TMI Blog2016 (3) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... output service provided by them. As regards the dispute raised in the impugned order as to eligibility to avail the CENVAT credit on the invoices raised by the ISD for the services received prior to the registration of the Head Office as an Input Service Distributor, it is held that such credit can be availed. Demand set aside - Decided in favor of assessee. - ST/2338/2010-DB - Final Order No. 20059 / 2016 - Dated:- 19-1-2016 - SHRI M.V.RAVINDRAN, JUDICIAL MEMBER AND SHRI ASHOK K. ARYA, TECHNICAL MEMBER For the Petitioner : Mr. D. Arvind, CA For the Respondent : Mr. Mohd. Yusuf, Addl. Commissioner (AR) ORDER Per : M.V.RAVINDRAN This appeal is directed against Order-in-Original No. 13/2010 dated 30/07/2010. 2. The relevant facts, after filtering our unnecessary details are during the period March 2006 to August 2006, appellant availed CENVAT credit of service tax paid on various services at their Head Office and subsequently distributed to the appellant herein. Appellant herein is provider of output services under the category of Manpower Recruitment and Supply Agency services, Business Auxiliary Services, Commercial Training or Coaching Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said services were received by them prior to their registration as ISD is also incorrect as the service which are rendered to the appellant is in respect of the entire business and correctly distributed to them. It is his further submission that the sales of investments have been granted and proceeds were used in the expansion of the appellant s business is not disputed in the entire case records. He would then draw our attention to the expansion that took place of the appellant s business in the form of revenue operations for the financial year 2006-07 to 2014-15. He would also submit that they have expanded their branches to various other cities and have increased from 8 branches to 26 branches. He relies upon the judgment of the Tribunal in the case GMR Industries: 2015 (38) S.T.R. 509 (Tri.-Bang.); Aditya Birla Nuvo Ltd.: 2009 (14) S.T.R. 304 (Tri.-Ahmd.) for the proposition that input services used for the business activity, CENVAT credit is available. He would also rely upon the decision of the Tribunal in the case of Precision Wire India Ltd. vs. CCE, Vapi: 2013 (32) S.T.R. 62 (Tri.-Bang.) for the proposition that invoices received prior to registration but distributed post ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as correctly availed CENVAT credit or otherwise in respect of the service tax paid on the services received by their Head Office in respect of the disinvestments undertaken by them. 5.2 Undisputedly facts are that appellants are output service providers and discharging service tax liability; they had their Head Office at Mumbai and registered with the department as ISD; the CENVAT credit availed or service tax is discharged by the service providers. It is also undisputed that the appellant had raised the plea before the adjudicating authority that the services on which service tax is paid and CENVAT credit is availed is in respect of the expansion of the business undertaken by them. 5.3 On this factual matrix, we have to consider whether the availment of CENVAT credit by the appellant on the various services is correct or not. In order to appreciate the correct position of law, we have to reproduce the definition of the input services as per Rule 2(l) of the CENVAT Credit Rules, 2004 which reads as under: 2(l) input service means any service,- (i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax for the various services received by them for raising the finance, CENVAT credit can be availed. In our considered view, the CENVAT credit availed by the appellant or service tax paid cannot be disputed. In yet another angle, it has to be noted that the CENVAT credit which is availed by the appellant is in respect of the distribution of the service tax by their Head Office as input service distributor. We find nothing on record to indicate that Head Office of the appellant was issued a show-cause notice denying them such CENVAT credit. In the absence of any doubt raised as to the eligibility to avail the CENVAT credit at their Head Office, the recipient unit, cannot be asked to explain the nexus of such credit to the output service provided by them. In our considered view, and is undisputed that the amounts so raised by the appellant by disinvestment, investment, etc., were recorded in their financial account towards the expansion of the business activity undertaken by the appellant. 5.6 In our considered opinion, the expansion of the business activity is directly connected with the activity of the service provided by the appellant to their service recipient which is nothin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning to the procurement of inputs and inward transportation of inputs. The Tribunal, proceeded to interpret the inclusive part of the definition and held that the Legislature restricted the benefit of Cenvat credit for input services used in respect of inputs only to these two categories viz. for the procurement of inputs and for the inward transportation of inputs. This interpretation which has been placed by the Tribunal is ex facie contrary to the provisions contained in Rule 2(l). The first part of Rule 2(l) inter alia covers any services used by the manufacturer directly or indirectly, in or in relation to the manufacture of final products. The inclusive part of the definition enumerates certain specified categories of services. However, it would be farfetched to interpret Rule 2(l) to mean that only two categories of services in relation to inputs viz. for the procurement of inputs and for the inward transportation of inputs were intended to be brought within the purview of Rule 2(l). Rule 2(l) must be read in its entirety. The Tribunal has placed an interpretation which runs contrary to the plain and literal meaning of the words used in Rule 2(l). Moreover as we have noted e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qualify to be a input service under Rule 2(l) of the 2004 Rules. 30 to 33 .. 34.Therefore, the definition of input service read as a whole makes it clear that the said definition not only covers services, which are used directly or indirectly in or in relation to the manufacture of final product, but also includes other services, which have direct nexus or which are integrally connected with the business of manufacturing the final product. In the facts of the present case, use of the outdoor catering services is integrally connected with the business of manufacturing cement and therefore, credit of service tax paid on outdoor catering services would be allowable. In view of the foregoing, we find that the impugned order is incorrect and unsustainable. 5.7 As regards the dispute raised in the impugned order as to eligibility to avail the CENVAT credit on the invoices raised by the ISD for the services received prior to the registration of the Head Office as an Input Service Distributor, we find that the judgment of the Tribunal in the case of Precision Wire (supra) is directly on the point wherein it is held that such credit can be availed. Relevant portion of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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