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Introducing the “In Favour Of” filter in Case Laws.
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of <h1>Cenvat credit on input services used for factory setup and modernization allowed where services nexus to manufacture exists; appeal allowed</h1> Cenvat credit on input services used for setting up, modernization, renovation or repairs of a factory is allowable where those services are shown to have ... Cenvat credit on input services used in relation to setting up, modernization, renovation or repairs of a factory - Entitlement to utilize Cenvat credit as a common pool / cross-utilization - Invocation of extended period of limitation - Doctrine of nexus between input services and manufacture of final products - HELD THAT:- On going through the facts of the case the case of the Revenue is that services utilized for not in relation to manufacture of final dutiable goods and the same is used in setting up of a factory which is not eligible to take Cenvat Credit. Appellant has availed the Cenvat Credit on various input services used for setting up of its factory, its modernisation and ultimately used for manufacture of final product is eligible for Cenvat Credit. Thus, we hold that appellant has correctly taken the Cenvat Credit on input services used for setting up of its factory, its modernisation and services used in relation to manufacture of final product is entitled to take Cenvat Credit. In view of this we do not find any merit in the impugned order. The same is set aside. In result appeal is allowed with consequential relief, if any. Issues: Whether the appellant is entitled to avail and utilize Cenvat credit on input services received for setting up, modernization, renovation of an additional/expanded plant and for services used in relation to manufacture of final products, and whether extended period of limitation is invokable.Analysis: The dispute turns on the scope of 'input service' under Rule 2(l) of the Cenvat Credit Rules, 2004 and the rules of utilization of Cenvat credit. The Tribunal reviews authorities holding that services used in relation to setting up, modernization, renovation or pre-feasibility activity may qualify as input services where they have nexus with the manufacturing activity, and that Cenvat credit is maintained in a common pool permitting cross-utilization without one-to-one correlation between specific inputs/services and specific final products. The Tribunal also considers authorities on invocation of the extended period of limitation where availment was disclosed in statutory returns and audited during assessment activity. Applying these principles to the facts, the Tribunal finds that the services for setting up/modernisation/renovation of the plant fall within the ambit of input services and that disclosed availment precludes invocation of extended limitation.Conclusion: The impugned denial of Cenvat credit is set aside and the appeal is allowed; the appellant is entitled to avail and utilize the Cenvat credit on the input services in question and the extended period of limitation is not invokable.
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