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2023 (1) TMI 54 - AT - Central ExciseAvailment of cenvat credit of the service tax paid by the appellant - input services or not - services in relation to fabrication of plant and machinery in the factory and making plant and machinery operational - credit denied for the period April 2011, when the setting up of the factory started to the period March 2016, when the setting up of the factory was completed and commercial production started. HELD THAT:- The appellants are engaged in manufacture of goods falling under Chapter 39 of the Central Excise Tariff Act, 1985 and availed cenvat credit of service tax during setting up of the factory. Revenue is of opinion that cenvat credit of services used for setting up of ‘factory, premises of provider of output service or the office relating to said factory or premises’ would not be admissible as the word setting put has been deleted from the definition of input service. This very issue has been examined by Tribunal in the case Reliance Industries Limited [2022 (4) TMI 729 - CESTAT AHMEDABAD]. In the said decision similar dispute was examined. The Tribunal in the case of Semco Electricals Private Limited [2009 (12) TMI 143 - CESTAT, MUMBAI] has held that in order to qualify as an input service, the service has to either fall within the means part or inclusive part of the definition of input service. Thus, any service which is covered under the means part of the definition, the credit cannot be denied even if, it does not appear in the inclusive part of the definition - without use of these services, the appellant could not have possibly manufactured the excisable goods. In this background, we do not find any merit in the argument of the Revenue that by deletion of word ‘setting up’ from the definition of input service any significant change has happened. However, w.e.f. 01.04.2012, a specific exclusion clause has been introduced in the definition of input service - the exclusion clause would obviously make such services ineligible for the cenvat credit under the head of ‘Input Service’. It is seen that the appellant has claimed that they have on their own not availed such credits relating to the exclusion clause. Denial of cenvat credit invoking Rule 4(7) of the Cenvat Credit Rules - HELD THAT:- It is apparent that the defence and documents in support of appellant’s claim has not been examined. In view of above, we find that demand on this count cannot be sustained as the order fails to examine the defence given by the appellant. In these circumstances, the demand on this count is set aside and matter is remanded to the original adjudicating authority. Credit of input services availed in respect of alleged ‘setting up of the factory’ as well as the suggestion of the appellant about the credit not availed on account of exclusion clause - HELD THAT:- The matter needs to be examined again by the original adjudicating authority in light of the decision of Tribunal in the case of Reliance Industries Limited [2022 (4) TMI 729 - CESTAT AHMEDABAD] which clearly holds that so long as input services on which the credit is taken by the appellant are covered under the means part of the definition, the credit even if, used for setting up of the plant or factory, cannot be denied. The matter is remanded to the original adjudicating authority for fresh adjudication.
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