CENVAT credit for input services used in a new technology centre upheld where no credit was claimed on fresh construction.

CENVAT credit on input services used for a new technology centre could not be denied merely because the amended definition excluded services for setting up a new unit. The record showed that credit was not claimed on fresh construction, and the identified services were used in relation to the assessee's taxable output services. On those facts, the Tribunal's view that the exclusion did not apply was upheld, and the credit claim was allowed.

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Issues: Whether CENVAT credit on the input services used for establishing a new technology centre could be denied on the ground that the amended definition of input service excluded setting up of a new unit.

Analysis: The dispute was confined to credit claimed on services used for the project at the new technology centre. The record showed that credit was not claimed on fresh construction, and the assessee was otherwise entitled to credit on the identified input services used in relation to its taxable output services. The Court found no error in the Tribunal's finding that the credit claim did not fall foul of the amended exclusion merely because the project involved setting up of a new centre.

Conclusion: The exclusion for setting up did not justify denial of the credit claimed on the input services in the facts of the case, and the issue was answered in favour of the assessee.

Ratio Decidendi: CENVAT credit on input services cannot be denied merely because they relate to a new project, where the credit is not claimed on fresh construction and the services are shown to have been used for providing taxable output services.

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