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2015 (9) TMI 1160 - CESTAT CHENNAI

2015 (9) TMI 1160 - CESTAT CHENNAI - TMI - CENVAT Credit - input services - mobile phone services - Outward Transport Services - Held that:- Credit on GTA allowed - So far as the Cenvat credit claim on availing of mobile phone services is concerned, there is no material on record to suggest that the mobile phones were no way related to the manufacture or in relation to manufacture or for the activities permitted by Rule 2 (l) of Cenvat Credit Rules, 2004. Therefore, assessee succeeds on this cou .....

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For the Petitioner : Shri V. S. Manoj, Adv For the Respondent : Shri L. Paneerselvan, AC (AR) ORDER Assessee is in appeal in respect of following three issues in the batch of appeal listed as E/00450 to 00453/2008:- (i) Denial of credit on outward transportation; (ii) Denial of Cenvat credit on mobile phone services; and (iii) Denial of Cenvat credit the documents showing the payment of tax addressed to Head Office. 2. Revenue is in appeal against only on the issue of denial of Cenvat credit on .....

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rtaka High Court in the case of CCE V. ABB Ltd., Bangalore reported in [2011] 44 VST 1, 2011-TIOL-395-HC-KAR-ST which was rendered on the appeal filed by the Department as against the decision of the full Bench of the Tribunal, while answering the issue whether the services availed by a manufacturer for outward transportation of final products from the place of removal should be treated as an input service in terms of Rule 2 (l) (ii) of the CENVAT Credit Rules, 2004 and thereby enabling the manu .....

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portion of the definition of 'input service' deals with service used by the manufacturer. Whether directly or indirectly, in or in relation to the manufacture of final products. It also includes clearance of final products from the place of removal. Therefore, services received or rendered by the manufacturer from the place of removal till it reached its destination falls within the definition of input service. What are the services that normally a manufacturer would render to a customer .....

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e ultimate destination i.e. the customer's/buyer of the said product, apart from attending to certain ancillary services as mentioned above which ensures proper delivery of the finished product upto the customer. Therefore, all such services rendered by the manufacturer and included in the definition of 'input service'. However, as the legislature has chosen to use the word 'means' in this portion of the definition, it has to be construed strictly and in a restrictive manner. .....

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hrase is used to expand the meaning of the word 'input service'. However, after using the omni-bus phrase, examples are given. It also includes transportation. The words used are (a) inward transportation of inputs or capital goods (b) outward transportation upto the place of removal. While dealing with inward transportation, they have specifically used the words 'inputs' or 'capital goods'. But, while dealing with outward transportation those two words are conspicuously .....

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ion of the definition, an outer limit is prescribed for outward transportation, ie up to the place of removal. 31. The phrase 'activities relating to business' is an omni-bus one and it finds a place in the inclusive definition. The question is, by a judicial interpretation, outward transportation of the final product from the place of removal till it is delivered to the customer, could be construed as falling within the definition of 'input service'. It is a well settled rule of .....

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ature deliberately did not include in the definition. If the Courts indulge in such interpretation, it amounts to rewriting the provision which is impermissible. Yet another reason for coming to such a conclusion is, in the first part of the restrictive definition 'clearance of final products from the place of removal' is expressly stated. If transportation of final product from the place of removal is included in the phrase 'clearance of final products from the place of removal' .....

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the definition when the phrase used is 'activities relating to business such as', merely because in that portion of the definition either transportation charges is not included or service rendered for clearance of final products is not included, it is impermissible to read those words as in the earlier portion of the definition, it is specifically provided for. It is a well known rule of interpretation that when the statute uses words and phrases in a particular section, meaning has to b .....

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of ours find support from the subsequent conduct on the part of the Central Government, which amended Rule 2 (i)(ii). By notification No.10/2008-C.E.(N.T.) dated 1.3.2008, the words 'clearance of final products upto the place of removal' were substituted in the place of the words 'clearance of final products from the place of removal'. The intention of the legislature is thus manifest. Till such amendment, the words 'clearance from the place of removal' included transpor .....

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s and outward transportation upto the place of removal. The phrase 'outward transportation upto the place of removal' used in the inclusive portion of the definition (the second part), has to be read along with the word inward transportation of input or capital goods. It has no reference to 'clearance of final products'. However, when the claims are put forth on the basis of the said circular of 23.8.2007, for benefit of CENVAT credit, even in the cases where the aforesaid condit .....

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nput service'. Therefore, it is clear that till such amendment made effective from 1.4.2008 notwithstanding the clarification issued by the Central Government by way of their circular, transportation charges incurred by the manufacturer for 'clearance of final products from the place of removal' was included in the definition of input service. Therefore, the interpretation placed by the tribunal on the words 'activities relating to business' as including clearance of final pr .....

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in manufacture. The two clauses in the definition take care to circumscribe input credit by stating that service used in relation to the clearance from the place of removal and service used for outward transportation up to the place of removal are to be treated as input service. The first clause does not mention transport service in particular. The second clause restricts transport service credit up to the place of removal. When these two clauses are read together, it becomes clear that transpor .....

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Punjab and Haryana High Court where it was held that when the ownership of the goods and the property remain with the seller of the goods till the delivery of goods in acceptable condition to the purchaser at his door step, the freight charges incurred by the manufacturer for such sale and supply at the door step of the customer are subjected to service tax and therefore, it falls within the definition of 'input service'. However, the Larger Bench of the CESTAT following the aforesaid j .....

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