TMI Blog2023 (9) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Hence, it would still qualify as an input service as per Rule 1(I) of CCR, 2004. Cenvat credit availed by the Appellant on the input services used in setting up of the factory is allowed - impugned order confirming the demand along with interest and imposing penalty is set aside - appeal allowed. - HON BLE MR. ASHOK JINDAL MEMBER (JUDICIAL) AND HON BLE MR. K. ANPAZHAKAN MEMBER (TECHNICAL) APPERANCE : For the Appellant : Shri Deepro Sen, Advocate For the Respondent : Shri J. Chattopadhyay, Authorized Representative PER K. ANPAZHAKAN : The Appellant is a division of Hindalco Industries Ltd., and is inter alia engaged in the manufacture of aluminium ingots. The Appellant s factory is situated at Sambalpur, Odisha. The setting up of the said factory was commenced in the month of June 2010 and in October 2013, the appellant commenced commercial production. During the process of setting up of the unit, the Appellant had received various input services and availed credit on such input services. Availment of such credit has been duly indicated by the Appellant in Form ER-1 return. An enquiry was initiated by the department which culminated into is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctory are, therefore, unambiguously covered as input services under Rule 2 (I) (ii) of the CENVAT Credit Rules, 2004 as they stood during the relevant period (post 1.4.2011). The mere fact that it is again not mentioned in the inclusive part of the definition makes no difference. (iv) Identical question in respect of eligibility of CENVAT Credit of the service tax paid towards setting up of plant came up for consideration before this Tribunal in the case of M/s Bharat Coking Coal Ltd., Vs., CCE ST, Ranchi 2021 (10) TMI 383-CESTAT Kolkata, wherein by following the ratio laid down in the case of Pepsico India (supra), the Tribunal held that the credit is admissible. (v) Based on the above decisions, the Appellant has prayed for allowing the credit and setting aside the impugned order. 4. The Ld. A.R. submitted that input services availed for setting up of a factory do not fall within the purview of input services defined under Rule 2(I) of the CCR, w.e.f 01.04.2011 inasmuch as the same has been specifically omitted from the includes part of the definition vide Notification No. 03/2011 dated 01.03.2011. Accordingly, he prayed for rejecting the appeal filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject input services used in setting up of the factory. This view has been held by the Tribunal in the case of Pepsico India Holdings Pvt. Ltd., Vs. CCT, Tirupati, 2021 (7) TMI 1094-CESTAT Hyderabad. The relevant part of the decision is extracted below: 16. We find that the definition of input service prior to 1.04.2011 had two parts- a main part of the definition and an inclusive part of the Excise Appeal No. 76189 of 2018 5 definition. This inclusive part specifically included the services availed for setting up the factory . After 1.04.2011, it has three parts- a main part, an inclusive part and an exclusive part. The services used for setting up the factory are neither in the inclusive part of the definition nor the exclusive part of the definition. Therefore, such services were neither specifically included nor were specifically excluded. 17. It takes us to the main part of the definition which must be examined. If it is wide enough to cover the services in question, CENVAT credit will be available, otherwise it will not be available. The main part includes services used by a manufacturer, whether directly or indirectly, in or in relation to the manufacturer o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture (i.e., in relation to a and b above); d) Activities indirectly in relation to manufacture (i.e., in relation to a and b above); 22. All four of the above qualify as input service as per Rule 2(I) (ii) as applicable post 1.4.2011. Although setting up the factory is not manufacture in itself, it is an activity directly in relation to manufacture. Without setting up the factory, there cannot be any manufacture. Service used in setting up the factory are, therefore, unambiguously covered as input services under Rule 2 (I) (ii) of the CENVAT Credit Rules 2004 as they stood during the relevant period (post 1.4.2011). The mere fact that it is again not mentioned in the inclusive part of the definition makes no difference. Once it is covered in the main part of the definition of input service, unless it is specifically excluded under the exclusion part of the definition, the appellant is entitled to CENVAT Excise Appeal No. 76189 of 2018 7 credit on the input services used. This Bench has already taken this view in Kellogs. Similar views have been taken by the other benches in the other cases mentioned above. 23. In view of the above, the impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * Kellogs India Pvt. Ltd., Vs. CCT, Tirupathi GST, 2020 (7) TMI 414 CESTAT Hyderabad. * CCE, Kolkata Vs. Texmaco UGL Rail, 2019 (7) TMI 1651-CESTAT Kolkata. * Hindalco Industries Ltd., Vs. CGST, Jabalpur, 2019 (5) TMI 1620- CESTAT New Delhi. * Linde India Pvt. Ltd., Vs. Commissioner of CGST CX, Rourkela 2023 (5) TMI 718 CESTAT, Kolkata. * Bharat Coking Coal Ltd., Vs. CCE ST, Ranchi 2023 (6) TMI 297- CESTAT-Kolkata. 11. Following the decisions cited above, we observe that the subject input services have a direct nexus with the manufacture of finished goods in the means clause of the definition of input services. Accordingly we hold that even if the word setting up of a factory has been specifically excluded from the definition w.e.f. 01.04.2011, such services are covered within the ambit of main clause of the definition. Hence, it would still qualify as an input service as per Rule 1(I) of CCR, 2004. In the light of the above discussions, we allow the Cenvat credit availed by the Appellant on the input services used in setting up of the factory. Consequently, the impugned order confirming the demand along with interest and imposing p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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