AI Drafter 
TaxTMI 
TaxTMI 
2025 (12) TMI 449
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctor General Audit for the year 2016-2017, it is observed that Appellant has not paid central excise duty correctly for the MRP based clearances and also availed ineligible CENVAT Credit of input services. During the course of audit, Appellant paid the alleged short payment and reversed the amount in the CENVAT account. However, has not paid interest and penalty on the short payment. Further, it is alleged that Appellant has availed ineligible CENVAT credit of input services on the strength of invoices issued by service providers and started utilizing this credit for the payment of central excise duty for the clearance made from October 2015 onwards. Further, out of the total amount of Rs. 6,54,97,114/- of ineligible CENVAT credit, an amount of Rs. 6,18,00,000/- pertains to the service tax paid on the upfront charges for the lease rent of land taken from Cochin Port Trust for setting of a factory in Willingdon Island. Since the said credit is taken while setting up the unit, alleging various omissions, show cause notices were issued and Adjudication authority as per the impugned order confirmed the demand. Aggrieved by said order, present appeal is filed before the Tribunal. 4. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of M/s. Kellogs India Pvt., Ltd. Vs. Commissioner of Central Tax, Tirupathi [2020 (7)-TMI-414 CESTAT Hyderabad] wherein the Hon'ble Tribunal in similar set of circumstances analysed the Cenvat Credit eligibility of service tax paid on leasing of land taken for setting up of factory post amendment made to the definition of input service. It was held that the services used in relation to setting up of plant are neither specifically included nor specifically excluded post amendment to the definition of input service. The definition of input service is wide enough to cover any services used for setting up a plant especially when the services are used for obtaining the land on lease. Without such land no factory can be set up nor can any manufacture take place and therefore it was held that the appellant therein is eligible to avail CENVAT credit of the service tax paid on leasing of land service. Similar decision was also rendered in the case of Pepsico India Holdings (Pvt.) Ltd. Vs. Commr. Of Central Tax, Tirupati, 2021 (7) TMI 1094 - CESTAT HYDERABAD and Sri Chamundeshwari Sugars Ltd. Vs.Commr. of Central Tax, MysuruCommissionerate-2021(11) TMI-13-CESTAT, BANGALORE". 6. The L....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce 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 11 ST/30122/2018 and E/31153/2018 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(l) (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' un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mercial production. Reliance is also placed on the decision of Shree Cement Ltd. Vs. CCE, Jaipur reported in [2015 (10) TMI 2198 - Cestat New Delhi], wherein it was held that there is no restriction that if any assessee avails cenvat credit on procurement of inputs (prior to start of manufacture), is not entitled to take cenvat credit. Infact, without procuring inputs, or some inputs service, assessee cannot start manufacturing activity. Therefore, it cannot be said that an assessee who is a manufacturer of excisable goods is to be denied the cenvat credit of duty paid on inputs or input service availed prior to commencement of manufacturing activity. 10. As regards demand against alleged ineligible CENVAT credit of Rs. 1,21,727/- availed by the Appellant on the ISD invoices issued in respect of services availed by the Regional Marketing office viz., Hyderabad, Bangalore and Chennai, the Learned Counsel submits that the payment of service tax and the credit was taken by ISD registration at Bangalore and thereafter said ISD office has distributed CENVAT Credit to the Appellant. The Learned Counsel further submits that the CENVAT credit pertains to the service tax paid by the mark....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ther submits that the jurisdiction to question and recover the credit availed by the ISD lies with the jurisdictional authority of the ISD and that no dispute regarding eligibility of CENVAT credit can be raised at recipient unit such as the Appellant, who has taken the credit based on the ISD invoice at a later stage. In this regard, reliance in placed on the judgment of CCE, Ahmedabad Vs. Godfrey Philips India Ltd reported in [2009 (239) ELT 323 (Tri- Ahmd.)], wherein the Hon'ble Tribunal, Ahmedabad held that the denial of Cenvat credit to a recipient on the basis of ISD invoice is incorrect when there was no dispute raised by the tax authorities regarding admissibility of service tax credit on input services availed by ISD. Reliance is also placed on Castrol India Lid Vs. Commissioner of Central Excise, reported in [2013 (291) ELT 469 (Tri. Ahmd.)], wherein it was held that demand if any regarding admissibility of input service credit as such, needs to be raised as ISD and not on unit level. Reliance is placed on the decision of the CESTAT, Mumbai in the matter of Hindustan Coca Cola Beverages Private Limited Vs. Commissioner of CGST & Customs reported in [2025 (2) TMI 949CE....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y of credit, the assessee was eligible to avail the credit of service tax paid on the event management services utilized for organizing various events for prospective clients/employees. Reliance is also placed on Honda Motorcycle and Scooter India Pvt. Ltd. Vs. Commr. of Central Tax, Bangalore reported in [2021 (3) TMI 1116-CESTAT Bangalore], wherein the credit availed on event management services for the inaugural function of the manufacturing unit was allowed as it involved advertisement and promotion and was attended by the customers, making the same an "input service for the purpose of Rule 2(l) of the CENVAT Credit Rules, 2004. 13. As regarding denial of Rs. 1,34,123/- in respect of services received in the form of repainting work on the ground that the said activity cannot be treated as input service under Rule 2(l) of the CENVAT Credit Rules, 2004, as construction or execution of works contract of a building or civil structure or making of structures for the support of capital goods are excluded from the definition of input service. As per Rule 2(l) of the CENVAT Credit Rules, 2004 it excludes only a specific type of works contract which is in the nature of works contract....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 17. As regards the allegation of ineligible CENVAT credit availed by the appellant on lease premium, we find that as held by this Tribunal in the matter of M/s. Shell India Pvt. Ltd. (supra), 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 be denied. As regards demand against ineligible CENVAT credit of Rs. 36,97,114/-, we find that without the very same services, Appellant cannot undertake the manufacturing process and therefore the services availed by the Appellant have direct nexus with the manufacturing activities undertaken by the Appellant. As regards CENVAT credit of Rs. 1,21,727/- availed by the Appellant on the ISD invoices issued in respect of services availed by the Regional marketing office viz., Hyderabad, Bangalore and Chennai, we find that the payment of service tax and the credit was taken by ISD office at Bangalore and thereafter said ISD office who, undisputedly, has borne the incidence of tax has distributed CENVAT Credit to t....