TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 92
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....ice Tax Appellate Tribunal, Kolkata (the 'Tribunal') in Excise Appeal No.76215 of 2016. The revenue has raised the following substantial questions of law for consideration: (i) Whether the Learned Tribunal has committed gross error of law by not fully appreciating the definition of 'input service' as defined under Rule 2(l) of Cenvat Credit Rules, 2004 and the applicability of the same in the facts and circumstances of the instant case? (ii) Whether the Learned Tribunal is right and justified in allowing the Cenvat Credit on the Works Contract Services in so far as they are used for laying of foundation or making of structure for support of capital goods which are excluded from the definition of 'input service' as defined in Rule 2(l) ....
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....ommissioner of Customs-I vs. Aasu Exim Pvt. Ltd. reported in 2018 (11) G.S.T.L. 226 (SC). The said case before the Hon'ble Supreme Court was an appeal under Section 130E(b) of the Customs Act, 1962 seeking to assail the correctness of the order of the Tribunal in relation to classification/rate of duty. In terms of the said provision, an appeal as against the order passed by the Tribunal where the issue relates to rate of duty or the classification of the products, lies to the Hon'ble Supreme Court and not to the High Courts. Nevertheless, the ratio laid down in the decision of the Hon'ble Supreme Court assumes importance in the case on hand. In paragraph 9 of the said judgement it has been held as follows: 9. In "Steel Authority of India....
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....led by the revenue under Section 35G is also identically worded and what is required to be seen by this Court is as to whether the question raised involves any substantial question of law which has not been answered or on which there is conflict of decisions necessitating a resolution. The second aspect is that when the Tribunal, on consideration of the material and relevant facts had arrived at a conclusion which is a possible conclusion, the same must be allowed to rest even if this Court is inclined to take another view of the matter. Bearing the above legal principle in mind, we propose to examine the case on hand. Firstly, we take note of the submission of Mr. Kundalia, learned standing counsel for the appellant that the Tribunal com....
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....tory provision, rather on a wrong understanding of the statutory provision has worded the show cause notice. The observations of the Assessing Officer stating that in terms of provisions of Rule 2(l), services provided under Works Contract Services have been straightaway excluded from the ambit of input service and hence it appears that availment of such credit is not at all admissible. This conclusion, at the very threshold by the Assessing Officer is on a wrong noting of the provision or in other words a wrong understanding of the statutory provision. Be that as it may, the assessee had submitted their reply and the case was adjudicated. Interestingly, when the case was adjudicated the scope of adjudication took a different turn and the A....
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....e further find that the appellant's factory is admittedly huge existing petroleum industry and working for decades. The ECIS service was used for expansion, renovation and modernization of overall existing petroleum plant. As per inclusion clause of the definition the services relating to modernization, renovation is an admissible input service. In our view, even though service of construction of building or civil structure are falling under the exclusion clause but even if similar service is used for renovation and modernization of existing factory, the credit is admissible. The exclusion applies only in respect of such service as specified therein which are used for initial setting of the factory. It is pertinent to note that when the exc....
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.... service tax has been levied only on 40% of the total value, it essentially means that service tax has been paid only on the service portion." On a reading of the above paragraph, it will clearly show that the decision can be clearly applied to the facts and circumstances of the case. In the said decision it has been held that even though services of construction of building or civil structure are falling under the exclusion clause but even if similar service is used for renovation and modernisation of existing factory, the credit is admissible. The exclusion applies only in respect of such service as specified therein which are used for initial setting of the factory. Thus, it is nobody's case much less revenue's case that project undert....