Tribunal denies credit for wind mill installation and civil work services for coil manufacturing

The Tribunal dismissed the appeal, upholding the order of the Commissioner (Appeals) that denied the availment of credit on wind mill installation and civil work services as input services for manufacturing H.R. Coils and C.R. Coils. The Tribunal determined that the services did not meet the criteria of being directly or indirectly used in the manufacturing process, as the wind mill was located separately and the power generated was exempted. Previous tribunal judgments were considered, leading to the conclusion that the appeal was not legally sustainable.

---

---

Issues:
1. Interpretation of the definition of input service under Rule 2(1) of the Central Excise Tariff Act, 1985.
2. Whether the wind mill installation and civil work services can be considered as input services for availing credit.
3. Applicability of previous tribunal judgments on the case.

Analysis:

Issue 1: Interpretation of the definition of input service under Rule 2(1):
The case involves the interpretation of the definition of input service as provided under Rule 2(1) of the Central Excise Tariff Act, 1985. The definition states that an input service is one used by the manufacturer directly or indirectly in or in relation to the manufacture of final products and clearance of final products up to the place of removal. This definition is crucial in determining the eligibility of services for availing credit under the Act.

Issue 2: Wind mill installation and civil work services as input services:
The appellant, engaged in the manufacture of H.R. Coils and C.R. Coils, availed credit of service tax paid on services such as installation and civil work for a wind mill used for electricity generation. The department contended that these services did not fall under the definition of input service as the wind mill was not directly or indirectly used by the manufacturer. The Tribunal agreed with the department's view, stating that the wind mill, located at a different place, was not used in the manufacturing process and the power generated was an exempted product. Therefore, the availment of credit on these services was deemed unsustainable.

Issue 3: Applicability of previous tribunal judgments:
The Tribunal referred to its earlier decision in the case of M/s. Real Strips Ltd. Vs. CCE Ahmedabad, where service tax credit was denied in a similar scenario. Additionally, the Tribunal considered various judgments cited by the appellant's advocate, including cases like Rajhans Metals (P) Ltd. Vs. CCE Rajkot, Atul Auto Ltd. Vs. CCE Rajkot, Ellora Times Ltd. Vs. CCE Rajkot, and Lanxess ABS Ltd. Vs. CCE Vadodara. These judgments were reviewed in the context of the present case to determine the legal sustainability of the appeal.

In conclusion, the Tribunal found that the appeal was not legally sustainable based on the interpretation of the definition of input service and the precedents set by previous judgments. Therefore, the appeal was dismissed, and the order of the Commissioner (Appeals) upholding the demand and interest was upheld.

---