Commissioner Of Customs vs M/S. Mark Exhaust Systems Ltd

[Arising out of Order-In-Appeal No. DLI-EXCUS-003-APP-367-13-14 dated 26/07/2013 passed by Commissioner of Central Excise, (Appeals), Delhi III, Gurgaon ]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should 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 Departmental authorities?

Commissioner of Customs Appellants

Delhi III, Gurgaon

Vs.

M/s. Mark Exhaust Systems Ltd. Respondent

Appearance:

Shri V P Batra, AR for the Appellants

None for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 26.2.2015

FINAL ORDER NO. A/ 50586 /2015-Ex(SM)

Per Ashok Jindal :

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, undergrouond 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(l) 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.

2. Heard the leanred AR. Considered the submissions.

3. The only ground for filing the appeal is that services of construction services are not construction services as per Rule2(l) of Cenvat Credit Rules, 2004. The provisions of Rule 2(l) of CCR 2004 are extracted herein below:-

2(l)?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 :

4. On going through the said provisions, I find that the inclusive part of the provisions of Rule 2(l) of CCR, 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(l) 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 )

( Ashok Jindal ) Member(Judicial)

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