TMI Blog2021 (1) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... vices used in relation to the manufacture of final products, be it prior to the manufacture of final products or after manufacture of final products. Having found so, the Commissioner follows his finding by making averment that if the service is not integrally connected with the manufacture of final products, the service would not qualify to be an input service under Rule 2(l) of CCR, 2004. The said service, availed by the appellants from M/s. Singhi Advisors, Mumbai, is in relation to their business (therefore cannot be considered to be provided in or in relation to the manufacture of final products) and therefore, is excluded from substantive definition. The appellants claimed that the service availed was legal service‟ and therefore, covered by the inclusive part of the definition of input service and hence, credit is admissible - the learned commissioner rejected the appellants‟ claim that the service availed by them from M/s. Singhi Advisors is in the nature of legal services. The learned Commissioner though correctly analysed the provisions of the CCR 2004, comes to a conclusion that the service availed by the appellants is in relation to business activities r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants have submitted that the said credit was not allowed to be transferred to the new unit in terms of Rule 10 of CCR 2004; they have not utilised the credit and even then, the department has issued demand notice for payment back of credit which is not legally sustainable - imposition of penalty was also not tenable. Appeal allowed - decided in favor of appellant. - Central Excise Appeal No. 20607 of 2015 - Final Order No. 20001/2021 - Dated:- 4-1-2021 - SHRI S.S GARG, JUDICIAL MEMBER AND SHRI P. ANJANI KUMAR, TECHNICAL MEMBER For the Appellant : Shri Gaurav Shah, Chartered Account LAXMINIWAS AND CO For the Respondent : Shri Rama Holla, Superintendent(AR) ORDER The issue involved in the case is admissibility of Cenvat credit by the appellants M/s Bhoruka Aluminium Limited (BAL)(M/s Bhoruka Extrusions Private Limited (BEPL). 2. Learned counsel for the appellant submits that M/s BAL wanted to sell the Aluminium extrusion business since they were not able to run the same effectively and availed the services of M/s Singhi Advisors for identifying a buyer for the specific business division, undertaking adequate negotiations and following due diligenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 142(6) of the Transitional provision of the CGST Act. 4. Learned counsel for the appellant submits that the above service very well falls within the including portion of the definition of the term input services under Rule 2(l) of the CENVAT Credit Rules, 2004; it has now been a settled principle that even after the definition of input service underwent a change in 2011, there is no necessity to have any direct nexus of the input service to the output service or excisable manufactured goods. He submits that Tribunal in the case of Tamilnadu Petro products Ltd Vs CCE, LTU, Chennai - 2017 (52) STR 427 (Tri - Chennai), Tribunal held that 5. It is not in dispute that the services availed by the appellant from M/s. MAPE are very much in the nature of Financial Advice for the purposes of disinvestment of shares to the extent indicated above. The averment of learned advocate that the proceeds of disinvestment were used as working capital for manufacturing operations has also not been discredited or disagreed with anywhere in the SCN or in original/appellate proceedings. In any case, the definition of input service as contained in Rule 2(l) ibid, particularly, after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll under the permissible input services. Vide written submissions dated 28-12-2020, learned AR submitted that the reason for confirming demands are clearly brought out in paras 15 to 38 of the OIO; Cenvat credit of ₹ 61, 80,000, availed on Advisory services, cannot be termed as directly or indirectly used in relation to manufacture of final products as the said service is related to sale of business of M/s Bhoruka Aluminium Ltd to M/s YKK Holding, Japan and hence not directly or indirectly connected to the manufacture of final products. Activities relating to business has been deleted from the list of eligible input service during Budget 2011 effective 01/04/2011; the inclusions and exclusions in the input service definition were made more specific. the advisory service rendered by the service provider neither gets covered under the definition of Legal service as defined in the sub rule (cca) of Rule 2 of the Service Tax Rules,1994 nor the said service can be related to financing . The ineligible credit wrongly availed was not reversed by the appellant and therefore, department is legally bound to recover the ineligible Cenvat credit availed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or execution of works contract of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or (B) services provided by way of renting of a motor vehicle, in so far as they relate to a motor vehicle which is not a capital goods; or (BA) service of general insurance business, servicing, repair and maintenance, in so far as they relate to a motor vehicle which is not a capital goods, except when used by - (a) a manufacturer of a motor vehicle in respect of a motor vehicle manufactured by such person; or (b) an insurance company in respect of a motor vehicle insured or reinsured by such person; or (C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee; Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e(cca) legal service means any service provides in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority. Based on the above decision and the correspondence between the appellants and M/s. Singhi Advisors which indicate that the legal counsel of the appellants takes active role in the completion of the transaction, learned Commissioner comes to a conclusion that the same is not legal service. Learned Commissioner also concludes that the services do not also fall under the financial services . 10. We find that the crucial point to be noted here in this case is whether or not the services availed by the appellant are input services to be eligible for credit in terms of Cenvat Credit Rules. The nomenclature and the classification of services is secondary. Just because the appellants could not classify the service availed under a particular head, it does not take away the substantial right of the appellants to avail the credit if it is otherwise permissible under the rules. As we have seen above that the definition of input service, even after the amendment carried o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edited or disagreed with anywhere in the SCN or in original/appellate proceedings. In any case, the definition of input service as contained in Rule 2(l) ibid, particularly, after its amendment w.e.f. 1-4-2011 contains two parts. The first part is an inclusive definition laying down examples of the type of input services that would fall within the ambit of eligible input services . The second part of the definition contains specific exclusions of services which cannot be considered as eligible input services for the purposes of Rule 2(l) ibid. The inclusive part of the definition therefore sets out only examples of input services which would fall in the genre of eligible input services . It also includes services used in relation to such activities . Financing finds a mention in the list of examples given in Rule 2(l). The type and nature of service provided by M/s. MAPE would definitely be services used in relation to financing and financial management of the appellant. This being the case, and considering that financial consultancy/advice is not disbarred otherwise in any of the exclusions in Rule 2(l) ibid, the eligibility of said input services should not be in questio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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