9911796707
TMI Blog2022 (11) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... 67,00,80,012/- ) which is answerable to the Commissioner Service Tax-1, Mumbai is decided as under : 5.1 The demand for inadmissible Cenvat Credit availed and utilized by the notice as above is confirmed to the extent of Rs. 36,42,20,169/- Rs. 34,37,05,962/-(Para 4.10.1) + Rs. 2,05,14,207/-(Para 4.7.6.)] and I order the recovery of the said amount under the provisions of Rule 14 of CCR, 2004 read with the proviso to Section 73(1) of the Finance 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly a Show Cause cum Demand Notice dated 16.12.2014 was issued to the appellant asking them to show cause as to why: "a. The CENVAT credit amounting to Rs 66,96,62,836/- as detailed in Annexure to the show cause notice should not be demanded and recovered from them under Rule 14 of Cenvat Credit Rules, 2004 read with proviso to Section 73 (1) of the Finance Act, 1994. b. Interest at the appropriate rate under 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 learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced vide the said amendment cannot be given retrospective effect and hence, reversal of Cenvat Credit on account of trading is not warranted for the period prior to 01.04.2011. Reliance is placed on the following decisions holding that reversal on account of trading is not required to be made for the period prior to 01.04.2011: * Trent Hypermarket Ltd. [2019 (6) TMI 1327 - CESTAT MUMBAI] * 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 be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed period is not invokable even in respect of period post 01.04.2011 as the Appellant has submitted all the details to the Department and cooperated with the investigation and hence, there is no question of suppression of facts or fraud involved in the present case. In this regard, detailed submissions are made at ground IX of the Appeal. Further, reliance is placed inter alia on the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the period 2008-2009 to 2012-2013. Allegation of the Department is that the appellant have taken the credit of input services used also for exempted services/non taxable activities, therefore the entire credit is not admissible. Adjudicating Authority have clearly found (para 4.7.6 of OIO) that 21 input services are used exclusively for the core activity such as generating revenue from sale of investment and assets. Such input services are management 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of a like nature in or of any incorporated company or other body corporate; (ia) derivative; (ib) units or any other instrument issued by any collective investment scheme to the investors in such schemes; (ic) security receipt as defined in clause (zg) of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (id) units or any other such instrument issued to the 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per formula prescribed u/r 6(2)/6(3A) of CCR, 2004. * Following judgments of Tribunal/ High Court were relied upon on trading of goods wherein judicial decisions have been treated as exempted service/non-service activity and order on reversal of credit either on pro-rata basis or u/r/ 6(3) / 6(3A) of CCR, 2004. * Mercedes Benz India Pvt Ltd. [2014 (36) STR 704 (Tri. Mum)] * Synise Technologies Ltd. [2015 (36) 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 followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices has no direct or indirect connection with the brand promotion activity on which they are paying service tax, therefore, availment of CENVAT credit is irregular. On this point, the Noticee has argued that they are not claiming CENVAT credit on services which are exclusively used for investment activity. In other words, they are taking CENVAT credit on the 'input services' which are 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of deciding this notice, I have considered the total amount of Rs. 67,00,80,012/ - which is a correct value. The difference is of very very small amount, therefore, I am considering the higher amount of CENVAT credit in order to provide correct calculations and to work out various amounts in proper manner. 4.6. Benefit of Rule 6(5) Rule 6(5) of CENVAT 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal 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 place of removal; 4.7.3. Thus, vide the Notification No. 3/2011-CE(NT), the scope of "input services" was restricted to keep general activities relating to business' out of the purview of said definition. 4.7.4. Further, from 1st April, 2011 certain services were also specifically excluded from the definition of "Input Services" and these services are given below: (A) service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso 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. (iii) Construction related services. (iv) Restricted meaning of Input Service with effect from 1st April, 2011. [These are being mentioned that as category reasons (i) to (iv) in the table given below ]: (Amount in Rs.) S r n o Description of input service 2012-13 2011-12 2010-11 2009- 10 1.10.0 8 to 31.3.2 009 Total credit availed Reason for denial of the credit 1 Air Travel Agent 147012 994720 101205 225513 135951 1604401 categor y-(i) 2 Event Manageme nt Service 3419654 1117475 1259434 168199 407867 6372629 categor y-(i) 3 Fashion designing 0 0 0 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich 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 companies and they earn different types of income from the investment made in the group companies, namely interest income, dividend income, profit on sale of investment, income from immovable property, Exchange gain etc. I need to examine as to whether any of those income has been arising out of an activity which can be considered as provision of service or not. This would be necessary to determine whether those activities can be considered as 'exempted service or taxable service. Further, for the purpose of proportionate reversal under Rule 6(3A) of the CCR, the said determination is necessary, Before discussing these aspects in detail, the definition of term 'exempted service as given in Rule 2(e) of the CCR, 2004, is given below: Definition up to 30.6.2012 (e) "exempted services" means taxable services which are exempt from the whole of the service tax leviable thereon, and includes services on which no servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The said Explanation is reproduced below: "Explanation for the removal of doubts, it is hereby clarified that "exempted service includes trading." 4.8.2.1. Since this Explanation was introduced for the purpose of removal of doubts, therefore, this Explanation would also be applicable for the period prior to 1st April, 2011. This view has also been held by the Hon'ble Supreme Court in the case of M/s. Oblum Electrical Industries V/s. CC, Bombay (1997(94)ELT 449 (SC) wherein it was held that " It is a well settled principle of statutory construction that the Explanation must be read as to harmonize with an clear up any ambiguity in the main provision". Further In the case of H & R JOHNSON (INDIA) LTD. V/S CBEC, [2002 (144) E.L.T. 506 (Kar.)] the Karnataka High Court, in Para 14 held as under "........ One of the recognized principles of interpretation of statutes is that if there is ambiguity in an earlier legislation, a subsequent legislation may fix the proper interpretation which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LLIES INDIA 19785522 765637500 745851978 197855 74.58 VANTECH INVESTMENTS 15319027 16238400 919373 153190 0.09 TATA MOTORS 4386678360 6487842727 2101164367 4386678 4 210.12 WIRELESS TT 5919999960 5919999960 0 59200000 5.92 TOTAL 13330981960 17252038057 3921056088 133309820 398 (Amount in Rs. For col 2 to 5) FY-2010-11 BOOKVALUE OF SHARE SALE PROCEEDS PROFIT/LOS S ON SALE 1% of purchase Value of Exempted Service Rs. in Crs* TATA MOTORS 4720637195 9558344838 4837707643 47206372 483.77 ADVINUS THERAPEUTI CS LTD 62607600 78259500 15651900 626076 1.57 TATA SKY 1909822478 3245909337 1336086859 19098225 133.61 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 TA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income as discussed earlier. 4.8.8. Profit on sale of Fixed Assets: It is explained by Noticee that this income represents profit on sale of assets like laptop, Furniture, mobile etc. This also cannot be considered as income form services because only trading of goods has been considered as service and in the present case it is sale of Mixed Assets, which is not a trading activity, 4.8.9 Interest Income Interest income also cannot be considered as an income from 'service' because interest on loan' has been excluded from the scope of "value of taxable service" in terms of Rule (2) of the Service Tax (Determination of Value) Rule 2006. Further, under Negative list era from 1 July, 2012, the activity of extending loan on deposit has been placed under Negative list under Section 66 (D)(N) 9. On the basis of above discussion the percentage of the credit attributable to the taxable services and exempted service is quantified as under (Amount Rs, in Crores) Pe rio d Divi den d Inc om e Inco me fro m the taxa ble serv ices (Bra nd Pro moti on Sch eme ) (TS) Profit on sale of term inves tmen ts and and lapse of warr antie s (ES) Mis c Rec ei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4614 79 5378824 2243424 44391723 1 5 Market Research 580302 67589 8 72837 9 121670 159570 2265819 1 6 Online Information & data base access or retrieval 521792 3 39291 83 23972 43 2752115 1642989 15939453 1 7 Professional services 0 1551 0 0 0 1551 1 8 Public Relations Services 354558 4 38915 82 35649 17 3911700 6235660 21149443 1 9 Security service 336341 27502 2 0 0 0 611363 2 0 Share Transfer Agent's Service 852 0 0 0 0 852 2 1 Sponsorship service 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 Interior Decorator 24039 47297 55426 22701 74943 224406 2 7 Internet Café 182539 18402 89200 223910 134783 648834 2 8 Insurance Auxiliary Service 931079 84029 8 93934 9 1074153 106721 3891600 2 9 Management Consultant's Services 121645 43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany is a PR Company promoting TATA brand. I agree on this point, but promoting TATA brand also help in enhancing the value of shares of TATA group, which the Noticee is holding and which are being traded by them. If the brand value of TATA group enhances it will increase the value of shares of TATA group and assessee will definitely gain from the said value which is reflected in the profit made by them. The trading of share is an "Exempted Service", hence services of M/s. Vaishnavi Corporate Communication Private Limited needs to be considered as common input services used for provision of taxable and exempted service and as per rule 6(3), proportionate reversal of credit is necessary. Similarly, the expenses incurred in advertising agency are also meant for advertising TATA brand. The logic given for service provided by 'Vaishnavi' would be equally applicable for this service also. Other services like Chartered Accountant services or telephone services or security services etc., can be said to be used for providing brand promotion services as well as it will help in provision of other exempted service like service of trading shares. Same logic would be applicable for othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the impugned order justifying the invocation of extended period of limitation for making the demand, in terms of Rule 14 (1) of the CENVAT Credit Rules, 2004 read with proviso to Section 73 (1) of the Finance Act, 1994 and for imposition of penalty under Rule 15 (3) and 15 (4) Commissioner has held as follows: "Invocation of Extended period 4.12 The Noticee has raised a point that, they have been providing lot of information to the Department from time to time and therefore suppression cannot be allowed in the present 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inquiry and investigations within the prescribed period of time, department cannot invoke extended period of limitation. In our view the demand to this extent cannot be sustained and needs to be set aside. Computational Errors 4.7 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 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 cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit on input and input services which is common or attributable to rendition of any exempted services. Even otherwise, since tax was paid on the entire premium recovered towards the service of managing investment in approved securities, appellant cannot be said to be rendering any exempted services. The term "Exempted Services" has been defined in Rule 2(E) of CENVAT Credit Rules, 2004, which reads as under: "exempted services" means taxable services which are exempt from the whole 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade mutual fund unit in the absence of a license from the SEBI. There is a restriction on the right to transfer unit and the appellant cannot transfer units to any other person. Further I find that the appellant cannot be termed as "service provider" because he only makes an investment in the mutual fund and earn profit from it which is shown in the Books of Accounts under the head "other income". Hence the question of invoking Rule 6 does not arise 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the view that Rule 6(3) is not applicable. In view of my discussion above, I am of the considered view that impugned order is not sustainable in law and therefore I set aside the same by allowing the appeal of the appellant with consequential relief, if any." In view of the decisions as above we are inclined to hold against 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cenvat credit availed by the appellant is in respect of the Service Tax paid by various service providers who had rendered the services of advise, procedural issue as to raising the finance by pledging of the shares on behalf of the appellant for borrowing from IDFC Ltd.; advisory service provided in relation to divestment of stakes in Indus Ind Telecom Network Ltd.; advisory services provided for acquisition of shares in 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x which is paid on (i) any input or capital goods received in the factory of manufacturer of the final product; and (ii) any input service received by the manufacturer of the final product. The subordinate legislation in the present case makes a distinction between inputs or capital goods on the one hand and input services on the other. Clause (i) above provides that the Service Tax should be paid on any 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orage and use of ammonia is an intrinsic part of that process". In the case of Ultratech Cement : "27. The definition of "input service" as per Rule 2(1) of 2004 Rules (insofar as it relates to the manufacture of final product is concerned), consists of three categories of services. The first category, covers services which are directly or indirectly used in or in relation to the manufacture of 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 'inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. 4.12 Since we have held that extent period of limitation is not available to the revenue as the ingredient as required for invoking the extended period are not available in the present case, we hold against penalties imposed on the appellant under 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 cannot be sustained, in view of Hon'ble Apex Court decision in the case of Rajasthan Spinning and Weaving Mills [2009 (238) ELT 3 (SC)] 4.13 Since we are of the view the matter needs to be remanded back to original authority for taking into account our observations made in para 4.6, 4.7, 4.8, 4.9, 4.10 and 4.11 the liability to interest will come only on the redetermined amount. 5.1 The appeals are allowed setting aside the impugned order and matter remanded to the original authority for reconsideration of the issues in light of the observations made in para 4.6, 4.7, 4.8, 4.9, 4.10 and 4.11 above. 5.2 Since the matter is quite old adjudicating authority should in remand proceedings decide the matter within three months from the date of receipt of this order. (Order pronounced in the open ..... X X X X Extracts X X X X X X X X Extracts X X X X
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