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2026 (4) TMI 1656
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....wherein it was alleged that DSP had contravened the provisions of Rules 2(l), 3 and 4 read with Rule 9(6) of the Cenvat Credit Rules, in as much as it had allegedly irregularly availed and utilised cenvat credit of Rs.1,11,09,888/- of tax paid on consultancy services provided by Mecon in relation to preparation of feasibility reports on various future projects such as New Medium Structural Mill, installation of new slag yard for SMS, modernization of billet caster and reconstruction of blast furnace. This consultancy was in relation to ongoing project of expansion plan of DSP, on the purported reason that since such services were related to a manufacturing process that may be undertaken in future. Therefore, benefit of cenvat credit would o....
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....ondent, DSL submits that the service in question was utilized in respect of proposed expansion of the existing unit. Therefore, the question of 'setting up' of a new unit does not arise. He submits the Revenue is erroneously terming the expansion and renovation as 'setting up' in order to deny the eligible Cenvat Credit. In fact, Tribunals have been allowing the Cenvat Credit even in case they were used for 'setting up'. He relied on the cited case law on this issue. Thus whether it is on account of renovation and expansion as claimed by the appellant or 'setting up' as claimed by the Revenue, in both the cases, the appellant would be eligible for Cenvat credit. 4. The Ld. Counsel further submits that the issue is no more res integra. In....
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....econstruction of Blast Furnace No.1 and in relation to setting up of a new factory, but those are in relation to modernization, renovation and expansion of an existing factory." 6. The issue as to whether the services utilized for 'setting up' or for 'renovation or repairs or expansion' stands settled by various Tribunal Benches, holding that the assessee would be eligible for the Cenvat Credit. This Bench in the case of Jamshedpur Continuous Annealing & Processing Co Pvt Ltd Vs CCGST Jameshedpur, [Excise Appeal No.75241 of 2020] vide Final Order No.77631/2025 dated 30th October 2025, has held as under : "8. In the case of Pepsico India Holdings Pvt. Ltd. v. CCT, Triupati, 2021 (7) TMI 1094-CESTAT Hyderabad, the Hyderabad Tribun....
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....nce 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 including the declaration or alteration of retail sale price on it or adoption of any other ....
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....rectly 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 (I) (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 othe....