PHALNAX LABS Pvt. Ltd. Versus CCT, VISAKHAPATNAM GST
Central Excise
2018 (11) TMI 68 – CESTAT HYDERABAD – TMI
CESTAT HYDERABAD – AT
Dated:- 6-9-2018
Appeal No. E/30482/2018 – A/31190/2018
Central Excise
Mr. M.V. Ravindran, Member (Judicial)
Shri M.V.S. Sridhar, Advocate for the Appellant.
Shri Arun Kumar, Dy. Commissioner /AR for the Respondent.
ORDER
Per: Mr. M.V. Ravindran
1. This appeal is directed against Order-in-Appeal No. VIZ-EXCUS- 002-APP-110-17-18, Dated 19.01.2018.
2. Heard both sides and perused the records.
3. The relevant issue that falls for consideration is on scrutiny of appellant's records, it was noticed by the audit party that appellant had availed ineligible CENVAT credit in respect of services rendered by the service providers while setting up of their plant. Show cause notice was issued for demand and reversal of such CENVAT credit. Appellant contested the show cause notice on merits as well as on limitation. Adjudicating authority
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definition and submits that what is contemplated from this view. CENVAT credit of service tax paid on the services for construction of works contract of a building or a civil structure or part thereof or laying of foundation and making of structures for support of capital goods. It is his submission that both the exclusion clauses would not apply to them. It is his further submission that the adjudicating authority has considered the activity of the service provider as works contract which is not a case as these are the labour charges which are awarded to the contractor.
5. Ld. DR on the other hand draws my attention to the findings recorded by the first appellate authority in paras 11 to 13 of the Order-in-Appeal. It is his submission that the first appellate authority has recorded that these services which are received by the appellant are not coextensively used to the manufacture of final products and the Hon'ble High Court of Andhra Pradesh in the case of Rayalaseema Hi-Strength
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utput 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 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, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation up to the place of removal;
but excludes,-
(A) service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereina
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s centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee”
7. From the above reproduced definition, it seems that Revenue wants to deny the CENVAT credit to the appellant on the ground that input services were covered in the Exclusion Clause A(b) laying of foundation or making of structure for support of capital goods. From the allegation in the show cause notice and the Annexure-B to the show cause notice, I find that the services which were rendered by the service providers were in respect of capital goods and not for laying of foundation or making structures for support of capital goods. Further, it has to be recorded in the findings of the first appellate authority that these services were not used coextensively for manufacture of final products, also seems to be not correct from the factual position as the appellant
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