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TMI Blog2021 (7) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... ariff. It had entered into a lease agreement with M/s. Sri City to lease land for a period of 99 years to set up a manufacturing plant. M/s Sri City paid service tax on the amounts charged by it for the leasing the land as well as on the amounts charged as development services. Similarly, services of consultants were obtained by the appellant to set up the plant on which also service tax was paid by the consultants. The appellant took CENVAT credit of the service tax amounting to Rs. 7,34,30,532/- so paid by the service providers between August 2014 to February 2015. 3. A show cause notice dated 16.12.2016 was issued by the Revenue to the appellant which culminated in the issue of the impugned order dated 12.10.2017. In this order, the CENVAT credit 3 ST/30122/2018 and E/31153/2018 has been denied on the ground that the services in question do not qualify as 'input services' post 1.4.2011. The CENVAT credit has been ordered to be recovered along with interest and a penalty has also imposed under Section 11AC of the Act read with Rule 15 (2) of CCR, 2004. Appeal E/31153/2018- Mondelez India Foods Pvt. Ltd. 4. The Appellant is engaged in the manufacture of Chocolates and other fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for setting up of their factory is not covered in the definition of 'input service' after 01.04.2011. The CENVAT credit was proposed to be recovered under Rule 14 (1) (ii) of the CENVAT Credit Rules, 2004 read with sub section (4) of section 11A of the Central Excise Act, 1944 along with 5 ST/30122/2018 and E/31153/2018 interest under section 11AA. It was also proposed to impose a penalty under Rule 15(2) read with section 11AC. 8. The appellant contested the demand both on merits and on limitation. Not agreeing with the submissions of the appellant, the Learned Commissioner, in the impugned order, confirmed the demand as proposed along with interest and imposed a penalty equal to the disputed CENVAT credit amount under Rule 15(2) read with Section 11AC. 9. Hence, the appeals were filed on the following common grounds. (a) The appellants are eligible for CENVAT credit of the disputed amount as input service. (b) Without the services in dispute, the appellants cannot manufacture any of the final products and hence the services are used in the manufacture of the final product. (c) On identical issue with respect to another unit set up in Sri City, in the case of Kellogs Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, in or in relation to the manufacture of final products and clearance of final products upto the place of removal and includes services used in relation to 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, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal; From 1.4.2011, it was amended as follows: (l) "input service" means any service, - (i) used by a provider of taxable service for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 'input service' after 1.4.2011 and therefore credit is available even though such services were no longer specifically in the inclusive part of the definition. Such a view was taken in the case of Kellogs by this Bench and in other cases cited above. He, therefore, prays that the appeals may be allowed and the impugned orders may be set aside. 12. Learned Departmental Representative vehemently opposes these arguments and supports the impugned orders and asserts that since the services related to setting up of a factory were removed from the inclusive part of the definition, it would mean no CENVAT credit was available. On a specific query from the bench, he submits that in the case of Kellogs this Bench held that CENVAT credit was available and the Revenue has appealed against the order which appeal is pending before the High Court of Andhra Pradesh for admission. 13. We have considered the arguments on both sides and perused the records. 14. The appellants had entered into an agreements to lease the land and to get various common facilities in the private industrial township called Sri City to set up their factories. It cannot be argued that manufacturing can take place wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer; the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account. 20. Thus, the term 'manufacture' itself is very wide and includes anything incidental or ancillary to manufacture. 21. For a service to qualify as 'input service' under CENVAT Credit Rules, 2004 post 2011, the service 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 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 manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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