TMI Blog2018 (8) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... dap Keeper Service and Renta- cab service at their Manesar and Gurgaon plants. The same were adjudicated resulting in confirmation of demands of ₹ 16,05,700/- and ₹ 30,76,127/- along with interest. Equivalent penalties were also imposed on the appellants under Section 11AC of the Central Excise Act, 1944. Aggrieved from the same the appellants have filed this appeal. 2. Ld. Advocate appearing for the appellants submits that the issue of availment of Cenvat credit on Mandap Keeper Service and Rent-a-cab service is no longer res integra. In this regard, he relied upon the judgment of Hon ble Punjab and Haryana High Court in appellant s own case as reported in CCE, Delhi-III Vs. Maruti Suzuki India Ltd. 2017 (49) S.T.R. 261 (P H). He further stated that in the show cause notice dated 18.04.2012 the period involved is April 2011 to March 2012 but they have not availed Cenvat Credit on Rent-a-cab service after 01.04.2011 and for the credit availed after 01.04.2011 the provision of service has been completed before 01.04.2011. In this regard, he invited attention to paragraph 30 of the Commissioner s order and contended that their assertion has not been rebutted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing five categories, in so far as a manufacturer is concerned: (i) Any service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products (ii) Any service used by the manufacturer whether directly or indirectly, in or in relation to clearance of final products from the place of removal (iii) Services used in relation to setting up, modernization, renovation or repairs of a factory, or an office relating to such factory. (iv) Services used in relation to advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, (v) Services used in relation to activities relating to business and outward transportation upto the place of removal. 19. The Court held that the expression business being an integrated/continuous activity, it could not be merely restricted to the manufacture of the product. In the absence of any qualifying words before the term activities in relation to business , it had to be construed widely and would cover all activities which were related to the functioning of the business. 25. The expression Business is an integrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product should be eligible for the benefit of Cenvat credit. 38. Service tax therefore, paid on expenditure incurred by the assessee on advertisements sales promotion, market research will have to be allowed as input stage credit more particularly if the same forms a part of the price of final product of the assessee on which excise duty is paid. In other words, credit of input service must be allowed on expenditure incurred by the assessee which form a part of the assessable value of the final product. If the above is not done, as sought to be done by the department in the present case, it will defeat the very basis and genesis Cenvat i.e. Value Added Tax. 21. The Court held that it was not necessary that the contents of the advertisement must be that of the final product manufactured by the person advertising. As long as the manufacturer can demonstrate that the advertisement services availed have 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, the manufacturer could avail the credit of the service tax paid by him. Once the cost incurred by the service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal products, but extends to all services used in relation to the business of manufacturing the final product. 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. 35. The argument of the Revenue, that the expression such as in the definition of input service is exhaustive and is restricted to the services named therein, is also devoid of any merit, because, the substantive part of the definition of input service as well as the inclusive part of the definition of input service putport to cover not only services used prior to the manufacture of final products, subsequent to the manufacture of final products but also services relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h, sales promotion events and also for business dealer meets, conferences, Executive Level Meetings, etc. which activities being important for the respondent to promote the sale of vehicles are connected to the business of manufacture of the respondent for which they are entitled to avail Cenvat credit, especially when the expense so mentioned is part of cost on which excise duty is paid. 24. Similarly, the Rent-a-Cab services used by the executives of the respondent for the purpose of travelling required for business meetings, visits to the dealerships, visits to the vendor sites, dealers meet, business promotion activities, vehicles launch, conferences, etc. is a an expenditure in relation to business being incurred by the respondent in order to promote the sales and for efficient running of the business for which they are entitled to avail Cenvat credit. 25. Further, as argued by the ld. Counsel for the respondent, as the cost of services of Rent-a-Cab and Mandap Keeper received, were included in the assessable value of the final product, on which excise duty is paid, which fact has not been disputed by the appellants, the respondent is entitled to avail the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rent-a-Cab services in the show cause notice dt. 18.04.2012 was completed before 01.04.2011. 8. In the above judgment dt. 21.10.2016 in CCE Vs. Maruti Suzuki India (supra), the Hon ble High Court had examined in detail the question of availment of input credit on Rent-a-cab services used by the executives of assessee and other business purposes and held as below:- 27. In Commr. of C. Ex., Chandigarh-II v. Federal Mogul Goetze (India) Ltd., 2015 (39) S.T.R. 735 (P H), the question was whether the CESTAT was correct in holding that the service of transportation of employees of the factory to the factory was an input service within the definition of input service in Rule 2(l) of the 2004 Rules. This Court affirmed the finding of the Tribunal that the transportation of the employees from their residence to the factory premises is related to their manufacturing activities and without coming to the factory, the production cannot be started. The provision of transportation facilities increases efficiency and increases the production capacity of the manufacturing unit itself. 28. In Commr. of C. Ex., Bangalore-III v. Stanzen Toyotetsu India (P) Ltd., 2011 (23) S.T.R. 444 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce comes on time at the work place, the employers have taken this measure which has a direct bearing on the manufacturing activity. At any rate it is an activity relating to business. This judgment has been followed in Commissioner of C. Ex., Bangalore-III v. TATA Auto Comp. Systems Ltd., 2012 (277) E.L.T. 315 (Kar.), Commissioner of Central Excise, Bangalore-I v. Graphite India Ltd., 2012 (27) S.T.R. 130 (Kar.) and Commissioner of Central Excise, Bangalore-I v. Bell Ceramics Ltd., 2012 (25) S.T.R. 428 (Kar.). Significance of 2011 amendment specifically excluding rent-a-cab service from the definition of input service: 29. In the case of Bellsonica Auto Components India (supra), the question was whether civil construction can be defined as an input service under Rule 2(l) of the Cenvat Credit Rules, 2004, though such service had no relation to the manufacturing process or any business activity of the assessees who were manufactures of metal sheets components for motor vehicles. They had availed Cenvat credit for service tax paid on civil work of constructing a plant/factory in the premises, namely for the manufacturing and for rental value of the immo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut service , the Hon ble Court held that if the said services were not covered by Rule (l), there was no necessity to introduce the said amendment. This made it clear that prior to the amendment, setting up of a factory premises of a provider for input service relating to such a factory fell within the definition of input service . As the amendment was not retrospective, it was held not to cover the case of the assessee, which related to the period 2007-08 to 2009-10, prior to the amendment. The question was thus answered against the revenue and availing of Cenvat credit was upheld. 32. For the same reason, as the rent-a-cab service has been excluded from the definition of input service by the 2011 amendment w.e.f., 1-4-2011, it has to be held that prior to the amendment, rent-a-cab service came within the definition of input service. As the assessment years in issue in the present case are 2009-10 and 2010-11, both prior to the amendment, the respondent is entitled to Cenvat credit on this service. 33. This aspect has also been clarified by Circular dated 29-4-2011 issued by the Government of India, where at Sr. No. 12 the question was : Is the credit avail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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