Appeal granted on cenvat credit rejection for ineligible service. Time-barred demand ruled out.

The Tribunal allowed the appeal challenging the rejection of cenvat credit on ineligible input service. It held in favor of the appellant, determining that the service in question was eligible for credit as it was labor-intensive and did not fall under Construction/Works Contract Service. The Tribunal ruled that the demand was time-barred, emphasizing the appellant's timely disclosure to the Department. The impugned order was set aside, granting the appellant relief on both merit and limitation grounds.

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Issues:
Appeal against rejection of cenvat credit on ineligible input service, categorization of service, time-barred demand, suppression of facts, applicability of extended period of limitation.

Analysis:
The appeal challenged the rejection of cenvat credit amounting to Rupees 13,28,482 on ineligible input service by the Commissioner (Appeals). The appellant, engaged in the manufacture of Sponge Iron & TMT bars, claimed the credit for Erection, Commissioning, and Installation Service, while the Department categorized it as Construction/Works Contract Service. The appellant argued that the service was pure labor without goods, supported by invoices and service tax challans. The appellant contended that the demand was time-barred, as credit was availed in 2012 and disclosed to the Department promptly. The appellant also cited a previous tribunal decision to support their claim for cenvat credit on the service in question.

The Tribunal considered the submissions and evidence presented by both parties. It noted that the service availed by the appellant was labor-intensive and did not involve goods, as evidenced by invoices and tax challans. The Tribunal found that the Department failed to establish that the input service fell under Construction Service/Works Contract Service. Citing relevant precedents, the Tribunal held in favor of the appellant regarding the eligibility of the service for cenvat credit. Additionally, the Tribunal addressed the issue of the extended period of limitation, noting that the appellant had duly informed the Department about the credit availed, thereby ruling that the demand was time-barred. The Tribunal emphasized the importance of proper documentation and disclosure by the appellant to avoid any allegations of suppression of facts.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal on both merit and limitation grounds. The demand for cenvat credit was deemed barred by limitation, and the appellant was granted consequential relief. The decision was pronounced in open court on 13/08/2019.

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