TMI Blog2010 (9) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... ginal authority which had denied credit of service tax paid by the respondents on (a) Health Insurance policies obtained for the benefit of their employees; (b) Insurance premium under the Director and Officers liability Insurance Policy; and (c) Outdoor catering services. Original authority had demanded this credit of Rs. 3,43,483/- as Cenvat credit irregularly availed by the assessee. He demanded the service tax and interest due thereon under Rule 14 of Cenvat Credit Rules, 2004 (CCR). Interest demanded was confirmed under Section 11AB of the Central Excise Act. A penalty of Rs. 3,43,483/- was imposed under Rule 15 of the CCR. The material period is years 2006-07 and 2007-08. In vacating the order of the original authority, the Commissioner had followed decisions of the Tribunal in the case of CCE, Mumbai-V v. GTC Industries Ltd. [2008 (12) S.T.R. 468 (Tri.- LB)] and in the case of Stanzen Toyotetsu India Pvt. Ltd. v. CCE, Bangalore [2009 (14) S.T.R. 316 (Tri. - Bang.)]. 2. In the appeal filed before the Tribunal, the Revenue has relied on the definition of input service contained in Rule 2(l) of CCR. It is submitted that the insurance service and outdoor catering service impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this claim : (i) CCE, Mumbai v. GTC Industries Ltd. [2008 (12) S.T.R. 468 (Tri. - LB.)] (ii) Commissioner of C. Ex. Cus., Guntur v. CCL Products (India) Ltd. [2009 (16) S.T.R. 305 (Tri.-Bang.)] (iii) Stanzen Toyotetsu India Pvt. Ltd. v. CCE, Bangalore [2009 (14) S.T.R. 316 (Tri.-Bang.)] (iv) Millipore India Ltd. v. Commissioner [2009 (13) S.T.R. 616 (Tri.) = 2009 (236) E.L.T. 145 (T)] (v) Commissioner of Central Excise, Raipur v. Raipur Rotocast Ltd. [2010 (18) S.T.R. 466 (Tri.-Del)] They also stated the following decisions of the Tribunal which had decided the dispute regarding entitlement of credit of service tax paid on catering services in their own case. (i) CCE, Visakhapatnam v. Dr. Reddy s Laboratories Ltd. [Final Order Nos. 1274/2009 dated 22-10-2009 in Excise Appeal No. 784/2009] (ii) CCE, Visakhapatnam v. Dr. Reddy s Laboratories Ltd. [Final Order Nos. 1297 1298/09 in Excise Appeal No. 343 344/09] (iii) CCE, Hyderabad v. Dr. Reddy s Laboratories Ltd. [Final Order Nos. 1313 to 1316/09 in Excise Appeal No. 361 to 364/09] 5. I have carefully studied the case records and considered the submissions made by the learned SDR. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service means any service, - (i) used by a provider of taxable service for providing an output 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 outward transportation upto the place of removal; In the inclusive part, the items listed include activities relating to business such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry and security, etc. Obviously the activities such as credit rating share r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As the Apex Court did not consider the statutory definition of input service in the said judgment, in my view, the ratio of the judgment of the Apex Court in Maruti Suzuki Ltd. case cannot be applied to interpret the scope of input services . In the definition of input service also, there is a specific and substantive part as well as an inclusive part. In the inclusive part, activities related to business are also included. Activities such as credit rating and share registry figure among the items specifically listed. By no stretch of imagination, activities such as credit rating and share registry satisfy the requirement of use in or in relation to the manufacture of final products. Therefore, the expression means , and includes used in the definition of input service without doubt enlarges the scope of the definition as appearing in the substantive part. 8.1 This issue was considered by the Hon ble High Court of Mumbai in Coca Cola India case (supra). Their lordships examined the following questions and answered them in the affirmative. (a) Whether services of advertising and marketing procured by the Appellants in respect of advertisements for aerated waters are co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of concentrate and the activity. Therefore, the phrase activities relating to business were words of wide import. 8.3 What followed from the above discussion was that the credit could be availed on the tax paid on the input service, as long as the manufacturer could demonstrate that the advertisement services availed had an effect or impact on the manufacture of the final product and establish the relationship between the input service and the manufacture of the final product. Once the cost incurred by the service had to be added to the cost, and was so assessed, it was a recognition by Revenue of the advertisement services having a connection with the manufacture of the final product. This test would also apply in the case of sales promotion. This was the finding the Hon ble High Court rendered in the Coca Cola India case in para 43 of the said judgment. It would, therefore, appear that all services which constitute activities related to business need not have a nexus with manufacture in a manner different from what was explained in the Coca Cola India case by the Hon ble High Court. 9. The apex court did not interpret the scope of input service in the Maruti Suzuki Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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