TMI Blog2023 (1) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... of input service, but fails to examine the admissibility of input services credit of these services under the main part of the definition of input service. The impugned order does not examine the admissibility of Cenvat Credit of these services in the main part of the definition, but relies solely on the changes made in the inclusive part of definition - In terms of the decision in the case of Pepsico India Holdings (Pvt.) Ltd [ 2021 (7) TMI 1094 - CESTAT HYDERABAD] , it is apparent that if the services provided in relation to setting up in unit would be covered under the main part of the definition. Unless specifically excluded by exclusion clause. It is seen that the impugned order does not examine which service would fall under which exclusion clause. The order in this regard is vague and not a speaking order. There are no option but to set aside the impugned order and remand the matter back to the original Adjudicating Authority to pass fresh order in the light of the Tribunal decisions in the case of Pepsico India Holdings (Pvt.) Ltd - Moreover, the Commissioner has expected to identify the specific exclusion clause of definition of input service under which he seeks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... protest. 2.3 Learned Counsel argued that Cenvat Credit has been sought to be denied becasuse during the material period, though registered under Central Excise laws, the Appellant had not yet started commercial production and hence, all the services availed by them was deemed to be towards setting up of the factory and as such, assumed to be excluded from the scope of the term input service under Rule 2(l) of CCR, 04. 2.4 Learned Counsel argued that the issue on hand is no more Res Integra, inasmuch as the CESTAT in the following cases, has categorically held that after 1.4.11, even if the words setting up are removed from the inclusive part of the definition of the term input service does not mean it is omitted from the first limb of the said definition, which covers services used in or in relation to, directly or indirectly, for manufacture of finished goods. The judicial view as it exists states that without setting up, manufacture is not possible and hence, the first limb of the definition of the term input service includes setting up of factory as well. He relied upon the following decisions: Pepsico India Holdings (P) Ltd. 2022(56) GSTL 22(Tri-Hyd.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b. M/s. Sai life science Ltd. 2017 (51) STR 55 (Tri. Hyd.) c. M/s. Musaddilal Projects Ltd., 2017 (4) GSTL 401 (Tri-Hyd) d. Jubilant Life Sciences Ltd. 2019 (29) G.S.T.L. 319 (Tri. All) e. M/s.Hindustan Petroleum Corporation Ltd. 2016 (9) TMI 680 [Cestat-Hyd.] f. SHIRUGUPPI SUGAR WORKS LTD. 2019 (3) TMI 667 - CESTAT BANGALORE g. UNI ABEX ALLOY PRODUCTS2019 (2) TMI 569 - CESTAT BANGALORE 2 Works Contract Used for erection / commissioning of plant and machinery does not involve construction of factory premises -same as all above- a. CMC Ltd. 2017(51) STR 17 (Tri-Hyd) 3 Supply of Tangible Goods Hiring of production related equipment, which otherwise qualify as capital goods, clearly establishes nexus with production related activity and hence, admissible input service a. Board Circular No.168/3/2013-ST dt.15.4.13. b. Adani Ports SEZ Ltd. 2016 (42) S.T.R. 1010 (Tri. Ahmd) c. M/s. Century Pulp and paper 2019(2) TMI 491(TRI.- New Delhi) d. M/S. CENTURY CEMENT 2019 (2) TMI 1034 (TRI.- New Delh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Services pertain to car rental for transportation of employees to the Dahej Site. (exclusively for official purposes) a. StenzenToyotetsu India P. Ltd. 2011(23) STR 444(Kar) b. NORTHERN COALFIELDS LTD 2020(2) TMI 1004 CESTAT New Delhi c. CHEMPLAST SANMAR LTD. (PVC DIVISION) 2019 (5) TMI 586 - CESTAT CHENNAI d. RELIANCE INDUSTRIES LTD 2016 (45) S.T.R. 383 (Tri. - Mumbai 11 Accommodation in Hotel Service For used in relation to business activities only a. Ultratech Cement Ltd. 2018(13) GSTL 160(Tri) b. R.K. Marble P. Ltd. 2017 (49) S.T.R. 434 (Tri. Del) c. Manatec Electronics P. Ltd. 2017 (47) S.T.R. 239 (Tri. Chennai) 12 Design Service other than interior decoration and fashion designing Used for design of Plant and machinery and essential for production a. MANHATTAN ASSOCIATES (I) DEV. CENTRE PVT. LTD.2017 (5) G.S.T.L. 99 (Tri. - Bang.) 13 Consulting Engineering 1. Without basic engineering, the plant cannot be made operational and it has dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices used for setting up of factory premises of output service provider or office relating to such factory or premises. It is seen that the definition of input service was amended with effect from 01.04.2011. Definition Prior to 01.04.2011, 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 a manufacturer, whether directly or indirectly, in or in relation to the manufacturer of final products and [clearance of final products and clearance of final product up to the place of removal], and includes services used in relation to setting up, 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, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating share registry, security, , inward transportation of inputs or capital goods and outward transportation upto the place of removal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mployee.] 4.1 The Commissioner in the impugned order has observed as follows: 37.5 Further I find that as per the change in the definition of input service after 01.04.2011, the initial 'setting up' word has been omitted and only modernization /renovation/repairs of such premises /office already existing is covered in the definition of input service after 01.04.2011. With effect from 01.07.2012 sub clause (A) to Rule 2(1) supra, has been substituted vide notification no. 28/2012-C.E. (N.T.) dated 20.06.2012. Sub clause (B), (BA) to Rule 2(1) of CCR Rules 2004, substituted vide notification No. 18/2012-CE (N.T.) dated 17.03.2012 w.e.f. 01.04.2012 as amended. Clauses A, B, BA, C exclude certain services from the definition of input service. I find that the service portion used in Construction, works contract services/ erection commissioning, laying of foundation, making structure for support of capital goods etc. and other services viz. rent-a-cab, Hotel services insurance, Architecture services etc. are not covered under the ambit of definition of input service under the Rule 2) (as amended) of the Cenvat Credit Rules, 2004. The erection commissioning, construc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V of the Finance Act 1994 (32 of 1994) paid or payable on taxable services used in, or in relation to, the manufacture of Excisable goods to the extent that the services appeared to fall under specific exclusion clause of 2) (A), 21) B. 21) (BA), and 2(1) C) of the Cenvat Credit Rules 2004. The same were used in setting up of their New Plant and factory and office premises etc. at Dahej. Renting of motor vehicle also specifically excluded under clause 2(1)(B), services of general insurance and other services excluded under 20h (BA), services for personal use or consumption of employees specifically excluded under clause 207) (C). Also in some of the cases the invoices were also not in the name of the assesee with different address. Therefore, the service tax credit does not covered under the purview of definition of input service under Rule 2) of the CENVAT Credit Rules, 2004 as these services were specifically excluded from the definition of input services. 37.9 In view of the discussion in the aforesaid paras, the assessee have availed service tax credit wrongly in contravention of Rule 2() and 2) (A), 2(1) 8, 2() (BA), and 2(1) (C) read with Rule 3 and Rule 9 of Cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 'manufacture' is not defined in the Rules, the definition under the Central Excise Act, 1944 must be considered. Section 2(f) of the Central Excise Act defines 'manufacture' as follows: 2 (f) manufacture includes any process (1) incidental or ancillary to the completion of a manufactured product. (ii) which is specified in relation to any goods in the Section or Chapter notes of the Fourth Schedule as amounting to manufacture; or (iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer, the word manufacturer shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account. 20 . Thus, the term 'manufacture' itself is very wide and includes anything incidental or ancillary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings (Pvt.) Ltd (supra), it is apparent that if the services provided in relation to setting up in unit would be covered under the main part of the definition. Unless specifically excluded by exclusion clause. 4.3 The impugned order also examines the specific exclusions made in the definition of input service. Para 37.9 of the impugned order deals with this specific exclusion made in the definition of input service. The said para reads as follows: 37.9 In view of the discussion in the aforesaid paras, the assessee have availed service tax credit wrongly in contravention of Rule 2() and 2) (A), 2(1) 8, 2() (BA), and 2(1) (C) read with Rule 3 and Rule 9 of Cenvat Credit Rules 2004 and therefore the cenvat credit of service tax amounting to Rs.7,55,44,027/- availed on input services, which are not covered under the definition of input service as provided under the Rule 2(7) of the Cenvat Credit Rules, 2004 and hence, it is not admissible and it is recoverable under Rule 14 of CENVAT Credit Rules, 2004 read with provisions of section 73 of Finance Act, 1994 and section 11A of the Central Excise Act, 1994. It is seen that the impugned order does not examine which servic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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