ISMT LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellant is a manufacturer and had availed construction service for construction of factory building, installation of plant and machinery etc. during the period Feb., 2010 to Dec., 2010 and the bills have been raised by the contractor and service provider during the period June - Dec., 2010 and the last payment for the bills, which are about 11 in number were made on 21 -1 -2011. Service Tax has been charged on the construction service by the service provider, which was paid by the appellant. The appellant took credit of the tax paid on input services, which were received on 28 -4 -2011. In pursuance of Order -in -Original, CENVAT Credit so availed was found to be not admissible in view of the amendment under Section 2(1)(sic) of the Cenvat Credit Rules, 2004, wherein clause (ii), it was mentioned "it excludes services such as construction service defined under Section 65(zzq) of the Finance Act, 1994". Thus, in view of the amendment, the credit was denied as the input tax credit was not admissible w.e.f. 1 -4 -2011 read with Rule 4, sub -rule (7). The other ground of rejection of Cenvat Credit was the construction activity of factory building, with installation of plant and machinery, was neither directly nor indirectly related to manufacture of final product. Being aggrieved, the appellant carried the matter before the Commissioner (Appeals), who upheld the Order -in -Original rejecting the appeal. Being aggrieved, the appellant is before this Tribunal. The appellant draws my attention to the aforementioned facts and relies upon Board's Circular No. dated 29 -4 -2011 issued by TRU, Ministry of Finance issuing clarification of certain Cenvat Credit issues, wherein, in clause (12) the issue was "is the credit available on services received before 1 -4 -2011 on which credit is not allowed now? E.g. rent a cab service." The clarification was given as follows: - "the credit on such service shall be available if its provision had been completed before 1 -4 -2011." It is also argued that the activity supports manufacture both directly and indirectly.

(2.) HEARD the learned Supdt. (AR) for the Revenue, who relies on the order of the appellate authority. Having considered the rival submissions, I find that in view of the clarifications issued by the aforementioned Circular and in view of the fact that services had been rendered and billed prior to 1 -4 -2011 for which payment has also been paid prior to 1 -4 -2011. Such input Service Tax credit is allowable and otherwise also as clarified vide the above mentioned Circular. It is also held that the construction activity in the present case supports manufacture both directly and indirectly. Thus, the appeal is allowed with consequential relief, if any. Stay application also stands disposed of.