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2010 (1) TMI 490 - CESTAT, AHMEDABADCenvat Credit - Input Services - applicants are providing taxable service falling under the category of "Transport of Goods through pipeline or other conduit service", which is a State Government Undertaking. A scrutiny of the documents was conducted and it was found that the applicants are availing input credit of service tax on commercial or industrial construction service/erection, installation and commissioning service used for execution of pipeline project, in contravention of provisions of Cenvat Credit Rules, 2004. Further, the applicants are also availing Cenvat Credit of input services like engineering consultancy, vehicle hiring services, insurance expenses, inspection charges, legal and profession fees, ROU/ROW expenses, site office expenses, security services etc. used in execution of pipeline system erected, commissioned, installed and constructed by the EPC contractors, in contravention of provisions of Cenvat Credit Rules, 2004. Accordingly, the Cenvat Credit availed was denied with interest and penalties under sections 76 and 78 were also imposed. Held that - cenvat credit availed by the assessee was covered under the definition of section 2(l) and moreover the provisions of Rule 6(1) were not applicable to the case of the assessee as the assessee had dealt in transportation of natural gas and it was not selling the pipelines. Therefore, there was no force in the contention of the revenue. Accordingly, the condition of pre-deposit of service tax, interest and penalty during the pendency of the appeal was to be dispensed with.
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