TaxTMI 
TaxTMI 
2024 (9) TMI 1250
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.... also availing Cenvat Credit of C. Excise Duty / Service Tax paid on Inputs, Capital Goods and Input Services under Rule 3 of Cenvat Credit Rules, 2004 (in short CCR). On the basis of an audit, a Show Cause Notice dated 18.03.2016 was issued to the respondent proposing to recover Cenvat Credit of Rs. 1,16,09,939/- availed by them on input services namely (a) Consultancy Services in relation to Design, Tendering & Supervision for New Port Infrastructure provided by M/S. AECOM India Pvt. Ltd., (b) Consultancy Services in relation to Layout, Siltation Estimates, Ship-manoeuvring simulations for additional berths provided by M/s. BMT Consultants India Pvt. Ltd., & (c) Consultancy Services in relation to "Land & Marine Geotechnical Investigation" for proposed expansion of marine facilities at Pipavav, Gujarat provided by M/S. Fugro Geotech Pvt. Limited on the ground that these services had no nexus with output services and therefore, the Cenvat Credit of Service Tax paid on such services was required to be recovered. The Show Cause Notice dated 18.03.2016 was adjudicated vide Order-In-Original dated 26.04.2017 wherein the adjudicating authority confirmed the recovery of Cenvat Cre....
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....rvice" nowhere provides the word "creation", "expansion or setting-up"; that the legislative intent is also to not allow Cenvat Credit of Service Tax paid on various services on account of 'Setting-up' of work since prior to 01.04.2011, the definition of "input service" was specifically containing in the inclusive part of the definition "Setting-up" which was deleted with effect from 01.04.2011. He further argued that while allowing appeal of the respondent, the Appellate Authority erroneously relied upon the Final Order of CESTAT, Bangalore in the case of Kakinada Seaports Ltd. [2015 (40) STR 509 (Tri. Bang.)] which was not correctly decided as Hon'ble CESTAT, Bangalore had allowed Cenvat Credit of Service Tax in respect of geotechnical investigation service in relation to 7th berth, to be came up into existence at later stage on the grounds that such claim of credit is similar to one of Cenvat Credit of Capital Goods wherein credit is allowed as soon as the same are received and no need to wait till they are erected, installed and commissioned. That, this view of the CESTAT Bangalore did not seem correct in as much as Capital Goods brought in the factory c....
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....t has availed the Consulting Engineer Services for modernisation of the port premises and making the additional berths operational from where it shall provide output services and enhance its capacity of business operations. Thus, the Respondent submits that the additional berths are essential for the provision of output services to new customers or increasing demand of services and hence, expenses incurred in respect of such berths have a direct nexus with output service. In light of above, the Respondent submits that credit of service tax paid on such services should be allowed. Fugro Biotech Pvt. Ltd. Consultancy Service provided for Land & Marine Geotechnical investigation for proposed improvisation/expansion of marine facilities The Respondent has availed the investigation services for evaluating whether it is technically and economically feasible to continue and/ or increase the marine facilities at the port of Pipavav. Expanding marine facilities involves huge costs and going for expansion and/ or renovation or improvisation without conducting investigation/ feasibility study can result into huge losses. Henc....
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....etting up' was specifically provided in the inclusive part for consideration as input service. However, the said phrase was deleted in the amended definition from 1.4.2011. Accordingly, the department had entertained a belief that in view of deletion of such phrase in the definition clause, the appellant should not be eligible for the benefit of consideration of the disputed services as input service. On perusal of the definition of 'input service' contained in the CENVAT statute, it transpires that the services used either directly or indirectly, in or in relation to the manufacture of final product should be considered as input service. In this case , it is an undisputed fact that the appellant had availed CENVAT credit on the disputed services for setting up of new Technology Centre and that by utilising such facility, it had provided the output services defined under the service tax statute. Since the disputed services were ultimately meant for accomplishing the objective of providing the output service, it cannot be said that since, the phrase 'setting up' was specifically excluded in the inclusive part of definition of input service, the benefit of CENVAT credit should ....
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....ther Benches in the other cases mentioned above." 6. In view of the foregoing discussions, we do not find any merits in the impugned order insofar as it has denied the CENVAT benefit and confirmed the adjudged demands on the appellant. Therefore, by setting aside the impugned order, the appeal is allowed in favour of the appellant. The above decision has been upheld by the Hon'ble Karnataka High Court vide its order cited as 2023(1) TMI 147 -COMMISSIONER OF CENTRAL TAX, BANGALOREVERSUSM/S. SHELL INDIA PVT LTD. He further relied upon the case law of case law in the matter of CSCI STEEL CORPORATION INDIA PVT LTD vs. C.C.E- BHARUCH- 2023 (1) TMI 506 - CESTAT AHMEDABAD passed by the coordinate bench of this Tribunal. It has been held as under: "4.2 It is seen that the issue has been examined by various Courts. Tribunal in the case of Pepsico India Holdings (Pvt.) Limited- 2022 (56) GSTL 22 (Tri.- Hyd.) has held as follows: "16. We find that the definition of 'input service' prior to 1-4- 2011 had two parts - a main part of the definition and an inclusive part of the definition. This inclusive part specifically included th....
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....;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 manufacture under Section 2(f) of the Central Excise Act. Any service which is used not only in manufacture but also in relation to' manufacture will also qualify as input service. The scope of input service is further enlarged with the expression whether directly or indirectly used in the definition of input service. Thus, there are: (a) Actual manufacture; (b) Processes incidental or ancillary to manufacture which are also manufacture; (c) Activities directly in relation to manufacture (i.e., in relation to 'a' and 'b' above); (d) Activities indirectly in relation to manufacture (i.e., in relation to 'a' and 'b' above); 22. All four of the above qualify as input service as per Rule 2(1)(ii) as applicable post 1-4-2011. Although setting up the factory is not manufacture in itself, it is an activity directly in relation....