Balkrishna Industries Ltd. Vs Commissioner (CESTAT Delhi)
The appeal arose from the order dated 05.05.2021 passed by the Commissioner (Appeals), upholding denial of CENVAT credit, interest and penalty. The dispute concerned two issues: (i) admissibility of CENVAT credit on repair and maintenance services relating to the factory, office premises, plant and machinery, and (ii) admissibility of CENVAT credit of service tax on freight for receipt of inputs/fuel based on invoices issued by the supplier/trader. The appellant manufactures pneumatic tyres falling under Chapter 40 of the First Schedule to the Central Excise Tariff Act, 1985.
During audit for the period May 2012 to March 2015, the Department alleged that the appellant had wrongly availed CENVAT credit on services relating to civil work, erection of steel structures, gate fixing, pipe railing, fabrication work, shed fabrication and other repair and maintenance work, treating them as works contract or construction services excluded from the definition of “input service” under Rule 2(l) of the CENVAT Credit Rules, 2004. It was also alleged that the appellant had wrongly availed CENVAT credit of ₹9,312 on service tax relating to freight for petroleum coke supplied in June 2013, as the supplier’s invoices merely stated that the amount was inclusive of service tax on freight. A show cause notice dated 10.03.2016 proposed disallowance of CENVAT credit amounting to ₹6,57,658, comprising ₹6,48,346 relating to construction services and ₹9,312 relating to GTA service.
