TMI Blog2017 (5) TMI 1647X X X X Extracts X X X X X X X X Extracts X X X X ..... the extended period of limitation could not be invoked. Penalties - Held that:- There was scope for the assessee to entertain the bonafide belief that the cenvat credit on the service tax paid on outward transportation up to the place of removal was available to them - the penalties imposed under Rule 15(3) of the Cenvat Credit Rules, 2004, are not warranted. Appeal allowed in part. - S.T. Appeal No.70325-70327/13 - FO/76568-76570/2018 - Dated:- 21-5-2017 - SHRI P. K. CHOUDHARY, JUDICIAL MEMBER Shri Arijit Chakraborty, Adv. for the Appellant (s) Shri S. S. Chattopadhyay, Supdt. (A.R.) for the Revenue ORDER Per Shri P. K. Choudhary : These appeals are filed by the appellants against the impugned Orders-in-Appeal Nos.14-16/JSR/2013 dated 16.01.2013 passed by Commr. (Appeals) of Central Excise Service Tax, Ranchi. 2. Briefly stated the facts of the case are that the show-cause notices were issued to the appellants for the alleged irregular availment of credit of service tax paid on outward freight for the purpose of transportation of their finished goods from their factory to customers as well as from depots to customers. The Adjudicating A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce or an office relating to such factory or premises, advertisement or sales, promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal; 3. The Full Bench of CESTAT in M/s. ABB Limited case, which has been upheld by the Karnataka High Court as mentioned above, has interpreted the aforesaid Rule observing that it is in two parts. In the first part, input service is defined with the expression means and in that context input service is defined as any service used by a provider of a taxable service or providing an output service or used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal . It is further held that second part of the definition starts from includes where some of the services are mentioned, which are included as input servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing discussion contained in the judgment of the High Court. 30. The definition of input service contains both the word means and includes , but not means and includes . The portion of the definition to which the word means applies has to be construed restrictively as it is exhaustive. However, the portion of the definition to which the word includes applies has to be construed liberally as it is extensive. The exhaustive 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 reaches its destination falls within the definition of input service. What are the services that normally a manufacturer would render to a customer from the place of removal? They may be packing, loading, unloading, transportation, delivery, etc. Though the word transportation is not specifically used in the said section in the context in which the phrase clearance of final products from the place of removal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al upto a certain point. Therefore, tax paid on the transportation of the final product from the place of removal upto the first point, whether it is depot or the customer, has to be allowed. 8. Our view gets support from the amendment which has been carried out by the rule making authority w.e.f. 1-4-2008 vide Notification No. 10/2008-C.E. (N.T.), dated 1-3-2008 whereby the aforesaid expression from the place of removal is substituted by upto the place of removal . Thus from 1-4-2008, with the aforesaid amendment, the Cenvat credit is available only upto the place of removal whereas as per the amended Rule from the place of removal which has to be upto either the place of depot or the place of customer, as the case may be. This aspect has also been noted by the High Court in the impugned judgment in the following manner : However, the interpretation placed by us on the words clearance of final products from the place of removal and the subsequent amendment by Notification 10/2008-C.E. (N.T.), dated 1-3-2008 substituting the word from in the said phrase in place of upto makes it clear that transportation charges were included in the phrase clearance from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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