2019 (5) TMI 587

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....nder Chapter 26 and 72 of the Central Excise Tariff Act, 1985. During the course of verification of appellant's record, it was noticed that the appellant had availed CENVAT credit of Rs. 2,08,231/- for the period from December 2014 to March 2015 on input services viz., fabrication of steel items and other services used for setting up of the factory in as much as the said services do not fall within the ambit of Rule 2(l) of CCR, 2004, as per amended Rules w.e.f. 01.04.2012, since the word "setting up" was deleted from the inclusive part of input services definition w.e.f. 01.04.2011. Accordingly a SCN dated 28.12.2015 was issued proposing to recover Service Tax credit availed on ineligible services to the tune of Rs. 2,08,231/- along with i....

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....f his submission, he relied upon the following decisions: * Deepak Fertilizers & Petrochemicals Corpn. Ltd. v. CCE, Belapur - 2013 (32) STR 532 (Bom.). * Orient Paper Mills v. CCE, Raipur - 2016 (45) STR 178 (T). * CCE, Aurangabad v. Endurance Technology Pvt. Ltd. - 2017 (52) STR 361 (Bom.). * Jubilant Life Sciences Ltd. v. CCE, Noida - 2017 (3) GSTL 298 (T). * DGM, Tata Motors Ltd. v. CCE, Pune-I - 2015 (40) STR 269 (T) 5. On the other hand, Learned AR defended the impugned order. 6. After considering the submissions of both the parties and perusal of the material on record, I find that CENVAT credit has been denied on the input services only on the ground that the same falls within the exclusion of 'input service' being in rel....

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....roduct; and (ii) any input service received by the manufacturer of the final product. The subordinate legislation in the present case makes a distinction between inputs or capital goods on the one hand and input services on the other. Clause (i) above provides that the Service Tax should be paid on any input or capital goods received in the factory of manufacture of the final product. Such a restriction, however, is not imposed in regard to input services since the only stipulation in clause (ii) is that the input services should be received by the manufacturer of the final product. Hence, even as a matter of first principle on a plain and literal construction of Rule 3(1) the Tribunal was not justified in holding that the appellant would n....

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.... The inclusive part of the definition enumerates certain specified categories of services. However, it would be farfetched to interpret Rule 2(l) to mean that only two categories of services in relation to inputs viz. for the procurement of inputs and for the inward transportation of inputs were intended to be brought within the purview of Rule 2(l). Rule 2(l) must be read in its entirety. The Tribunal has placed an interpretation which runs contrary to the plain and literal meaning of the words used in Rule 2(l). Moreover as we have noted earlier, whereas Rule 3(1) allows a manufacturer of final products to take credit of excise duty and Service Tax among others paid on any input or capital goods received in the factory of manufacturer of ....