TMI Blog2022 (5) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... case of RELIANCE INDUSTRIES LTD. VERSUS C.C.E. S.T. -RAJKOT [ 2022 (4) TMI 729 - CESTAT AHMEDABAD] where it was held that any service relating to modernization, renovation of the existing factory is admissible as input service which is the direct case of the appellant. From the above decision of this Tribunal it is clear that any construction and works contract if used for repair and renovation of existing factory, the same falls under inclusion clause of definition of Input Service, accordingly, the Cenvat credit is admissible - Appeal allowed - decided in favor of appellant. - SERVICE TAX Appeal No. 11981 of 2019-SM - A/10528/2022 - Dated:- 17-5-2022 - MR. RAMESH NAIR, MEMBER (JUDICIAL) Shri Jigar Shah, Advocate for the Appellant Shri R P Parekh, Superintendent (AR) for the Respondent ORDER The issue involved is that whether the appellant is entitled for Cenvat credit in respect of Construction/ Works Contract Service for re-carpeting of road in their industrial estate. The lower authorities denied Cenvat credit on the ground that it is a new construction of road under works contract service which is excluded in the definition of Input Service und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.10 Without prejudice to our above findings, we further find that the appellant s factory is admittedly huge existing petroleum industry and working for decades. The ECIS service was used for expansion, renovation and modernization of overall existing petroleum plant. As per inclusion clause of the definition the services relating to modernization, renovation is an admissible input service. In our view, even though service of construction of building or civil structure are falling under the exclusion clause but even if similar service is used for renovation and modernization of existing factory, the credit is admissible. The exclusion applies only in respect of such service as specified therein which are used for initial setting of the factory. It is pertinent to note that when the exclusion was brought in the rules, services relating to setting up of the factory was removed from the inclusion clause of the definition of input service in rule 2(l) of Cenvat Credit Rules, 2004 therefore, there is a direct nexus of the service mentioned in the exclusion clause and setting up of the factory. It is important to note that the legislature consciously continued the services of ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the factory is eligible to credit. Before scrutiny of the rival contentions, the relevant old and amended Rule 2(l) of the Cenvat Credit Rules, 2004 are reproduced as below : 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, Prior to 1-4-2011 (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 up to 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 up to the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of dutiable goods on commission basis. 8. A plain reading of the said provisions makes it clear that service utilized in relation to modernization, renovation and repair of the factory are definitely fall within the meaning of input service even though; construction of a building or civil structure or part thereof has been placed under exclusion clause of the said definition of input service . After amendment to the definition of the input service , a clarification issued by the Board vide Circular No. 943/4/2011-CX, dated 29-4-2011 whereunder answering to the questions raised on the eligibility of credit of service tax paid on construction service as an input service used in modernization, renovation or repair, it has been clarified that the said services being provided in the inclusive part of definition of input service are definitely eligible to credit. Thus, harmonious reading of the inclusive part of the definition and the exclusion clause mentioned at clause (a) relating to construction service of the definition of input service , it is clear that the construction service relating to modernization, renovation and repair of the factory continued to be withi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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