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TMI Blog2023 (1) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... t and machinery in the factory and making plant and machinery operational. The show cause notice essentially relies on the changes made in the definition of input services appearing in Rule 2(l) of the Cenvat Credit Rules, 2004. The changes made in the definition are as follows: Before 01.04.2011: "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 manufacture 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 a factory,.......... ......................................................upto the place of removal:" After 01.04.2011 and as amended "2(l) "input service" means any service. - (i) used by a provider of taxable service for providing an output service, or (ii) used by a 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 modemization, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pection of boilers. 19,15,18,523 4A 2. Business support service -Refrigerator, freeze service charge -Waste disposal & Boiler erection charges. - Low site material unloading storage. - Installation of diesel generator package. 2,91,03,030 4B 3. Erection & Commissioning service - Installation & Commission of pipes, fittings, diesel generator sets and off-GAS VAR system. -Structural Fabrication, Equipment installation, piping insulation & painting charges. - Manpower for mechanical works -Dismantling/repairs/painting of boiler. -AMC charges for voltas make chiller. 1,29,85,736 4C 4. Clearing & Forwarding Service Clearing & Forwarding agent Services 1,27,94,777 4D 5. Repair & Maintenance Service -Container unloading, wooden packaging. - AMC charges & Waste disposal. -HW disposal for co-processing -Service charges for PLC system. - Installation of new electrical panel. -Repair & Painting work. 59,14,823 4E 6. Installation & Commission service -Structural fabrication, Equipment installation. piping, insulation & painting charges. - Manpower for mechanical works. - Erection & Ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Telephone services 345 5F Total 27,75,07,510 He argued that all these services are covered under the definition of input service as it existed after amendment w.e.f. 01.04.2011 also i.e. even after deletion of word 'setting up' from the definition of the input service. 2.1 He argued that all these services are used in or in relation to manufacture of finished goods without availing these services, no manufacturing could have possibly taken place as there would have been no factory. He argued that in these circumstances, the input credit of these services is admissible in term of the main part of the definition of input service. He further argued that the same principle has been relied in the decision of Tribunal in case of Reliance Industries Limited (supra) wherein the credit under Erection Commissioning and Installation Services has been specifically allowed under main definition when the service was clearly received as initial setting up of the plant. 2.2 He further argued that they themselves have not availed cenvat credit of services relating to Civil Construction of the factory. He pointed out that the appellant have taken the constructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out that following changes have been made in the definition of input service. E.3 In the inclusive clause of the new definition with effect from 1.4.2011, the following phrase have been specifically deleted:- i) Setting up which prefixed services in relation to factory or an office relating to such factory ii) Activities relating to business, such as which prefixed specific inclusions. E.4 The following specified services, if they are used for construction of a building of a civil structure or a part thereof, or laying of foundation or making of structures for support of capital goods, have been excluded w.e.f. 1.4.2011: i) A service provided by an architect in his professional capacity: or ii) A service provided by a port or any person authorized by the port, in relation to port service; or iii) A service provided by other port or any person authorized by that port in relation to port service; or iv) A service provided by airports authority or any person authorized by it, in an airport or civil enclave; or v) A service provided in relation to construction service; or vi) A service provided in relation to the construction of a complex; and vii) A service provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was made. He argued that no penalty in these circumstances can be imposed on the appellant. 3. Learned Authorized Representative relies on the impugned order. He particularly relied on para 4.3, 4.7, 4.8, 4.11, 4.12, 4.13, 4.14, 4.19 of the impugned order. 4. We have considered rival submissions. The appellants are engaged in manufacture of goods falling under Chapter 39 of the Central Excise Tariff Act, 1985 and availed cenvat credit of service tax during setting up of the factory. It is seen that the definition of input service prior to 2011 read as follows: "(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 manufacture 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 a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, activities relatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyee;" Further amendments were made in the definition of input service on 01.04.2012, the said definition, therefore, read as follows: (l) "input service" means any service, - (i) used by a provider of output service for providing an output service; or (ii) used by a 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 modernisation, 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, 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, but excludes - (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 (h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emco Electricals Private Limited 2010 (18) STR 177 has held that in order to qualify as an input service, the service has to either fall within the means part or inclusive part of the definition of input service, is reproduced below: "Both parts of the definition have to be construed harmoniously 9.1 The definition of the term "Input service‟ as defined under Rule 2(l) of the Cenvat Credit Rules, 2004 has two parts - (i) the "means‟ part which is the main part of the definition and (ii) "inclusive‟ part which is illustrative and certainly not exhaustive. 9.2 The "means‟ part of the definition covers any service used directly or indirectly, in or in relation to manufacture of the final products and clearance of the final products from the place of removal. The definition is one of very wide connotation. It covers within its ambit all services received by the manufacturer of final products, as long as they are related to the manufacturing business of the assessee. 9.3 A service would qualify as "input service‟ even if not covered by the "means‟ portion, if it satisfies the "includes‟ portion of the definition. In other words, in order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sly make such services ineligible for the cenvat credit under the head of 'Input Service'. It is seen that the appellant has claimed that they have on their own not availed such credits relating to the exclusion clause. 7. Another issue relates to the denial of cenvat credit invoking Rule 4(7) of the Cenvat Credit Rules. The amount of Rs. Rs. 29,29,272/- has been denied invoking Rule 4(7) of the Cenvat Credit Rules. The appellant have contended that they have availed the said credit within the period prescribed under Rule 4(7) in their ST-3 Returns and they have claimed that they have produced the said returns before the original adjudicating authority however, no findings have been given by the original adjudicating authority on this defence of the appellant. We find that this issue has been examined in para 4.19 of the impugned order. It is apparent that the defence and documents in support of appellant's claim has not been examined. In view of above, we find that demand on this count cannot be sustained as the order fails to examine the defence given by the appellant. In these circumstances, the demand on this count is set aside and matter is remanded to the original adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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