Jamshedpur Continuous Annealing & Processing Co. Pvt. Ltd. Vs Commr. of CGST & Central Excise (CESTAT Kolkata)
CESTAT Kolkata allowed the appeal filed by Jamshedpur Continuous Annealing & Processing Co. Pvt. Ltd. against the demand of Service Tax/CENVAT credit relating to services used for setting up its manufacturing unit.
The appellant manufactures continuous annealed steel coils and sheets under Chapter 72 of the Central Excise Tariff Act, 1985. During its business operations, it procured various services, including erection and commissioning, design and drawings, consultancy, installation and other related services. Service providers charged service tax on these services, and the appellant availed CENVAT credit on the basis that the services were connected with the manufacture of its final products. The credit was also disclosed in the appellant’s excise returns.
A show cause notice dated 12 February 2018 alleged that services used for setting up the factory were not eligible for CENVAT credit after 1 April 2011 because the words “setting up” had been deleted from the inclusive portion of the definition of “input service” under Rule 2(l) of the CENVAT Credit Rules, 2004. The adjudicating authority confirmed the demand, leading to the present appeal.
The appellant contended that although “setting up” was deleted from the inclusive portion of the definition from 1 April 2011, the main portion of the definition continued to cover services used by a manufacturer, directly or indirectly, in or in relation to the manufacture of final products. According to the appellant, there was no specific exclusion of services relating to erection and commissioning of machinery.
