TaxTMI 
TaxTMI 
2013 (5) TMI 183
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....e appeal. 2. This appeal is directed mainly against denial of CENVAT credit on capital goods/inputs on the one hand and on input services on the other. The amount of CENVAT credit denied on capital goods/inputs is Rs. 44,16,292/- and the amount of CENVAT credit denied on input services is Rs. 3,14,27,009/-. The items on which total CENVAT credit of Rs. 44,16,292/- was taken by the appellant are HR Plates, MS Plates, Rails and MS Pipes. They claimed these items to be capital goods and accordingly took CENVAT credit in the relevant register. When the credit was proposed to be denied in the relevant show-cause notice on certain grounds alleged by the department, the appellant, alternatively, pleaded in their reply to the show-cause notice t....
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....8/- Total 3,14,27,009/- In the relevant show-cause notice, it was inter alia alleged that the CENVAT credit was taken on invoices which contained unexplained corrections regarding both quantity and value and further that the above services did not have any nexus with the setting up of the cement manufacturing plant. In their reply to the show-cause notice, the party pleaded that all the services were used in connection with the setting up of their plant. They also endeavoured to clarify the corrections of quantity and value in the invoices. They submitted that all the corrections were made so as to record lower figures of quantity and value of the services received so that the correct amount ....
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....ance nor denial of the said allegation in their reply and the basic allegation is left unattended. This observation/finding of the adjudicating authority is ex facie baseless inasmuch as the reply to the show-cause notice, which we have perused, did contain specific denial of the relevant allegations raised in the notice and also contained specific pleadings regarding the manner of use of HR Plates, MS Plates etc. We also find that several photographs were produced by the appellant in a bid to show to the adjudicating authority that the plates, pipes etc. were used to fabricate various items of capital goods in connection with setting up of the cement factory. The learned Commissioner appears to have seen these photographs, but she recorded....
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....on to the definition of input and to understand the scope of such arguments. The above issue raised by the learned counsel and the learned Commissioner(A.R.) with reference to the 2nd explanation to the definition of input is highly contentious and, therefore, it is incumbent on the adjudicating authority to re-examine the issue and render a correct decision thereon. The adjudicating authority has got to examine whether HR Plates, MS Plates and Pipes etc., which are claimed by the appellant to have been used in the manufacture of capital goods in connection with setting up of their cement plant, would fall in the exclusion part of the 2nd explanation to the definition of input. If these items cannot fall in the exclusion part of the explana....
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....dit Rules 2004. Setting up of a factory was one of the activities expressly mentioned in the inclusion part of the definition of input service, which was omitted from the definition only with effect from 1/4/2011. The period of dispute in this case is, entirely, prior to April 2011 and therefore it was incumbent on the Commissioner to consider whether the aforesaid services were, in fact, used in or in relation to the setting up of the cement factory. Of course, the burden is on the appellant to prove that the services were used in or in relation to the setting up of the cement factory. They set up such claim in their reply to the show-cause notice, but the adjudicating authority held that no nexus was established between any of the above s....