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Cenvat Credit on WOrks Contract Services
Cenvat Credit on Works Contract service availed for making changes in the production process, factory layout, and improvements to the existing facilities to increase volume of production and to improve quality of the product
HELD – The disputed works are (a) Expansion of capacity of Effluent Treatment Plant (b) Epoxy coating to the floor /Flooring works (c) Pipe & valve fittings, erection of cooling tower and foundation works - the inclusive part of the definition includes services related to modernisation, renovation and repair of factory.
These works would fall within the work of modernisation, renovation and repair works and therefore are eligible for credit – appellant is eligible for credit on expansion of capacity of ETP) and flooring works. The credit availed on services used for laying foundation of tank/cooling tower is disallowed
The issue being an interpretational one, no penalty can be imposed for irregular availment of credit towards works contract service of laying foundation