contended that the relationship between the respondent and the service users was that of a Licensor and Licensee, not involving manufacturing. The Tribunal's reliance on previous cases was challenged by the appellant.In response, the respondent's counsel argued that the construction of Railway Sidings involved using goods like Cement and Iron, which are essential for manufacturing capital goods. Even though these goods could be reused, their temporary use in construction qualified the respondent for CENVAT Credit. The respondent's entitlement to CENVAT Credit was supported by the Commissioner and the Tribunal.Issue 2: Interpretation of the definition of 'Input' and 'Input Service' under CENVAT Credit Rules, 2004:The definition of 'Input' and 'Input Service' under CENVAT Credit Rules, 2004 was crucial in determining the eligibility for CENVAT Credit. 'Input' encompassed goods used for providing any output service, excluding specific items like diesel oil and goods used for construction or support of capital goods. Similarly, 'Input Service' included services used for providing an output service, with exclusions for certain services primarily for personal use.The respondent had constructed Railway Sidings for marshaling and loading goods, using materials like MBC Sleepers. The Commissioner and Tribunal found that the goods and services used in setting up the Railway Sidings were eligible for CENVAT Credit as they facilitated taxable services. The construction activity by the respondent for providing 'Cargo Handling Services' qualified as a taxable service, making them eligible for CENVAT Credit under the Rules.The judgment referenced legal precedents from the Andhra Pradesh High Court and the Gujarat High Court, supporting the interpretation that goods used in relation to manufacturing final products or providing taxable services were eligible for CENVAT Credit. The Gujarat High Court had previously allowed CENVAT Credit for a company constructing a Jetty for Port Services. Ultimately, the High Court ruled in favor of the Assessee Company, dismissing the appeal by the Revenue.
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