Input service credit covers factory renovation and modernisation services, including expansion-related work performed at the premises.

Services used in relation to modernisation, renovation or repairs of a factory fall within the inclusive definition of input service under the Cenvat Credit Rules, 2004. The dispute concerned professional services used for expansion-related work at factory premises, and the analysis treated such services as eligible where they were connected with renovation and related works. The stated result was that Cenvat credit on the service tax paid was admissible, and the lower authorities' rejection was set aside.

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Issues: Whether Cenvat credit of service tax paid on professional services used for expansion, renovation, modernisation or repairs of the factory was admissible under Rule 2(l) of the Cenvat Credit Rules, 2004.

Analysis: The definition of input service expressly includes services used in relation to modernisation, renovation or repairs of a factory. The dispute turned on whether the services obtained at the factory premises for expansion-related work fell outside that inclusive part of the definition. On the record, there was no basis to exclude such services merely because they related to expansion of production capacity, especially when the services were rendered in the factory premises and were connected with renovation and related works.

Conclusion: The claim for Cenvat credit was held to be admissible and the rejection by the lower authorities was set aside.

Final Conclusion: The assessee succeeded on the question of credit eligibility, and the impugned order was quashed.

Ratio Decidendi: Services used in relation to modernisation, renovation or repairs of a factory fall within the scope of input service for Cenvat credit purposes when they are connected with work carried out at the factory premises.

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