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2019 (1) TMI 430 - HC - Central ExciseCENVAT Credit - input services - lease rentals and operations and maintenance of windmills situated far away from their factory - case of Revenue is that the windmill is situated far away from the manufacturing plant, there is no nexus and the type of transaction between the assessee - interpretation of Rule 2(l) of CENVAT Credit Rules. Held that:- There is no dispute that the electricity generated by the windmills are exclusively used in the manufacturing unit for final products, there is no nexus between the process of electricity generated and manufacture of final products and there is no necessity for the windmills to be situated in the place of manufacture. The definition of “input service” is wider than the definition of “input”. Furthermore, if one takes a look at the Rules, more particularly Rule 2(k), as it stood prior to 01.04.2011, which defines “input”, the words “within the factory of production” has been specifically inserted - However, these words are physically missing in Rule 2(l), which defines “input service” and it would mean any service used by a provider of taxable service for providing an output service or used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal. Though the definition of “input service” has to be widely construed, and in terms of Rule 3, which allows the manufacturer of final products to take the credit of service tax inputs or capital goods received in the factory of manufacture of final products, insofar as any input service is concerned, the only stipulation is that it should be received by the manufacturer of final products - Therefore, this would be the correct manner of interpreting Rule 2(l) of the Rules. The decision of the High Court of Bombay in Endurance Technology Pvt. Ltd. [2015 (6) TMI 82 - BOMBAY HIGH COURT], which has been followed by the Larger Bench of the Tribunal in Parry Engg. & Electronics P. Ltd. [2016 (1) TMI 546 - CESTAT AHMEDABAD], where it was held that Management, maintenance and repair of windmills installed by the respondents is input service as defined by clause "l" of Rule 2. Rule 3 and 4 provide that any input or capital goods received in the factory or any input service received by manufacture of final product would be susceptible to CENVAT credit. Rule does not say that input service received by a manufacturer must be received at the factory premises. Appeal dismissed - decided against Revenue.
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