In the instant case, Endurance Technology Pvt. Ltd. (the Respondent) was availing Cenvat credit on Management, Maintenance or Repair Services (Impugned Input services) received on windmills installed outside the factory premises for generation of electricity for being used in factory premises to manufacture the final product. The Department denied Cenvat credit on the ground of Impugned input services being received outside the factory premises.
The Hon’ble High Court of Bombay held that Rule 3 and 4 of the Credit Rules provide that any Input or Capital goods received in the factory or any Input service received by manufacturer of final product would be susceptible to Cenvat credit. The Credit Rules do not say that Input service received by a manufacturer must be received at the factory premises. Thus, the Impugned Input services received on windmills installed by the Respondents outside factory is Input service as defined by Rule 2(l) of the Credit Rules and Cenvat credit would be available on impugned Input services.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: firstname.lastname@example.org)