New Jetty Construction which was for Expansion of existing Jetty includes in Input Service, can avail Service Tax Credit: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the Construction new jetty for expansion of the existing Jetty includes an Input service, and service tax credit can be availed.

Ms Dimple Gohil, Advocate appeared for the Appellant and Shri Vijay G Iyengar appeared for the Revenue.

Gujarat Chemical Port Limited, the appellant submitted that the services in question were used by the appellant for the expansion of the existing Jetty and not for setting up of a new Jetty. Even though the setting up of a new building or construction is excluded from the definition of Input Service, still, the appellant is entitled to Cenvat credit. 

The Revenue has denied Cenvat credit on Management & Business Consultant service and Technical Inspection and certification service only on the ground that these services were used in respect of the ‘setting up’ of a new Jetty. 

It was evident that the appellant already had a Jetty in operation and they proposed to construct one more Jetty adjacent to the existing Jetty. The additional Jetty is nothing but the expansion of the existing Jetty.  Therefore, the expansion, renovation or modernization of the existing jetty, and construction are still covered in the inclusion clause of the definition of Input Service under Rule 2(l) of Cenvat Credit Rules, 2004.

As per the above-said rule, the manufacturer or producer of final products shall be allowed to take CENVAT credit of the duty paid on inputs lying in stock or in process or inputs contained in the final products lying in stock on the date on which any goods manufactured by the said manufacturer or producer cease to be exempted goods or any goods become excisable.

While allowing the appeal, held that a Coram comprising of Mr Ramesh Nair, Member (Judicial)  “even though setting up of a new factory, construction of the building of service provider is not excluded from the definition of Input service.  In this case, the construction of the Jetty is clearly likethe expansion of the existing Jetty therefore, credit is admissible.”The impugned order was set aside.

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