TMI Blog2011 (2) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... d warehousing services are provided by the assessee - A plain reading of both the above definitions would show that, unless excluded, ail goods used in relation to manufacture of final product or for any other purpose used by a provider of taxable service for providing an output service are eligible for CENVAT credit - assessee used cement and TMT bar for providing storage facility without which storage and warehousing services could not have been provided - Appeal is dismissed - 312 , 322 of 2010 - - - Dated:- 1-2-2011 - V.V.S. Rao and Ramesh Ranganathan, JJ. [Judgment per : V.V.S. Rao, J. (Common)]. This order shall dispose of the two appeals filed by the Revenue under Section 35G of the Central Excise Act, 1944. First of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax and penalty thereon. After receiving the reply of the assessee, the assessing authority passed the Order-in-Original dated 19-6-2007 confirming the proposal in the show cause notice demanding service tax under Section 73 of the Finance Act, interest thereon under Section 75 of the Finance Act read with Rule 14 of the Rules, and penalty under Section 78 of the Finance Act read with Rule 15(1) of the Rules; adjusted the service tax through CENVAT credit taken in ineligible items and imposed penalty of ₹ 100/- per day till the amount of ₹ 1,24,744/- is paid under Section 76 of the Finance Act. But penalty, under Rule 15 of the Rules, was not imposed. The assessee then filed two appeals under Section 84 of the Finance Act before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is that they claimed CENVAT credit irregularly with reference to cement and TMT bars used in the construction of warehouses through which the storage and warehousing services are provided by the assessee. Section 65(102) of the Finance Act defines storage and warehousing as to include storage and warehousing services for goods including liquids and gases but does not include any service provided for storage of agricultural produce or in service provided by cold storage. As per Section 65(105)(zza), read with Section 66 of the Finance Act, there shall be levied tax on storage and warehousing services at 12% of the value of taxable service. The service tax payable is determined in accordance with Section 67(4) read with the Service Tax R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 upto 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 outwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final product in the substantive/specific part of the definition. In each case it has to be established that inputs mentioned in the inclusive part is used in or in relation to the manufacture of final product . It is the functional utility of the said item which would constitute the relevant consideration. Unless and until the said input is used in or in relation to the manufacture of final product within the factory of production, the said item would not become an eligible input. The said expression used in or in relation to the manufacture have many shades and would cover various situations based on the purpose for which the input is used. However, the specified input would become eligible for credit only when used in or in relation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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