2019 (1) TMI 1171 – CESTAT NEW DELHI – TMI – CENVAT Credit – input – Cement, M.S. Plates, M.S. Channels etc. used for construction of factory shed, building or laying of foundation or making of structures for the support of capital goods – Held that:- The plain reading of the amended explanation in the definition of Input, makes it clear that the opening line for Explanation 2 is about the input including goods as are used in the manufacture of the capital goods used in the factory of the manufacturer. It becomes clear that the explanation is exclusively in respect of the manufacture only, that too when it is used for construction of factory shed, building or laying of foundation or making of structure etc. The use of word factory shed further clarifies that the explanation is exclusively for the manufacturer and not for the service provider. Thus, by taking inference from the above said explanation, credit in respect of inputs, which is undisputedly used for providing output service
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ruction of factory shed, building or laying of foundation or making of structures for the support of capital goods as inputs. Department alleging the credit to have been wrongly availed, served the show cause notice No.1476 dated 10.06.2013 upon the appellant proposing that the credit of ₹ 25,00,843/- be disallowed to the appellant and be rather recovered alongwith the interest at the appropriate rate and the proportionate penalties. The said proposal was confirmed vide the Order-in-Original No.822 dated 08.04.2015. Being aggrieved, an appeal was preferred before Commissioner (Appeals), who vide Order in Appeal No.155 dated 20th March, 2018 has rejected the appeal. Resultantly, the appellant is before this Tribunal. 2. I have heard Mr. Ashish, C.A. for the appellant and Mr. P. Juneja, ld. D.R. for the Department. 3. It is submitted on behalf of the appellant that through vide Notification No. 16/2009 dated 07.07.2009 explanation 2 has been added to the definition of input. But it
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ayed to be allowed. 5. Per-contra, ld. DR while justifying the order under challenge has impressed upon para 7 of the impugned order. It is submitted that Commissioner (Appeals) has reasonably explained as to why he do not agree to the grounds taken by the appellant for explanation 2 to not to be applicable to the service provider. The case laws as relied upon by the appellant have clearly been distinguished. Therefore, there is no infirmity in the order. Appeal is accordingly prayed to be dismissed. 6. After hearing both the parties, it is foremost important to look into the definition of input as was existing since cenvat credit Rules, 2004 came into existence, as it got amended in the year 2009 and subsequently in the year 2011. The definition of inputs prior to 1-4-2011 as well as after 1-4-2011 is noticed as under : Prior to 1-4-2011. As per Rule 2(k) of Cenvat Credit Rules, 2004 input means – (i) all goods except light diesel oil, high speed diesel oil and motor spirit, commonly
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nels, CTD or TMT bars or other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods. w.e.f. 1-4-2011 : As per Rule 2(k) of the Cenvat Credit Rules, 2004, input means – (i) all goods used in the factory by the manufacturer of the final product; or (ii) any goods including accessories, cleared along with the final product, input means the value of which is included in the value of the final product and goods used for providing free warranty for final products; or (iii) all goods used for generating of electricity or steam for captive use; or (iv) all goods used for providing any output service; But excludes – (A) light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol; (B) any goods used for – (a) construction of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of any taxable se
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etc. The use of word factory shed further clarifies that the explanation is exclusively for the manufacturer and not for the service provider. Thus, by taking inference from the above said explanation, credit in respect of inputs, which is undisputedly used for providing output service namely errection, commission, installation, the credit cannot be denied to the service provider i.e. the appellant. I draw my support from the decision of Ahmedabad Tribunal in Ultratech Transmission (supra) and I am of the opinion that the findings of Commissioner (Appeals) in para 7 thereof do not help the Revenue as the exclusion made under the explanation to definition of input service does not extend to the service provider. 8. As a result, I am of the opinion that the Commissioner (Appeals) has found wrong observation. The decisions relied upon by the appellant though have been held to not to be applicable to the given circumstances that Commissioner (Appeals) has miserably been silent to point ou
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