TMI Blog2022 (1) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... orised Representative that from 01.04.2011, construction services and works contract services were excluded from the definition of input service, it is found that though construction service was excluded but since modernization, renovation and repair and maintenance is still continue to be existed in the inclusion clause of definition, credit shall be allowed. From the judgment of this Tribunal in M/S ION EXCHANGE I LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, SUARAT-II [ 2017 (12) TMI 151 - CESTAT AHMEDABAD] it can be seen that the amended definition of Input Service from 01.04.2011 was considered and it was viewed that though the construction service/ works contract service were excluded but it was interpreted that the said service related to only new construction or setting up of a new factory. But since modernization, renovation or repair and maintenance, even after exclusion category, continue to remain in inclusion clause of definition, credit cannot be denied - the adjudication order deciding the matter on the basis of exclusion category is beyond the scope of show cause notice. The appellant is entitled for Cenvat credit - Appeal allowed - d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Plant was installed for which they have availed construction service from the contractor. Any activity of construction in the running existing factory shall be treated as modernization, renovation or repair and maintenance of existing factory. The definition of Input Service under Rule 2(l) is reproduced below:- Rule 2(l) input service means any service,- (i) used by a provider of taxable service for providing an output service; or (ii) 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, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transporta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant submits that both the authorities below had misinterpreted/misunderstand definition of input service brought into from 1-4-2011. He submits that even though the words setting up had been deleted from the definition of input service but the words modernization, renovation and repair of the factory continued to be in the said definition even after 1-4-2011. He submits that exclusion clause inserted with effect from 1-4-2011 should be read in the context while interpreting the applicability of exclusion clause. The Ld. Advocate submits that the construction service excluded from the scope of input service be limited to new construction required in setting up of a factory, however, cannot be made applicable to activities relating to repair, renovation and modernization of the existing factory building, plant and machinery. In support, the Ld. Advocate referred to the clarification at Para 4 of the Circular No. 943/4/2011-CX, dated 29-4-2011 issued by the Board. It is his contention that there is no dispute to the fact that the construction service had been utilized by the appellant in renovation and repair of the factory in compliance with the requirement of US ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e means any service, - (i) used by a provider of output service for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation up to the place of removal; but excludes, - (A) service portion in the execution of a works contract and construction services including service listed under clause (b) of Section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for (a) construction or execution of works contract o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pair of the factory continued to be within the meaning of input service and accordingly, the Service Tax paid on such service is eligible to credit. Undisputedly, the appellant carried out modernization/renovation work to meet USA, FDA guidelines for manufacture of their products therefore, the service tax paid on such construction service is eligible to credit. In the result, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per the law. 6. From the above judgment of this Tribunal it can be seen that the amended definition of Input Service from 01.04.2011 was considered and it was viewed that though the construction service/ works contract service were excluded but it was interpreted that the said service related to only new construction or setting up of a new factory. But since modernization, renovation or repair and maintenance, even after exclusion category, continue to remain in inclusion clause of definition, credit cannot be denied. Moreover, the show cause notice has not made any charge related to exclusion category of Input Service , it only deals with main clause and inclusion clause of definition. Therefore, the adju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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