2009 (12) TMI 143 - CESTAT, MUMBAI

Cenvat Credit- Input service- The appellant was a 100 per cent EOU. It manufactures excisable goods i.e. electrical wiring, accessories. The entire production was exported out of India. Accordingly, the appellant had filed periodical refund claims for refund of service tax paid on ‘input services’ used in the manufacture and sale of exported goods. However, the revenue sought to reject the refund claim on the services, namely 1. rent a cab 2. outdoor catering services 3. air travel booking 4. telephone/mobile services 5. steamer agent services on the ground that they did not qualify as ‘input services’ as defined under rule 2(l) of the Cenvat Credit Rules. The case of the department was that the credit of service tax paid on services would be available only if such services were used in or in relation to the manufacture, whether directly and indirectly of the final products and the clearance of final products from the place of removal. In other words, the contention of the department was that the aforesaid services did not satisfy the ‘means’ part of the definition of input service in Rule 2(l). Thus, the refund claim was rejected by the adjudicating authority. Commissioner (Appeals) upheld the order. Held that- the definition of input is exhaustive but is restrictive in scope. It treats all goods used in or in relation to manufacture of final product or for any other purpose within the factory of production, but certain goods which would be eligible as per definition have been excluded and certain goods which could be interpreted as not includible have been specifically included. Therefore, all goods other than specified as includible have to be shown to be used in or in relation to manufacture of final product or for any other purpose with in the factory of production. Thus the appellant was entitled to the Cenvat Credit availed on the services which were used in relation to the manufacture of final product or used in relation to the business activity and in the instant case the service used by the appellant were in relation to the business activity. Thus, the appellant were entitled to refund of service tax.