TMI Blog2017 (6) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner was clearly in error in taking the view that the Explanation (2) Rule 2(k) would be applicable irrespective of the fact where the goods have been used by the manufacturer or the service provider. There is no bar for service provider to avail the full credit on cement and steel structural items used for provision of erection, commissioning and installation services - appeal allowed - decided in favor of appellant. - E/3705/2012-EX[DB] - A/53321/2017-EX[DB] - Dated:- 16-5-2017 - Mr. (Dr.) Satish Chandra, President And Mr. V. Padmanabhan, Technical Member Present Shri Amit Jain, Advocate for the appellant Present Shri Dharam Singh, DR for the respondent ORDER Per: V. Padmanabhan The appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of erection, commissioning and installation at the customers site was irregualr. The Department took the view that these items are specifically excluded from the definition of input by virtue of Explanation 2 to the definition in Rule 2(k) of the Cenvat Credit Rules 2004. Accordingly, show cause notices were issued and the adjudicating authority, vide the impugned order denied the Cenvat Credit on the subject items. Aggrieved by the impugned order the present appeal has been filed. 4. With the above background, we have heard Shri Amit Jain, Advocate for the appellant and Shri Dharam Singh, DR for the respondent. 5. The Ld. Counsel for the appellant explained that the impugned order has been challenged mainly on the following grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard both the sides and perused the records. 8. The issue in the instant case relates to the admissibility of Cenvat Credit on cement and steel structural items. The appellant has carried out a turnkey contract for these items. The terms of the contract include not only design and engineering, but also civil engineering work including construction as also erection, commissioning of the entire facilities. From the commercial invoices issued by the appellant, copies of some of which were perused by us, it is evident that service tax has been paid at full rates without availing any abatement. The invoices also indicate rendering of civil work which definitely involves use of cement and other steel structural items. From the nature of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the manufacturer; 2(k) input means- (W.e.f. 07.07.2009) (i) all goods, except light diesel oil, high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of final products or for any other purpose, within the factory of production; (ii) all goods, except light diesel oil, high speed diesel oil, motor spi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the decision of the Hon ble CESTAT in the case of Adani Port SEZ Ltd. wherein the Tribunal has held as follows: 8 On plain reading of Explanation 2 of the definition of Input , as amended on 7-7-2009, we find that the said explanation would apply in respect of the goods used in the manufacture of capital goods, which are further used in the factory of the manufacturer . Thus, it is clear that input Cement and Steel used in the factory of manufacturer shall not be eligible input credit. This explanation is applicable only to the manufacturer and not the service provider. It is to be read strictly as per plain meaning of the statute. There is no indication in the Explanation that it would apply to the service provider. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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