TMI Blog2019 (10) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... r providing telecommunication service, the erection and construction of telecommunication towers is a basic essential requirement and would be an input service - Credit allowed. Clearing and forwarding service - HELD THAT:- The requisite custom clearance at the port is required for the clearance of the goods which include hardware and software forming port of the BSC as well as optical fibre cables. The said clearing and forwarding service would, therefore, be an input service - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE, SERVICE TAX AND CUSTOMS, BANGALORE-II VERSUS NASH INDUSTRIES [ 2016 (6) TMI 155 - CESTAT BANGALORE] - credit allowed. Real estate service - HELD THAT:- It is seen that the Appellant has used this service for procuring suitable plots for construction of the shops of the Appellant. It is, therefore, in relation to the business of the Appellant and, therefore, would be eligible for input service - reliance placed in the case of DELTA ENERGY SYSTEMS LTD. VERSUS COMMISSIONER OF C. EX., DELHI-III [ 2014 (1) TMI 664 - CESTAT NEW DELHI] - credit allowed. Thus, the Appellant was entitled to avail the Cenvat Credit on the three services, namely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cating Authority, however, did not accept the submissions of the Appellant in regard to construction service, clearing and forwarding service and real estate service, but dropped the demand in regard to the other five services. 5. The Commissioner has disallowed Cenvat Credit on three services. It is, therefore, appropriate to examine the relevant provisions of the 2004 Rules. Rule 3 of the 2004 Rules provides that a provider of output service shall be allowed to take credit of the service tax leviable under sections 66, 66A and 66B of the Finance Act 1944. This Cenvat Credit can be utilised for payment of service tax on any output service. 6. Rule 2(l) defines input service and it is reproduced below; 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, whether directly or indirectly, in or in relation to the manufacturer of final products and clearance of final products upto the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities carried out by them is nothing but civil work necessary for tower site building and construction of tower foundations. The said activities in their widest scope include initial site cleaning, earth work in excavation, Earth filling and Compaction, transportation and shifting of templates, fixing of template and tower bolt, rubble soiling and river sand filling, P.C.C and R.C.C work, guard room construction along with electrical fitting like tubes, fans, boundary, wall construction, plaster of DG, backfilling inside DG, DG shifting, placing of DG on DG pad, other brick work, plastering, shuttering, Erection of chain fencing, MS angle, Supply, Fabrication and Installation of Main Gate and steel reinforcement. 5.7.3 On a careful examination of relevant Cenvat Credit document pertaining to said services, it is observed that the service provider billed for the work done to build material infrastructure for the party cell sites plus relevant service charges, but category of service found mentioned in the service provider s bills are nowhere mentioned in the list of services provided under Finance Bill 1994. The party in their defence replies stated that C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and I do not find any strength in part s arguments in this regard. 10. It will be seen from a perusal of the aforesaid paragraph that though the Commissioner noticed that the service was availed by the Appellant for carrying out the civil work necessary for tower site building and construction of tower, but Cenvat Credit has been denied for the following reasons: 1. Category of service found mentioned in the service provider s bill are not mentioned in the list of service provided under the Finance Act, 1994. 2. Service has no nexus with the telecommunication service. 3. Equipments essential for providing such service can function without such structures. 4. Not covered under the definition of input service provided under Rule 2(1) of the 2004 Rules. 11. It is submitted by learned Counsel for that the Appellant that for providing telecommunication service, the Appellant is using wireless equipments which require radio antennas to transmit and receive radio signals. The transmission of signals is an integral and essential part of the service. These antennas are mounted on towers wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess Ltd., Vs. CST, Chennai 2018 (1) TMI 1218 CESTAT Chennai, and the observations are as follows: 12. On the second issue regarding eligibility of various credits on input services, we note that the main activity of which substantial credit has been availed by various appellants is with reference to erection and construction of telecommunication towers. The plea of the Appellant is that these towers are basic essential requirements for telecommunication service. As such, the service of erecting of such tower is essentially an input service covered by the main means clause of the definition for input service that is used by a service provider for providing output service. We are in agreement with the said proposition. We also note that ratio adopted for inputs and capital goods which were used for creating such towers cannot be automatically applied to input services rendered in creating towers. In this connection, we refer to a decision of the Tribunal in Idea Cellular Ltd. Vs CST, Mumbai 2016-TIOL-2486-CESTAT-MUM. The Tribunal examining a similar dispute observed as follows: 7. The issue involved in the case is the eligibility to avail Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e services have direct nexus with the output service and therefore, is eligible for credit. The Tribunal in the Appellant s own case vide Final Order dated 22.01.2018 has allowed the credit. For this reason, we hold that the credit on this service is eligible. (emphasis supplied) 17. The second service for which Cenvat Credit has been denied is clearing and forwarding service. CLEARING AND FORWARDING SERVICE 18. The reason why credit of input service has been denied for clearing and forwarding service is contained in paragraph 5.8.3 of the Order and is reproduced below; 5.8.3 From the details as submitted by the party with regard to the functions of the service provider, it is observed that activity of the service providers can fall within the purview of Customs House Agent Services and not the Clearing and Forwarding Agent Services as claimed in defence reply. The party arguments in this regard are thus not factual and the party fails to substantiate its claim that the said C F Services have link with the provisions of main output service, Telecommunication Services . Otherwise also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a very wide scope as held by the Hon ble Bombay High Court in the case of Coca Cola v. CCE, Pune III 2009 (242) E.L.T. 168 (Bom.) and further while allowing the Cenvat Credit with regard to input services involved in these appeals, the learned Commissioner has relied upon various decisions of the Courts and the Tribunals and has also mentioned about the nexus. In this regard Para 6.5 of the impugned order is reproduced herein. 6.5 The next issue is nexus of various input services and the manufacturing activity/ business of the Appellant is as follows; Sl No. Nature of service Nexus Relied upon decision - - - - - - - - - - - - 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecognised device to enlarge the meaning of the work defined and it expands the scope of input service as given in the basic definition by bringing within its ambit, services which would not normally get covered by the main definition. The word includes is often used in interpretation clauses in order to enlarge the meaning of the words and phrases occurring in the body of the statute. However, even when an extended definition is used, it is necessary to draw a line to exclude categories obviously not intended to be included. I further find that a service not mentioned in the extended definition has to partake of the characteristics common to the other services specifically mentioned, in order to become an input service as per extended definition. 25. A perusal of the aforesaid order indicates that Cenvat Credit has been disallowed for the following two reasons: 1. Correct nomenclature has not been used to describe such taxable service. 2. No nexus with provision of output service. 26. It has been submitted by learned Counsel for the Appellant that the said service is used for procuring suitable plots for c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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