Gujarat High Court
Real Strips Ltd vs Commissioner Of Central Excise - Ii on 13 November, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
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C/TAXAP/1564/2011 CAV JUDGMENT DATED: 13/11/2025
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Reserved On : 15/10/2025
Pronounced On : 13/11/2025
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/TAX APPEAL NO. 1564 of 2011
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting Yes No
✓
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REAL STRIPS LTD
Versus
COMMISSIONER OF CENTRAL EXCISE - II
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Appearance:
MR SUDHANSHU BISSA FOR MR PARESH M DAVE(260) for the
Appellant(s) No. 1
MS HETVI H SANCHETI(5618) for the Opponent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned advocate Mr. Sudhanshu
Bissa for learned advocate Mr. Paresh M.
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Dave for the appellant and learned
advocate Ms. Hetvi H. Sancheti for the
respondent.
2. This Tax Appeal is filed under section
35G of the Central Excise Act, 1944 (For
short "the Act") arising out of the final
order dated 02.08.2011 passed by the
Customs, Excise and Service Tax Appellate
Tribunal, West Zonal Bench at Ahmedabad
(For short "the Tribunal") in Appeal
No.E/576/11.
3. The appeal is admitted by this Court
vide order dated 15.02.2012 for
consideration of the following substantial
questions of law:
"a) In view of the definition of
"input service" as provided in
Rule 2 of the CENVAT Credit Rules,
2004, whether the Tribunal below
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committed substantial error of law
in holding that CENVAT Credit of
service tax paid on services, like
installation, commissioning and
civil works as well as maintenance
for a windmill comes within the
purview of Rule 3 of the said
Rules.
(b) Whether the Tribunal below
committed substantial error of law
in denying the CENVAT credit of
service tax paid on services, like
installation and commissioning as
well as civil works and
maintenance of a windmill only
because the windmill was located
at a place other than the factory
premises and electricity generated
at the site of windmill was not
excisable."
4. Brief facts of the case are that the
appellant is a company situated in
Ahmedabad and is engaged in the
manufacture of goods like H.R. Coils and
C.R.Coils and has installed a Windmill in
Kutch District for generating electricity
using wind energy.
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5. For installation and commissioning of
this windmill, the appellant has availed
erection, commissioning and installation
services on which the Agency providing the
above services has paid service tax of
Rs.2,87,122/- inclusive of Education cess.
Subsequently, the appellant after
receiving invoices of the erection,
commissioning and installation has availed
credit of this amount of service tax in
its RG 23A Part II. It is the case of the
appellant that these transactions were
also duly reflected in the Cenvat register
and extracts thereof were also submitted
with the monthly returns of the above
period. Further, it is the case of the
appellant that no objection was raised by
the Range and Divisional Officers in this
regard.
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6. It is the case of the appellant that,
after the said agency installed,
commissioned and erected the windmill and
after windmill started operating
successfully, Gujarat Energy Development
Agency (GEDA) has also issued certificates
for commissioning of windmill so as to
certify that the appellant had done all
that was necessary under the Government
policy for setting up a wind farm for
generating wind energy. The appellant
having started producing electricity using
the above windmill, the units of
electricity so generated were given to
Gujarat Energy Transmission Corporation
Limited (GETCO) who transferred
electricity so generated through the State
Government grid line, and the certificates
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in appellants favour for quantity i.e.
units of electricity generated by the
appellant and units of electricity allowed
to the appellant for being utilized in its
factory after adjusting 4% wheeling
charges have also been issued by GETCO on
regular basis.
7. It is the case of the appellant that
on the basis of these certificates, the
appellant has been allowed to utilize the
specified number of units of electricity
at its factory in relation to
manufacturing and other related
operations, and no electricity charges or
duties have been recovered from the
appellant on these units of electricity
under the above policy.
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8. However, the Central Excise EA-2000
Audit Party found availment of the above
cenvat credit objectionable and therefore,
a Show Cause Notice came to be issued by
the Assistant Commissioner of Central
Excise, dated 02.03.2010 proposing to
deny and recover Cenvat credit of
Rs.2,87,122/- on the ground that credit of
service tax and Education cess paid on
erection, commissioning and installation
services for windmill was not available
because windmill was installed at a place
other than the factory and hence,
availment of credit was in contravention
of Rules 3(1) and 4(1) of Cenvat Rules.
9. The appellant filed a reply to the
above Show Cause Notice. However, the
Assistant Commissioner of Central Excise.
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Division-IV, Ahmedabad-II passed Order-
in-Original dated 01.11.2010 thereby
confirming that credit of Rs.2,87,122/-
was not admissible to the appellant, and
also ordered for appropriation and
adjustment of the amount of Rs. 2,87,122/-
along with interest of Rs.12,364/- already
deposited by the appellant during the
intervening period, and a penalty of Rs.
2,87,122/-.
10. Being aggrieved by the Order-in-
Original, the appellant preferred an
appeal before the Commissioner (Appeals),
Ahmedabad who by Order-in-Appeal dated
19.01.2011 upheld the demand of cenvat
credit along with interest but reduced the
penalty to Rs.2000/-. The Commissioner
(Appeals) while passing the order-in-
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appeal placed reliance upon the decisions
of the Tribunal in cases like Rajhans
Metals Pvt. Ltd. (supra) and Atul Auto
Ltd. -2009 (237) ELT 102 etc. wherein the
Tribunal has held in all such cases that
credit of service tax paid on services
availed in respect of installation,
erecting, commissioning and maintenance of
Windmills was not admissible because the
Windmills were installed at a far away
place and not in the factory premises and
because the electricity generated by using
Windmills was not excisable and
accordingly the services used at the site
of the Windmills could not be held as
input services for the manufacturing unit
located elsewhere.
11. Being aggrieved, the appellant filed
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an appeal before the Tribunal against the
above order of the Commissioner (Appeals).
The Tribunal vide order 02.8.2011 upheld
the order as regards denial of cenvat
credit and recovery of interest alongwith
penalty of Rs.2,000/- observing as under:
"M/s. Real Strips, Ahmedabad are
engaged in manufacture of H.R.
Coils and C.R. Coils falling under
Chapter Heading No.72 of Central
Excise Tariff Act, 1985. They had
availed credit of Rs.2,87,122/ in
respect of service tax paid on
services namely installation and
and civil work, maintenance of the
wind mill installed for generation
of electricity considering such
services as input service. The
department issued a show cause
notice stating that their activity
does not fall under the definition
of input service given in Rule
2(1). It was the view of the
department that the wind mill
located at Kutch cannot be
considered as input service as the
same is not used by the
manufacturer. The original
adjudicating authority confirmed
the demand and appropriated the
amount of credit reversed along
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with interest and imposed a
penalty. The appellant filed an
appeal before Commissioner
(Appeals) who also upheld the
demand and interest but reduced
the penalty. They aggrieved with
the order of Commissioner
(Appeals) and filed this appeal
along with the stay petition.
2 The definition of "input
service" as provided under Rule
2(1) is as follows:
input service" means any service
(1) used by a provider of taxable
service for providing an output
service, or
(11) used by the manufacturer,
whether directly or indirectly, in
or in relation to the manufacture
of final products and clearance of
final products from and includes
services used in relation to
setting up. inward transportation
of inputs or capital goods and
outward transportation upto the
place of removal".
3. As is clear from the above
definition, "input service" means
service which is used by the
manufacturer of final products and
clearance of final products up to
the place of removal. Therefore, a
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service can be treated as input
service only when it is 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.
4 In the instant case, the wind
mill is located at Kutch and
therefore cannot be considered as
input service as the same are not
used by the manufacturer directly
or indirectly. Further more the
power generated is an exempted
product and different activity
altogether and not related to
manufacture. Therefore the
availment of credit is not
sustainable.
5. In fact the issue has been
already decided by this Tribunal
in the case of M/s. Real Strips
Ltd. Vs. CCE Ahmedabad vide order
No.A/619/WZB/AHD/2011 dated
25.03.11. The order of the
Tribunal clearly denied the
service tax credit and upheld the
order. I have also gone through
the following judgments cited by
the learned advocate:
1. Rajhans Metals (P) Ltd. Vs. CCE
Rajkot [2007 (8) STR 498 (Tri.
Ahmd.)]
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2. Atul Auto Ltd. Vs. CCE Rajkot
[2009 (237) ELT 102 (Tri. -
Ahmd.)]
3. Ellora Times Ltd. Vs. CCE
Rajkot [2009 (13) STR 168 (Tri.
Ahmd.)]
4. Lanxess ABS Ltd. Vs. CCE
Vadodara [2010 (259) ELT 551 (Tri.
Ahmd.)]
6. It is very clear that the
appeal is not sustainable legally.
therefore dismiss the appeal and
uphold the order of the
Commissioner (Appeals)."
12. Learned advocate Mr. Sudhanshu Bissa
appearing for the appellant submitted that
only ground on which Cenvat Credit is
denied by the respondent authorities and
as upheld by the Tribunal is that the
electricity was being generated in Wind
Mills far away from the factory premises
and as electricity is not excisable,
Cenvat Credit is not available even at the
premises of the Wind Mills.
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13. It was submitted that the electricity
generated by the Wind Mills was utilised
by the appellant in its manufacturing unit
through GEB. It was submitted that the
agreement with GEB was only for the
purpose of utilising the power generated
by the Wind Mills for consumption at
factory for manufacturing purpose which is
connected through GEB Power Grid/High
tension supply lines.
14. It was submitted that the appellant
was already paying charges for excess use
of power from GEB in addition to power
generated by the Wind Mills transmitted
through GEB power grid. It was therefore,
submitted that there is nexus between the
power generated through Wind Mills and the
goods manufactured as three activities i.e
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sale, supply and consumption takes place
immediately even though place of
generation and manufacturing are different
and therefore, the appellant is entitled
to avail the credit of service charges
incurred in relation to the Wind Mills. In
support of his submission, reliance was
placed on the following decisions:
1) Commissioner of Central Excise v.
Excel Crop Care Ltd. reported in 2018 (12)
STR 436 (Guj.).
2) C.C.E. & Cus., Aurangabad v. Endurance
Technology Pvt. Ltd. reported in 2017 (52)
S.T.R. 361 (Bom.)
3) Commissioner of C. Ex. & S.T., Chennai
v. Ashok Leyland Ltd. reported in
2019(369) E.L.T. 162 (Mad.)
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4) Parry Engg. & Electronics P. Ltd. v.
C.C.E. & S.T., Ahmedabad-I,II,III reported
in 2015(40) S.T.R. 243 (Tri.-LB)
5) Endurance Technologies P. Ltd. v.
Commr of C. Ex., Aurangabad reported in
2011 (273) E.L.T. 248 (Tri.-Mumbai)
15. It was submitted that this Court in
case of Excel Crop Care Ltd.(supra) after
considering the provisions of the Act and
the Rules and more particularly,
definition of "input service" as defined
in Rule 2(l)(i) of the Rules held that
mobile service provider, who is liable to
pay service tax and recovers the same by
adding such service tax in his bill, is
the person providing taxable service and
is rendering "output service" so as to
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constitute "input service" in the hands of
respondent assessee. It was therefore,
submitted that the service tax paid by the
appellant on the installation and erection
of the Wind Mill is required to be given
credit under the provisions of the Rules.
16. Reliance was also placed on Circular
No.97/8/2007-S.T. dated 23.08.2007 more
particularly, clause 8.3 thereof in which
doubt raised regarding the admissibility
of the Cenvat Credit on service tax paid
in respect of mobile phones was answered
to the effect that in the Rules, no
condition has been prescribed with regard
to admissibility of credit of service tax
only on telephone connection installed in
the business premises. It was therefore,
submitted that the for the electricity
utilised for manufacturing by the
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appellant provided by GEB against supply
of electricity generated by Wind Mills,
the appellant was entitled to the credit
of service tax.
17. On the other hand, learned advocate
Ms. Hetvi Sancheti for the respondent
reiterated the contentions raised before
the Tribunal and submitted that there is
no connection between the electricity
generated at the place of installation of
Wind Mills by the appellant and the
manufacturing activity taking place at its
factory as the electricity is being
received through GEB. It was pointed out
that the electricity itself is not
excisable and therefore, service tax
credit is rightly rejected by the
Tribunal.
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18. Having heard the learned advocates for
the respective parties and having
considered the facts of the case, the
issue on hand has already been decided by
this Court by order of even date in Tax
Appeal No.1037 of 2008, wherein it has
been held as under:
"18. Having heard the learned
advocates for the respective
parties and having considered
the facts of the case, it would
be germane to refer to the
relevant provisions of the Act
and the Rules.
Finance Act, 1994:
"65(29) - "commissioning
and installation agency"
means any agency providing
service in relation to
erection, commissioning or
installation."
"(39a) "erection,
commissioning or
installation" means any
service provided by a
commissioning and
installation agency, in
relation to,-
(1) erection,
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commissioning or
installation of plant,
machinery or equipment; or
(ii) installation of-
(a) electrical and
electronic devices,
including wirings or
fittings therefor; or
(b) plumbing, drain laying
or other installations for
transport of fluids; or
(c) heating, ventilation
or air-conditioning
including related pipe
work, ductwork and sheet
metal work; or
(d) thermal insulation,
sound insulation, fire
proofing or water
proofing; or
(e) lift and escalator,
fire escape staircases or
travelators; or
(f) such other similar
services;"
Cenvat Credit Rules, 2004 :
"Rule 2(l)"input service"
means any service, -
(i) used by a provider of
taxable service for
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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 from the
place of removal,
and includes services used
in relation to 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,
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;"
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Rule (4) Conditions for
allowing CENVAT credit (1)
The CENVAT credit in
respect of inputs may be
taken immediately on
receipt of the inputs in
the factory of the
manufacturer or in the
premises of the provider
of output service."
19. Definition of term "input
service" as appearing in Rule
2(l) of the Rules would also
include any service used by a
provider of taxable services for
providing an output service, or
used by the manufacturer,
whether directly or indirectly,
in relation to the manufacture
of final products and clearance
of final products from the place
of removal.
20. In the facts of the case,
the appellant has utilised the
electricity supplied by GEB
against the electricity
generated by Windmills and
therefore, service tax paid by
the appellant on the
installation, erection and
services in connection with
maintenance of the Wind Mills
are exclusively used in relation
to manufacturing activity and
therefore, the same would be
squarely covered under the
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definition of "input service",
as the management, maintenance
and repair of Windmills
installed by the appellant would
fall within "input service" as
defined by clause (l) of Rule 2
read with Rule 4 of the Rules
which provides that any input or
capital goods received in
factory or any input services
received by the manufacturer of
final product would be
susceptible to Cenvat Credit.
21. It is pertinent to note that
there is no provision in the
Rules which stipulates that
input services received by the
manufacturer must be received by
the manufacturer at the factory
premises.
22. This Court in case of Excel
Crop Care Ltd. (supra) while
considering the question as to
the allowability of Cenvat
Credit on mobile services after
considering Rule 2(l) of the
Rules held that the mobile
service provider who is liable
to pay service tax and recovers
the same by adding such service
tax in his bill, is the person
providing taxable service and is
rendering output service so as
to constitute input service in
the hands of the assessee and
therefore, the ground on which
the credit was disallowed as the
phones were not installed in the
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factory premises was held to be
a ground not germane to the
provisions of the Rules.
23. The Hon'ble Bombay High
Court in case of Endurance
Technology Pvt. Ltd.(supra) on
similar issue of allowability of
Cenvat Credit on electricity
generated from the Windmills has
held as under:
"5. On perusal of these
Rules, it becomes clear
that the management,
maintenance and repair of
windmills installed by the
respondents is input
service as defined by
clause "I" of Rule 2. Rule
3 and 4 provide that any
input or capital goods
received in the factory or
any input service received
by manufacture of final
product would be
susceptible to CENVAT
credit. Rule does not say
that input service
received by a manufacturer
must be received at the
factory premises. The
judgments referred to
above, also interpret the
word "input" service in
similar fashion.
In the case of
Commissioner of Central
Excise, Nagpur v.
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Ultratech Cement Ltd.
[cited supra), the
Division Bench of this
Court held that the
definition of "input
service" is very wide and
covers not only services
which are directly or
indirectly used in or in
relation to manufacture of
final product but also
includes various services
used in relation to
business of manufacture of
final product. The
expression "activities" in
relation to business is
also discussed in this
judgment by referring to
judgment of Apex Court.
In the case of Deepak
Fertilizers &
Petrochemicals Corporation
Ltd. v. C.C.Ex. Belapur
[cited supra) the Division
Bench held as under:
"The definition of the
expression input service'
covers any services used
by the manufacturer,
whether directly or
indirectly, in or in
relation to the
manufacture of final
products. The words
'directly or indirectly'
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and 'in or in relation to'
are words of width and
amplitude. The subordinate
legislation has advisedly
used a broad and
comprehensive expression
while defining the
expression 'input
service'. Rule 2(1)
initially provides that
input service means any
services of the
description falling in
subclauses (i) and (ii).
Rule 2(1) then provides an
inclusive definition by
enumerating certain
specified services. Among
those services are
services pertaining to the
procurement of inputs and
inward transportation of
inputs. The Tribunal,
proceeded to interpret the
inclusive part of the
definition and held that
the Legislature restricted
the benefit of Cenvat
credit for input services
used in respect of inputs
only to these two
categories viz. for the
procurement of inputs and
for the inward
transportation of inputs.
This interpretation which
has been placed by the
Tribunal is ex facie
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contrary to the provisions
contained in Rule 2(1).
The first part of Rule
2(1) inter alia covers any
services used by the
manufacturer directly or
indirectly, in or in
relation to the
manufacture of final
products. The inclusive
part of the definition
enumerates certain
specified categories of
services. However, it
would be farfetched to
interpret Rule 2(1) to
mean that only two
categories of services in
relation to inputs viz.
for the procurement of
inputs and for the inward
transportation of inputs
were intended to be
brought within the purview
of Rule 2(1). Rule 2(1)
must be read in its
entirety. The Tribunal has
placed an interpretation
which runs contrary to the
plain and literal meaning
of the words used in Rule
2(1). Moreover as we have
noted earlier, whereas
Rule 3(1) allows a
manufacturer of final
products to take credit of
excise duty and Service
Tax among others paid on
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any input or capital goods
received in the factory of
manufacturer of the final
product, insofar as any
input service is
concerned, the only
stipulation is that it
should be received by the
manufacturer of the final
product. This must be read
with the broad and
comprehensive meaning of
the expression 'input
service' in Rule 2(1). The
input services in the
present case were used by
the appellant whether
directly or indirectly, in
or in relation to the
manufacture of final
products. The appellant,
it is undisputed,
manufactures dutiable
final products and the
storage and use of ammonia
is an intrinsic part of
that process."
6. In view of this
discussion, we have no
hesitation to hold that
the answer to question No.
(1) is in affirmative.
Despite this settled
position, learned counsel
for the appellant tried to
submit that the judgment
cited at Sr. No. (2) is
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being challenged before
Supreme Court. This
submission does not really
help us in deciding the
appeals. Both appeals are
dismissed."
24. Similarly, Hon'ble Madras
High Court in case of Ashok
Leyland Ltd.(supra) after
considering the decision of
Bombay High Court in case of
Endurance Technology Pvt. Ltd.
(supra) held as under:
"17. Thus, we are to
consider as to whether
there has been any nexus
between the energy
generated and the
manufacturing activity of
the assessee. This very
issue was considered in
Endurance Technology Pvt.
Ltd. (supra). In fact, we
find two substantial
questions of law framed
for consideration in
Endurance Technology Pvt.
Ltd. (supra), which are
more or less identical to
that of the questions of
law framed in these
appeals. The first
question framed for
consideration was whether
the assessee is entitled
to avail Cenvat credit on
management, maintenance or
repair services provided
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on services to windmills
installed and situated
away from the factory
premises. The second
question was whether
electricity generated on
two different places far
away could be said to have
been used for manufacture
of the final product of
the assessee in its
factory at Aurangabad.
18. So far as the second
substantial question of
law is concerned, it was
answered in the
affirmative in the light
of the stand taken that
admittedly, such
electricity generated at
those two different
locations was adjusted to
the electricity used in
the factory at Aurangabad
and this adjustment was
admitted by the Revenue
and accordingly, the
second question was
answered in favour of the
assessee. In the case on
hand also, in the show
cause notice, the
adjudicating authority
does not dispute the fact
that equivalent quantity,
that is, the quantity
generated is the same as
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the quantity drawn by the
assessees from the TNEB
grid. On the first
question of law, with
regard to the availment of
cenvat credit on input
services, the Hon'ble
Supreme Court referred to
the decisions of the High
Court of Bombay in the
case of Commissioner of
Central Excise, Nagpur v.
Ultratech Cement, 2010
(20) S.T.R. 589 (Bom.);
Commissioner of Central
Excise, Nagpur v.
Ultratech Cement Ltd.,
2010 (260) E.L.Τ. 369
(Bom.); and Deepak
Fertilizers &
Petrochemicals Corporation
Ltd. v. C.C. Ex. Belapur,
2013 (32) S.T.R. 532
(Bom.). The Hon'ble
Supreme Court, after
taking note of the
relevant rules, held that
it becomes clear that
management, maintenance
and repair of windmills
installed by the
respondents is input
service as defined in
Clause I of Rule 2. It was
held that Rules 3 and 4
provide that any input or
capital goods received in
the factory or any input
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service received for
manufacture of final
product would be
susceptible to Cenvat
credit. Further, it was
held that Rule does not
say that input service
received by a manufacturer
must be received at the
factory premises and the
decisions relied on also
interpret the word "input
service" in similar
fashion.
19. Further, by referring
to the decision in
Commissioner of Central
Excise, Nagpur v.
Ultratech Cement, 2010
(20) S.T.R. 589 (Bom.)
(supra), it was held that
the definition of "input
service" is very wide and
covers not only services
which are directly or
indirectly used in or in
relation to manufacture of
final product, but also
includes various services
used in relation to
business of manufacture of
final product. Further,
the expression
"activities" in relation
to business was also
discussed in the said
decision following the
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decisions of the Apex
Court.
xxx
25. As already pointed
out, there is no dispute
that the electricity
generated by the windmills
are exclusively used in
the manufacturing unit for
final products, there is
no nexus between the
process of electricity
generated and manufacture
of final products and
there is no necessity for
the windmills to be
situated in the place of
manufacture. Further, as
already noticed, the
definition of "input
service" is wider than the
definition of "input".
Furthermore, if one takes
a look at the Rules, more
particularly Rule 2(k), as
it stood prior to 1-4-
2011, which defines
"input", the following has
been specifically
inserted.
"within the factory of
production".
However, these words are
physically missing in Rule
2(1), which defines "input
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service" and it would mean
any service used by a
provider of taxable
service for providing an
output service or used by
the manufacturer, whether
directly or indirectly, in
or in relation to the
manufacture of final
products and clearance of
final products from the
place of removal. Though
the definition of "input
service" has to be widely
construed, and in terms of
Rule 3, which allows the
manufacturer of final
products to take the
credit of service tax
inputs or capital goods
received in the factory of
manufacture of final
products, insofar as any
input service is
concerned, the only
stipulation is that it
should be received by the
manufacturer of final
products. Therefore, this
would be the correct
manner of interpreting
Rule 2(1) of the Rules.
26. In the light of the
above, we are of the
considered view that the
decision in the case of
Ellora Times Ltd. (supra)
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does not lay down the
correct legal position and
we agree with the decision
of the High Court of
Bombay in Endurance
Technology Pvt. Ltd.
(supra), which has been
followed by the Larger
Bench of the Tribunal in
Parry Engg. & Electronics
P. Ltd."
25. In view of above settled legal
position and in absence of words
"within the factory of production" in
Rule 2(l) which defines "input
service" which would mean that any
service used by a provider of taxable
service for providing an output
service or used by the manufacturer
whether directly or indirectly, or in
relation to the manufacture of final
product and clearance of final product
from the place of removal, the
definition of 'input service' has to
be widely construed and therefore, the
appellant would be entitled to the
credit of service tax paid on inputs
or capital goods or services received
for Windmills for goods manufactured
in the factory because only
stipulation is that the input service
should be received by the manufacturer
of products.
26. Therefore, in view of decision of
this Court in case of Excel
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Crop Care Ltd. (supra) we are in
respectful agreement with the decision
of Hon'ble Bombay High Court in case
of Endurance Technologies P. Ltd.
(supra) as well as decision of Hon'ble
Madras High Court in case of Ashok
Leyland Ltd. (supra).
27. In view of foregoing
reasons, we answer the questions
of law in favour of the
appellant assessee and against
the Revenue. Appeal is
accordingly allowed.
19. Adopting the same reasoning, we answer
the questions of law in favour of the
appellant assessee and against the
Revenue. Appeal is accordingly allowed.
(BHARGAV D. KARIA, J)
(PRANAV TRIVEDI,J)
RAGHUNATH R NAIR
