Case Law Details
Pepsico India Holdings (Pvt.) Ltd Vs Commissioner of Central Tax (CESTAT Hyderabad)
The department wants to deny benefit of the CENVAT credit on the ground that ‘services related to setting up of a factory’ which were specifically included prior to 1.4.2011 were no longer specifically included post 1.4.2011.
We find that the definition of ‘input service’ prior to 1.4.2011 had two parts- a main part of the definition and an inclusive part of the definition. This inclusive part specifically included the services availed for setting up the factory. After 1.4.2011, it has three parts- a main part, an inclusive part and an exclusive part. The services used for setting up the factory are neither in the inclusive part of the definition nor the exclusive part of the definition. Therefore, such services were neither specifically included nor were specifically excluded.
It takes us to the main part of the definition which must be examined. If it is wide enough to cover the services in question, CENVAT credit will be available, otherwise it will not be available. The main part includes “services used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal.” The term manufacture is not defined in the Rules.
Term ‘manufacture’ itself is very wide and includes anything incidental or ancillary to manufacture.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
