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TMI Blog2023 (9) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... g with interest while also seeking to impose penalty under Section 11AC of the Central Excise Act, 1944. The show-cause notices were adjudicated vide OIO No. 124- 127/SA/CCE/2012 dated 26.11.2012. The appellants are before us against this order. 2. Ms. Krati Singh, learned Counsel for the appellants, submits that the definition of Input Services during the relevant period allowed credit of services which are used by the manufacturer whether directly or indirectly, in relation to the manufacture and clearance of final products up to the place of removal; the definition also included services used in relation to business activity till 01.04.2011; the only exception was to the Outdoor Catering Service used for personal consumption of any employee w.e.f 01.04.2011. She submits that there is no exclusion for allowing credit of input services used for construction; in fact, the services used in setting up of the factory is specifically included in the definition of Input Service; Construction Services were excluded only w.e.f 01.04.2011 whereas the issue pertains to the period February 2008 to December 2008. She further submits that the Service of Rent-a-Cab was used to facilitate the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly analysed Section 2(l) by dividing it into two parts terming them the 'mean' part and the 'includes' part and that the present case would fall under both the parts of the definition as the phraseology is wide enough to cover the said services, the same being directly or indirectly or in any event in relation to the manufacture of the respondents' final product. 8. The land was taken on lease to construct the factory. The factory was constructed to manufacture the final product. The land and the factory were required directly and in any event indirectly in or in relation to the manufacture of the final product and for the clearance thereof up to the place of removal. But for the factory the final product could not have been manufactured and the factory needed to be constructed on land. The land and the factory are used by the manufacturer in any event indirectly in or in relation to the manufacture of the final product, namely, metal-sheets. The respondents' case, therefore, falls within the first part of Rule 2(l) aptly referred to by Mr. Amrinder Singh as the "means part." 9. The respondents' case also falls within the second part of Rule 2(l) i.e. the "inclusive" part. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices were not covered by Rule 2(l), it would not have been necessary to introduce the amendment. It is clear, therefore, that prior to the amendment the setting up of a factory premises of a provider for output service relating to such a factory fell within the definition of 'input service.' The amendment of 2011 is not retrospective and is not applicable to the respondents' case. 5. In respect of Rent-a-Cab Service, Hon'ble High Court of Punjab & Haryana in the case of Maruti Suzuki India Ltd. (supra) observed that: 27. In Commr. of C. Ex., Chandigarh-II v. Federal Mogul Goetze (India) Ltd., 2015 (39) S.T.R. 735 (P&H), the question was whether the CESTAT was correct in holding that the service of transportation of employees of the factory to the factory was an input service within the definition of input service in Rule 2(l) of the 2004 Rules. This Court affirmed the finding of the Tribunal that the transportation of the employees from their residence to the factory premises is related to their manufacturing activities and without coming to the factory, the production cannot be started. The provision of transportation facilities increases efficiency and increases the product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal product. By no stretch of imagination can it be construed as a welfare measure. It is a basic necessity. To ensure that the work force comes on time at the work place, the employers have taken this measure which has a direct bearing on the manufacturing activity. At any rate it is an activity relating to business." This judgment has been followed in Commissioner of C. Ex., Bangalore-III v. TATA Auto Comp. Systems Ltd., 2012 (277) E.L.T. 315 (Kar.), Commissioner of Central Excise, Bangalore-I v. Graphite India Ltd.,2012 (27) S.T.R. 130 (Kar.) and Commissioner of Central Excise, Bangalore-I v. Bell Ceramics Ltd., 2012 (25) S.T.R. 428 (Kar.). 6. In respect of Outdoor Catering Services, Hon'ble High Court of Bombay in the case of Ultratech Cement Ltd. (supra) held as follows: 31. In our opinion, the ratio laid down by the Apex Court in the case of Maruti Suzuki Ltd. (supra) in the context of the definition of 'input' in Rule 2(k) of 2004 Rules would equally apply while interpreting the expression "activities relating to business" in Rule 2(l) of 2004 Rules. No doubt that the inclusive part of the definition of "input' is restricted to the inputs used in or in relation to the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in relation to the business of manufacturing the final products. Therefore, while interpreting the words used in the definition of 'input service', the ratio laid down by the Apex Court in the context of the definition of 'input' alone would apply and not the judgment in its entirety. In other words, by applying the ratio laid down by the Apex Court in the case of Maruti Suzuki Ltd. (supra), it cannot be said that the definition of 'input service' is restricted to the services used in relation to the manufacture of final products, because the definition of 'input service' is wider than the definition of 'input'. 34. Therefore, the definition of input service read as a whole makes it clear that the said definition not only covers services, which are used directly or indirectly in or in relation to the manufacture of final product, but also includes other services, which have direct nexus or which are integrally connected with the business of manufacturing the final product. In the facts of the present case, use of the outdoor catering services is integrally connected with the business of manufacturing cement and therefore, credit of service tax paid on outdoor catering services ..... X X X X Extracts X X X X X X X X Extracts X X X X
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