Ahresty India Private Limited Vs Commissioner of Central Goods & Service Tax (CESTAT Chandigarh)
The appeals arose from a common order dated 17.02.2014 passed by the Commissioner of Central Excise, Delhi-III, confirming denial of CENVAT credit of ₹1,33,40,371, along with interest and penalty, in respect of three show cause notices covering the period from February 2009 to November 2011. The dispute related to CENVAT credit claimed on Commercial or Industrial Construction (setting up/expansion of factory building), Outdoor Catering, Insurance Services and Air Travel Agent Services.
The Tribunal noted that this was the second round of litigation. In the first round, the Commissioner had confirmed demands on several input services. On appeal, the Tribunal remanded the matter for fresh adjudication. During de novo proceedings, the Commissioner dropped demands relating to several services but confirmed the demand only with respect to the four disputed services, leading to the present appeals.
Regarding Commercial or Industrial Construction Service, the appellant submitted that the services were used for setting up and expansion of its factory building and qualified as “input service” under Rule 2(l) of the CENVAT Credit Rules because “setting up” was specifically included in the definition applicable during the relevant period. The appellant also contended that the factory was already operational and the services were used only for expansion of production capacity. The Revenue maintained that construction of buildings lacked nexus with manufacture.
