TMI Blog2014 (11) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Act, 1944 and were not with respect to eligibility of CENVAT Credit on ‘Input Services’. It is now a settled legal position that cevnat credit on ‘Input Services’ is also admissible if the same are availed beyond the ‘place of removal’ provided such services are availed in relation to manufacture. - extended period cannot be invoked and accordingly, there is no point in imposition of penalties upon the appellant. - Decided in favour of assessee. - Appeal No. : E/671/2012 - ORDER No. A/11982/2014 - Dated:- 14-11-2014 - Mr. H.K. Thakur, J. For the Appellant : Shri P.V. Sheth, Advocate For the Respondent : Shri Jeetesh Nagori, A.R. JUDGEMENT This appeal has been filed by the appellant against the OIA No. 318/2012/COMMR(A)/RBT/RAJ dated 06.06.2012 passed by Commissioner (Appeals), Rajkot. Under this OIA dated 06.6.2012, first appellate authority has upheld the OIO No. 47 to 49/ADC/2011 dated 15.12.2011 passed by the adjudicating authority. The issue involved in the present proceeding is whether the demands regarding denial of CENVAT credit on Installation and Erection services availed by the appellant are sustainable or not. 2. Shri P.V. Shet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010 (020) STR 366 (Tri. Ahmd.)] (f) Veena Industries Limited vs. CCE Vapi - [2012 (028) STR 147 (Tri. Ahmd.)] (g) Oudh Sugar Mills Limited vs. CCE, Lucknow - [2012 (282) ELT 541 (Tri. Del.)] 2.2 Learned advocate appearing on behalf of the appellant specifically made the bench go through Para 4.1 and 4.2 of the order passed by this bench in the case of CCE Vapi vs. Alidhara Textool Engineers Pvt. Limited (supra) to drive home the point that installation/ Erection services are availed in relation to their manufacturing activity as the contracts are composite one and include manufacturing of Gasifier plant, its transportation and installation. That the above case laws were also relied upon by the appellant before the lower authorities but no reasoning is given by them about the non-applicability of case laws relied upon. 2.3 It was also the case of the learned advocate that demand beyond one year is also time barred because in Para 3.3 of the OIO dated 15.12.2011 adjudicating authority has conceded that before 01.4.2008 the words used in the definition of Input Services in Rule 2(l) of the Cenvat Credit Rules, 2004 were from the place of removal and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CCE, Delhi -III (supra) credit of services availed beyond the place of removal are not admissible. That as per judgment of Bombay High Court in the case of CCE Nagpur vs. Ultratech Cement Limited (supra) and CCE Ahmedabad vs. Cadila Healthcare Limited (supra) Installation/ Erection activities are not in relation to the manufacturing activities of the appellant and hence will not be covered by the inclusive part of the definition of Input Services given in Rule 2(l) of the Cenvat Credit Rules, 2004. 4. Heard both sides and perused the case records. The issue involved in the present proceedings are:- (i) whether CENVAT credit of Input Services of Installation/ Erection of Gasifier Plant, at customer s premises, availed by the appellant is admissible as a service availed in relation to their manufacturing activity under Rule 2(l) of the Cenvat Credit Rules, 2004. (ii) whether the extended period and imposition of penalties are attracted against the appellant in the present facts and circumstances. 4.1 Definition of Input Services as given in Rule 2(l) of the Cenvat Credit Rules, 2004 during the relevant period after 01.4.2008 was as follows:- 2(l) Inp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any documentary evidence that any extra amount is recovered for erection, installation and commissioning, it has to be held that entire transaction from the designing to manufacturing and installation is one. In this regard the observation made by this Bench, in Para 4.1 and 4.2 of the case law CCE Vapi vs. Alidhara Textool Engineers Pvt. Limited [2009 (14) STR 305 (Tri. Ahmd.)], are very relevant and are reproduced below:- 4.1 In this case erection and commissioning charges have been included in the cost of the machines sold. The appellants have selected the agency to do this work and once the purchaser enters into an agreement for supply of the machine including the erection and commissioning charges, the responsibility for erection and commissioning is of the manufacturer. Therefore what is happening in this case is that the supplier of the machine is not only selling the machine but is also providing the service of erection and commissioning. Once erection and commissioning cost is included, in the transaction value, the natural conclusion that would emerge is that the processes undertaken in the buyers premises are actually incidental to manufacturing act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of completion of this whole transaction has to be treated to have been rendered in or in relation to the manufacture. 4.3 The above case law was also followed by Chennai Bench in the case of Autoprint Machinery Manufacturer Pvt. Limited vs. CCE, Coimbatore [2010 (19) STR 428 (Tri. Chennai)] and by this bench in the case of Alidhara Tesxpin Engineers vs. CCE, Vapi (supra), It is observed from the decision of this bench in the case of CCE Vapi vs. Alidhara Textool Engineers Pvt. Limited (supra) that in a contract of composite nature the activities of erection and installation have to be considered as an activity in relation to manufacture. It is not a case for interpreting the inclusive part of the definition given in Rule 2(l) of the Cenvat Credit Rules, 2004 but the present case of the appellant is covered by the main body of definition of Input Service given in Rule 2(l) of the Cenvat Credit Rules, 2004. This part of the definition has not undergone any change either before 01.4.2008 or after 01.4.2008. Case law of CCE, Ahmedabad-II vs. Cadila Healthcare Limited (supra) relied upon by the Revenue rather fortifies the above view. In Para 5.1 (xix) Hon'ble Gujarat High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mited with respect to Research and Development activities outside the factory were also held to be admissible for cenvat credit when the drugs were not even commercially manufactured. In the light of the above observations I do not find any justification in taking a different view than what is taken by this bench in the case of CCE Vapi vs. Alidhara Textool Engineers Pvt. Limited. Appellant s case is thus covered by the main body of the definition of Input Services and it has to be held that servicers availed by the appellant are in relation to the manufacturing of the excisable goods. The case laws of Quality Steel Tubes (P) Limited vs. CCE UP (supra), Thermax Limited vs. CCE (supra) and Maruti Suzuki Limited vs. CCE, Delhi-III (supra), relied upon by the learned AR are not applicable to the facts and circumstances of the present proceedings as the same were delivered either with respect to eligibility of CENVAT credit as Inputs or for determining assessable value under Section 4 of the Central Excise Act, 1944 and were not with respect to eligibility of CENVAT Credit on Input Services . It is now a settled legal position that cevnat credit on Input Services is also admiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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