The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad remanded back matter for fresh adjudication as there was no finding on the nature of input services.
M/s. Shubhalakshmi Polyesters Ltd. filed present appeal being aggrieved with the order under which the Commissioner has disallowed the cenvat credit availed by the Appellant on various input services. The appellant has installed the plant and availed the cenvat credit of various input services viz., Vastu consulting service, Construction Contractors Services, etc. during the setting up.
An enquiry against the appellant was initiated and it was revealed that appellant had availed the input services credit on various services prior to the commencement of the commercial production in their factory and credit availed by the appellant on various input services do not fall in the ambit of the definition of “input service”.
A show cause notice was issued to the appellant. In adjudication proceeding, Commissioner of Central Excise confirmed the cenvat demand of Rs. 1,13,88,436/- alongwith interest and also imposed equal amount of penalty under Rule 15(2) of Cenvat Credit Rules,2004 read with Section 11 AC of the Central Excise Act, 1944. Hence this appeal has been preferred before the Tribunal.
S. S. Gupta with Mehul Jiwani, learned Chartered Accountant appearing on behalf of Appellant submitted that the service relating to setting up of factory of Plant and Machinery has been covered under the ‘main part’ of the definition i.e used in relation to manufacture of the goods. Although setting up the factory is not manufacture in itself, it is an activity directly in relation to manufacture.
The Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “On perusal of the case records, we find that the nature of use of the disputed services as explained by the appellant was not properly addressed by the adjudicating authority in the impugned order passed by him. Hence, we are of the considered view that the matter should be remanded to the original authority for a proper fact finding on issue of eligibility of Cenvat credit on the disputed services.”
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