Case Law Details
Bhagwati Power & Steels Ltd. Vs Commissioner (CESTAT Delhi)
Introduction: The case between Bhagwati Power & Steels Ltd. and the Commissioner (CESTAT Delhi) was centered on the disallowance of Cenvat Credit of ₹ 2,10,808 under Rule 14 of the Cenvat Credit Rules, 2004. The significant issue was whether Bhagwati Power & Steels Ltd. could avail Cenvat Credit on the fabrication and erection services for the installation of an SMS Plant under the categories of ‘Modernization, Renovation or Repair.’
Detailed Analysis
The Appellant’s Position: Bhagwati Power & Steels Ltd. contested that the Cenvat Credit should not have been denied, citing several past judgments to affirm that their case fell under the inclusive clauses of the ‘Input Service’ definition. They specifically emphasized that the credit availed for services used in repair and renovation, and for the provision of fabrication and erection services, should be allowed as it directly related to the company’s production activity.
The Department’s Stand: On the other hand, the Department asserted that the appellant availed input service credit on ineligible grounds. They argued that the construction services involving modernization and renovation were outside the scope of the input service definition post its amendment.
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