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TMI Blog2013 (5) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... ht be covered by the definition of input provided, of course, they were used for manufacture of machinery (capital goods). - Matter remanded back for reconsideration. Regarding input services - nexus - appellant claims to have used 15 services, in, or in relation to, the setting up of their cement plant. - the burden is on the appellant to prove that the services were used in or in relation to the setting up of the cement factory. They set up such claim in their reply to the show-cause notice, but the adjudicating authority held that no nexus was established between any of the above services and the manufacture of cement. It appears, this finding was recorded without due regard to the fact that setting up of factory was one of the aspec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Credit Rules 2004, they could appropriately be considered as inputs in terms of the 2nd explanation to the definition of input given under Rule 2(k). The adjudicating authority neither accepted the above items as capital goods nor recognized them as inputs. In the result, the above CENVAT credit came to be denied to the party. 3. The total CENVAT credit of over Rs. 3.14 crores was denied to the appellant on 15 services listed below:- Sl. No. Input Service Description Credit demanded (in Rs.) 1. Security service 1,36,119/- 2. Insurance 70,242/- 3. Banking and financial services 16,46,832/- 4 Tel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken. These submissions/ clarifications of the appellant also did not impress the adjudicating authority. In the result, the entire CENVAT credit came to be denied to the appellant. The learned counsel for the appellant submits that the allegations in the show-cause notice were categorically denied in the reply thereto but, without properly examining the submissions made in the reply to the show-cause notice, the learned Commissioner observed that the allegations in the show-cause were not denied. In this connection, the learned counsel has extensively referred to the allegations in the show-cause notice and the corresponding denials recorded in the reply to the notice. On a perusal of these documents, we have found force in the submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect that the photographs indicated iron and steel structural support to machinery having been fabricated from plates, pipes etc. These photographs are available on record and we have seen them. Indeed, these photographs show not only machinery but also structural support. Apparently, the endeavour of the party to prove that the plates, pipes, etc. were used to fabricate the machinery and not the structural support thereto became futile. In our view, the evidence adduced by the party should have been appreciated with better application of mind. 4. The learned counsel has referred to the 2nd explanation to the definition of input and has submitted that the HR Plates, MS Plates, Pipes etc. which were claimed to have been used for fabrication ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the definition of input provided, of course, they were used for manufacture of machinery (capital goods). In any case, it is up to the appellant to establish their case before the adjudicating authority. Burden is on them to show that HR Plates, MS Plates, Pipes etc. were used to fabricate capital goods (falling under Rule 2(a) (A) of the CENVAT Credit Rules 2004) and not for fabricating supporting structures for such capital goods. In case it is found that the plates and pipes were used to manufacture supporting structures, the question would arise for consideration by the adjudicating authority as to whether such plates pipes would come within the purview of the expression other items used in the aforesaid explanation. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of cement. It appears, this finding was recorded without due regard to the fact that setting up of factory was one of the aspects expressly mentioned in the inclusion part of the definition of input service. 6. Yet another reason stated by the adjudicating authority for denial of CENVAT credit on the 15 services is something concerning the invoices on the basis of which the credit was taken by the party. We have seen specimen copies of such invoices and have found that, in some of the invoices, the quantity and value were altered by the appellant. Lower quantity and the corresponding lower value are seen hand-written beside the quantity and value printed in these invoices. The claim of the appellant is that the CENVAT credit was taken on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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