By TIOL News Service

MUMBAI, AUG 02, 2017: THE appellant is engaged in the manufacture of MS Barrels.

For constructing a temporary shed for the storage of goods, they received services of erection, commission and installation on which they availed CENVATcredit.

The department objected and denied credit on the ground that the services were not used in or in relation to the manufacture of final product.

The Commissioner (Appeals) also upheld this view.

In appeal before the CESTAT, the appellant took the plea that the services of erection, commission and installation were received for setting up of temporary shed used for storage of final product of the appellants during the rainy season; that the definition of ‘input service' in 2(l) of CCR, 2002 includes the services of setting up of factory shed in the premises and also for storage of goods and, therefore, the credit is admissible.

The AR reiterated the findings of the impugned order.

The Bench extracted the definition of "Input service" and observed -

"5. …, it can be seen that the services of setting up, modernization, renovation or repairs of a 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, are in the inclusion category of definition of "input service". The setting up of the factory also includes the storage place in the factory premises. Therefore, in the present case the service received for setting up of storage is admissible input service. Even the independent storage is also included in the definition of input service…."

The impugned order was set aside and the appeal was allowed.

(See 2017-TIOL-2723-CESTAT-MUM)