Tribunal Overturns Order, Allows Cenvat Credit on Consultancy and Hotel Services Post-Definition Amendment.

The Tribunal set aside the impugned order denying Cenvat Credit on service tax for various services, including Consultancy and Hotel Services, following the amendment to the definition of input service. It concluded that the services, used in relation to manufacturing final products, were not excluded and allowed the appeal in favor of the appellant.

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Issues involved: Denial of Cenvat Credit of service tax paid on various services.

Comprehensive Details:

Issue 1: Denial of Cenvat Credit
The disputed services include Consultancy Service, Hotel Service, Erection, Commissioning and Installation, Technical Testing and Inspection, and others. The adjudicating authority denied the Cenvat Credit post-amendment of the definition of input service. The amendment replaced "setting up of the factory" with "modernization, renovation or repairs of a factory" in the definition. Certain excluded categories of services were also incorporated, such as services in the execution of works contract and construction services.

Issue 2: Interpretation of Input Service
Upon considering the disputed services, it was found that they did not fall under the excluded category. As the services were used in relation to the manufacture of final products, the denial of Cenvat Credit was deemed unsustainable. Reference was made to a Co-ordinate Bench decision which emphasized that services used in setting up the factory are covered as 'input services' under the CENVAT Credit Rules. The Tribunal concluded that the impugned order denying the Cenvat Credit and confirming the demands on the appellants lacked merit. Consequently, the order was set aside, and the appeal was allowed in favor of the appellant.

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