TMI Blog2023 (4) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... osition of law that the credit availed by an assessee cannot be denied or varied on the ground that the classification of service should have been made in a different category by the provider of service. Variation in the classification or consequent rate of payment of service tax is not possible at the end of the recipient of service. Once the classification is finalised at the end of the service provider the same cannot be altered at the end of the service recipient - Consequently, the cenvat credit cannot be denied to the appellant on this ground. The demand made by the revenue to deny cenvat credit by the appellant and order its recovery is rejected - question of interest and penalty no longer survives - Appeal allowed. - Excise Appeal No. 52974 of 2018 - FINAL ORDER NO. 50454/2023 - Dated:- 10-4-2023 - SH. P. V. SUBBA RAO, MEMBER (TECHNICAL) AND MS. BINU TAMTA, MEMBER (JUDICIAL) Sh. B. L. Narasimhan and Ms. Sukriti Das, Advocates for the appellant Sh. Rakesh Agarwal, Authorised Representative for the respondent ORDER The appellant/ assessee has filed the present appeal challenging the order of the Commissioner (Appeals) dated 13.06.2018 confirming t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011, thereby the words input services relating to 'setting up' have been omitted vide Notification No. 3/2011-CE (NT) dated 01.03.2011. Also, under the exclusion clause of the definition of input service the 'construction services' have been specifically added and therefore the credit has to be disallowed. Being aggrieved, the appellant has filed the present appeal before this Tribunal. 6. We have heard the learned Counsel for the appellant and also the authorised representative for the revenue and have perused the records of the case. 7. The allegations in the show cause notice that the two units were earlier separate and independent and obtained the common registration only on 31.01.2014, therefore cenvat credit on the services availed prior to registration is not admissible, is unsustainable in view of the decisions of the Tribunal in the case of the appellant itself. The Bench of this Tribunal in the Final Order No. 53004/2017 dated 23.02.2017 taking note of the order of the High Court approving the single registration for both the units, held: 7. The procurement of capital goods as well as utilization of input services for setting up the MGU happened ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we do not find any logical reason to accept the plea of the Revenue that on the mere taking of a single registration as against the two registrations, there was merger or amalgamation or transfer to hold that the assessee would not be entitled to any credit adjustment on the duty payable on sugar manufactured . We are of the view that the decision of the Hon‟ble Madras High Court is squarely applicable to the facts of the present case . The aforesaid decision has been subsequently followed by the Tribunal in rejecting the Appeal filed by the department, vide Final Order No. 50785 of 2019 dated 07.01.2019 titled as CCE GST, Udaipur Vs. Manglam Cement Limited. Therefore, the findings of the authorities below that the services in dispute were received used by them for setting up of their new unit prior to beginning of production on the ground that the application for common registration was made only on 23.01.2014, the same was granted on 31.01.2014 and they started dispatching cement w.e.f. 22.02.2014, is absolutely unsustainable. 8. The main issue in the present case is whether the appellant rightly availed the cenvat credit on input services used by them in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s placed emphasis on the includes‟ clause of the definition as also the excludes‟ clause of the definition of input service‟. The decision of the Tribunal in Pepsico India Holdings, on which reliance has been placed by the appellant, also interpreted the means‟ clause of the definition of input service‟. It would, therefore, be appropriate to consider this decision. 38. What came up for decision before the Tribunal in Pepsico India Holdings was whether the appellant was entitled to CENVAT credit on the input services‟ used in the setting up‟ of the plants. In particular, what was considered was whether setting up‟ of the plants would be a service falling in the means‟ clause of the definition of input service‟, even if setting up‟ was deleted from the includes‟ clause of the definition of input service‟ w.e.f. 01.04.2011. The Tribunal observed that the definition of the means‟ part of the definition was very wide and services used in setting up‟ of the factory would be covered under the input services‟, under rule 2(l) of the Credit Rules in the means‟ part of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded the services availed for setting up the factory. After 1.4.2011, it has three parts- a main part, an inclusive part and an exclusive part. The services used for setting up the factory are neither in the inclusive part of the definition nor the exclusive part of the definition. Therefore, such services were neither specifically included nor were specifically excluded. 17. It takes us to the main part of the definition which must be examined. If it is wide enough to cover the services in question, CENVAT credit will be available, otherwise it will not be available. The main part includes services used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal. The term manufacture is not defined in the Rules. xxxxxxxxx 21. For a service to qualify as input service‟ under CENVAT Credit Rules, 2004 post 2011, the service in question need not be covered even by the very wide definition of manufacture under section 2(f) of the Central Excise Act. Any service which is used not only in manufacture but also in relation to‟ manufacture will also qualify as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. The findings recorded above are squarely applicable to the facts of the present case and therefore we do not find any justification in denying the benefit of cenvat credit to the appellant. Here MGU was a part of the existing unit itself. The services so utilized for setting up of the factory which were availed prior to the commencement of production shall fall within the means clause‟ of the definition of input service‟, which has been held to be wide enough to allow cenvat credit of services used in or in relation to manufacture whether directly or indirectly. It is pertinent to appreciate that grinding unit was set up so as to utilize the excess production of clinker in the main fatory and applying the principle laid down in the case of Kellogs (supra), there is a direct nexus between the manufacture of the final product the services used for setting up the grinding unit, MGU. 13. The findings of the authorities below that services related to Erection, Commissioning Installation services, Works Contract service hiring of JCB Earth Moving machinery service have been received in relation to construction activity which under the exclusion clause (A) u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold that the appellant who is the consumer of those goods could not get the classification of the manufacturer change. Similarly, the case of Commissioner C. Ex. Vs. Manglam Cement Ltd 2017 (47) STR 349 , holds that it is well settled position of law that the credit availed by an assessee cannot be denied or varied on the ground that the classification of service should have been made in a different category by the provider of service. Variation in the classification or consequent rate of payment of service tax is not possible at the end of the recipient of service. In a recent decision, the Tribunal in Reliance Industries Ltd Vs . CCE ST, Rajkot 2022 (4) TMI 729 , has observed that classification of service cannot be disturbed or challenged at the end of the service recipient and particularly for denial of cenvat credit. Once the classification is finalised at the end of the service provider the same cannot be altered at the end of the service recipient. We find no reason to take a contrary view as against the settled principles of law holding the field. Consequently, the cenvat credit cannot be denied to the appellant on this ground. 15. The learned Counsel for the th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Credit-Rs. 20,02,604) Jaypee Rewa Plant v. CCE,2018 (9) TMI 633 - CESTAT NEW DELHI Orient Cement Ltd. v. CCE, Hyderabad, 2017 (51) STR 459 (Tri.-Hyd.) Services for Supply of Tangible Goods for hiring of crane and earth moving machinery to shift machinery/equipment at MGU (Credit- Rs. 4,28,453) Saravana Global Energy Ltd. v. Commissioner of C. Ex., Puducherry, 2017 (52) S.T.R. 179 (Tri. - Chennai) Larsen Toubro Ltd. v. CCE, Mumbai-II, 2018(15) GSTL 66(Tri.-Mumbai) Hiring of JCB Heavy Earth Moving machinery service for Erection, Commissioning and Installation of railway track, plant and machinery (Credit -Rs. 3,97,003) Maintenance or repair services for electrification and power supply work at MGU essentially used in relation to manufacture of final product. (Credit-Rs. 24,151) Orient Cement Ltd. (supra) Chartered Accountant Services for accounting, regulation compliances, Project audit necessary for completion of expansion/ m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the said decision is based on the earlier decisions on the subject. The case law cited by the authorised representative is not applicable in the present controversy and is clearly distinguishable. We chose to take the same view as has been repeatedly and successively taken in the line of decisions by different Benches of this Tribunal and therefore reliance placed on Parle International Ltd., vs. UoI -2021 (375) ELT 633 cannot be pressed. He also informed that the decisions of the Tribunal in the above said cases of Hindustan Zinc , Kellogs India have not been accepted by the department and appeal has been preferred against them before the respective High Courts. However, there is no order of stay by any higher forum and therefore as a matter of judicial discipline the earlier decisions of this Tribunal on the same issue are binding on this Bench. 17. We respectfully agree with the aforesaid decisions and therefore the demand made by the revenue to deny cenvat credit by the appellant and order its recovery is rejected. Consequently, the question of interest and penalty no longer survives. 18. In view of the entire discussion above, the impugned order is set aside. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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