2017 (12) TMI 151

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....ing under Chapter 39 of CETA, 1985 and availed cenvat credit of Service Tax paid on Construction Service (modernization, renovation and repair service) of the existing plant and machinery in their factory premises, so as to meet USA, FDA guidelines during the period June 2011 to March 2012. Alleging that after amendment to definition of Input Service with effect from 01.4.2011 'construction service', being placed on the exclusion clause, therefore credit availed by the appellant is irregular; consequently, notices were issued to them on 17.9.2012 for recovery of inadmissible credit of Rs. 12,40,205/- with interest and penalty. On adjudication, the demand was reduced to Rs. 9,82,887/- with interest and penalty. Aggrieved by the said ....

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....ue reiterated the findings of the Ld Commissioner (Appeals). 5. Heard both sides and perused the records. 6. The short issue involved for determination in the present case is: whether the appellants are eligible to credit of Service Tax paid on construction service relating to modernization/renovation of their factory. 7. It is the contention of the Revenue that after amendment to the definition of input service all construction service undertaken within the factory premises fall outside the scope of the said definition, accordingly, Service Tax paid on construction service is not admissible to credit. The appellant, on the other hand, submits that on deletion of word setting up from the scope of said definition, new construction underta....

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....service, - (i) used by a provider of [output service] for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services....

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....l use or consumption of any employee;] [Explanation. - For the purpose of this clause, sales promotion includes services by way of sale of dutiable goods on commission basis.] 8. A plain reading of the said provisions makes it clear that service utilized in relation to modernization, renovation and repair of the factory are definitely fall within the meaning of input service even though construction of a building or civil structure or part thereof has been placed under exclusion clause of the said definition of 'input service'. After amendment to the definition of the 'input service', a clarification issued by the Board vide Circular No 943/4/2011-CX dt 29.4.2011 dt 29.4.2011 where-under answering to the questions raised....