2017 (8) TMI 1265 - AT - Central Excise

CENVAT credit - input - erection, commission and installation services received for the purpose of making a temporary shed for the storage of goods - denial of credit on the ground that the service of erection, commission and installation is not used in or in relation to the manufacture of final product - Held that - the services of setting up, modernization, 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, are in the inclusion category of definition of input service - setting up of the factory also includes the storage place in the factory premises - in the present case the service received for setting up of storage is admissible input service. Even the independent storage is also included in the definition of input service - appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of cenvat credit for service of erection, commission, and installation for a temporary shed used for storage of goods.

In this case, the appellant, engaged in manufacturing MS Barrel, availed cenvat credit for the service of erection, commission, and installation for a temporary shed used for storage of goods. The adjudicating authority denied credit, stating the service was not used in or in relation to the manufacture of the final product. The Commissioner (Appeals) upheld this view, leading to the present appeal. The appellant argued that the service for setting up the shed falls under the definition of "input service" as per the Cenvat Credit Rules, 2002. The appellant relied on the case of Kitec Industries (India) Ltd. to support their claim. On the other hand, the revenue representative reiterated the findings of the impugned order.

Upon careful consideration, the Member (Judicial) found that the service received by the appellants was indeed for setting up a temporary storage shed for the final product manufactured on the factory premises. Referring to the definition of "input service," it was noted that services related to setting up, modernization, renovation, or repairs of a factory, including storage up to the place of removal, are considered input services. The judgment in Kitec Industries (India) Ltd. was cited, where services for a temporary storage shed for construction materials were deemed input services. In this case, as the temporary storage shed was for the finished goods of the appellants, the judgment's ratio was deemed applicable. Consequently, the impugned order was set aside, and the appeal was allowed.