2023 (9) TMI 55

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....nce of the Show Cause Notice dated 17.02.2016, which proposed recovery of CENVAT Credit of Rs. 64,62,12,397/- availed by the Appellant during the period April 2011 to September 2013 for setting up of the factory under Section 11A(4) of the Central Excise Act, 1944 (hereinafter referred as 'the Act'), along with demand of interest under Section 11AA of the Act and imposition of equivalent penalty under Rule 15(2) of CENVAT Credit Rules, 2004 read with Section 11AC(1) of the Act. 2. The said Notice was adjudicated by the Commissioner, vide Order-in- Original dated 31.03.2017, wherein the demand of Rs. 52,97,86,556/- was confirmed under Section Rule 14 of CENVAT Credit Rules, 2004 read with Section 11A(4) of the Central Excise Act, 1944. Interest was demanded under rule 14 of CENVAT Credit Rules, 2004 read with Section 11AA of the Central Excise Act, 1944. Penalty of Rs. 52,97,86,556/- under Rule 15(2) of CENVAT Credit Rules, 2004 read with Section 11AC (c) of the Central Excise Act, 1944 was also imposed. The present appeal has been filed by the Appellant against the impugned order. 3. In the Grounds of appeal, the Appellant made the following submissions: (i) The cred....

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.... filed by the Appellant. 5. Heard both sides and perused the appeal records. 6. We observe that the impugned order has denied the credit availed by the Appellant on the input services availed for 'setting up of a factory' as the same has been specifically omitted from the 'includes' part of the definition vide Notification No. 03/2011 dated 01.03.2011, w.e.f. 01.04.2011. Thus it is necessary to look into the definition of 'input services', w..e.f. 01.04.2011. 7. The relevant portion of Rule 2(I) w.e.f 01.04.2011 is as under:- "input service" means any 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 modernization, renovation or repairs of a factory, remises, 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, financ....

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....on to the manufacturer of final products and clearance of final products up to the place of removal." The term manufacture is not defined in the Rules. 18. The definitions as per of CCR 2004 reads as follows RULE 2 Definitions. - (1) in these rules, unless the context otherwise requires: (a) (b).... (I) (2) The words and expressions used in these rules and not defined but defined in the Excise Act shall have the meanings respectively assigned to them in the Excise Act. 19. Since the term 'manufacture' is not defined in the Rules, the definition under the Central Excise Act, 1944 must be considered. Section 2(f) of the Central Excise Act defines 'manufacture' as follows 2(f) "manufacture" includes any process i) incidental or ancillary to the completion of a manufactured product; ii) which is specified in relation to any goods in the Section or Chapter notes of the Fourth Schedule as amounting to manufacturer; or iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labeling or re-labelling of containers....

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....her cases mentioned above. 23. In view of the above, the impugned orders denying CENVAT credit and ordering its recovery along with interest and imposing penalties cannot be sustained. The impugned orders are set aside and the appeals are allowed with consequential reliefs, if any. 9. In the case of M/s Bharat Coking Coal Ltd., Vs., CCE & ST, Ranchi 2021 (10) TMI 383, the Tribunal Kolkata, allowed CENVAT Credit of the service tax paid towards setting up of plant. The relevant portion of the decision is reproduced below: "6. The issue before us is whether credit is available on Coal handing Plant (CHP), which has been set up by the appellant for evacuation of coal from its mining premises. It is relevant to note the preamble to the contract which reads as below:-........ From the above, it appears that the purpose of setting up of the CHP is to load the coal into the railway wagons in an automated manner after the coal is crushed into the desired size. It is not in dispute that the service used by the appellant is for modernization of the coal loading process. The definition of input service specifically includes services received by a manufacturer for ....