2026-VIL-1464-CESTAT-AHM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Cenvat Credit on Input Service used for setting up Manufacturing Facility - Eligibility of services used for setting up factory after omission of phrase setting up from Rule 2(l) of Cenvat Credit Rules 2004 effective from 01.04.2011 - Appellant engaged in manufacturing of excisable goods availed service tax credit on various services for setting up of new plant. Revenue disallowed Cenvat Credit contending that as per definition of input service under Rule 2(l) of Cenvat Credit Rules 2004, credit on input services used for setting up of factory is not admissible after amendment effective 01.04.2011 - Whether services used for setting up of factory are eligible for Cenvat Credit notwithstanding deletion of phrase setting up from the inclusive clause of the definition - HELD - Definition of input service comprises a main clause, an inclusive clause and an exclusive clause - Services used for setting up factory are unambiguously covered as input services under the main clause of Rule 2(l) of the Cenvat Credit Rules 2004 as they are used either directly or indirectly in or in relation to manufacture of final products. The mere deletion of phrase setting up from the inclusive clause does not render such services ineligible as long as they are covered by the main clause and not specifically excluded under the exclusion clause - The decisions in Pepsico India Holdings (Pvt.) Ltd., M/s. Shell India Pvt. Ltd. and M/s. Nemak Aluminium Casting (I) Pvt Ltd. support the view that services used for setting up a factory are covered within the main clause as they have direct and inextricable nexus to manufacturing activity - Matter is remanded to the Adjudicating Authority to re-examine each service availed by the Appellant with reference to documentary evidence adduced to determine whether such service is covered by exclusion clause in the definition of input service under Rule 2(l) of CCR, 2004 – The appeals are allowed by remand
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