9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (7) TMI 414 - AT - Central ExciseCENVAT Credit - input services - Renting of Immovable Property Service - service tax paid under the deeds for infrastructure development agreement, lease deed and subsequent maintenance on which service tax was paid by the input service provider under the head of renting of immovable property service - effect of amendment with effect from 01.04.2011 - HELD THAT - As can be seen from the three components of the definition of input service under Rule 2(l) of CENVAT Credit Rules 2004, the initial part says that any service used by a service provider in connection with provision of output service or by a manufacturer in or in relation to manufacture of the final products whether directly or indirectly is covered under the definition of input service - This definition has been further enlarged by adding several other input services such as those services used in relation to setting up, modernisation renovation etc. The terms setting up has been deleted with effect from 01.04.2011 and hence was not on the Statute during the relevant period - The third part of the definition excludes certain types of services and this exclusion part of the definition also does not have in it, the services used in setting up of the plant. The services used in relation to setting up of a plant are neither specifically included nor specifically excluded during the relevant period. That takes us to the main part of the definition which, with respect to manufacturer allows CENVAT credit of services used in or in relation to manufacture whether directly or indirectly. This definition is wide enough to cover in its compass any services used for setting up a Plant especially when the services are used for obtaining the land on lease - there is a direct nexus between the manufacture of the final products and the services used for setting up of plant by leasing the land. The appellant is entitled to CENVAT credit of the disputed amounts and the impugned order needs to be set aside - Appeal allowed - decided in favor of appellant.
Issues:
- Availment of CENVAT credit on ineligible input services - Interpretation of the definition of input service under Rule 2(l) of CENVAT Credit Rules 2004 - Dispute regarding services used in setting up a factory post-amendment Analysis: 1. The appellant, engaged in manufacturing prepared foods, availed CENVAT credit on services related to a development agreement and lease deed with M/s Sri City (P) Ltd. The Revenue contended that these services were used for setting up the plant, excluded from the definition of input service post-amendment. A show-cause notice disallowed the credit, ordering recovery and imposing a penalty. 2. The appellant's appeal to the first authority was rejected, leading to the current appeal. The appellant argued that the services were used for renting the plot for factory construction, directly linked to manufacturing. The definition of input service under Rule 2(l) was crucial, with a change post-April 2011 excluding "setting up" from the definition. 3. The appellant's counsel highlighted that the definition includes services used directly or indirectly in manufacturing and clearance of final products. The exclusion of "setting up" post-amendment was emphasized, leading to a debate on whether services used for setting up a factory post-amendment are covered under the definition. 4. The Tribunal analyzed the definition comprehensively, noting that services for setting up a plant were neither specifically included nor excluded post-amendment. The main part of the definition allowed credit for services used in or in relation to manufacturing. A direct nexus between the services for setting up the plant and manufacturing was established, leading to the appellant being entitled to CENVAT credit. 5. Consequently, the impugned order disallowing the credit was set aside, and the appeal was allowed with consequential relief. The Tribunal's decision was based on the interpretation of the definition of input service and the direct nexus between the services in question and the manufacturing process.
|
