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2024 (11) TMI 716
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....ved and used related to procurement of capital goods while setting up their new plant is not admissible to appellant from 01.04.2011 onwards. 2. Shri Vinay Kansara, Learned Counsel appearing on behalf of the Appellant submits that even the wording "setting up" was removed with effect from 01.04.2011 from the inclusive limb of the definition of input service, the Cenvat credit on the subject input service is still admissible in terms of the expression "used by a manufacturer, whether directly or indirectly, in or in relation the manufacture of final product" which is in the main limb. He further submits that the subject input services were used for procurement and erection and installation of capital goods/ machineries/ equipment which was subsequently used for manufacture of excisable goods. Therefore, these services qualify the term of the main limb of the input service as defined under Rule 2 (l) of Cenvat Credit Rules, 2004. Therefore, the credit is clearly admissible. The credit is admissible irrespective of the fact that whether the same has been received or used prior to commercial production. In support he placed reliance on the following judgments:- Evonik Speci....
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....for Cenvat credit. In this regard, we find that even though the wording "setting up" was deleted from the inclusion clause, there is no change in the main clause of the definition which reads 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, financing, recruitment and quality control, coaching and training, computer networking credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal." 4.1 From the reading of the above rule, it can be seen that as per the main clause....
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....ory' which were specifically included prior to 1.4.2011 were no longer specifically included post 1.4.2011. 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 the services availed for setting up the factory. After 1.4.2011, it has three parts- a main part, an inclusive part and an exclusive part. The services used for setting up the factory are neither in the inclusive part of the definition nor the exclusive part of the definition. Therefore, such services were neither specifically included nor were specifically excluded. 17. It takes us to the main part of the definition which must be examined. If it is wide enough to cover the services in question, CENVAT credit will be available, otherwise it will not be available. The main part includes "services used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture 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 rule ....
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....ion 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 to manufacture. Without setting up the factory, there cannot be any manufacture. Services used in setting up the factory are, therefore, unambiguously covered as 'input services' under Rule 2 (1) (ii) of the CENVAT Credit Rules, 2004 as they stood during the relevant period (post 1.4.2011). The mere fact that it is again not mentioned in the inclusive part of the definition makes no difference. Once it is covered in the main part of the definition of input service, unless it is specifically excluded under the exclusion part of the definition, the appellant is entitled to CENVAT credit on the input services used. This Bench has already taken this view in Kellogs. Similar views have been taken by the other Benches in the other 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....
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....in clause of the definition of input service. unless it is specifically excluded under the excludes clause of the definition, the Appellant is entitled to CENVAT Credit on the subject input services used in setting up of the factory. This view has been held by the Tribunal in the case of Pepsico India Holdings Pvt. Ltd., Vs. CCT, Tirupati, 2021 (7) TMI 1094- CESTAT Hyderabad. The relevant part of the decision is extracted below: "16. We find that the definition of 'input service prior to 1.04.2011 had two parts- a main part of the definition and an inclusive part of the Excise Appeal No. 76189 of 2018 5 definition. This inclusive part specifically included the services availed for 'setting up the factory'. After 1.04.2011, it has three parts- a main part, an inclusive part and an exclusive part. The services used for setting up the factory are neither in the inclusive part of the definition nor the exclusive part of the definition. Therefore, such services were neither specifically included nor were specifically excluded. 17. It takes us to the main part of the definition which must be examined. If it is wide enough to cover the services in question, C....
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....pression 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 (l.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 to manufacture. Without setting up the factory, there cannot be any manufacture. Service used in setting up the factory are, therefore, unambiguously covered as "input services' under Rule 2 (1) (ii) of the CENVAT Credit Rules 2004 as they stood during the relevant period (post 1.4.2011) The mere fact that it is again not mentioned in the inclusive part of the definition makes no difference. Once it is covered in the main part of the definition of input service, unless it is specifically excluded under the exclusion part of....
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.... Bangalore North 2021-VIL-820- CESTAT-BLR-ST maintained in 2023-VIL-01-KAR-ST. Reliance Corporate IT Park Ltd, Vs. Commissioner of Central Excise Thane-II 2023-VIL- 136-CESTAT-Mum-ST. Hindustan Zink Ltd., Vs. Commissioner of CGST, Excise & Customs, Udaipur 2021 (8) TMI 872-CESTAT New Delhi. Kellogs India Pvt. Ltd., Vs. CCT, Tirupathi GST, 2020 (7) TMI 414- CESTAT Hyderabad. CCE, Kolkata Vs. Texmaco UGL Rail, 2019 (7) TMI 1651-CESTAT Kolkata. Hindaico Industries Ltd., Vs. CGST, Jabalpur, 2019 (5) TMI 1620- CESTAT New Delhi. Linde India Pvt. Ltd., Vs. Commissioner of CGST & CX, Rourkela 2023 (5) TMI 718 - CESTAT, Kolkata. Bharat Coking Coal Ltd., Vs. CCE & ST, Ranchi 2023 (6) TMI 297- CESTAT-Kolkata. 11. Following the decisions cited above, we observe that the subject input services have a direct nexus with the manufacture of finished goods in the 'means' clause of the definition of input services. Accordingly we hold that even if the word 'setting up of a factory' has been specifically excluded from the definition w.e.f. 01.04.2011, such services are covered within the ambit of main clause of the definiti....
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....pati, reported in 2021 (7) TMI 109-CESTAT HYDERABAD. The relevant paragraphs appearing in the said order are extracted herein below: "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....
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....en considered by the Tribunal in the case of Shiruguppi Sugar Works Limited (supra) wherein in identical facts, the Tribunal has allowed Cenvat credit. The relevant portion of the order is reproduced :- "6. After considering the submissions of both the parties and perusal of the material on record, I find that the appellant have availed the credit on erection/commissioning of machinery, which is used for manufacture of sugar. Further, I find that these impugned services fall in the definition of input service even after 1.4.2011. Further, I find that in the case of Uni Abex Alloy Products (supra), this Tribunal has held that it is a settled law that CENVAT credit is available if the impugned services are used in or in relation to the manufacture of final products and if the nexus of such services with the manufacture is established. Further, I find that it has consistently been held by the Hon'ble Supreme Court that the words 'in relation to manufacture' have been used to widen and explain the scope, meaning and content of the definition and applying the same ratio, CENVAT credit of service tax paid on input services is admissible so far as input services have ....