The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), invalidated order as vague and non -speaking on the ground that there was non-examination of whether service fall under exclusion clause of input service.
The appeal has been filed by M/s. CSCI Steel Corporation India Pvt Ltd, the appellant against denial of Cenvat Credit.
The issue involved is regarding availability of Cenvat Credit on various services viz. Management Consultancy services, Legal and Professional services of / and services used mainly in erection and commissioning, laying of foundation and making structure in support of capital goods/ machinery and also other services such as rent-a-cab, hotel services, insurance services, architectural services etc., and whether they are valid input services within the meaning of Rule 2(l) of the Cenvat Credit Rules, 2004 during the period 2012-14.
The Counsel for the appellant argued that the appellant reversed the entire alleged wrongly availed Credit and that the appellant had reversed the entire Credit on account of insistence by the Audit Party along with amount of penalty of Rs. 1 crore under protest.
The Counsel further argued that Cenvat Credit has been sought to be denied because during the material period, though registered under Central Excise laws, the Appellant had not yet started commercial production and hence, all the services availed by them was deemed to be towards “setting up” of the factory and as such, assumed to be excluded from the scope of the term “input service” under Rule 2(l) of CCR, 2004.
It is seen that the order of Commissioner examines the omission of words in initial “setting up” in the inclusive part of the definition of input service, but fails to examine the admissibility of input services credit of these services under the main part of the definition of input service.
The Bench comprising Ramesh Nair, Judicial Member and Rju, Technical Member observed that “The impugned order does not examine the admissibility of Cenvat Credit of these services in the main part of the definition, but relies solely on the changes made in the inclusive part of definition. It is seen that the impugned order does not examine which service would fall under which exclusion clause. The order in this regard is vague and not a speaking order.”
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