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2018 (7) TMI 337 - AT - Service TaxCENVAT credit - input services - whether the service of getting its premises painted is an input service as defined in Rule 2(1) of Cenvat Credit Rules, 2004 for which the appellant was entitled to take the credit? - Held that - Any service which is not per se for construction of building but is merely for renovation/ modernisation/ maintenance works, the same is very much inclusive in the definition of input services and as such are eligible for credit under this rule. Onus of proof - Held that - Since the Department has come up with the plea of service of the appellant as one being under the category of Work Service Contract, the entire burden was on the Department to prove the same. Burden thereof cannot be shifted upon the appellant - The Adjudicating Authority is held to have miserably failed to appreciate the proper evidence on record. Not only this, they have also failed to properly interpret the provision of law. As a result, the Order under challenge is held to not to be sustainable. Appeal allowed - decided in favor of appellant.
Issues:
Challenge to Commissioner (Appeals) order regarding Cenvat Credit on inadmissible input service for Works Contract and Construction Services. Analysis: The appellant, a partnership firm engaged in commercial coaching activities, challenged the Commissioner (Appeals) order regarding the wrongly availed Cenvat Credit on inadmissible input service for Works Contract and Construction Services. The Department found the appellant to have utilized the credit amounting to ?1,42,324 on inadmissible services during the period from October 2013 to March 2015. A Show Cause Notice was issued, and the Adjudicating Authority confirmed the demand, along with interest and penalty. The Commissioner (Appeals) upheld this decision, leading to the present appeal. The appellant argued that the expense incurred for painting the premises where commercial coaching was provided should not be considered a Works Contract or Construction Service but maintenance. They cited relevant case laws to support their claim. On the other hand, the Department contended that the appellant failed to provide evidence that the services on which the credit was taken were used for providing an output service. The Commissioner (Appeals) found no evidence that the premises where coaching services were rendered were painted, thus confirming the demand. The Tribunal analyzed the definition of "input service" under Rule 2(K) of Cenvat Credit Rules, 2004. It concluded that services for renovation, modernization, or maintenance, not solely for construction, are inclusive in the definition of input services and eligible for credit. Citing precedent cases, the Tribunal held that Works Contract Services used for maintenance are not excluded from the definition of input services. The burden of proof regarding the nature of the service was on the Department, and the appellant's evidence showed that the painting was for maintenance of the coaching premises, not construction. The Adjudicating Authority failed to properly interpret the law and appreciate the evidence, leading to the decision that the appellant rightly availed the credit. Consequently, the appeal was allowed, and the order under challenge was set aside. In conclusion, the Tribunal's detailed analysis of the definition of input services and the burden of proof regarding the nature of the service led to the decision in favor of the appellant. The judgment clarified the eligibility of maintenance services for Cenvat Credit and emphasized the importance of proper interpretation of the law and evidence in such cases.
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