Tribunal grants CENVAT credit, rejects Department's demand, deems order unsustainable.

The Tribunal allowed the appellant's appeal, holding the service eligible for CENVAT credit as it was not classified as industrial construction service but as mechanical work. The Department's demand for credit within a larger limitation period was rejected due to lack of grounds for alleging suppression of facts. The Tribunal found the impugned order unsustainable in law and limitation, setting it aside in favor of the appellant.

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Issues:
- Eligibility of CENVAT credit for fabrication and erection work service
- Application of the larger period of limitation for demand of CENVAT credit
- Classification of service as industrial construction service

Eligibility of CENVAT Credit:
The appellant, engaged in manufacturing steel blooms, availed CENVAT credit for erection, commissioning, and installation of a Sinter Plant. The Department raised objections based on an audit report, alleging the service fell under "Industrial Construction Service" and was ineligible for credit. The appellant argued the service was mechanical work, not construction. They provided details of the work, invoices, and cited legal precedents supporting their position. The Tribunal found the service provider paid service tax under erection and commissioning, not construction. The description of work in the purchase order supported this. The Tribunal held the service was eligible for credit under input service definition.

Application of Larger Period of Limitation:
The Department invoked the larger period of limitation for demanding CENVAT credit from September 2011 to August 2012. The appellant argued the notice was time-barred, as the audit report was from May 2012, and all details were known to the Department. They asserted no suppression of facts existed. Citing legal precedents, the appellant contended that when transactions are recorded and verified, there is no suppression. The Tribunal agreed, stating the notice was issued late without grounds for alleging suppression, thus not warranting the extended period.

Classification of Service:
The Department contended the service included civil construction, falling under industrial construction service. The appellant argued the service was not construction but related to machinery and equipment. The Tribunal examined the nature of work, purchase order, and invoices. It found the service provider paid tax under erection and commissioning, not construction. Legal precedents supported that authorities over recipients cannot misclassify services. The Tribunal ruled in favor of the appellant, holding the service did not qualify as industrial construction service, allowing the appeal.

In conclusion, the Tribunal set aside the impugned order, finding it unsustainable in law and limitation. The appellant's appeal was allowed, emphasizing the service's eligibility for CENVAT credit and rejecting the application of the extended period of limitation.

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