TMI Blog2016 (9) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... l Excise, Bangalore-II Commissionerate. 2. Briefly, the facts of the present case are that the appellants, M/s Heidelberg Cement India Ltd. (formerly Mysore Cements Ltd.) are engaged in the manufacture of Cement and Cement Clinker falling under Chapter sub-heading No. 2523 2940 and 2523 1000 respectively. The unit is availing Cenvat credit on various inputs, capital goods and service tax under the provisions of Cenvat Credit Rules, 2004. During the course of audit of the records of the appellants company by the Accountant General Audit party, it was noticed that the appellant has wrongly availed and utilized the service tax credit of ₹ 8,54,471/- during the month of December 2008 in respect of the Consultancy Services provided by M/s CARE Sustainability on Clean Development Mechanism (CDM) Service in relation to Carbon Credit Management Services , which appeared to be not covered under the definition of input service as contemplated under Rule 2(l) of the Cenvat Credit Rules, 2004. Therefore, a Show-Cause Notice dated 21.3.2011 was issued to the appellant proposing demand of ₹ 8,54,471/- attributable to Cenvat credit wrongly availed on Clean Development Mechanism Ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Environment and Forests, Government of India, in order to participate in the Clean Development Mechanism project activity as per the Kyoto Protocol. He also submitted that the appellants have received consultancy services from M/s CARE Sustainability for services in relation to greenhouse gas emission reduction and carbon credit management service as per the guidelines under the Kyoto Protocol which includes assessment, validation and monitoring the appellants premises for meeting the requirements of reduced emission norms. 3.1. The learned counsel also submitted that as per the agreement with M/s CARE Sustainability, the following services are to be provided by way of consultancy services : (a) Preparation of project design documents addressing the requirements under the Kyoto Protocol; (b) Assistance in obtaining approvals from Ministry of Environment Forests; (c) Assistance in validation and monitoring of the project in terms of meeting the requirements of reduced emission norms; (d) Assistance in obtaining certified emissions reductions (CERs); and (e) Transaction of CERs. He also submitted that the consultancy service received by the appellants as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel relied upon the following decisions in support of his submissions : (i) Shree Bhawani Paper Mills Ltd. Vs. CCE, Lucknow [2012 (28) S.T.R. 409 (Tri.-Del.)] (ii) CCE, Nagpur Vs. Ultratech Cement Ltd. [2010 (260) E.L.T. 369 (Bom.)] (iii) CCE, Bangalore-III Vs. Stanzen Toyotetsu India Pvt. Ltd. [2011 (23) S.T.R. 444 (Kar.)] (iv) NTF (India) Pvt. Ltd. Vs. CCE, Delhi-III [2013 (30) S.T.R. 575 (Tr.-Del.)] (v) Anar Chemicals Pvt. Ltd. Vs. CCE, Ahmedabad [2011 (24) S.T.R. 32 (Tri.-Ahmd.)] 4. On the other hand, the learned A.R. for the Respondent-Revenue submitted that the services provided by the service provider is related to certification of less emission of carbon di-oxide and the said service enables the appellant to earn Carbon Emission Certificates which can be traded in the market. He also submitted that the inclusive part of the definition restricts its scope to the services used in relation to the manufacture or business activity of the kind to give effect to the activities of business and does not include welfare and general activities. He also submitted that the impugned service received by the appellant has no nexus with their manufacturing activity and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nition. In other words, in order to qualify as an input service, a service has to fall either within the means part or includes part of the said definition. The Hon ble High Court of Bombay in the case of Commissioner of C.E., Nagpur Vs. Ultratech Cement Ltd. [2010 (260) E.L.T. 369 (Bom.)] has observed in Para 27 as under : 27. The definition of input service as per Rule 2(l) of 2004 Rules (insofar as it relates to the manufacture of final product is concerned), consists of three categories of services. The first category, covers services which are directly or indirectly used in or in relation to the manufacture of final products. The second category, covers the services which are used for clearance of the final products up to the place of removal. The third category, includes services namely; (a) Services used in relation to setting up, modernization, renovation or repairs of a factory, (b) Services used in an office relating to such factory, (c) Services like advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, (d) Activities relating to business such as, accounting, auditing, financing, recruitment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved as under : 5. After hearing both sides duly represented by Shri Hemant Bajaj, learned Advocate and Ms. Renu Jagdev, SDR it is seen that the services of M/s. Ernst Young Pvt. Ltd., were availed in relation to the power plant used for manufacture of paper. Admittedly, such paper is liable to duty of excise. As a result of modernisation of power plant, the appellant earned Certified Emission Reduction Sale (hereinafter referred to CERS). Such earning of CERS is on account of appellant having entered into an agreement with M/s. EDF Trading Ltd., company organised under the laws of England. This seems to be scheme for encouraging manufacturer to use fossil fuel to develop their plant in such a manner so as to reduce the carbon emission which vitiates atmosphere. The revenue s contention that such earning of carbon credit from the United Nations company was not liable to Service Tax and inasmuch as the services of E Y were availed for earning of such credits, the appellant is not entitled to avail the credit. 6. I find no merits in the above contention of the Revenue. The services availed from M/s. Ernst Young Pvt. Ltd., were admittedly for modernisation of the po ..... X X X X Extracts X X X X X X X X Extracts X X X X
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