Order Date – 22 December 2022

Facts –

• The Appellant, BASF (India) Limited (BIL) is engaged in managing goods falling under Chapter 39 to First Schedule of the Central Excise Tariff Act, 1985 and availed cenvat credit of service tax during setting up of the factory.
• A show cause notice issued denying cenvat credit for the services in relation to the fabrication of plant and machinery in the factory and making plant and machinery operational during setting up of the factor (April 2011 to March 2016).

Issue –

• Whether the appellant is eligible for cenvat credit of the service tax paid?

Order –

• The Tribunal observed that the exclusion clause in the definition of input service would obviously make such services ineligible for the cenvat credit under the head of ‘Input Service’. It is seen that the appellant has claimed that they have on their own not availed such credits relating to the exclusion clause.
• It was found that it is apparent that the defence and documents in support of appellant’s claim has not been examined. In view of above, the Tribunal find that demand on this count cannot be sustained as the order fails to examine the defence given by the appellant.
• The Tribunal held that on the issue of the credit of input services availed in respect of alleged ‘setting up of the factory’ as well as the suggestion of the appellant about the credit not availed on account of exclusion clause, the matter needs to be examined again by the original adjudicating authority.
• Hence the appeal is remanded back to the original adjudicating authority.