TMI Blog2007 (8) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... d K. Sambi Reddy, JDR's, for the Respondent. [Order per : T.K. Jayaraman, Member (T)]. The details of the appeals are given in the following tabular column. Appeal No. Appellant v. Respondent Reversal of Credit or Payment of duty Interest Penalty ST/345/2006 The India Cements Limited v. The Commissioner of Central Excise, Tirupati Rs. 74,97,087/- under Rule 14 of Cenvat Credit Rules, 2004 read with sub-section (1) of Section 11A of the Central Excise Act, 1944 and also demand of interest under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AB of the Central Excise Rules, 2004 Rs. 10,000/-under sub-rule (3) of Rule 15 of the Cenvat Credit Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue against the Orders-in-Appeals passed by the Commissioner (A). All these appeals involve a common question of fact and law. Therefore, they are taken up together for disposal by a common order. 1. The cement factories manufacture cement and after the manufacture of cement, they have to clear them either from the factory or from the depot. When the finished goods are cleared from the factory, the factory is place of removal. In several cases, the finished goods are transferred to the depots and the final products are removed from the depots. In such cases, the depots become the place of removal. Now the question is whether the services of the goods transport operator to transport the final products from the place of removal can be treat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (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 up to the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and qualitative control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully, it is seen that the Input Service includes inward transportation of inputs or capital goods with which we are not concerned now and outward transportation upto the place of removal. Revenue interprets the above words to mean that the manufacturer can take credit of outward transportation only upto the place of removal forgetting or ignoring the first limb of the definition of Input Service in Rule 2(1)(ii). In other words, whatever outward transportation is used and if the Service tax is paid on the goods transport services availed for such outward transportation, then the manufacturer is not entitled for such credit. According to Revenue, as far as outward transportation is concerned the credit is limited to the tax paid on outw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s entitled for the credit on the tax paid on the input service. 4.3 Let us take another case where the depot becomes the place of removal. In that case, the outward transportation from the depot to the premises of the buyer becomes a service used by the manufacturer in relation to clearance of final products from the place of removal. In such circumstances, this service viz., the outward transportation from the place of removal becomes an Input Service as far as the manufacturer is concerned. Once it is an input service , then automatically, the appellant is entitled for the credits. We want to show that these interpretations in no way conflict with the inclusive definition [second limb] where the outward transportation is limited up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Service as given in Rule 2(1)(ii) has to be interpreted. 4.4 Summing up- A careful reading of the definition reveals that any service inter alia used by the manufacturer in or in relation to clearance of final products from the place of removal is an Input Service . In other words, the outward transportation of the final products from the factory is an Input Service and outward transportation of the final product from the depot is an Input Service . Once these services are defined as Input Service , the credit cannot be denied. As regards the outward transportation of the final products from the factory to the depot is concerned, it is defined as Input Service in view of the inclusive definition which reads as outward transportat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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