Case Law Details
NEO Structo Construction Ltd Vs C.C.E. & S.T.-Surat-I (CESTAT Ahmedabad)
CESTAT Ahmedabad held that Cenvat Credit of duty paid on inputs used in manufacture of final products cleared without payment of duty and which is further utilized for manufacture of final products on which duty is paid is allowable.
Facts- The appellant had entered agreement with M/s L&T, Hazira for fabrication of ACN Reactor. The work essentially involved fabrication and assembly as per drawing provided by M/s L&T, Hazira. This ACN reactor fabricated by the appellant was to be used by M/s L&T, Hazira as part of the other plant and machinery such as offshore platform and jackets and ship building.
The appellant sub contracted some work to M/s Neetu Engineering, Surat and M/s Ebenezer Engineering, Surat. The sub-contractors completed the work and charged the service tax to the appellant and the appellant availed the cenvat credit of the said service tax charged by the sub-contractors. The current issue involved is the demand of the cenvat credit availed by the appellants on these services obtained from the sub-contractors.
Notably, the appellant had raised the bills to M/s L&T, Hazira but not charged the service tax amount on the same, whereas when the sub-contractor had raised the bills to the appellant they had charged the service tax. The revenue was of the view that since the activity of the appellant did not attract service tax, the appellant could not have availed the cenvat credit on input service used for their output service in terms of Rule 6(1) and 6(2) of Cenvat Credit Rules, 2004.
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