Input service credit for factory construction services is admissible under the Cenvat Credit Rules, with later exclusion applied prospectively.

Input service credit on civil construction service used for setting up factory premises is admissible under the Cenvat Credit Rules, 2004, because services used in relation to setting up a factory fall within the inclusive definition of input service under Rule 2(l). The later exclusion of construction services was treated as prospective and not applicable to the period in dispute, so the credit claim remained allowable on the basis of binding jurisdictional precedent and the broader interpretation of input service.

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Issues: Whether input service credit on civil construction service used for construction of factory premises is admissible under the Cenvat Credit Rules, 2004.

Analysis: The issue was covered by binding jurisdictional precedent holding that services used for setting up a factory fall within the definition of input service under Rule 2(l) of the Cenvat Credit Rules, 2004. The inclusive part of the definition specifically covers services used in relation to setting up a factory, and the later amendment excluding construction services was held to be prospective and not applicable to the period in dispute. The reasoning also treated the credit entitlement as supported by the broader interpretation of input service adopted in earlier precedent.

Conclusion: Input service credit on construction service for factory premises is admissible, and the Revenue's appeal fails.

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