TaxTMI 
TaxTMI 
2015 (11) TMI 167
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....redit taken by such manufacturer on the input service used in the final products could be utilised for discharging service tax liability as a person liable for paying service tax in relation to the said Goods Transport Agency service received by them on claiming the GTA service as an output service in terms of the above Explanation to Rule 2 (p) of Cenvat Credit Rules, 2004?" 2. The facts, in a nutshell, are as hereunder :- The respondent/assessee is a manufacturer of monobloc pumps falling under Tariff Item No.8413.7010 of the schedule to the Central Excise Tariff Act, 1985. The assessee is registered with the Central Excise Department. As a manufacturer of excisable goods, the respondent/assessee availed credit of duty paid on inputs, capital goods and service tax on input services under the Cenvat Credit Rules, 2004. On scrutiny of the documents by the Department, it came light that the assessee had wrongly availed credit of service tax paid on outward transportation during the period from 1.4.05 to 30.9.06 amounting to Rs. 3,03,634/-, thereby contravening the provisions of Rules 2 and 3 of the Cenvat Credit Rules as the service tax paid on outward freight beyond the place of ....
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.... whether the services availed by a manufacturer for outward transportation of final products from the place of removal should be treated as an input service in terms of Rule 2 (1) (ii) of the CENVAT Credit Rules, 2004 and thereby enabling the manufacturer to take credit of the service tax on the value of such services, held as follows: "30. The definition of 'input service' contains both the word 'means' and 'includes', but not 'means and includes'. The portion of the definition to which the word means applies has to be construed restrictively as it is exhaustive. However, the portion of the definition to which the word includes applies has to be construed liberally as it is extensive. The exhaustive portion of the definition of 'input service' deals with service used by the manufacturer. Whether directly or indirectly, in or in relation to the manufacture of final products. It also includes clearance of final products from the place of removal. Therefore, services received or rendered by the manufacturer from the place of removal till it reached its destination falls within the definition of input service. What are the services that normal....
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....of inputs or capital goods but also includes outward transportation of the final product upto the place of removal. Therefore, in the later portion of the definition, an outer limit is prescribed for outward transportation, i.e. up to the place of removal. 31. The phrase 'activities relating to business' is an omni-bus one and it finds a place in the inclusive definition. The question is, by a judicial interpretation, outward transportation of the final product from the place of removal till it is delivered to the customer, could be construed as falling within the definition of 'input service'. It is a well settled rule of interpretation that, while interpreting a provision, the Court must take note of not only the express words used but also the words which are not used. If the legislature has expressly used the words 'in respect of the transportation' in a particular manner and did not choose to include within the ambit of the word 'transportation'. Certain aspects. Having regard to the scheme of the Section, the way it is worded, it is not open to the Court to include something which the legislature deliberately did not include in the definition....
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....from the place of removal' included transportation charges from the place of removal till it reached the destination, namely the customer. Therefore, the said input service was included in the early part of the definition 2(i)(ii). Consequently, we cannot read what is expressly provided in the early part of the rule as having been included in the later part of the rule while interpreting the words 'activities relating to business', though it has been amplified by saying it is only an inward transportation of inputs or capital goods and outward transportation upto the place of removal. The phrase 'outward transportation upto the place of removal' used in the inclusive portion of the definition (the second part), has to be read along with the word inward transportation of input or capital goods. It has no reference to 'clearance of final products'. However, when the claims are put forth on the basis of the said circular of 23.8.2007, for benefit of CENVAT credit, even in the cases where the aforesaid conditions are not satisfied relying on the words clearance of final products from the place of removal, the Central Government it fit to amend the provision ....
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....hat when the ownership of the goods and the property remain with the seller of the goods till the delivery of goods in acceptable condition to the purchaser at his door step, the freight charges incurred by the manufacturer for such sale and supply at the door step of the customer are subjected to service tax and therefore, it falls within the definition of 'input service'. However, the Larger Bench of the CESTAT following the aforesaid judgment held the expression 'activities relating to business' covers transportation upto the customers' place and it is an integral part of the manufacturing business and therefore, credit cannot be denied by relying on a specific coverage of outward transportation upto the place of removal in the inclusive clause. However, the interpretation placed by us on the words 'clearance of final products from the place of removal' and the subsequent amendment by notification 10/2008 CE(NT) dated 1.3.2008 substituting the word 'from' in the said phrase in place of 'upto' makes it clear that transportation charges were included in the phrase 'clearance from the place of removal' upto the date of the said su....