TaxTMI 
TaxTMI 
2026 (7) TMI 1192
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....ncy/video tape production agency service. For the purpose of payment of service tax and for compliance with the service tax statute, the appellants are registered with jurisdictional Service Tax authorities holding Service Tax registration No. AAAAY0557FST001. The appellants are eligible to avail CENVAT credit of duties inputs, capital goods and service tax paid on input services received/ used by them for providing output services in terms of CENVAT Credit Rules, 2004 (CCR). 2.2 During the course of EA-2000 audit of accounts of the appellants for the period October, 2014 to June, 2017, the departmental authorities have noticed that the CENVAT credit availed by the appellants in respect of 'RCC column strengthening' by means of a steel plate covering, using anchor fasteners, is in relation to works contract service of original work, for which the service provider has paid service tax by taking abatement and therefore taking CENVAT credit on such input service is ineligible in terms of exclusion clause under Rule 2(l) of CCR, 2004. The department had initiated show cause proceedings for demand of CENVAT credit by issue of Show Cause Cum Demand Notice (SCN) dated 16.03.2020 for re....
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....CCR, 2004. In support of their stand, he produced copy of the Chartered Accountant's Certificate dated 26.06.2024 stating that the disputed value of services of an amount of Rs.57,20,892/- involving service tax payment of Rs.3,05,114/- have been duly accounted under the sub-heading 'Repairs and Maintenance-Building'. 3.2 Further, he submitted that the allegation of suppression in not sustainable as the complete details have been furnished in their statutory returns and the entire basis of the SCN is based on the information disclosed in their statutory records. Thus, he claimed that demand of tax by invoking extended period and imposition of penalty is not sustainable. 3.3 In this regard, Learned Chartered Accountant he relied upon the decisions in the following cases: (i) Reliance Industries Ltd. Vs. Commissioner of Central Excise & Service Tax, Rajkot - 2022-VIL-281-CESTAT-AHM-CE (ii) Commissioner of Central Excise & Customs Vs. Reliance Industries Limited - 2023-VIL-59-SC-CE (iii) Jai Balaji Industries Limited Vs. Commissioner of Central Excise & Service Tax, Durgapur-2022-VIL-571-CESTAT-KOL-CE Thus, he claimed that the impugned order is not s....
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....on/ document/ evidence, it is not possible to verify the facts to arrive at any conclusion in favour of the appellant." However, on perusal of the SCN dated 16.03.2020, the details of four invoices have been provided at paragraph 2 and the same has also been mentioned as one of the relied upon document at paragraph 13. Therefore, the findings of the learned Commissioner (Appeals) is incorrect and on this ground alone the impugned order is liable to be set aside. 7.2 On perusal of the details submitted by the appellants, more particularly invoices No. FE-95/YRF-04/15-16, FE-95A/YRF-04/15-16, FE95B/YRF-04/15-16 and FE-96/YRF-05/15-16 all dated 07.11.2015, it is clear that the service tax has been paid on disputed input services. On the basis of such prescribed duty paying documents, the appellants have rightly taken credit of such service tax paid as input service under Rule 3 of the CENVAT Credit Rules, 2004 (CCR of 2004). In this regard, I find that it is an undisputed fact on record that applicable service tax has been paid on the input services. There is also no dispute that the appellants are eligible to avail CENVAT Credit. The dispute therefore remains to be examined is ....
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.... part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of service portion in the execution of a works contract or construction service as listed under clause (b) of section 66E of the Act; xxx xxx xxx xxx (l) 'input service' means any service,-- (i) services provided or agreed to be provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India where service tax is paid by the manufacturer or the provider of output service being importer of goods as the person liable for paying service tax for the said taxable services and the said imported goods are his inputs or capital goods; or (ii) any service used by a provider of output service for providing an output service; or (iii) any service used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal,; and includes services used in relat....
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....ods. Further, in Rule 2(k) ibid the service portion of the works contract is excluded as exception, and this cannot be construed as being excluded from the definition of 'input', as decided by the original authority and the same having been upheld in the impugned order, which is contrary to the provisions of CENVAT statute as discussed above. 8.3 Plain reading of the phrase 'input service' as defined under Rule 2 (l) of CCR, 2004 as above, I find that it provides for three categories of services, out of which first category refers to : (1) 'means' part of the definition, generally cover services which are used directly or indirectly, in or in relation to manufacture of final goods or for providing of output services; and second category refers to (2) 'inclusion' part of the definition, specifically state certain services used in relation to various activities, which is used in relation to the manufacture of final products or provision of output services, both of which are covered under the scope of 'input services'. Further, the third category, (3) 'exclusion' part of the definition provided under Clauses (A), (B), (BA) and (C), specifically provide fo....
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....e 'means' and 'inclusion' part of the definition of 'input service' under Rule 2(l) ibid and are not covered by 'exclusion' part of the definition, I find that there is no legal basis for denial of CENVAT Credit on these repair or maintenance/ renovation service. 8.6 In view of the above discussions, I find that the grounds for rejection of CENVAT Credit on input services in the order of the adjudicating authority under Rule 2(k) ibid, which was upheld by the learned Commissioner (Appeals) is not proper and justified as neither the factual details nor the legal position were examined. In view of the above, I am of the considered view that the grounds on which the inputs service credit was disallowed in the original order, which was upheld by the impugned order, have no legal basis and accordingly is liable to be dismissed as being not legally sustainable. 8.7 As I have disposed the appeal on merits and factual matrix of the case, I am not recording any findings on other submissions made by the appellants, in respect of invocation of extended period and imposition of penalty. Further, as rightly held in a number of decisions by the higher judicial forum, in respect of issues c....
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....its manufacturing facilities in their Jamnagar refinery by setting of facilities such as Coke Gasification Island, Air Separation Unit (ASU), CoRecovery Unit, Sulphur Recovery Unit (SRU),Refinery Off-Gas Cracker Plant (ROGC),Low Density Polyethylene Plant (LDPE), Linear Low Density Polythylene Plant (LLDPE), the Captive Power Plant etc. This project was nomenclated by the appellant as the J3 project. The erection, commission, installation service and works contract service in dispute were rendered under 81 contracts by 41 contractors/ service providers. ................................ 4.10 Without prejudice to our above findings, we 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....
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....rvice Tax paid on such service is eligible to credit. Undisputedly, the appellant carried out modernization/renovation work to meet USA, FDA guidelines for manufacture of their products therefore, the service tax paid on such construction service is eligible to credit. In the result, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per the law." 19. Reliance was also placed on the decision in the case of Mahle Engines Components India P. Ltd Vs. Commr. Of C. Ex., Indore -2018 (363) E.L.T. 1150 (Tri. - Del.) wherein it was held as under:- "6. With regard to the availment of Cenvat credit of the Service tax on painting of the factory building & machinery, I find that the Authorities below have denied Cenvat credit on the ground the construction of building or civil structure is falling under the Exclusion Clause contained in the definition of "input service" under Rule 2(1) of the Rules. However, on perusal of the sample copies of the invoices issued by the service provider, I find that the services were provided in relation to the painting of the factory building and plant & machinery, which are appropriately classifia....