Cenvat credit on pre-amendment construction input services cannot be denied retrospectively or for later availment.

Cenvat credit on construction-related input services received in 2005-06 could not be denied merely because the credit was availed after the 1 April 2011 amendment excluding construction services from the definition of input service; the entitlement accrued when the services were received, and the later amendment could not retrospectively withdraw it. The credit also was not barred by limitation, as the Cenvat Credit Rules did not prescribe any fixed period for availing credit on received input services before 2014. The denial of credit was therefore unsustainable, and the assessee was held entitled to the credit.

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Issues: Whether Cenvat credit on construction-related input services received prior to 1 April 2011 could be denied because the credit was availed after the amendment to the definition of input service, and whether the availment was barred by limitation.

Analysis: The services in question were received in 2005-06 for construction of a kiln, while the amendment excluding construction services from the definition of input service operated from 1 April 2011. The credit had accrued when the services were received, and a subsequent amendment could not operate retrospectively to take away that entitlement. The record also showed that, before 2014, the Cenvat Credit Rules did not prescribe a fixed period for availing credit on received input services, so the credit could not be rejected merely because it was taken later.

Conclusion: The denial of credit was unsustainable. The assessee was entitled to the Cenvat credit, and the demand was set aside.

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