TMI Blog2019 (3) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... ities are not leviable to service - On an analogous situation, wherein credit was availed on inputs, when the process does not amount to manufacture, the Courts have consistently held that the credit cannot be denied at the receiver’s end. The Hon'ble Apex Court in the case of Commissioner of Central Excise Vs. MDS Switchgear Ltd. [2008 (8) TMI 37 - SUPREME COURT] has held that the MODVAT credit enables the recipient manufacturer to avail the benefit of duty paid by the supplier manufacturer - In the present case, CENVAT scheme enables the service recipient to avail credit of the service tax paid by the service provider. The CENVAT scheme therefore allows the manufacturer or service recipient to avail the credit of duty to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction of roads is specifically excluded in the said definition. That M/s. Sunmar Constructions ought not to have paid service tax on the said services. The credit therefore availed by the appellant is ineligible. Show Cause Notice was issued proposing to demand the wrongly availed credit along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand, interest and imposed penalties. Hence this appeal. 2. On behalf of the appellant, ld. counsel Shri Sai Prashanth submitted that the department does not dispute that the roads were constructed by M/s. Sunmar Constructions within the factory premises of the appellant. So also there is no dispute that the appellant has availed CENVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to service tax and therefore the credit availed has been rightly rejected. If at all M/s. Sunmar Constructions can apply for refund. 4. Heard both sides. 5. The issue is whether the appellants are eligible to avail credit of the service tax collected by them for construction of roads carried out by M/s. Sunmar Constructions. It is seen that M/s. Sunmar Constructions have collected service tax from the appellant and issued proper invoices. The appellants have availed credit of the same amount under proper documents. It is now the case of the department that M/s. Sunmar Constructions ought not to have paid service tax on the construction of the roads since such activities are not leviable to service. On an analogous situation, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rwise fulfilled all conditions tor availing Cenvat credit thereof. 6. So also the Hon'ble Apex Court in the case of Commissioner of Central Excise Vs. MDS Switchgear Ltd. 2008 (229) ELT 485 (SC) has held that the MODVAT credit enables the recipient manufacturer to avail the benefit of duty paid by the supplier manufacturer. In the present case, CENVAT scheme enables the service recipient to avail credit of the service tax paid by the service provider. The jurisdictional High Court in the case of Modular Auto Ltd. (supra) has observed that even when the activity rendered by the service provider does not amount to service, the credit availed by the service recipient for the on the service tax collected from him would be eligible f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the extent that has been paid by the supplier or provider and in the invoices in full unless the same is restricted or barred by some other legal provision in law. The manufacturer or service recipient cannot be denied the credit only on the score that the same has been short-paid or has been paid when not required. This is the ratio that has been granted in slew of decisions of the higher appellate forums. 8. On appreciating the facts and law and also applying the ratios laid down in the above decisions, we are of the considered opinion that the demand cannot sustain. The impugned order is set aside and the appeal is allowed with consequential relief, if any. (Dictated and pronounced in open court) - - TaxTMI - TMITax - Service ..... X X X X Extracts X X X X X X X X Extracts X X X X
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