Cenvat Credit on Input Services for Setting up New Plant admissible despite Definition Change in Rule 2 (l) of Cenvat Credit Rules, 2004: CESTAT

The CESTAT has ruled that CENVAT credit on input services for setting up new plants remains admissible despite changes in Rule 2(l) of CENVAT Credit Rules, 2004. The ruling clarifies the scope of input services and their eligibility for credit during plant establishment. The tribunal examined the legislative intent behind the rule changes and their impact on existing rights. The decision emphasizes that services used in relation to setting up manufacturing facilities qualify as input services. The ruling provides clarity on the treatment of pre-operative expenses and their eligibility for CENVAT credit. This interpretation maintains the principle of allowing credit for services essential to business setup. The decision has significant implications for manufacturing sector taxpayers claiming CENVAT credit during expansion or establishment of new facilities.