2026-VIL-10-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Setting up of factory, CENVAT credit on input services, Modernization of Mines/factory – Denial of CENVAT credit on the input services received in connection with modernisation of plant - Whether the appellant is entitled to the CENVAT credit on the input services used for the modernization plant when the definition of "input service" under the CENVAT Credit Rules, 2004 was amended with effect from April 1, 2011 to exclude "setting up of a factory" from its ambit – HELD - The input services in question are directly linked to the manufacture of the final product, as without these services, the appellant could not have set up the factory for the manufacture of goods. Since these input services are covered under the "means" clause of the definition of "input service", the fact that "setting up of a factory" was specifically excluded from the "includes" clause does not make any difference. Unless the input services are specifically excluded from the definition, the appellant is entitled to the CENVAT credit on such services – Further, the term "manufacture" is defined very broadly under the Central Excise Act, 1944, and includes any process incidental or ancillary to the completion of a manufactured product. The services used for the modernization of the factory are covered within this wide definition of "manufacture" and, therefore, qualify as "input services" under the CENVAT Credit Rules, 2004 - The appellant is entitled to the CENVAT credit on the items in dispute, which has been used by them for setting of factory/mines post 01.04.2011 – The appeal is allowed
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