2026-VIL-51-CESTAT-HYD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Cenvat Credit on Input Services used for setting up of Factory, Extended Period – Appellants were constructing a plant and availing certain Cenvat credits in respect of various input services - Dept raised two demands- one for credit being the irregularly availed on input services used for initial setting up of the unit, and another for irregular credit availed on various counts - Whether Cenvat credit is eligible on input services used for initial setting up of factory – HELD - The definition of 'input service' in the CCR, 2004 underwent changes before and after April 1, 2011, whereby the term 'setting up' was excluded from the inclusive part of the definition. While certain specified services like architectural services, construction services etc. used for setting up of the factory were ineligible for Cenvat credit, the credit on other input services used during the setting up stage, which were not specifically excluded, should be allowed - The matter back is remanded back to the original adjudicating authority to re-examine the invoices and allow the benefit of Cenvat credit on those input services which were clearly not covered under the excluded category of services – The appellant had itself reversed the entire amount of irregular credit along with interest before the issuance of the show cause notice. Merely because the appellant had made good the amount, it did not absolve them of the statutory violations, and the Department was justified in invoking the extended period of limitation and imposing the penalty - The appeal is partly allowed by way of remand to the original adjudicating authority to re-examine the invoices and allow the Cenvat credit on those input services which were not specifically excluded under the definition of 'input service'. The demand and penalty in respect of the irregular credit availed is upheld – The appeal is partly allowed
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