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2023 (2) TMI 894 - AT - Service TaxRecovery of Cenvat Credit wrongly taken - export of services - input services - Air Travel Agent Service (ATAS) - Business Auxillary Service (BAS) - short payment of Service Tax on Overriding Commission - short payment of service tax - period from October, 2007 to September, 2010 - HELD THAT:- During the period covered in these impugned notices, denial of Cenvat credit on input services such as Car hire charges, Insurance charges, Travel expenses and Staff welfare expenses is not legally maintainable in terms of Rule 2 (1) of CCR, 2004, as all these services are input services considering the sweep and depth of definition of input service as per Rule 2 (1) of CCR, 2004. It 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, activities relating to business etc. This being an inclusive definition of an ‘input service’, these expenses are having a connection with the provision of output services. Hon’ble High Court of Judicature of Mumbai (Nagpur Bench) in the case of CCE, Nagpur Vs. Ultratech Cement Ltd. [2010 (10) TMI 13 - BOMBAY HIGH COURT], has held that for an input service the expression “activities in relation to business” in the definition of ‘input service’ postulates activities which are integrally connected with the business of the assessee. If the activity is not integrally connected with the business of the manufacture of final product, the service would not qualify to be input service under Rule 2 (1) of the CCR, 2004. The definition of ‘input service’ seeks to cover every conceivable service used in the business of manufacturing the final products. The categories of services enumerated after the expression ‘such as’ in the definition of ‘input service’ do not relate to any particular class or category of services, but refer to variety of services used in the business of manufacturing final products. Nothing in the definition of ‘input service’ to suggest that the legislature intended to define the expression ‘such as’ restrictively. The inclusive part of the definition of input service is only illustrative and not exhaustive. In the absence of any intention of the legislature to restrict the definition of ‘input service’ to any particular class or category of services used in the business. Appeal allowed.
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