TaxTMI 
TaxTMI 
2011 (4) TMI 982
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....order, the lower appellate authority has set aside the order passed by the adjudicating authority. The Additional Commissioner, Meerut-I by its order dated 28-10-2009 had confirmed the demand for recovery of inadmissible credit of service totalling Rs. 19,61,606/- and the entire amount having been deposited the same was appropriated. The adjudicating authority had also directed the payment of interest and imposed equal amount of penalty. 2. Placing reliance in the decision in the matter of Commissioner of Central Excise, Nagpur v. Ultratech Cement Ltd., reported in 2010 (260) E.L.T. 369 (Bom.), Commissioner of C. Ex., Nagpur v. Manikgarh Cement Works reported in 2010 (18) S.T.R. 275, the DR submitted that the credit was in relation ....
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....prior to the commencement of manufacturing activity (such as services for setting up, modernization, renovation or repairs of a factory) as well as services rendered after the manufacture of final products (such as advertisement, sales promotion, market research etc. and includes services rendered in relation to business such as auditing, financing etc....... Thus, the substantive part of the definition "input service" covers services used directly or indirectly in or in relation to the manufacture of final products, whereas the inclusive part of the definition of "input service" covers various services used in relation to the business of manufacturing the final products. In other words, the definition of "input service" is very wide and co....
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....ive part qualified by the place of use. For example, one of the categories mentioned in the inclusive part is "used as packing material". Packing material by itself would not suffice till it is proved that the item is used in the course of manufacture of final product. Mere fact that the item is a packing material whose value is included in the assessable value of final product will not entitle the manufacturer to take credit. Oils and lubricants mentioned in the definition are required for smooth running of machines, hence they are included as they are used in relation to manufacture of the final product. The intention of the Legislature is that inputs falling in the inclusive part must have nexus with the manufacture of the final product.....
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....used in the manufacture of sodium cyanide is an eligible input, since it has a significant role to play in the manufacturing process and since the final product cannot emerge without the use of gas. Similarly, Heat Transfer Oil used as a heating medium in the manufacture of LAB is an eligible input since it has a persuasive role in the manufacturing process and without its use it is impossible to manufacture the final product. Therefore, none of the categories in the inclusive part of the definition would constitute relevant consideration per se. They become relevant only when the above crucial requirement of being "used in or in relation to the manufacture" stands complied with. In our view, one has to therefore read the definition in its ....
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.... Commissioner (Appeals) has observed that commercial construction services for the purpose of construction of staff quarters for the factory staff/workmen inside the factory premises are also covered by the definition of term input service'. While arriving at the said finding, the Commissioner (Appeals) has tried to analyze the definition clause as being comprised of two parts, one main part and another inclusive clause. Referring to the inclusive clause, the Commissioner (Appeals) has taken into consideration the scope of the expression "such as," in relation to the expression 'activity relating to the business'. 5. The term 'input service' has been defined under Rule 2(l) of the Cenvat Credit Rules, 2004. It is defined as under : ....
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....ng to the business, undoubtedly, gives various examples as rightly pointed out by the Advocate for the appellants those being illustrative nature would not be restrictive only to those items which are specified in the said definition clause. However, having said so, it also to be noted that that such examples relate to the input or capital goods upto the place of removal. The expression 'up to the place of removal' obviously relate to the place of removal of the goods. The clause also refers to the expression input and capital goods before referring to the activity of construction thereof upto the place of removal. The overall reading of the definition of the input service, therefore, clearly relate to those inputs and capital goods which a....