2026-VIL-1287-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Cenvat Credit – Eligibility of credit on input services used for setting up of factory after deletion of word ‘setting up’ from inclusive portion of definition of input services – Appellant availed Cenvat credit on services procured for setting up of Plant – Department during audit issued show cause notice denying Cenvat credit of the entire amount claimed, alleging that after the deletion of the term setting up from the inclusive portion of the definition of input services w.e.f. 01.04.2011, no credit of any service used for setting up of factory would be available and confirmed the demand – Whether Cenvat credit is available for input services used in setting up of factory after the amendment to Rule 2(l) of Cenvat Credit Rules, 2004 – HELD – The definition of input service has three limbs namely means clause, includes clause and excludes clause – Services used for setting up of a factory are directly linked to the manufacture of the final product and are covered within the ambit of means clause which defines input service as service used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products – Although the word setting up was specifically excluded from the includes clause w.e.f. 01.04.2011, the services remain covered under the main means clause as they are used in relation to manufacture – Services for setting up a factory are activities in relation to manufacture and being covered by the main clause and not specifically excluded by the excludes part, qualify as input service for Cenvat credit – None of the exclusionary clauses cover the services on which Cenvat credit has been availed and these services are clearly not in relation to construction of any building or civil structure but are covered under the means portion of the definition of input services – The Cenvat credit on services used in setting up of factory is admissible post 01.04.2011 – The impugned order is set aside and the appeal is allowed
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