The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that claim of Cenvat Credit cannot be rejected without considering the evidence submitted by the appellant.
M/s Astoria Agro & Allied Inds. Pvt. Ltd, the appellant engaged in the manufacture of Sugar and Molasses. During the period 26.11.2016 to 30.6.2017, they availed Cenvat credit amounting to Rs. 4,34,680/- on service tax paid on civil construction service, preparation of draft project report and modification of old bullock cart and during the period 26.5.2016 to 30.3.2017 they availed Cenvat credit amounting to Rs. 3,16,116/- on a chequered plate, angles, channels and beams.
These services and goods, according to the department, were not input services and inputs as they were not having any nexus with the manufacturing and w.e.f. 1.4.2011 some of the services such as the laying of foundation and construction of civil structure were specifically excluded from the definition of input service.
Two show cause notices were issued to the appellant proposing denial of the Cenvat credit on the said services and goods and the same culminated in the Orders-in-Original confirming the demand and ordering its recovery along with interest and equal penalty. The Commissioner (Appeals) vide impugned order although upheld the demand but reduced the penalty to 10% of the Cenvat credit disallowed.
It was evident that the Commissioner has not gone into the details of the project report submitted by the appellant for the sugar plant modernization and bagasse-based cogeneration project in support of their submission that the Cenvat credit has been availed on the service of preparation of the project report for expansion of existing sugar plant with co-generation plant and the same is admissible.
To consider the claim made by the appellant, then it has to be looked into by the Commissioner and cannot be brushed aside merely being an afterthought. The bench comprising Mr Ajay Sharma, member (judicial) set aside the impugned orders and remanded the appeal to the Commissioner (Appeals) to be decided afresh within a period of three months, after giving reasonable opportunity of hearing to the appellants.
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