COMMISSIONER OF CUSTOMS Vs. MARK EXHAUST SYSTEMS LTD.
LAWS(CE)-2015-2-94
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on February 26,2015

COMMISSIONER OF CUSTOMS Appellant
VERSUS
Mark Exhaust Systems Ltd. Respondents

JUDGEMENT

ASHOK JINDAL,MEMBER (J) - (1.)REVENUE is in appeal against the impugned order wherein the learned Commissioner (Appeals) has allowed input service credit on construction service claimed by the respondents for construction of gas bank plate, construction of drive way, construction of paint shop, land/earth filling with compaction, fabrication work, digging of gutter and laying rainwater pipes, sound proofing of rooms, construction of ETP, underground tanks and sludge pits, excavation, RCC work, construction of gas godown, construction of store, flooring work, fencing MS railing, construction of foundation of machines, fixing of doors, windows, dismantling of RCC and PCC road, etc., on the premise that same do not qualify as input service credit as per Rule 2(1) of the Cenvat Credit Rules, 2004. A show cause notice was issued to the respondents to deny the Cenvat credit. The adjudicating authority denied the Cenvat credit, confirmed the demand along with interest and also imposed a penalty. Respondents filed appeal against the order before learned Commissioner (Appeals) who examined the issue in detail and thereafter allowed the Cenvat credit on the above items. Against the said order, Revenue is in appeal before me on the ground that services availed by the respondents have no nexus directly with the manufacturing activity. Heard the learned AR. Considered the submissions.
The only ground for filing the appeal is that services of construction services are not construction services as per Rule 2(1) of Cenvat Credit Rules, 2004. The provisions of Rule 2(1) of Cenvat Credit Rules, 2004 are extracted herein below: -

"2(1) "Input service" means any service -

(i) used by a provider of taxable service for providing an output service, or,

(ii) used by the 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 relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit relating, share registry, and security, inward transportation of inputs or capital goods and outward transportation up to the place of removal."

On going through the said provisions, I find that the inclusive part of the provisions of Rule 2(1) of Cenvat Credit Rules, 2004 provides for availment of Cenvat credit for setting up, of modernization, renovation or repairs in the factory premises and all the services mentioned hereinabove are only related to these services. In these circumstances, I am unable to understand why the appeal has been filed by the Revenue before this Tribunal. As the learned Commissioner (Appeals) has examined the issue in detail and thereafter concluded that all the services are services of inclusive part of the "inputs services" as per Rule 2(1) of the Cenvat Credit Rules, 2004. Therefore, I hold that respondents are entitled to take Cenvat credit on construction services and also do not find any infirmity in the impugned order and same is upheld. The appeal filed by the Revenue is dismissed.

(Dictated and pronounced in the open Court)

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