TMI Blog2022 (11) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... period of limitation by alleging charge of suppression against the appellant. For its own failure to make inquiry and investigations within the prescribed period of time, department cannot invoke extended period of limitation. The demand to this extent cannot be sustained and needs to be set aside. Computational Errors - HELD THAT:- As regards computational error as stated by the revenue in the appeal the issue do not involve any specific question of law to be agitated upon. Appellant have also pointed out certain computational errors in calculating the amounts to be confirmed. These are matter of factual verification for which we would remand the matter back to the original authority for re- computation of demand if any in accordance with the principles of law. The applicability of Rule 6 (3) by treating the 34 services as has been held by the Commissioner as common input services for providing the exempted and taxable services of brand promotion - the present case is not for determination of common input services, but revenue needs to identify those services which have been exclusively used for providing the taxable service and those which have been used for management of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance Act, 1994 against M/s. Tata Sons Ltd. The balance amount of demand is ordered to be dropped as discussed in para 4.3, 4.6 and 4.10 supra. 5.2 I hereby order the payment of interest at the appropriate rate under Rule 14 of the CCR, 2004 read with Section 75 of the Finance Act, 1994 on the above service tax amount of Rs. 36,42,20,169/- confirmed against M/s. Tata Sons Ltd as above. 5.3 I impose penalty equal to 100% of CENVAT credit wrongly availed and utilized which comes to Rs. 36,42,20,169/- Penalty would be payable under Rule 15(4) of CCR period from 1.10.2008 to 27.02.2010 and under Rule 15(3) of CCR for the period from 1.3.2010 to 31.3.2013. 6. This order is issued without prejudice to any other action that may be initiated against the noticee under the provisions of the Finance Act, 1994 or rules framed there under or any other law for the time being in force in India. 2.1 Appellant is registered service provider providing taxable services under the category of Intellectual Property Services [Section 65 (105) (zm)] and Banking and Financial Services [Section 65 (105) (zzr)] of the Finance Act, 1994. 2.2 During course of audit it was observed that ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 14 of Cenvat Credit Rules, 2004 read Section 75 of the Finance Act, 1994 should not be recovered from them. c. Penalty should not be imposed on them under the provisions of Rule 15 (3) or 15 (4) of Cenvat Credit Rules, 2004 as applicable during the relevant period read with Section 78 of the Finance Act, 1994 2.5 The show cause notice was adjudicated as per the impugned order referred in para 1 above. 2.6 Aggrieved by the order, both Appellant and Respondent have filed appeal before the tribunal. 3.1 We have heard Shri Vikram Nankani, Sr. Advocate, with Shri Rohit Jain, Shri Nawz Pal, Advocates and Shri Jignesh Ghelani, C.A. for the appellant and Shri Shamboo Nath, Principal Commissioner, Authorized Representative for the revenue 3.2 Arguing for the appellant learned counsel submits: In this regard, pursuant to the hearing on 20.07.2022, the Appellant makes the following submissions, which are without prejudice to each other, and the submissions made in the appeal. The Appellant is a CIC and the same is an admitted fact as evident from para. (2 of the SCN and para. 4.2 of the OIO). The expression CIC, is defined by the RBI in exercise of powers con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] Adani Energy Ltd [2022 (3) TMI 696 - CESTAT AHMEDABAD] Panacea Biotec Ltd. [2019 (1) TMI 1245 - CESTAT NEW DELHI] As per the Department appeal, value of exempt service on account of trading in securities must be the sale value of the securities during the period prior to 01.04.2011 and the margin scheme introduced vide Explanation to Rule 6(3D) will only apply for the period post 01.04.2011. In M/s Mercedes Benz India Pvt. Ltd [2020 (3) TMI 146 - CESTAT MUMBAI]. it was held that the entire sale value of the securities cannot be regarded as the value of exempt service. In paras. 19 and 20 it is stated that the principle incorporated vide formula introduced as per amended Rule 6 w.e.f. 01.04.2011 shall apply for the period prior to 01.04.2011 also. The OlO has however allowed the benefit of the margin scheme for the entire disputed period. 34 services on which credit is sought to be modified are exclusively used for provision of taxable output services of intellectual property rights and have direct nexus with the taxable output services. Accordingly, entire CENVAT Credit attributable to 34 services should be eligible. In this regard, it is submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision in Trent Hypermarket Ltd. v. Commissioner Of Central Excise, Pune-III, 2019 (6) TMI 1327 - CESTAT MUMBAI where it was held that extended period is not invokable in respect of the present issue in question even for the period post 01.04.2011 There are computational errors in the order. The Cenvat credit availed by the Appellant has been considered higher by Rs. 1,77,99,483/-. the percentage of credit attributable to taxable services arrived at by the OIO in para. 4.9 was applied in reverse order in para 4.10 to arrive at the proportionate credit allowed on 34. Audit observations were issued to the Appellant vide letter ST/HQ/EA-2000/Gr.03/Tata Sons/12-13/3824 dated October 29, 2013, stating that CENVAT Credit amounting to Rs. 9,93,774/- is to be reversed. Pursuant to the EA- audit, the Appellant had reversed the said Cenvat credit. However, the same was not considered in the OlO computation. Miscellaneous receipts (details given in Exhibit 10 of Appeal) are not in nature of exempt services. Only renting of residential accommodation is exempt service and due reversal of the same has been made under Rule 6(3A) of Credit Rules. Renting of residential accommodati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agement consultancy, manpower supply, business support, etc. are primarily used for its core business and certain services i.e construction related service are excluded from the definition u/r 2(1) of CCR. The total credits on this count denied are Rs. 2.05 cr. Commissioner has held (at para 4.4 of OIO) that the period of demand from 1/4/2008 to 30.08.2008 is time barred which involved input service credit of Rs.6.14 Cr. The Appellant in their submissions dated 12.5.2015 have stated that credit involved during the period April 2008 to Sep. 2008 was only Rs.3.58 cr, thus, excess credit of Rs.2.56 Cr. was erroneously allowed by adjudicating authority. During the hearing it was brought to the notice of the Bench that Annexure to the Show cause notice have tabulating wrongful credit of Rs 66.96 cr. The appellants have taken credit on 59 items which are used for earning income for the Core activity as well as Brand promotion activities. Out of 59 items there are 21 items involving input service credit of Rs.2.05 cr which was categorically disallowed by the Adjudication Authority, being exclusively used for exempted service. Adjudication Order held trading of investments, miscel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investors under any mutual fund scheme; (ie) Government securities; (iia) such other instruments as may be declared by the Central Government to be securities; and (iii) Rights or interest in securities, It was admitted by the Appellant that they are selling and buying the securities from / to their group Companies. It may be seen from the P/L statement for F.Y. 2008 09 extracted at para 3 ibid, that the Appellant have shown Net Profit of Rs. 206485 Lakhs on sale of investment. The Appellant investment portfolio contain share, debenture, units in mutual funds, etc. It was argued by AR that during the year 2008-09 and subsequent years the income generated from the sale of investments, interest, dividends constitute around 93% of total income and the appellant have use the common credit of Rs 66.96 cr for earning this income. It is erroneous on the part of the Appellant to state that input services has not been used for exempted/non taxable activity. The definition of exempted services under CENVAT Credit Rules, 2004 prior to 1.4.2011 is as under: Rule 2 (e) exempted services means taxable services which are exempt from the whole of the service tax leviable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) STR 903 (Tri. Mum)] Mercedes Benz India Pvt Ltd. [2016 (41)STR 577 (Bom.)] Delcam Software India Pvt Ltd [2016(43) STR 103 (Tri. Mum)] AVL India pvt Ltd. - 2017 (4) GSTL 59 (Tri.Del.) CESTAT Excise, Common Appeal Final Order No. A/85162-85165/2020 dt. 31.01.2020 Credit of input service can be taken for providing output service either taxable or exempted and taxable both. The CCR, 2004 do not provide for taking credit on non-service activity. If input service on which credit have been taken for the taxable service as well as non-service activity, then assessee is bound to reverse the credit on the portion of non service activity on pro-rata basis. Subsequently, demand amounting to Rs. 36,42,20,169 was confirmed vide the old based on the following grounds: Credit amounting to Rs 2,05,14,207/- in respect of 21 services was disallowed fully on the ground that they did not qualify as 'input service' under Rule 2(1) of the CCR having no nexus with the output service provided by the Appellant or specifically barred under the exclusionary clause of Rule 2(1). (para. 4.7 of the OlO) Appellant is engaged in trading of securities of the group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re used for brand promotion activity only. On going through the description of input services, which is available in the Annexure to the show cause notice, I find that there may be some substance in the argument of the Noticee, because on the face of it some of the services appear to have been used in providing brand promotion services. Illustration of such service could be telephone services, Chartered Accountant services, Security Agency Services etc., which could have been used for providing brand promotion services as well as other services. In other words, these services could be considered as common input services. However, I also find that only on this basis СENVAT credit cannot be allowed for the entire amount because availment of CENVAT credit is governed by different provisions of the CENVAT Credit Rules. Therefore, in order to take a judicious view, I would be examining other provisions of the CENVAT credit Rules. In fact some of these provisions are beneficial to the Noticee. 4.3. I propose to discuss the following issues: (i) Issue about the time bar i.e. demand being issued for a period beyond 5 years; (ii) Issue about the eligibility under Rule 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NVAT Credit Rules provided that the services specified in the said Rule were allowed CENVAT credit for full amount even though part of these services were used for provision of exempted services. This rule was omitted with effect from 1st April, 2011. I have gone through the list of input services available in the Annexure to the show cause notice and found that five services were covered in the said Rule 6(5). Accordingly, I ordered to allow CENVAT credit on those services for full amount as these appeared to have been used partly used in the taxable output service namely brand promotion services. The details of these services and credit availed is given below: (Amount in Rs.) Sr No Description of input service Clause of Section 65(105) 2010-11 2009-10 1.10.08 to 31.3.09 Total credit availed 1 Security Agency 65(105)(w) 280431 129337 40712 450480 2 Bank Financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit rating, share registry, security, business exhibition, legal services inward transportation of inputs or capital goods and outward transportation upto the place of removal; 4.7.2. Definition of 'input services' post 1.4.2011 (subsequent to amendment vide notification No. 3/2011-CE(NT) reads as - Input service means any service, - (i) used by a provider of Output service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to , modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services inward transportation of inputs or capital goods and outward transportation upto the plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the output service of the Noticee. Becoming a Member of the Club or Organizing function where Mandap Keeper service have used has no direct relationship with the brand promotion activity of the Noticee. 4.7.6. I also find that there are certain Construction related services which also cannot be said to have any nexus with the output services. I further find that there are certain services, as detailed above like Works Contract Service, which have been excluded from the definition of Input services but still they have taken the CENVAT credit after 1st April, 2011. At this stage, I also mentioned that from 1st April, 2011, the definition 'Input Service', was restricted by deleting the term activities relating to business. Therefore, many of the services which do not have direct relationship should also get excluded from the definition of input services. For the purpose of easy understanding, I am broadly classifying the reasons for disallowing the CENVAT credit in the following categories: (i) Services not having direct nexus with the provision of output services. (ii) Services excluded from the definition of input services with effect from 1st April, 2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 670219 315580 213438 78952 2004394 categor y-(i) 9 Rail travel agent 0 0 63 0 20 83 categor y-(i) 1 0 sound recording 0 0 0 5799 0 5799 categor y-(i) 1 1 Travel Agent 0 1071052 614 29 2081 1073776 categor y-(i). 1 2 Pandal Shamiana 0 0 0 0 249959 249959 categor y-(i) 1 3 Misc service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 420 7 Based upon the above discussion, I ordered for disallowing the CENVAT credit on the below mentioned 21 services totaling to Rs.2,05,14,207/-. 4.7.7. The Noticee in his reply dated 3.2.2015 has provided exact nature of some of the input services to show how there are used for providing their output service of brand promotion. However, I find that out of the 21 services identified by me as not eligible for CENVAT credit, they had given exact nature of only two services namely, Event Management Service and Mandap Keepers. For the remaining above mentioned services, they have not given the exact nature and use which itself shows that those services do not have direct nexus or those are not eligible for other reasons as discussed above, in the table. 4.8 Exempted services and Proportionate Reversal: As discussed above, I find that there are number of input services on which they have taken Cenvat Credit, which have been used for the provision of taxable output service, namely, brand promotion service as well as for carrying out other activities like investment incomes. The assessee's core activity is to invest in the group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income is also given in para 4.9 below. 4.8.1. Dividend Income: The TSL has invested in the shares of Tata Group of Companies and it earns dividend from this investment. The question is whether the dividend income can be considered as a service income or not. In my view, the dividend income cannot be considered as service income because it is in the nature of share of profit earned by the owners of an organization. The Shareholders are like owners and dividend is like their share of profit. On this account, dividend income cannot be considered as arising from provision of any service. Therefore, this income would not be considered while calculating the ratio under Rule 6(3A) of CCR. 4.8.2. Profit on sale of investment: This income represents Profit or Loss incurred on sale of investment like shares, debentures or other securities by TSL. Shares and securities are treated as goods and trading of goods has been held by the Tribunal and Courts as service. Further, the aspect of trading of goods being treated as exempted service has been clarified by amending the definition of exempted service by adding an Explanation in the definition in the Rule 2(e) of CCR. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the details, namely, purchase cost of the shares and sale proceeds was called from the Noticee and vide their letter dated 21st August, 2015 they provided these details. Based upon these details, the value of 'exempted service' i.e. service value of the trading activity has been worked out which is given below: (Amount in Rs. For col 2 to 5) FY- 2008-09 BOOKVALUE OF SHARE PROFIT/LOSS ON SALE SALE PROCEEDS 1% of purchase Value of Exempted d Service Rs. in Crs.* TCS 24233313 8925756667 8901523354 242333 890.15 TATA TELE 3621172720 16508911860 1288773914 0 36211727 1288.77 INDIAN HOTELS 5557121600 5026316459 -530805141 55571216 5.56 TATA POWER 609938190 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TATA CAPITAL 454490781 572763360 118272579 4544908 11.83 TOTAL 7147558054 1345527703 5 6307718981 71475581 631 (Amount in Rs. For col 2 to 5) FY-2011-12 BOOKVALUE OF SHARE SALE PROCEEDS PROFIT/LOS S ON SALE 1% of purchase Value of Exempted Service Rs.in Crs* TATA MOTORS 4393244522 996214576 4 5568901242 4393244 5 556.89 ADVINUS THERAPEUTICS LTD 95700000 149242645 5 3542645 957000 5.35 TATA INVESTMENT 19909716 35451820 15542104 199097 1.55 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from long term investment in Immovable Property: This represents profit made on sale of immovable property. Trading of immovable property is not a service. Even, amendment made in the definition of Exempted Service has clarified trading of goods as exempted service only. Therefore, this income is not being considered as a service income. 4.8.5. Exchange Gain: This income also cannot be considered as income from service because it is on account of foreign currency value difference. 4.8.6. Guarantee Commission (Export): This is a commission they have earned on account of giving guarantee in favour of their group of companies to lenders. This is definitely a taxable income and would be considered for calculation under Rule 6(3A) of CCR as exempted income as they are not paying service tax. 4.8.7. Profit on sale of Current Assets: It has been clarified by Noticee that this income is actually on account of sale of land and therefore being the profit on sale of immovable property, it would not be considered as service income as discussed earlier. 4.8.8. Profit on sale of Fixed Assets: It is explained by Noticee that this income repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.0 0.0 0. 0 0.0 29 1.2 219 3.0 24 84. 2 11. 7 20 09 - 10 209 6.7 290. 0 398. 0 6.0 6.0 0.0 2.0 9.1 3. 8 0.0 29 2.1 404 .0 69 6.1 42. 0 20 10 - 11 346 4.8 319. 8 631. 0 29. 0 6.4 0.2 1.3 0.0 0. 0 0.0 32 1.1 660 .0 98 1.2 32. 7 20 11 - 12 340 3.1 383. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 225414 26354 3 10964 0 67279 9806 675682 6 Company Secretary 24428 16691 17562 1113 329 60123 7 Consulting fees 0 10300 69286 0 0 79586 8 Courier 24474 27492 32162 22676 51068 157872 9 AC Installation 340388 845 0 0 0 341233 1 0 Information Technology Software Services 68491 0 0 0 0 68491 1 1 Internet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice 105784 68 14166 996 16969 810 7526053 8912050 58153377 2 2 Telephone 388173 46301 5 29253 3 480999 301260 1925980 2 3 Video Tape Services 70860 34426 3 20117 44352 8181 487773 2 4 Bank Financial Services 214124 29124 6 0 0 0 505370 2 5 Business Support Services 422686 40 23890 047 22338 368 1886678 7 9786127 117149969 2 6 Interi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % of credit available (as per col. 15 of the table given under para 4.9 supra), 11.7 42.0 32. 7 34. 7 75.6 Net Cenvat credit allowable under Rule 6(3A) 194149 58 66382 943 27849 652 3347769 3 1999741 7 167122662 4.10.1. In view of the above, the assessee is entitled to the Cenvat Credit of Rs. 16,71,22,662/- in terms of Rule 6(3A) of CCR, 2004 for the period from 1.10.2008 to 31.3.2013. The balance credit of Common services amounting to Rs. 34,37,05,962/- [Rs, 51,08,28,624 - Rs. 16,71,22,662] is disallowable and stands recoverable from the assessee. 4.11.1. Based upon the above discussion, the availability of CENVAT credit is summarised as below: Description Amount in Rs. reference para number of the order Cenvat Credit admissible as per Rule 6(5) of CCR, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Noticee's contention that these services are exclusively used for brand promotion services. To repeat, the telephones have been used for carrying out business of TATA Sons as a whole and it cannot be said that the said service is used only for brand promotion and not for any other activity. 4.11.2. The total amount demanded in Show Cause Notice is summarized as below: TEXT AMOUNT (Rs) RELEVANT PARA OF THE ORDER A CORRECTED DEMAND AMOUNT OF SCN 670080012 4.5 B LESS AMOUNT TIME BARRED 61468326 4.4 C LESS ADMISSIBLE CREDIT AS PER RULE 6(5) OF CCR 2004 77208855 4.6 D LESS CREDIT ADMISSIBLE UNDER R/6(3A) 167122662 4.10 E LESS CREDIT DISALLOWED UNDER R2(l) 20614207 4.7.6 F LESS CREDIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case, I have gone through the correspondence submitted by them. They have furnished Annual Reports, details of CENVAT credit attributable to exempted services, information for preparing the profile of the company, 3CD Income Tax Audit report etc. Submitting the Balance Sheet or 3CD report or reversal of credit information does not mean that department was aware of availing of CENVAT credit of various services which are used in taxable as well as non-taxable services. If the information is given by a well reputed group like of Noticee, department cannot believe that those information would be incomplete. Simply giving copy of the Balance Sheet does not mean that all relevant information has been provided to the department. I could have accepted their view, if any inquiry specific to availment of CENVAT credit on exempted and taxable service was initiated by the department and if they have provided information with regard to use of services in the taxable and exempted service. In fact when they have submitted the information regarding use of input services in the exempted output services, department can very well accept their version that whatever services they have used in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual verification for which we would remand the matter back to the original authority for re- computation of demand if any in accordance with the principles of law determined by us in this order. Merits of the Case: 4.8 The demand in the present case has been made by referring to the incomes indicated by the appellant in their book of accounts. The case against the appellant is that substantial portion of the business income earned by the appellant is from trading of securities, which is exempt from payment of service tax. Even if it is held that appellants were trading in securities, then also for the benefit of Rule 6 (3D)(d) of CCR will have to be allowed, and impugned order cannot be faulted to that extent. The department appeal in this respect do not hold any merits. For making the observation to this effect learned Authorized Representative has marshaled is arguments based definition of Securities in the Securities Contract (Regulation) Act, 1956 and Sale of Goods Act. The definitions under these Acts have been adopted under Finance Act, 1994. However while making the above submissions while both as per show cause notice and impugned order accept that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the service tax leviable thereon, and includes services on which no service tax is leviable under section 66 of the Finance Act (and taxable services whose part of value is exempted on the condition that no credit of inputs and input services, used for providing such taxable service, shall be taken. Explanation - For the removal of doubts, it is hereby clarified that exempted services includes trading) 12. It can be seen from the above definition that in order to be termed as Exempted Services , the following is required: (i) Taxable service which is exempted from whole of service tax leviable thereon or (ii) Service, on which no service tax is leviable under section 66(B) of Finance Act; or (iii) Taxable service whose part is exempted on the condition that no credit on input and input services used for providing such taxable services shall be taken but shall not include the service which is exported. 13. The definitive meaning attributable to the above would mean that an exempted service means no tax should have been leviable on the same and a person undertaking trading of securities on his own account does not discharge any tax qua other act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and I am of the view that Department has wrongly invoked the provisions of Rule 6(3) demanding the reversal of credit on the exempted services. I also find that substantial demand is time-barred as during the audit, the Department entertained the view that the appellant is engaged in providing the exempted services and consequently issued the show-cause notice. The appellant has been filing the returns under the taxable service of 'Commercial Training and Coaching and has provided all the records to the Department during the course of investigation and has not suppressed any material fact from the Department and in view of the various decisions relied upon by the appellant, extended period cannot be invoked where the Revenue's case is based on Balance Sheet and income return and other records of the assessee. In view of my discussion above, I am of the considered view that the impugned order is not sustainable in law and the same is set aside by allowing the appeal of the appellant. Space Matrix Design Consultants Pvt. Ltd. [2019 (4) TMI 1599 - CESTAT BANGALORE] 5. After considering the submissions of both the parties and perusal of the material on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviding the exempted and taxable services of brand promotion. In our view the present case is not for determination of common input services, but revenue needs to identify those services which have been exclusively used for providing the taxable service and those which have been used for management of investments. Thus for reconsideration of the common inputs used for providing the exempted and taxable service as determined in para 4.8 of the impugned order the matter needs to be remanded back to the original authority. Authorized representative has relied upon certain decisions rendered by the tribunal in case of trading f goods wherein it has been held that proportionate reversal as per the rule 6 (3) should be applicable to the case of trading of goods during the period prior to the amendments made in 2011. We do not have any quarrel with the above proposition to the extent of trading of goods. However as we have held that investment management is not trading of services these decisions do not advance the case of revenue. 4.10 In the case of Hinduja Global Solutions Ltd [2016 (42) STR 932 (T-Ban)] following has been held: 5.1 The issue involved in this case is whether th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a company; advisory services provider for disinvestment of stakes owned by the appellant and its subsidiaries in various entities and syndication fee for arranging loan of Rs. 200 crores to appellant. 5.4 It can be seen from the above reproduced services which were received by the appellant were in respect of raising of finance for the expansion of the business of the appellant. This specific plea taken by the appellant before adjudicating authority has not been controverted in the impugned order which would mean that the adjudicating authority has accepted that the appellant had embarked upon expansion of the business. It is to be recorded that for expanding any business, there is always requirement of working capital which needs to be raised by the assessee and in this case, it is undisputed that the appellant had raised such finances by investment and divestment and disinvestment of the business interest they had in various entities. 5.5 The plain reading of the definition of input services (as hereinabove reproduced) would indicate that the activities relating to business which is in the second portion of the definition includes the activity of financing which would m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y input or capital goods received in the factory of manufacture of the final product. Such a restriction, however, is not imposed in regard to input services since the only stipulation in clause (ii) is that the input services should be received by the manufacturer of the final product. Hence, even as a matter of first principle on a plain and literal construction of Rule 3(1) the Tribunal was not justified in holding that the appellant would not be entitled to avail of Cenvat credit in respect of services utilized in relation to ammonia storage tanks on the ground that they were situated outside the factory of production. The definition of the expression input service covers any services used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products. The words directly or indirectly and in or in relation to are words of width and amplitude. The subordinate legislation has advisedly used a broad and comprehensive expression while defining the expression input service . Rule 2(1) initially provides that input service means any services of the description falling in sub-clauses (i) and (ii). Rule 2(1) then provides an inclusive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 and quality control, coaching and training, computer networking, credit relating, share registry and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal. Thus, the definition of input service not only covers services, which fall in the substantial part, but also covers services, which are covered under the inclusive part of the definition. 28 .. 29. The expression activities in relation to business in the definition of input service postulates activities which are integrally connected with the business of the assessee. If the activity is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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