RADICAL CHANGES IN THE DEFINITION OF “INPUT SERVICE” UNDER THE CENVAT CREDIT RULES 2004: BRINGING AN END TO THE AMBIGUITY OR ANOTHER PANDORA’S BOX OF LITIGATION? 

[Chanchal Agrawal]

INTRODUCTION

CENVAT Credit is available on input goods, input services and capital goods. Manufacturer as well as service provider will be eligible to get CENVAT credit of ‘input services’. Definition of ‘input service’ has been changed w.e.f. 1-4-2011. The new definition is significantly different from the earlier definition of ‘input service’.

Confusion and lack of clarity are the moot cause of majority of the litigations. Experts and professionals like lawyers, advices are constantly sought for. Every law takes its own time to mature. Its not the legislature’s lack of credibility as there is no end to anyone’s imagination resulting into doubts never thought of before. Thus, regular amendments have been seen w.r.t CENVAT Rules.

Particularly, the amendment effected form 01.04.2011 has aroused varied opinions from all walks of life. It would be interesting to note the reaction it receives from the judiciary which plays instrumental role in standing of the law. 

Definition of input services [rule 2(l)] have been completely revamped. Many input service which were hitherto eligible will not be eligible after 1-4-2011. Services relating to construction of factory or office, motor vehicles and personal use or consumption of employee will not be eligible for CENVAT credit.

The scope has been narrowed by removing the expression “activities related to business” from the inclusive part of the definition. This expression had enabled assesses to claim credits on most input services which were in the nature of business expenses. Thus, assessees would now be required to demonstrate that input services qualify for offsets within the restricted scope of the new definition. The scope has been further narrowed by excluding services in relation to setting up of factory or premises there from.

Yet again, services such as outdoor catering, heath services, health and fitness centre, and life insurance services, used primarily for personal use or consumption of employees have been specifically excluded from the definition of input services. The fundamental changes to the core definition of  “input services” is actually very worrisome as it militates against the understanding that the forthcoming GST law will be broadly worded and hence amenable to a liberal and inclusive interpretation in relation to this definition.

Taking a fresh look at the entire matter, it can be said that the Input Credit Mechanism, right from its introduction, has undergone the variety of changes over a period of time. It has been almost seven years since introduction of the CENVAT Rules, which govern the refund of the unutilised CENVAT credit to the service exporter. However, the position as regards eligibility is not yet settled. The only victims of such legal system are the industries and ultimately the final consumers.

When elephants fight, the grass on the ground gets cleaned up. Here, it is the claimant who is at the receiving end.

LEGISLATIVE HISTORY OF CENVAT CREDIT AND CENVAT RULES

·         Cascading effect

Taxation of inputs, like raw materials, components and other intermediaries had a number of limitations. In production process, raw material passes through various processes stages till a final product emerges. Thus, output of the first manufacturer becomes input for second manufacturer and so on. When the inputs are used in the manufacture of product `A', the cost of the final product increases not only on account of the cost of the inputs, but also on account of the duty paid on such inputs. As the duty on the final product is on ad valorem basis and the final cost of product `A' includes the cost of inputs, inclusive of the duty paid, duty charged on product `A' meant doubly taxing raw materials. In other words, the tax burden goes on increasing as raw material and final product passes from one stage to other because, each subsequent purchaser has to pay tax again and again on the material which has already suffered tax. This is called cascading effect or double taxation.^[1]

·         Implications of cascading effect and remedial steps thereof

This very often distorted the production structure and did not allow the correct assessment of the tax incidence. Therefore, the Government tried to remove these defects of the Central Excise System by progressively relieving inputs from excise and countervailing duties. An ideal system to realize this objective would have been to adopt value added taxation (VAT). However, on account of some practical difficulties it was not possible to fully adopt the value added taxation^.[2]

Hence, Government evolved a new scheme, MODVAT, introduced in India in 1986 vide rules 57A to 57U^[3]. Subsequently, MODVAT scheme was restructured into CENVAT scheme^[4]. A new set of rules 57AA to 57AK , under The CENVAT Credit Rules, 2004 (CCR,2004), were framed and whatever restrictions were there in MODVAT Scheme were put to an end and comparatively, a free hand was given to the assesses. Under the CENVAT Scheme, a manufacturer of final product or provider of taxable service shall be allowed to take credit of duty of excise as well as of service tax paid on any input received in the factory or any input service received by manufacturer of final product.^[5]

The system was termed as Modvat, as it was restricted up to manufacturing stage and credit of only excise duty paid on manufacturing products (and corresponding CVD paid on imported goods) was available.

Further, Sec. 94(2) of Finance Act, 1994 empowers Central Government to make rules. Thus, Service Tax Credit Rules, 2002 were issued effective from 16-8-2002, which are now merged with CENVAT Credit Rules, 2004 w.e.f. 10-9-2004.^[6]

INPUT SERVICE

Sec. 2 (l) of the CENVAT Credit Rules, 2004 defines “input services” with the latest amendment in CENVAT Credit (Amendment) Rules, 2011^.[7] The last amendment was in 2010.

· The Definition

The amended definition is detailed than the previous one. It provides that “input service” means any service, –

(i) used by a provider of taxable service for providing an output service; or

(ii) used by a 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 modernisation, 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, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal; but excludes services, –

(A) specified in sub-clauses (p), (zn), (zzl), (zzm), (zzq), (zzzh) and (zzzza) of clause (105) of section 65 of the Finance Act (hereinafter referred as specified services), insofar as they are used for–

(a) construction of a building or a civil structure or a part thereof; or

(b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or

(B) specified in sub-clauses (d), (o), (zo) and (zzzzj) of clause (105) of section 65 of the Finance Act, insofar as they relate to a motor vehicle except when used for the provision of taxable services for which the credit on motor vehicle is available as capital goods; or

(C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee;”.

·         The Analysis

The definition of ‘input service’ is broadly in three parts – First is main part, second is inclusive part and third part covers exclusions. First part of the definition is restrictive in scope as it covers input services used for providing taxable output service or used by manufacturer, directly or indirectly, in relation to manufacture or clearance of final product upto the place of removal. Second i.e. inclusive part of the definition expands the scope much beyond the coverage of first part. The third part covers specific exclusions.

• Before the 2011 amendment

In the landmark decision of Coca Cola India (P) Ltd., v. Commissioner of Central Excise[8]before the 2011 amendment,  the Hon'ble High Court was considering the definition of 'input service'. It was held that this definition could be divided into 5 parts/limbs and that each limb of the definition could be considered as an independent benefit.   It was further held that, if an assessee could satisfy any one of the five limbs of the above definition, credit of the service tax paid on the relevant input service would be available to him. It was further clarified by the court that it was not necessary for the assessee to satisfy other limbs of the definition. 

It may be noted that, although the above decision is significant w.r.t nature of proof for the assessee, in the light of 2011 amendment, the definition is made more detailed. Thus, a ‘6^th limb’ can be added providing for the services not to be classified as input services for the CENVAT Rules. Also, since no judicial pronounce has been made till date in regards to the impact of this addition, only a speculation can be made.

• Changes due to the amendment

The new definition of “input service” has silently deleted the following terms:

(i) setting up of factory

(ii) activities relating to business,

(iii) such as

Therefore, the credit is no more admissible on services used in setting up of factory and activities related to business. Further, the deletion of the term “such as” has been done with intention^[9] to disallow credit on all other activities which are not specifically covered within the definition and scope of “input service”.

The availment of credit on Mobile and phone service was a settled issue as it was an activity related to business; but post amendment this has become a questionable issue. One to one co-relation of input service with manufacturing/output service has not been the norms in the past but henceforth each and every activity of input service will be required to be justified as there is no general term like “activities related to business” which gave a cover to all services for qualifying as “input service”.^[10]

Further, the definition of “input service” provides a negative list of services on which credit will not be admissible to a manufacturer or service provider. The new additions in the definition of “input service” are:

(i) business exhibition

(ii) legal services

It would be interesting to note the reaction of the assesses towards the changes done.

• ‘directly or indirectly, in or in relation to’

The first part of the definition uses phrases ‘directly or indirectly, in or in relation to’.  Distinction  between  the  services  used  in  manufacture  and  service  used  in  relation  to  manufacture is too thin.

In Tamilnadu Kalyan Mandapam Association v.  Union of India^[11], the Hon’ble Supreme Court observed that the phrase “in relation to” is of the widest amplitude. Referring to M/s. Doypack Systems Pvt. Ltd. v. Union of India and Others^[12] this Court observed as under:

“The expressions ‘pertaining to’, ‘in relation to’ and ‘arising out of’, used in the   deeming provision, are used in the expansive sense. The  words “pertaining to” and “in relation to” have the same wide meaning and have been used interchangeably for among other reasons, which may include avoidance of repetition of the same phrase in the same clause or  sentence, a method  followed  in  good  drafting. The expression ‘in  relation  to’  (so  also  ‘pertaining to’)  is  a  very  broad  expression  which  presupposes another subject matter. These are words of comprehensiveness which might have both a direct significance as well as an indirect significance depending on the context.”

In view of the above, it transpires that ‘in or in relation to the manufacture’ means, the input^[13] or input services have been used during the process of manufacturing the product.  The input need not form part of final product.  Moreover  input  service  consumed  in  manufacture  can  never  be  part  of  the  final  goods.  Thus  the  term  ‘in  or  in  relation  to  manufacture’  is  a  very  wide  term  and  covers  all  service  inputs  which  have  direct  or  indirect nexus with the manufacturing process.^[14]

• ‘clearance of final products upto the place of removal’

The term used is pre-fixed by ‘and’. This makes the phrase a mandatory requirement. Sec. 4(3) (c) of the Excise Act, 1944 defines “place of removal” under three parts:

(i) it can be a factory, a warehouse, a depot, premises of a consignment agent or any other place or premises, (ii) goods are to be sold by the manufacturer, and (iii) sold goods are removed.

Thus, any premise from where the final goods are sold by the manufacturer is deemed as ‘place of removal’. Re-sale of goods by the dealers either by wholesalers or retailers is beyond the scope of place of removal.^[15]

According to a recent ruling of the Customs Excise & Service Tax Tribunal, the Manufacturer-Exporters are entitled to avail CENVAT Credit of Service Tax paid on all input services used up to the Port.^[16] It  has been held that in case of export ; the place of removal is the Port and all the services used up to the Port are “input services” under CENVAT Credit Rules.

The Tribunal has ruled that where the sale is on FOB/CIF basis, the place of removal has to be the load port only. Further the definition of input services also has been defined to mean any service rendered in relation to outward transportation up to the place of removal. Since, input service includes services rendered for outward transportation up to the place of removal, all the service tax paid to facilitate goods to reach the place of removal has to be eligible for the benefit of CENVAT credit.^[17]Further the definition of input service also includes any service used for manufacture directly or indirectly in or in relation to the manufacture of final products and clearance of final products from the place of removal. There is no dispute that the CHA services are required to facilitate clearance of final products from the place of removal i.e. the load port^[18]

• ‘Inclusive of’

The second part of the definition starts with ‘includes’ but ends with ‘excludes’ which means that the services specified there under are ‘indicative with the exceptions enlisted in specific’.

In Maruti Suzuki Ltd. v. Commissioner of Central Excise^[19]  the Apex court held that the definition of 'input service' given under Rule 2(l) has to be considered as a whole and that anything mentioned as input service in the inclusive part of the definition should necessarily satisfy the essential requirements of the main part of the definition. In other words no service which does not satisfy the requirement of having been used in or in relation to the manufacture or clearance of final product whether directly or indirectly, would qualify to be an input service. The mere mention of a service in the inclusive part of the definition would not per se entitle the service recipient to claim CENVAT credit.

AVAILING CENVAT CREDIT FOR INPUT SERVICES

Rule 3 (1) of CENVAT Credit Rules, 2004 provides that a manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit under specified circumstances.

Rule 4 prescribes conditions for allowing CENVAT credit. This rule in respect of availing service tax paid on input services imposes conditions vide sub-section (7).  According to this sub section the CENVAT credit in respect of input service shall be allowed, on or after the day on which payment is made on the value of input service and the service tax paid or payable as is indicated in invoice, bill or, as the case may be, challan referred to in Rule 9.  But this condition is not applicable in respect of credit of duties paid on inputs and capital goods.

The reason for such discrimination is explained by the Department.^[20]  The question and answer in relating to this aspect is reproduced as below:

12.6. Whether it is necessary to avail credit only after making payment against the bill/invoice challan in respect of input services?

Yes.  Credit of service tax on the input services can be availed only after making payment of the amount indicated in the invoice/bill challan.   This is necessary because the input service provider will be paying the service to the Government only after he realizes the payment, as the payment of service tax is only upon realization.^[21].   The above requirement is not applicable in respect of credit of duties paid on inputs and capital goods.

Now the payment of service tax pattern is changed by the Notification No. 18/2011from the cash basis to accrual basis by making the rule namely ‘Point of Taxation Rules, 2011.  Due to this Rule 4(7) should also be changed.  The Notification No.3/2011-Central Excise (N.T)dated 01.03.2011 which comes into effect from 01.04.2011 brings amendments to the CENVAT Credit Rules, 2004 through CENVAT Credit (Amendment) Rules, 2011.^[22] This Amendment Rule does not amend Rule 4(7) but inserted a proviso after Rule 4(7) as detailed below:

“Provided that if any payment or part thereof, made towards an input service is returned, the manufacturer or the service provider who has taken credit on such input service, shall pay an amount proportionate to the CENVAT credit availed in respect of the amount so returned.

Explanation I – The amount mentioned in this sub rule, unless specified otherwise, shall be paid by the manufacturer of goods or the provider of output service by debiting the CENVAT credit or otherwise on or before the 5^th day of the following month except for the month of March, when such payment shall be made on or before 31^st day of the month of March.

Explanation II – If the manufacturer of goods or the provider of output service fails to pay the amount payable under this sub-rule, it shall be recovered, in the manner as provided in Rule 14, for recovery of CENVAT credit wrongly taken.

Explanation III – In case of a manufacturer who avails the exemption under a notification based on the value of clearances in a financial year and a service provider who is an individual or proprietary firm or partnership firm, the expression, “following month” and “month of March” occurring in Sub Rule (7) shall be read respectively as “following quarter” and “quarter ending with the month of March”.

AVAILING SERVICE TAX CREDIT PRIOR TO MAKING PAYMENT OF SERVICE TAX IS PERMISSIBLE BUT THE ASSESSEE IS LIABLE TO PAY INTEREST AND PENALTY

In respect of taking credit of service tax paid on the input services the condition is prescribed in Rule 4(7).   The sub-clause (7) of Rule 4 provides that the CENVAT credit in respect of input service shall be allowed, on or after the day on which payment is made of the value of input service and the service tax paid or payable as indicated in the invoice, bill or, as the case may be, challan referred to in Rule 9.

In the course of service tax audit if such violations are found the Department would not allow even to take credit.  In one case, (discussed below) the Tribunal held that it is permissible to take service tax credit prior to making payment of service tax but the assessee is liable to pay interest and penalty.

In Praveen Jain &Co., Private Limited V. Commissioner of Service Tax,Delhi^,[23] the appellant received input service during the period of October 2004 to November 2004.   The appellant has taken credit of service tax indicated in the invoices during the said period and utilized the same.   The appellant paid the said bills including service tax during the period from February 2005 to May 2005.   The Department issued a show cause notice alleging that the recipient of service could not take credit unless they made payment of service charges and service tax to the service provider and therefore the Department concluded that the credit taken by the appellant was irregular.   The Original Authority confirmed the demand and imposed penalty.  The appellant filed appeal against the order of the Original Authority before the Commissioner of Central Excise (Appeals) who upheld the findings of the Original Authority. 

Therefore the present appeal has been filed by the appellant before the tribunal.   The appellant contended that the credit facilities for input service was introduced on 10.9.2004 and the assessee was not familiar with the law and as in the case of receipt of inputs they have taken the credit of service tax based on the invoices for input services.  It was mistake as they are eligible to take credit only after the payment was made by them.   They have received the services from the registered service provider.   They have also made the payments and therefore the denial of credit and demand of duty is not justified.   The appellant relied on the decision of the Tribunal in Raj Khosla & Co. Private Limited v. Commissioner of Service Tax, New Delhi,[24] in which it was held that on subsequent regularization of the deficiency of the documents, the mistake has been condoned and the credit has been made available.

The Tribunal held that the appellants undisputedly have taken the credit based on invoices from the service provider without making payment of service charges and service tax.   The Original Authority clearly held that the appellants have paid the service charges and service tax to the service provider after some delay.  There is no allegation or finding that the provider of service from whom the appellants have received the services are not genuine or that they are not registered with the excise Department.   Therefore the Tribunal held that on subsequent payment of service charges and service tax to the provider of service, the appellants are eligible to take the credit.   The Tribunal further held that during the interim period i.e., between the date of taking credit and the date of payment to the service provider, the appellants have enjoyed the monetary benefit and therefore the demand of interest for this period as held by the Original Authority deserves to be upheld.  

ACTIONS OF REVENUE AUTHORITY

There is tendency on the part of revenue to restrict the scope of ‘input service’ on pretext of other.  Most  often,  CENVAT  credit  of  service  tax  paid  on  taxable  service  paid  by  the manufacturer is denied on the ground that said service is not used in the manufacture of  final goods. Rule 4(1) of the Credit Rules states that CENVAT credit in respect of inputs may be taken on receipt of the inputs in the factory of the manufacturer or in the premises of the provider of output service.  But no such stipulation regarding receipt of input service, which is separately defined under the Credit Rules, is provided.

The latest amendment of 2011 has also paid no heed to this anomaly and loophole. The consequence of which is that it leaves the manufacturer capitalizing the input service helpless.

REFUND OF CENVAT CREDIT ON INPUT SERVICES

In The Commissioner of Central Excise, Hyderabad-IV v. M/s. Deloitte Tax Services India Pvt. Limited^[25], it was held that the scope of definition of input services is very wide and it covers input services related to business. Thus the activities related to tax returns of other business activities cannot be said as Information Technology Services which was excluded from Business Auxiliary Services and therefore, refund of CENVAT credit on input services used in providing export of such services cannot be disallowed.

In another matter of Jindal Steel & Power Ltd. v. Commissioner Of Central Excise, Raipur^[26],the Services were received from foreign company by the assessee as recipient. Assessee paid the tax on the deemed output services.^[27] The credit denied on ground that assessee was not providing any output service is not justified. It was held that merely because assessee was required to pay the tax on behalf of the supplier, they should not be denied the right as a recipient. Credit cannot be denied merely because assessee wrongly paid tax as 'consulting engineer services' instead of 'transfer of technology'.

In BBC World (I) Pvt. Ltd. v. Commissioner Of Service Tax, New Delhi^[28], the appellant were a subsidiary in India of U.K. company (BBC) and their functions were securing advertisement for airtime sales on BBC World Channel, and collecting airtime revenue for BBC, for which they would get commission from BBC. When the same person i.e. the Appellant were providing the broadcasting service, as defined under Section 65(15) of the Act, to their clients in India and also the Business auxiliary service, as defined under Section 65(19) of the Act, to BBC, U.K., the latter cannot be treated as an input for the former. Therefore, Marketing and Bill collection under BAS for principal cannot be treated as input service, thus credit is not admissible. The impugned order rejecting of adjustment of excess paid tax against short payment, is justified because as per Rule 6(3) of STR, adjustment can be done only when Service tax paid at higher rate or value.

In Fibres & Fabrics International Pvt. Ltd. & Anr. Versus Cc (Appeals), Bangalore^[29], the issue related to refund of unutilized input service credit on export of final product. With effect from 10.09.2004, Rule 5 of CENVAT Credit Rules, provided refund of CENVAT Credit on input or input service. Even though the rule allows it, Notification no. 11/2002 dated 01.03.2002 did not provide the refund. But, that notification was superseded by another Notification 5/2006 dated 14.03.2006 providing refund of input credit also, which has been not utilized - there is indeed a provision u/r 5 for such refund w.e.f. 10.9.04, just because the notification has not been issued at that time, we cannot deny the benefit provided in the Rule Not. no. 5/06 to be taken as effective from 10.9.04. Refunds in the matter pertain prior to 14.03.2006 so this is admissible.

CONCLUSION

Thus, the definition of ‘input service’ which was once understood to be of widest amplitude, the 2011 amendment has brought in elaborative limitations which form the quintessential part of the definition. CENVAT Credit Rules have been butchered and slaughtered as there is a sea change in definition of “input service” which restricts a free hit by manufacturers and service providers. In his budget speech, the Finance Minister stated that the amendments were intended to “achieve a more realistic balance between input credits and output tax and to harmonise the provisions of the scheme across goods and services”.^[30]

These objectives appear to have been met but with the result that taxpayers will now be able to offset significantly lesser input tax credits than before! But the amended provisions may open a Pandora’s Box of litigation for manufacturers and service providers who were hitherto enjoying credit on all activities related to business. Another painful amendment is omission of sub-rule(5) of Rule 6 in CENVAT Credit Rules and henceforth 100 per cent credit of specified services cannot be availed on common input services.

The Rules are always amended for simplification of laws but they always lead to more and more complication and litigation. Indeed, the proposals undo numerous Tribunal and Court rulings that had extended the benefit of tax credits to several inputs/input services which now stand excluded. Not a very encouraging augury of the things to come in the GST!

End of litigation is desirable but not at the cost of inequitable changes - the government wants taxes from all sectors but when it comes to giving credit and making the whole system work on the equitable principle of VAT the government goes two steps backward. Why is Value added tax system desirable - its because it creates a chain whereby the taxes paid earlier and given credit of against the output liabilities and thereby minimising the double taxation on transaction - to say that it will minimise the litigation is in my opinion a travesty. First we were fighting for our rights where the law was on our side now the the law has been changed so as to rob us that singular right.

 

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[1] Subject to prescribed conditions, the assessee has to obtain a duty paid invoice from the consignor and then he can take credit of such duty amount in the account maintained for this purpose and the same can be utilized by him for the payment of the duty on the goods from his factory. Frequently Asked Questions, Q. 13, Central Excise, Central Board of Excise and Customs at http://www.cbec.gov.in/faq.htm.

[2] http://www.icai.org/resource_file/18926sm_finalnew_idtl_excise_cp4.pdf

[3] Central Excise Rules, 1944 which was further amended and Rules 57Q to 57U have been inserted in Chapter V w.e.f. 01-03-1994.

[4] It was introduced in place of Modvat w.e.f. 1.4.2000; vide new set of rules 57AA to 57AK. Later, separate CENVAT Credit Rules were introduced w.e.f. 1-7-2001. These were replaced by CENVAT Credit Rules, 2002. These are now replaced by CENVAT Credit Rules, 2004 w.e.f. 10-9-2004.

[5] Excise Duty: MODVAT and CENVAT, at http://business.gov.in/taxation/modvat.php.

[6] http://dateyvs.com/cenex07.html; accessed on 14-02-08 at 21:05 hrs

[7] NOTIFICATION NO. 3/2011-CENTRAL EXCISE (N.T.), DATED 1-3-2011 available at http://taxguru.in/type/budget-2011-12/.

[8] 2009 -TMI - 34433 - (BOMBAY HIGH COURT)

[9] SACHIN MENON, DEVIL IS IN DETAILS IN CENVAT CREDIT RULES, 1ST March, 2011, the Economic Times Delhi, at http://www.kpmg.com/IN/en/WhatWeDo/Tax/UnionBudget2011/Post%20Budget%20Articles/02_03_2011_ET2.pdf; See also, MAHESH JAISIN, CENVAT CREDIT RULES MIRED IN UNLIMITED LEGAL CONTROVERSIES – AFTER ALL, WHAT ARE  'INPUT SERVICES'!!?, BMR Insights, at http://www.bmradvisors.com/upload/documents/BMR%20Insight_CENVAT%20Credit%20Rules%20mired%20in%20unlimited%20legal%20controversies%20%E2%80%93%20after%20all_Mahesh%20Jaising_TIOL_14%20Feb1297845845.pdf

[10] G. NATARAJAN, ADVOCATE, KUDOS TO THOSE BEHIND NOTIFICATION 3/2011 CE (NT) DATED 01.03.2011, SWAMY ASSOCIATES, at http://www.swamyassociates.com/downloads/2011/budget_articles/CCR%20amendments%20.pdf

[11] (2004) 167 E.L.T. 3 (SC), also See. Renusagar Power Co.  Ltd.  v. General Electric Company  and  Another (1984) 4 SCC 679, S.C observed as under: “Expressions such as  “arising  out of”   or  “in   respect   of”   or   “in  connection   with”   or   “in   relation   to”   or   “in   consequence   of”   or  “concerning”  or  “relating  to”  the  contract  are  of  the  widest  amplitude  and  content  and  include  even  questions  as  to  the  existence  validity  and  effect (scope) of the arbitration agreement.” In Thyssen Stahlunion GMBH v.  Steel Authority of India Ltd.  (1999) 9 SCC 334, S.C observed as under:  “The  phrase  “in  relation  to  arbitral  proceedings”  cannot  be  given  a  narrow  meaning  to  mean  only  pendency  of  the  arbitration  proceedings  before the arbitrator. It would cover not only proceedings pending before  the arbitrator but would also cover the proceedings before the court and  any proceedings which are required to be taken under the old Act for the  award  becoming  a  decree  under  Section  17  thereof  and  also  appeal  arising there under. The contention that if it is accepted that the expression  “in  relation  to  arbitral  proceedings”  would  include  proceedings  for  the  enforcement  of  the  award  as  well,  the  second  limb  of  Section  85(2)(a)  would become superfluous and cannot be accepted.”

[12] (1988) 2 SCC 299 at 302,

[13] CENVAT Credit Rules 2004, Sec. 2(k) as amended in 2011.  

[14] Rohit Surfactants Pvt Ltd v. CCE, Bhopal, 2009 -TMI - 34961 - CESTAT, NEW DELHI.

[15] Supra Note 9.

[16] AIT-2009-01-CESTAT 

[17] Ibid 

[18] AIT-2009-01-CESTAT 

[19] (2009) 22 STT 54

[20] FAQ – Directorate of General of Service Tax,, 5^th Edition, September 2010.

[21] Rule 4(7)  of CENVAT Credit Rules, 2004

[22] Availement Of CENVAT Credit For Input Services

[23] 2011 (265) ELT 239 (Tri.Del)

[24] 2008 (07) LCX 0297

[25] 2008 TMI - 3715 - CESTAT, BANGALORE

[26] 2008 TMI - 30901 - CESTAT, NEW DELHI

[27] Rule 2(p) CCR, 2004.

[28] 2009 TMI - 33230 - CESTAT NEW DELHI

[29] 2009 TMI - 33501 - CESTAT BANGLORE

[30] PRANAB MUKHERJE, Minister of Finance, Budget 2011-2012 at http://indiabudget.nic.in/ub2011-12/bs/bs.pdf