TMI Blog2023 (7) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... RAL EXCISE, PUNE-III [ 2009 (8) TMI 50 - BOMBAY HIGH COURT] has held that expression means and includes is exhaustive and expression business is an integrated/continued activity and is not confined or restricted to mere manufacture of the product. Therefore, activities in relation to business can cover all activities that are related to the functioning of the business - The Hon ble High Court also held that once the cost incurred by the service has to be added to the cost, and is so assessed, it is a recognition by Revenue for the services having a connection with the manufacture of the final product. This Tribunal also in the case of M/S RAJRATAN GLOBAL WIRE LTD. VERSUS COMMISSIONER, CENTRAL GOODS SERVICE TAX, UJJAIN [ 2021 (4) TMI 400 - CESTAT NEW DELHI] has held that once there is no evidence that the insurance service was obtained for the personal use of the employee of assessee, it is definitely an eligible input service for which the assessee is entitled to claim the Cenvat credit. Above all, department has conceded for this issue to no more res integra and to have been decided in favour of the assessee - it is held that the Cenvat credit availed by the appellant o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also, there is no evidence of any positive act on the part of the appellant proving that appellant had intention to evade the payment of duty. In these circumstances, the order of imposition of penalty is held unreasonable. Thus, it is held that there was no shortcoming as were pointed out against the appellant (3 in number). The order confirming the demand based on alleged said short comings is therefore not sustainable. Same is accordingly, hereby set aside - appeal allowed. - Service Tax Appeal No. 50721 of 2021 [DB] - FINAL ORDER No. 50828/2023 - Dated:- 5-7-2023 - DR. RACHNA GUPTA, MEMBER (JUDICIAL) AND MRS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Mr. Pawan Arora and Ms. Akanksha Kumari, Advocates for the Appellant Mr. Harshvardhan, Authorised Representative for the Respondent ORDER The appellant in the present case is registered under Service Tax for providing Maintenance and Repairing Services and Renting of Immovable Property Services . The tax audit of appellant was conducted on 24th July, 2018 for the period 2013-14 to 2017-18. During the course of audit, department observed that appellant had entered into an agreement with M/s. Ericsson I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable in the records of Revenue. It is impressed upon that department cannot insit appellant to reverse Cenvat credit under Rule 6(3)(i) of the CCR, 2004 as default option. Learned counsel has relied upon the decision of this Tribunal, Mumbai Bench, in the case of Mercedes Benz India (P) Ltd. Vs. Commissioner of C.Ex., Pune-I reported as 2015 (40) S.T.R. 381 (Tri.-Mumbai). Learned counsel has also relied upon the decision of the Tribunal in the case of Dalmia Bharat Sugar and Industries Ltd. and Dalmia Chini Mills Vs. Commissioner of Central Excise, Customs and Service Tax, New Delhi reported as 2017-TIOL- 113-CESTAT-DEL. 3.1 Learned counsel further submitted that the issue of levy of service tax on legal services is a question of law, still being pending adjudication. The questione of imposition of penalty in such circumstances does not at all arise. The order under challenge is accordingly prayed to be set aside and appeal is prayed to be allowed. 4. While rebutting these submissions, learned DR has conceded that the issue with respect to the premium for insurance services to be called as input service stands decided in favour of the assessee. However, with respect to the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 (hereinafter referred as specified services) in so far as they are used for (a) construction or execution of works contract of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or (B) services provided by way of renting of a motor vehicle, in so far as they relate to a motor vehicle which is not a capital goods; or (BA) service of general insurance business, servicing, repair and maintenance, in so far as they relate to a motor vehicle which is not a capital goods, except when used by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or repairs of a factory, or an office relating to such factory, (iv) Services used in relation to advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, (v) Services used in relation to activities relating to business and outward transportation upto the place of removal. Each limb of the definition of input service can be considered as an independent benefit or concession exemption. If an assessee can satisfy any one of the limbs of the above benefit, exemption or concession, then credit of the input service would be available. This would be so even if the assessee does not satisfy other limb/limbs of the above definition. To illustrate, input services used in relation to setting up, modernization, renovation or repairs of a factory will be allowed as credit, even if they are assumed as not an activity relating to business as long as they are associated directly or indirectly in relation to manufacture of final products and transportation of final products upto the place of removal. The Hon ble High Court also held that once the cost incurred by the service has to be added to the cost, and is so assessed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) Insofar as the first limb is concerned, the requirement of establishing a nexus between the input service and the process of manufacture is to be regarded as 'satisfied if the expenditure incurred for the input service forms part of the cost of production/value of the final product, on which duty of excise is levied. 10. The Larger Bench has discussed that the decision of Hon ble Bombay High Court in the case of Central Excise, Nagpur Vs. Manikgarh Cement reported as 2010 (20) S.T.R. 456 (Bom.)is not applicable for the reason that the decision of Coca Cola (I) Pvt. Ltd. (supra)was not brought to the notice of the Bench in the said case. It has been concluded by the said Larger Bench that the definition would cover not only input services which have a nexus with the manufacture of the final product (covered by the first limb in the definition), but also other input services , which do not have such a nexus but are covered by either of the other four limbs of the definition. Each limb of the definition is independent and benefit of Cenvat credit would be available even if any one of them is satisfied. So far as the first limb is concerned, the requirement of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the manufacture of exempted goods or for provision of exempted services, or input service used in or in relation to the manufacture of exempted goods and their clearance upto the place of removal or for provision of exempted services], except in the circumstances mentioned in sub-rule (2): (3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow (any one) of the following options, as applicable to him, namely:- (i) pay an amount equal to five percent of value of the exempted goods and exempted services; or (ii) pay an amount as determined under sub-rule (3A); or (iii) maintain separate accounts for the receipt, consumption and inventory of inputs as provided for in clause (a) of sub-rule (2), take CENVAT credit only on inputs under sub-clauses (ii) and (iv) of said clause (a) and pay an amount as determined under sub-rule (3A) in respect of input services. The provisions of sub-clauses (i) and (ii) of clause (b) and sub-clauses (i) and (ii) of clause (c) of sub-rule (3A) shall not apply for such payment: Provided that if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to determine and pay such amount provisionally for each month, but shall determine the CENVAT Credit attributable to exempted goods or exempted services for the whole year as prescribed in condition (c) and pay the amount so calculated on or before 30th June of the succeeding financial year. 14. Clause (i) further provides that if the amount so determined is not paid within the due date i.e. 30th June then in addition to the said amount, the assessee shall be able to pay interest @24% per annum to the due date till the date of payment. Thus, it is evident that the condition of filing the declaration is only directory and not mandatory. In case, a particular option is not opted by the output service provider, we are of the opinion that Revenue cannot insist assessee to a avail particular option. We draw our support from the decision in the case of Mercedes Benz India (P) Ltd. (supra). Further, most of the requirements under Rule 6(3A) like, name, address and registration no. of the assessee, description of taxable services and exempted services, CENVAT Credit of inputs and input services lying in balance as on the date of exercising option, are already available in the records o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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