Input service credit for water pipeline laying services is admissible where the services support manufacturing operations directly or indirectly.

Service tax credit on pipeline-laying services used exclusively to transport water required for manufacture was held admissible as input service under Rule 2(l) of the Cenvat Credit Rules, 2004. The definition of input service was applied broadly, covering services used directly or indirectly and in relation to manufacture, and was not confined to services performed within the factory premises. Following the assessee's earlier case, the departmental exclusion was found unsustainable, and the disallowance of credit was set aside.

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Issues: Whether service tax credit on services used for laying pipelines for supplying water to the manufacturing unit was admissible as input service under Rule 2(l) of the Cenvat Credit Rules, 2004.

Analysis: The service related to laying and using pipelines exclusively for transport of water required in the manufacturing process. The scope of input service is not confined to services within the factory premises, and the definition under Rule 2(l) is broad enough to cover services used directly or indirectly, in or in relation to manufacture. Following the earlier decision in the assessee's own case, the exclusion adopted by the department was found unsustainable.

Conclusion: The credit was admissible and the disallowance could not be sustained.

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