M/S. Hindustan Zinc Ltd vs Commissioner Of Central Excise
- CitationExcise Appeal No. 59821 of 2013
Ratio decidendi
The rule this decision rests on
Under the definition of "input service" in Rule 2(l) of the Cenvat Credit Rules, 2004, as it stood before 01.04.2011, services used in relation to the setting up of a factory or premises of the provider of an output service fall within the definition, and credit on such services is admissible where the factory is set up for the manufacture of final products liable to central excise duty. A denial of Cenvat credit on construction services used for setting up a factory, for the period before the amendment omitting the words "setting up", is contrary to Rule 2(l) and cannot be sustained, the question being concluded by the Tribunal's earlier decision in Liugong India Pvt. Ltd. vs. CCE Indore, which the Tribunal follows as binding precedent.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in-Original No. JAI-EXCUS-002-COM-042-13-14 dated 03.07.2013 passed by the Commissioner of Central Excise, Jaipur II].
For approval and signature:
Hon'ble Shri Ashok Jindal, Member (Judicial)
Hon'ble Shri B. Ravichandran, Member (Technical)
1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3 Whether Their Lordships wish to see the fair copy of the Order?
4 Whether Order is to be circulated to the Departmental authorities?
M/s. Hindustan Zinc Ltd. Appellants
Vs.
Commissioner of Central Excise Respondent
ST, Jaipur
Appearance:
Shri B L Narasimhan, Advocate for the Appellants
Shri Ranjan Khanna, DR for the Respondent
CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial)
Hon'ble Mr. B Ravichandran, Member (Technical)
Date of Hearing /decision: 19.08.2015
FINAL ORDER NO. 52628 /2015-EX(DB)
Per Ashok Jindal:
The appellant is in appeal against the impugned order wherein the inputs service credit on construction service has been denied to the appellant on the premise that same does not qualify as input service as per Rule 2(l) of the Cenvat Credit Rules, 2004.
2. Heard the parties.
3. Similar issue came up before this Tribunal in the case of Liugong India Pvt. Ltd. vs. CCE Indore, Final Order No. A/51702/2014 EX(DB) dated 31.3.2014 wherein this Tribunal has observed as under:
5. We have considered the submissions from both the sides and perused the records. There is no dispute that the services, in question, in respect of which the Cenvat Credit has been taken are the services relating to setting up of the factory and have been used for this purpose only. During the period of dispute the definition of input service as given in Rule 2(l) of Cenvat Credit Rules, 2004 was as under:-
input service means any service:-
(i) used by a provider of taxable service for providing an output service, or
(ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and [clearance of final products upto the place of removal]
and includes services used in relation to setting up, modernization, renovation or repairs of factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal.
It is only with effect from 01.04.2011 by amendment to the Rule 2(l) that words setting up were omitted. The period of dispute in this case is from 2008-2009 to 2009-2010 i.e. the period prior to 01.04.11 when the definition of input service specifically included the services used in relation to setting up of the factory or premises of the provider of output service. Thus the services, in question, used for setting up of factory have to be treated as input service and would be eligible for Cenvat Credit, as the factory has been setup for manufacture of final products which are liable to Central Excise duty. Therefore denial of Cenvat Credit, in question, is contrary to the provisions of Rule 2(l) of Cenvat Credit Rules, 2004. We find that the same view has been taken by the Tribunal in the case of Bellsonica Auto Component India Pvt. Ltd.(Supra) and also in the case of Madhusudan Auto Ltd.(Supra). The impugned order, therefore, is not sustainable. The same is set aside. The appeal is allowed.
4. As the issue has already been settled by the decision of this Tribunal in the case of Liugong India Pvt. Ltd. vs. CCE Indore (supra), therefore, following the said precedent decision of this Tribunal, we allow the cenvat credit to the appellant on construction services and set aside the impugned order by allowing the appeal.
(Dictated and pronounced in the open court )
( Ashok Jindal ) Member(Judicial)
( B Ravichandran )
Member(Technical)
ss
4
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