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TMI Blog2024 (9) TMI 1250X X X X Extracts X X X X X X X X Extracts X X X X ..... p Kumar Mudvel, Superintendent (AR) for the Appellant-Revenue Shri Jigar Shah, Advocate for the Respondent-Assessee ORDER Present appeal has been filed by the Revenue ( the Appellant ) against the impugned Order-in-Appeal dated 08.06.2018, passed by the Commissioner (Appeals), Central GST Excise, Rajkot who has set aside the Order-in-Original dated 26.04.2017 passed by the Joint Commissioner, Central Excise Service Tax, Bhavnagar. 2. Briefly stated facts of the case are that M/S Gujarat Pipavav Port Limited, Uchhaiya, Tal-Rajula, Distt. Amreli ('the Respondent) who are registered under service tax are engaged in providing taxable service under various categories as specified under the Finance Act, 1994. The respondent are also availing Cenvat Credit of C. Excise Duty / Service Tax paid on Inputs, Capital Goods and Input Services under Rule 3 of Cenvat Credit Rules, 2004 (in short CCR). On the basis of an audit, a Show Cause Notice dated 18.03.2016 was issued to the respondent proposing to recover Cenvat Credit of Rs. 1,16,09,939/- availed by them on input services namely (a) Consultancy Services in relation to Design, Tendering Supervision for New Port Infrastructure provided b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent is providing port services and therefore, they require repair and maintenance of berths, stake yards, cleaning of sea channel for smooth movement of ships etc. whereas services availed / taken by the respondent in this case were in relation to proposed expansion of port infrastructure or additional berths; that The Appellate Authority also erred in holding that looking to business growth, the respondent is entitled to do future planning such as construction of new berth, yards and other ancillary facilities, as the services availed for setting up new berth for expansion of port services are not entitled to Cenvat Credit because the inclusive portion of definition of input service nowhere provides the word creation , expansion or setting-up ; that the legislative intent is also to not allow Cenvat Credit of Service Tax paid on various services on account of Setting-up of work since prior to 01.04.2011, the definition of input service was specifically containing in the inclusive part of the definition Setting-up which was deleted with effect from 01.04.2011. He further argued that while allowing appeal of the respondent, the Appellate Authority erroneously relied upon the Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision of port services to the customers. BMT Consultants India Pvt. Ltd. Consulting Engineer Services provided in relation to Layout, siltation estimates, ship manoeuvring simulations for additional berths, design for restoration of bund, etc. The Respondent has availed above services in relation to project management, site supervision and inspection, consulting engineer, design support service, etc. for renovation of existing berth facilities as well as additional birth facilities. The Respondent has availed the Consulting Engineer Services for modernisation of the port premises and making the additional berths operational from where it shall provide output services and enhance its capacity of business operations. Thus, the Respondent submits that the additional berths are essential for the provision of output services to new customers or increasing demand of services and hence, expenses incurred in respect of such berths have a direct nexus with output service. In light of above, the Respondent submits that credit of service tax paid on such services should be allowed. Fugro Biotech Pvt. Ltd. Consultancy Service provided for Land Marine Geotechnical investigation for propose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p the new project namely, Technology Centre, consequent upon amendment brought into Rule 2(l) ibid vide Notification No.3/2011- C Ex.(NT) dated 1.3.2011, effective from 1.4.2011. 5.1 The period of dispute involved in this case is from October 2011 to March 2016. The definition of input service was amended with effect from 1.4.2011.under the un-amended definition, the phrase setting up was specifically provided in the inclusive part for consideration as input service. However, the said phrase was deleted in the amended definition from 1.4.2011. Accordingly, the department had entertained a belief that in view of deletion of such phrase in the definition clause, the appellant should not be eligible for the benefit of consideration of the disputed services as input service. On perusal of the definition of input service contained in the CENVAT statute, it transpires that the services used either directly or indirectly, in or in relation to the manufacture of final product should be considered as input service. In this case , it is an undisputed fact that the appellant had availed CENVAT credit on the disputed services for setting up of new Technology Centre and that by utilising such f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 other cases mentioned above. 6. In view of the foregoing discussions, we do not find any merits in the impugned order insofar as it has denied the CENVAT benefit and confirmed the adjudged demands on the appellant. Therefore, by setting aside the impugned order, the appeal is allowed in favour of the appellant. The above decision has been upheld by the Hon ble Karnataka High Court vide its order cited as 2023(1) TMI 147 -COMMISSIONER OF CENTRAL TAX, BANGALOREVERSUSM/S. SHELL INDIA PVT LTD. He further relied upon the case law of case law in the matter of CSCI STEEL CORPORATION INDIA PVT LTD vs. C.C.E- BHARUCH- 2023 (1) TMI 506 - CESTAT AHMEDABAD passed by the coordinate bench of this Tribunal. It has been held as under: 4.2 It is seen that the issue has been examined by various Courts. Tribunal in the case of Pepsico India Holdings (Pvt.) Limited- 2022 (56) GSTL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 manufacture; (c) Activities directly in relation to manufacture (i.e., in relation to 'a' and 'b' above); (d) Activities indirectly in relation to manufacture (i.e., in relation to 'a' and 'b' above); 22 . All four of the above qualify as input service as per Rule 2(1)(ii) as applicable post 1-4-2011. Although setting up the factory is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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