AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 522
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.... Circle-A, Bhiwadi (Alwar) vide their letter dated 06.05.2014. 1.2 From the CENVAT Credit details furnished to Audit, it was noticed that the appellant had availed CENVAT Credit of Service Tax paid on various input services during the period from 01.04.2011 till the date of commencement of commercial production. Some of the services on which CENVAT Credit of Service Tax was availed by the appellant are as mentioned below: - • Consulting Engineer Service • Erection, Commissioning and Installation Service • Security Agency Service • Manpower Recruitment or Supply Agency Service • Testing and Certification Service • Courier Service • Telecommunication Service • Supply of Tangible Goods Service • Goods Transport Agency Service • Commercial Training Service • Construction Service • Banking and Other Financial Services • Short Term Accommodation Service 1.3 The appellant had availed CENVAT Credit of Service Tax paid on all the services that were received prior to the commencement of commercial production. According ....
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....ization, renovation or repairs of a factory". The said definition of input service was amended by omitting the words "setting up"; on the basis of this, the Department has taken an erroneous view that the services of Erection, Commissioning and Installation and other related services availed by the appellant would fall under the broad category of "setting up of a factory" and is ineligible for credit. 7.3 The List of various services availed by the appellant and which have been denied by the Department, was adverted to by the Ld. Counsel for the appellant to argue that such services were used directly or indirectly in or in relation to the manufacture and therefore are eligible for credit. 7.4 The Ld. Counsel also adverted to clause (ii) of the definition of "input service" to argue that a manufacturer is eligible to avail credit on services used directly or indirectly, in or in relation to the activity of manufacture; since the various services have been used for the commencement of production of the factory, which are directly or indirectly related to the manufacture of the final product, the credit is eligible. 7.5 It is further submitted by the Ld. Counsel that the app....
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....issioner, Central Goods, Excise & Service Tax, Udaipur [2023 (4) TMI 601 - CESTAT, New Delhi] (Final Order No. 50454 of 2023 dated 10.04.2023 in Excise Appeal No. 52974 of 2018) wherein after examining the very same issue, the Tribunal held that the credit was eligible when the services availed are in relation to manufacture. 7.7 The Ld. Counsel thus prayed that the appeal may be allowed. 8.1 Shri Rudra Pratap Singh, Ld. Authorized Representative, appeared and argued for the Department. The Ld. Authorized Representative adverted to the definition of "input service" post 01.04.2011 and submitted that the words services used in relation to "setting up" of a factory have been omitted with effect from 01.04.2011; all the impugned services have been availed by the appellant prior to commencement of commercial production and only after commencement of production can it be said that manufacture has happened. 8.2 To support his contention that there is no manufacture prior to commencement of production, the Ld. Authorized Representative relied upon the following decisions: - i. Collector of C.Ex. v. Ballarpur Industries Ltd. [1989 (43) E.L.T. 804 (S.C.)] ii. J.K.....
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....nward transportation of inputs or capital goods and outward transportation upto the place of removal;" (Emphasis supplied) 11.3 After 01.04.2011, the above definition underwent amendment and the words "setting up" of a factory as well as "activities relating to business" have been omitted. The definition after 01.04.2011 is reproduced below: - "(l) "input service" means any service, - (i) used by a provider of taxable 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, inward transportation of inputs or ca....
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.... very same issue as to whether credit on input services is eligible before commencement of production was considered by the Tribunal in the case of M/s. Pepsico India Holdings (Pvt.) Ltd. (supra). In the said case, the Department had denied the credit alleging that the services are used for setting up of factory. The relevant part of the order reads as under: - "12. Learned Departmental Representative vehemently opposes these arguments and supports the impugned orders and asserts that since the services related to setting up of a factory were removed from the inclusive part of the definition, it would mean no Cenvat credit was available. On a specific query from the Bench, he submits that in the case of Kellogs this Bench held that Cenvat credit was available and the Revenue has appealed against the order which appeal is pending before the High Court of Andhra Pradesh for admission. 13. We have considered the arguments on both sides and perused the records. 14. The appellants had entered into an agreements to lease the land and to get various common facilities in the private industrial township called Sri City to set up their factories. It cannot be argue....
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.... 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 manufacture; 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 labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer; the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account. 20. Thus, the term 'manufacture' itself is very wide and includes anything incidental or ancillary to manufacture. 21. For a service to qualify as 'input service' under Cenvat Credit Rules, 2004 post 2011, the service in question need not be covered even by the very wide definition of ma....
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.... 01.04.2011. 9. The above issue is no longer res integra as the same has been decided in favour of the assessee by various Benches of the Tribunal in several decisions, Hindalco Industries Ltd., vs. Commissioner, Central GST, Central Excise & Customs, Jabalpur -2019 (5) TMI 1620 -CESTAT New Delhi, Commissioner of Central Excise, Kolkata-III vs. M/s Texmaco UGL Rail (P) Ltd., (Now known as Texmaco Hi-Tech Pvt. Ltd., (Vice-Versa) -2019 (7) TMI 1651 -CESTAT Kolkata, Kellogs India Pvt. Ltd., vs. Commissioner of Central Tax, Tirupathi GST -2020 (7) TMI 414 -CESTAT Hyd., PepsiCo India Holdings (Pvt.) Ltd. vs. Commissioner of Central Tax, GST, Tirupati -2022 (56) GSTL 22 (Tri. Hyd.) and Hindustan Zinc Limited vs. Commissioner of CGST, Excise Customs, Udaipur -2021 (8) TMI 872 -CESTAT New Delhi after considering the provisions of section 2 (l) of the Finance Act, 2004 both pre and post amendment. 10. Referring to these decisions, the submission of the learned Counsel for the appellant is that omission of the words 'setting up' from the inclusive clause of the definition of 'input service' does not render the credit on services used in relation to plant and....
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....o a similar building, road, dam, airport etc., therefore there is a vast difference between the civil structure, building, etc. and technological structure which in the present case, the appellant have erected and installed by using ECIS". ... ... .... 16. The Learned Authorised Representative for the revenue has vehemently opposed the appeal and supported the impugned orders. There cannot be any quarrel with the principle that in Orient Cement Ltd., vs. CC, CEx.& ST, Hyd.-2017 (51) STR 459, it has been laid down that the changes brought out by the amendment in Rule 2(l) w.e.f. 01.04.2011 is prospective in nature. So far as the decision in Vikram Cement vs. CCEx., Indore -2009 (242) ELT 545, is concerned, the Bombay High Court was dealing with the issue whether welding electrodes can be called as „inputs‟ in terms of Rule 2(k) of Cenvat Credit Rules, 2004, therefore, no reliance could be placed on the said judgement. Similarly, the other case law Shriram General Insurance Co. Ltd., vs. Commissioner of C. Ex., Jaipur-I - 2021 (44) GSTL 185 (Tri. Del.), Herrenknecht India Pvt. Ltd., vs. Commissioner of GST & Central Tax, Chennai -2019 (....
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....f the present case. 14.2 In the case of M/s. J.K. Cotton Spinng & ors. (supra), the issue was with regard to demand of Central Sales Tax under Section 8(3)(b) of the Central Sales Tax Act, 1965 read with Rule 13 framed under Section 13 of the said Act. The question that was considered was whether the benefit as provided in Section 8(1) of the Act could be extended to the impugned goods. 14.3 A similar issue was considered in the case of M/s. Indian Copper Corporation (supra), which is also a decision passed analysing as to whether the impugned goods therein would get the benefit of Section 8(1) of the Central Sales Tax Act. These decisions do not have any connection with the facts or law considered in the case before us. 14.4 The judgement in the case of M/s. Eastend Paper Industries Ltd. (supra), though rendered under the Central Excise Act, 1944, is with regard to inputs and not input services. The said decision analysed the meaning of manufacture and also whether the wrapping paper used would be an integral part of the manufacture. 14.5 Further, in the decision in the case of Union of India v. M/s. Delhi Cloth & General Mills (supra), the meaning of manufacture was a....