Custom, Excise & Service Tax Tribunal
Kamal Rub Plast Industries P Ltd vs Cce-Delhi-Iii on 29 September, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
Single Member Bench
Date of Hearing: 15/09/2015
Pronounced on : 29.09.2015
Appeal No. E/54818/2014-EX[SM]
(Arising out of OIA No.124-CE-DLH-2014 passed by Commissioner (Appeal), Central Excise, New Delhi]
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3.
Whether their Lordships wish to see the fair copy of the order?
4.
Whether order is to be circulated to the Department Authorities?
Kamal Rub Plast Industries P Ltd. Appellant
Vs.
CCE-Delhi-iii Respondent
Appearance:
Shri R.S. Sharma, Advocate for the appellant.
Shri M.R. Sharma, DR for the respondent.
Coram: Honble Smt.Sulekha Beevi C.S., Member (Judicial) Final Order No. 53009/2015 Per: Sulekha Beevi C.S. The appeal is filed challenging the impugned order which disallowed Cenvat credit of service tax paid on construction services.
2. The appellant is engaged in manufacturing Automotive Rubber parts and are also availing benefit of Cenvat credit. The appellant got constructed some portion of their existing factory block and also some repair work of old factory building by M/s Sunshine Constructions. The appellant took cenvat credit on the service tax paid on invoices issued for these services. The Department entertained the view that as the services have been used for construction of building which is neither for finished goods nor output services, but the output being property, the credit is not admissible. That credit is admissible only when the service is used in or in relation to manufacture of dutiable final product or in providing some taxable service. That construction service has not been used in relation to final product. Secondly ,that from 01/04/2011 the service of construction of a building for civil structure or part thereof has been specifically excluded from the definition of input service. That setting up, modernisation, renovation or repairs of a factory does not include construction or repairing of building. The show cause notice issued raising the allegations culminated in the order which disallowed the credit of Rs. 1,05,628/, and ordered recovery of the same with interest besides imposing equal amount of penalty. In appeal, the Commissioner (Appeals) upheld the same. Aggrieved, the appellants before the Tribunal.
3. The issue involved is whether the appellants are entitled to the credit on service tax paid in regard to construction services for the period April 2011 February 2012. The show cause notice for this period was issued on 28/03/2012. The definition of input service given under Rule 2(l) of Cenvat credit rules, 2004 after 01/04/2011 expressly excludes services used for construction of a building or a civil structure or a part thereof. The learned counsel for appellant submitted that these services were availed by the appellant and building/construction was completed and handed over before 01/04/2011. But the service provider had issued the invoice only on 26/04/2011.The learned counsel adverted to the CBEC circular No.354/73/2011-TRU and argued that the Board has issued clarification that credit is available on services excluded after 1/04/2011, if its provision had been completed before 01/04/2011. To substantiate the contention that the building has been completed before 01/04/2011 the appellant has produced the letter dated 28/01/2011 issued by M/s Sunshine Constructions wherein it is stated that the building is complete for handing over and that the final bill will be forwarded shortly. The appellant has produced copy of the ledger account showing the details of payment made to M/s Sunshine Constructions. This ledger account shows payment made through bank by appellant to Sunshine constructions from 26/07/2010 to 31/03/2011. Again, the memo for the sanction of Electricity load extension to the newly constructed building is also produced. It shows that extension of load was accorded to the factory on 31/01/2011. The copies of drafts for payment made by appellant towards Building and Other Construction Workers Welfare Cess, is furnished. This shows the dates of payment of above cess as 17/04/2010 and 22/06/2010. These documents establish that the provision of availing the construction service had been completed before 01/04/2011 but that invoice was raised only on 26/04/2011. In my view when the provision of construction service has been completed prior to 01/04/2011 denial of credit only because of the delay in issuing the invoice is not justified as the Board has clarified that credit is available if the provision of the service was completed before 01/04/2011. The appellant has been able to establish a case in their favor. I hold that the credit is admissible on these services as the provision has been completed prior to 01/04/2011.
4. In the result, the impugned order is set aside. The appeal is allowed with consequential reliefs if any.
(Pronounced in the open court on 29.09.2015) (Sulekha Beevi C.S.) Member (Judicial) Ritu 1