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M/s. Orient Paper Mills Versus CCE & ST, Raipur

2016 (7) TMI 1066 - CESTAT NEW DELHI

Cenvat Credit - input services - nexus with manufacturing activity - repair and maintenance service and erection and commissioning services with reference to water pipe line laid by the appellant to obtain water from Sharda OCM Plant situated away from the manufacturing facility of the appellant. - Held that:- In this context, it is to be seen that for the appellant, water is one of the main input items used in the manufacture of paper. Admittedly, water is being transported from outside by a pi .....

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engaged in the manufacture of paper liable to central excise duty. They were availing credit on inputs and input services. The present appeal deals with the dispute regarding appellant s eligibility for service tax credit of ₹ 4,90,316/- paid towards availing repair and maintenance service and erection and commissioning services with reference to water pipe line laid by the appellant to obtain water from Sharda OCM Plant situated away from the manufacturing facility of the appellant. The .....

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and for the purpose of input services, there is no necessity to avail the services inside the premises of the factory only. She relied on the decided case laws in support of the contention that the scope of Rule 2(l) is quite wide and cannot be restricted to the services received inside the factory only. 3. Ld. AR supported the findings of the lower authorities and submitted that the pipe line for transport of water has no direct link to paper manufactured and as such, the denial of credit is j .....

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d fact is that the services received by the appellants in the present case are not falling under any exclusion Clause. The Revenue disputed that the pipe line related services are not having any nexus with the manufacture of paper by the appellants. In this context, it is to be seen that for the appellant, water is one of the main input items used in the manufacture of paper. Admittedly, water is being transported from outside by a pipe line laid and maintained by the appellant. Input Services t .....

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product; and (ii) any input service received by the manufacturer of the final product. The subordinate legislation in the present case makes a distinction between inputs or capital goods on the one hand and input services on the other. Clause (i) above provides that the Service Tax should be paid on any input or capital goods received in the factory of manufacture of the final product. Such a restriction, however, is not imposed in regard to input services since the only stipulation in clause (i .....

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used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products. The words directly or indirectly and in or in relation to are words of width and amplitude. The subordinate legislation has advisedly used a broad and comprehensive expression while defining the expression input service . Rule 2(l) initially provides that input service means any services of the description falling in sub-clauses (i) and (ii). Rule 2(l) then provides an inclusive def .....

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d by the Tribunal is ex facie contrary to the provisions contained in Rule 2(l). The first part of Rule 2(l) inter alia covers any services used by the manufacturer directly or indirectly, in or in relation to the manufacture of final products. The inclusive part of the definition enumerates certain specified categories of services. However, it would be farfetched to interpret Rule 2(l) to mean that only two categories of services in relation to inputs viz. for the procurement of inputs and for .....

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