TaxTMI 
TaxTMI 
2015 (12) TMI 1060
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....during the year 2007-08 holding Service Tax Registration Certificate No. AAECA 5046RST001 for providing Port services and others. The Appellants are Port registered under Indian Port Act, 1908 and it has been providing services in relation to Port. The Appellants operate Port and its services encompass entire arrangement of activities right from the berthing of ships to the storing of the goods and subsequent dispatch to customers. The Appellants are engaged in the business of running of private Ports. The Appellants do not carryout all the activities in the Port and have appointed various service providers for carrying out specific activities such as CHAs, Surveyors, Transporters etc. The Appellants provide the various taxable services as output services as under:- (a) Port Service (b) Other port service (c) Storage and warehousing service (d) Cargo handling service (e) Goods transport agency service (f) Management and consultancy services (g) Consulting engineer service and Sponsorship services 3. The Appellants availed CENVAT Credit on inputs, capital goods and input ser....
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....le 2(l) are wide to cover all or any input without use of which, the output service cannot be rendered. The Honble Supreme Court in the case of State of Punjab & Another Vs British India Corporation Ltd (1964) 2 SCR 114 = AIR-1963-SC-1459 observed that the words like directly or indirectly wide and liberal meaning can be given to the words used for, depending upon the object and the purpose of the legislature. (e) In the present case, jetty and other buildings situated within port area are the heart of the port service. None of the above, viz. port jetty, port building and store & warehouse building, can be said to be incidental to the taxable service rendered by the Appellant. In other words, all are part and parcel of Port service. (f) The Larger Bench decision of the Tribunal in the case of Vandana Global Ltd as relied upon by the Adjudicating authority would not be applicable as held by the Honble Gujarat High Court in their own case. The Tribunal in the case of Bharti Airtel Ltd Vs CCE 2013 (29) STR 401 (Tri-Mum), has clearly held that Explanation 2 to the definition of input under Rule 2(k) of the said Rules, would not be ....
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....that the input services were used for providing output taxable services. In this context, the learned Advocate drew the attention of the Bench to the use of input service in detail, which was explained before the Adjudicating authority. The learned Advocate also demonstrated the Bench, some of the invoices of input service. The learned Advocate filed written submissions with statements and compilation of case laws. 6. The learned Authorised Representative on behalf of the Revenue submitted on all the issues as under:- (A) For cement and steel:- (i) This issue has already been decided by the Tribunal in the Appellants own case as reported in 2009 (13) STR 178 (Tri-Ahmd)/ 2008-TIOL-1691-CESTAT-AHM. However, he fairly concedes that this decision has been set aside by the Hon'ble High Court of Gujarat (supra). (ii) The Tribunal in the case of Gujarat State Petronet Ltd (GSPL) Vs CCE Ahmedabad 2013 (32) STR 510 (Tri-Ahmd), denied the credit of pipes as capital goods, procured by the contractor for laying of pipeline system for GSPL. (iii) Explanation 2 as amended in the definition of input vide notification dt.0....
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....T/160/2007 (reported in 2008-TIOL-1891-CESTAT-AHM) disallowed the CENVAT credit on cement and steel. The Appellants filed appeal before the Hon'ble Gujarat High Court. By the judgment dated 29.04.2015 in Tax Appeal No. 15 of 2009 as reported in 2015-TIOL-1288-HC-AHM-ST (Mundra Port & Special Economic Zone Limited vs. CCE, Rajkot), the Hon'ble High Court allowed the appeal of the Appellant. The Appellant would be entitled to avail input credit on Cement and Steel. The relevant portions of the decision of the Hon'ble Gujarat High Court (2015-1288-HC-AHM-ST) are reproduced below:- "7. It is not disputed that jetty was constructed and input credit was claimed on cement and steel. The aforesaid definition of Rule 2(k) was applicable and Explanation 2 did not provide that cement and steel would not be eligible for input credit. According to learned counsel for the Appellant, the Appellant is not manufacturer and, therefore, the provisions Explanation 2 of Rule 2(k) would be applicable only to the factory and manufacturer. The Appellant is neither having any factory nor he is manufacturer. The Appellant is a service provider of port. We need not go into this question ....
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....-TIOL-624-CESTAT-DEL-LB]. We have carefully gone through the decision of the Larger Bench of the Tribunal. We do not find that amendment made in CENVAT Credit Rules 2004 which come into force on 7.7.2009 was clarificatory amendment as there is nothing to suggest in the Amending Act that amendment made in Explanation 2 was clarificatory in nature. Wherever the legislature wants to clarify the provision, it clearly mentions intention in the notification itself and seeks to clarify existing provision. Even, if the new provision is added then it will be new amendment and cannot be treated to be clarification of particular thing or goods and/or input and as such, the amendment could operate only prospectively. In our opinion, the view taken by the Tribunal is based on conjectures and surmises as the Larger Bench of the Tribunal used the expression that intention behind amendment was to clarify. The coverage under the input from where this intention has been gathered by the Tribunal has not been mentioned in the judgment. There is no material to support that there was any legislative intent to clarify any existing provision. For the same reason, as mentioned above, the decision of the Ap....
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....which are further used in the factory of the manufacturer. Thus, it is clear that input Cement and Steel used in the factory of manufacturer shall not be eligible input credit. This explanation is applicable only to the manufacturer and not the service provider. It is to be read strictly as per plain meaning of the statute. There is no indication in the Explanation that it would apply to the service provider. The Hon'ble Gujarat High Court in the appellants own case held that amendment in Explanation-2 in Notification No. 16/2009-CE (NT) (supra) was not clarificatory in nature and the amended definition will not be applicable to the service providers. So, the denial of input credit on Cement and Steel before and after amendment of Explanation 2 of definition Input, cannot be sustained. 9. With regard to the second issue, denial of CENVAT Credit on the other input/capital goods, the adjudicating authority observed that the inputs and capital goods were used in the construction of Port Jetty, Port buildings and Warehouse services, which are not output service i.e. Port services. It has also observed that inputs and capital goods were used for maintenance repair of mach....
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.... (ii) all goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing any output service; Explanation 1. - The light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever. Explanation 2. - Input include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer; (I) input service means any service, - (i) used by a provider of taxable service for providing an output service, or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertis....
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....t service provider respectively. The present case relates to output service provider. There is no dispute that the appellants herein are not manufacturer and covered under Clause (ii) of input definition. The words all goods, if read with used for providing any output service in Clause (ii) of Rule 2(k) of Rules 2004, make it clear that any goods other than specified in the said Clause, used for providing any output service, would be treated as input and covered under the said definition. Further, the particular expression used for providing any output service in the said Clause (ii) in Rule 2(k) have widened the scope of definition of input in respect of output service. The definition of capital goods under Rule 2(a) of the Rules provides the goods, specified in sub-Clause (i) to (vii) of Clause (A) used for providing output service, would be treated as capital goods. Similarly, the definition of input service in Rule 2(l) of Rules 2004, is in two parts. Clause (i) and (ii) of Rule 2(l) cover the service provider and the manufacturer respectively. The present case relates to output service provider. The expression any service, if read with used by a provider of taxable servic....
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....o the specific part, one finds that the word input is defined to mean all goods, except light diesel oil, high speed diesel oil and petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not. The crucial requirement, therefore, is that all goods used in or in relation to the manufacture of final products qualify as input. This presupposes that the clement of manufacture must be present. 8. Yet again considering the inclusive part of the definition of input, it was held as follows. All these considerations become relevant only when they are read with the expression used in or in relation to the manufacture of final product in the substantive/specific part of the definition. In each case it has to be established that inputs mentioned in the inclusive part is used in or in relation to the manufacture of final product. It is the functional utility of the said item which would constitute the relevant consideration. Unless and until the said input is used in or in relation to the manufacture of final product within the factory of production, the said item would not become an elig....
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....ervice for providing passive telecom infrastructure by way of telecom tower to various cellular telecom operators. The Revenue strongly relied upon the decision of the Hon'ble Bombay High Court in the case of Bharti Airtel Limited vs. CCE - 2014-TIOL-1452-HC-MUM-ST. The Tribunal observed that the Hon'ble Bombay High Court was examining the issue on a different platform of facts. Hon'ble High Court was concerned with admissibility of Cenvat credit of duty paid on tower and parts for providing telecom services. The towers and parts were held to be immovable, hence not goods and not excisable and therefore, not considered as input for providing telecom service. But in the present case the question of nexus between tower parts and output service of telecommunication is not under consideration. In the case of Bharti Airtel Ltd. (supra), Cenvat credit was denied on inputs and capital goods used for providing the output service namely Telecommunication Service. The Tribunal observed as under:- "11. We find that the appellant is solely emphasizing on the provisions of Rule 2(k)(ii) which defines input as under : "2(k) input means - (i) all goods, except lig....
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....ible under Rule 2(k)(ii) for providing output service i.e. Business Support Service. The inputs are not immovable when they are purchased and then brought to the site for creation of towers. Merely because the tower parts, etc., are assembled together, it would be totally unreasonable to suggest that Cenvat credit on them is not admissible despite Rule 2(k)(ii). This Rule has to be interpreted as it stands. Reliance is placed on the High Court of H.P. judgment in case of Gujarat Ambuja Cement - 2008-TIOL-683-H.C.-H.P. = 2010 (256) E.L.T. 356 (H.P.) and the Tribunal decision in the case of Commissioner of Central Excise, Raigad v. JSW Ispat Steel Ltd. - 2013-TIOL-1758-CESTAT-MUM, in which it was held that Excise duty paid on parts of components would be admissible even if they are assembled into goods which are immovable or exempted. By analogy in the present case Cenvat credit would be admissible under Rule 2(k)(ii) ibid. Ld. AR contended that the appellant had claimed Cenvat credit on capital goods in their returns. We note that if law provides credit on inputs under Rule 2(k)(ii) they cannot be precluded from availing this statutory right. As analysed above, the facts and circums....
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....input services as given in Rule 2(l)(i) of CENVAT Credit Rules, 2004 which reads as under: Input services means any service used by a provider of taxable service for providing an output service. According to the Revenue in this case the services listed above have not been used for providing the service for the construction of the mall. Since mall is not an excisable product or is a service, credit is not admissible. As submitted by the learned counsel, the issue which was before the Honble High Court of Andhra Pradesh was similar to the present one. The Honble High Court of Andhra Pradesh considered the definition of the input and input service and took a view that using cement and TMT bars for construction of warehouse, the CENVAT credit on cement and TMT bars would be admissible. The Honble High Court observed as follows : "6. The only allegation against the assessee is that they claimed CENVAT credit irregularly with reference to cement and TMT bars used in the construction of warehouses through which the storage and warehousing services are provided by the assessee. Section 65(102) of the Finance Act defines storage and warehousing as to include storage an....
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....on, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal. 7. A plain reading of both the above definitions would show that, unless excluded, all goods used in relation to manufacture of final product or for any other purpose used by a provider of taxable service for providing an output service are eligible for CENVAT credit. In Maruti Suzuki Ltd. v. Commissioner of Central Excise, Delhi-III, (2009) 9 SCC 193 = 2009 (240) E.L.T. 641 (S.C.) the Supreme Court laid down as follows : 9. Coming to the statutory definition of the word input in Rule 2(g) in the CENVAT Credit Rules, 2002, it may be noted that the said definition of the word input can be divided into three parts namely : (i) specific part (ii) inclusive part (iii) place of use Coming to the specific part, one finds that the word input is defined to me....
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....f port is :- "Port. A harbour where ships load and unload cargo; any place where persons and cargo are allowed to enter a country and where customs officials are stationed. [Blacks Law Dictionary, 7th & 8th Eds.]. A place for the loading and unloading of the cargoes of vessels, and the collection of duties or customs upon imports and exports. [Blacks Law Dictionary, 5th Ed.]. A port is a place intended for loading or unloading goods; hence includes the natural shelter surrounding water, as also sheltered water produced by artificial jetties, etc. [The Baldhill CCANY, 42 F 2d 123, 125]. A port is a place where a vessel can lie in a position of more or less shelter from the elements, with a view to the loading or discharge of cargo. [Hunter v Northern Marine Insurance Co. Ltd. (1888)13 App Cas 717, 726, per Lord Herschell]." The word port must be construed in its usual and limited popular or commercial sense as a place where ships are in the habit of coming for the purpose of loading or unloading, embarking or disembarking. [The Mowe (1915) P 1, 15, per Evans]. The word "jetty", menas as per Mitra's Legal and Commercial Dictionary (6th Edit....
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....bmissions. The same is reproduced below, a perusal of which shows that these inputs and capital goods are necessary for providing the output service, and hence CENVAT Credit would be eligible on them. Annexure "B" Adani Ports And Special Economic Zone Limited Statement of various Inputs & Capital goods used for providing Port services SN Input Items Uses of Inputs 1. Air Compressor Used as machinery in liquid processing plant. 2. ALIPHATIC ACRYLIC POLYURETHANE Conveyour belt system for fertilise cargo 3. Bitumen Used for open godown facility (cargo storage in open godown) and internal Road in port area. 4. BRG ROLL MTR, 22314 E,70 MM, 150 MM Material used for maintenance of RTGC Cranes at CT2 5. BRG ROLL MTRS, 2309/E, 45MM, 100MM Operation & Maintenance of crane 6. BUNK HOUSE, PREFABRICATED For security purpose 7. Cable, PVC Cable Used for bagging machine, power transmission, electrical tower in open area. 8. Cable Tray Cable lying tray (outside lying) 9. CAUSTIC SODA, MFR:GACL Used in Liquid Terminal Tank cleaning 10. CBL ELE ARM, 1.1 KV, APPEAL, XLPE, 4C, 12MM2 Cable for el....
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....0MM, 10 MM For equipments like crane, hydra and loaders 37. Paint For maintenance of Tug, Excavator, Crane, Tank Farm, Liquid Pipeline Used for erosion coatings. 38. PAINT, CONPLAST-W, MFR:FOSROC Port inside area Mpt jetty repair work 39. PAINT, ENAMEL, GREEN, 52140-40900 For painting job of Tugs & Dredgers 40. PAINT, EPOXY, INTERTHANE-410, MFR:AKZONOBLE For painting job-Single Point Mooring (SPM) 41. PIPE N-MET, PVC, 6KG/CM2,1-1/2 IN For liquid terminal operations purpose 42. Plastic Sheet Used for covering bulk cargo lying in open area/ godown i.e. Wheat, Fertilizer, Sugar, etc and covering open wagon of bulk fertilizer 43. PUMP WATER, PN-3800883, MFR:CUMMINS Engine spares - Container Terminal Operations 44. ROPE WIRE, NYLN, 10 MM Used on Tugs for Heaving line for passing Towing rope & Mooring ro9pe 45. ROPE WIRE, SS, 8 MM Wire rope for crane use 46. ROPE, POLY PROPYLENE, 6- CIRCUMFERENCE Used for Tugs Mooring at Tug berth with the Help of rope 47. ROPE, SZ:12IN, 8-STRAND, HIGH STRENGTH Used for Tugs for Unberthing & berthing of ships Forward Towing Winch. 48. SEAL, O....
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....ular heading have been mentioned in the said order. It has been further observed that as per Rule 3 of the said Rule 2004, the CENVAT Credit is available only on the inputs, capital goods, input Services as defined under Rule 2 of the Rule 2004 and the credit availed by the appellants on the said Goods and Services are not admissible to them, as it is not covered with the definition under Rule 2 of the said Rule. The Adjudicating Authority observed that the appellant had not submitted any evidences, which proves that these services were used for business and providing Output Service. It is further observed that the appellants had not submitted any details of bank charges and in absence of which the nexus of such bank charges to the Output Services cannot be established. 21. It is observed that what constitutes the "Input Service" has been considered by various Courts and this Tribunal in number of cases, by way of interpreting the definition of input services. The definition of input service has already been reproduced in Para 10 in this order. As per Clause (i) of Rule 2(l) of CENVAT Credit Rules, 2004, "input service" means any service used by a provider of taxable service for....
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....excluded, all goods used in relation to manufacture of final products or for any other purpose, used by a provider of taxable services for providing an output service are eligible for CENVAT Credit. The Tribunal held in the case of Navratna S.G. Highways Prop. Pvt. Ltd. (supra) that the definition of Input and Input services are pari materia as far as the service providers are concerned. In the case of Reliance Infratel Ltd (supra), the Tribunal held that the CENVAT Credit is eligible on goods viz. Brackets, Mounting Pole, Mount Clamps, Cable, Pre-fabricated Buildings/Shelters/Panels etc used in erection/fabrication of telecommunication tower fixed to earth, used for providing Business Support Service. In the case of the present appellants themselves (supra), the Hon'ble Gujarat High Court has held that credit of duty paid on cement and steel used for construction of Jetty used for providing Port services are eligible for credit. In another case of the present appellant - 2011 (21) STR 361 (Guj.), the Hon'ble High Court of Gujarat upheld the decision of the Tribunal holding that they are entitled for CENVAT Credit of Service Tax paid on various services namely Mobile Phones....
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....uld promote the brand of The Appellant and increase its business. The Appellant further engaged promotions and media agency for public relation and media release co-ordination and facilitation purpose. This service is specifically included in third part of the definition of Input Service defined under Rule 2(1) f the CENVAT Credit Rules 2004. 2 Air Port Services The Appellant is having an airstrip at mundra, which facilitate its customers who are availing port service and other stake-holders for better connectivity with other parts of India and thus help in providing port service more efficiently. Airports Authority of India who is the only service provider under this category manages communication & navigation system and air traffic management to facilitate air operation smoothly. CENVAT Credit availed for the Airport service should also be allowed following the same logic as that of "Rent a Cab" Service which was allowed by the Hon'ble Tribunals" decision in the Appellants" own case on the ground that transport of various personnel and other officials is necessary to provide authorized operation efficiently. 3 Air Travel Agency The Appellant availed the services....
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.... of port. Service relating to "auditing" is specifically included in third part of the definition of Input Service defined under Rule 2(1) of the CENVAT Credit Rules 2004. 10 Cleaning Activity Services The Appellant availed the services from various service providers who provided the services of housekeeping in port area and port offices. Cleanliness port area required for sale port operation. 11 Clearing & Forwarding Agents Services The Appellant availed the services of various clearing and forwarding agencies for custom clearance of various dry cargo and liquid cargo on behalf of various customers. 12 Commercial Coaching & Training Services The Appellant availed the service from various service providers who organized various types of trainings to train mechanical and engineering technicians for better handling of tools, equipments, convey our belts, cranes used in the port and port systems. Further training were provided to non-technical staff for smooth functioning of port. Such training are needed to provide the port service efficiently. Service relating to coaching and training is specifically included in third part of the definition of Input Serv....
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.... offered by the Appellant has been listed company in National Stock Exchange (NSE) & Bombay Stock Exchange (BSE). The Company is required to tax depository services of NSE & BSE for securities related information and data required from time to time for publication to public and bankers. 19 Cosmestic / International Journey by Air The Appellant availed Air travel services for travelling by air for various executives and directors for attending various business meeting and conferences related to port business operation and development purpose. 20 Dredging Services Dredging is the prime activities needs to be carried out for construction & operation of Port. For keeping minimum draft level near jetty area, dredging in the sea is required to be carried out from time to time to keep minimum draft level. 21 Erection, Commission-ing or Installation Services The Appellant availed services for erection, commissioning & Installation of various plants & machinery, equipment, tugs and cranes which enable the port to provide smooth and efficient movement and handling of cargo within the port area and it reduces the turnaround time for Import and Export of cargo and in....
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....y be) as well as breakdown maintenance (maintenance/repair on breakdown of any machine) services to be carried out on various plant & machinery equipment used for providing the port service, tugs and cranes used for providing port service. Further repair and maintenance is also required of jetty, port offices and warehouses which are needed for the day to day operation to provide port service. 28 Management Consultants Services The Appellant availed management consultantancy service from various service providers in the field of business management and project management for effective and efficient management of port operations and developments. The scope of services included within business management the services of consultancy services to define the desired process model for capital projects, review existing processes, establish gaps in coverage and content, design to be business processes, define functional requirements for IT enablement of designed business processes, program-manage implementation of designed business processes and provide subject matter expertise in program managing, IT implementation for capital project management. The above services are needed for ....
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....5 Port Services The Appellant hired services from various port services providers for providing port services at Mundra port for its own customers. The scope of the port services consisting of port and dock/jetty services, berthing, mooring, towage and anchorage in relation to vessels and goods in-loaded in the port area. In availing such port service, the service provider raises invoice to The Appellant and in turn The Appellant raises bill to its customer. 36 Port Services (Marine Consultancy) Being port service provider, the Appellant hired the services from various port services provider for operations and maintenance of tug oats for vessel operations and movements. Tug boats used for berthing and de-berthing of vessels after loading and unloading of cargo from the vessels. 37 Renting of Immovable Property Services The Appellant hired its registered office located in Ahmedabad on rent. Various internal departments like secretarial, finance, accounting, commercial, human resource, administration etc are being handled from the Registered office. 38 Scientific & Technical Consultancy Services The Appellant availed scientific and technical services ....
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....nce and site formation of open yard godown required for storage of cargo like fertilisers, steel pipes & plates and minerals and therefore essential in providing port service. 44 Sponsorship Services The Appellant provided sponsorship services to various types of Govt. and Semi-Govt. programmes related to port sector which is needed to promote the brand of the company. 45 Stock Exchange Services The Appellant being listed company on National Stock Exchange (NSE) & Bombay Stock Exchange (BSE), need to comply with SEBI, ROC & Stock exchange regulations as well as Companies Act. For compliances, The Appellant has been listed on NSE and BSE and they need to pay annual listing fees to NSE & BSE. 46 Storage & Warehouse Services The Appellant hired godowns for storage of cargo before export of cargo or before clearance of cargo after import. Storage and warehouses services is an integral port of providing cargo handling facilities to various customers availing port service as no port can operate without having a storage facility for storing cargo. 47 Supply of Tangible Goods The Appellant hired tug boats for vessel operations and movements. Tug boats us....
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....ulting Engineers, Erection, Commissioning or Installation, General Insurance, Insurance Auxiliary Services, Insurance Services, Life Insurance Services, Maintenance and Repair Services, Management Consultant, Scientific and Technical Consultancy, Security Services, Technical Inspection and Certification and Technical Testing and Analysis which are covered under Rule 6(5) of the CENVAT Credit Rules, 2004. These services would be eligible for availing CENVAT Credit as the said input services are used for providing output services, and are also covered under Rule 6(5) of the CENVAT Credit Rules, 2004. Third category includes Advertisement Agency, Banking and Financial Services, Chartered Accountant, Commercial Training and Coaching, Credit Rating Agency, Goods Transport Agency, Manpower Recruitment Agency, Market Research Agency Services, Scientific and Technical Consultancy, Security Services, Share Registry Services, Steamer Agent's Services, Technical Inspection and Certification, Technical Testing and Analysis and Transport of Goods by Cruise Ship which falls under the inclusive part of the definition of input services, as defined under Rule 2(l) of CENVAT Credit Rules, 2004. H....
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....d in their own case (supra) that profession fees will be input services. The inclusive part of definition also mentions similar services and says such as. It is, therefore, clear that these services will be eligible to be treated as input services, and credit of the same would be eligible. The Appellant has listed under Category VI, Commercial or Industrial Construction Services and Construction Service. It is observed that in Appellants own case (supra), Hon'ble High Court of Gujarat has held that credit is available on construction of jetty for output service viz. Port Service. The Hon'ble High Court of Andhra Pradesh in Sai Samhita Storages case (supra) held that Construction of Warehouses is eligible for credit for output service, Storage and Warehousing services. Tribunal has also held in same vein the cases of Reliance Infratel Ltd (supra) and in the case of Navratna S.G. Highway (supra). Therefore, it is found that the Appellants are eligible for credit on these services also. 25. The learned Authorised Representative for the Revenue particularly referred the decision of the Hon'ble Bombay High Court in the case of Commissioner of Central Excise, Nagpu....
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.... credit as defined under Rule 2(l) of the CCR, 2004? In that case, the assessee was engaged in the manufacture of P&P medicines. The Hon'ble High Court held that input service namely Technical Testing and Analysis is admissible for CENVAT Credit, as final product could be manufactured only upon approval of regulatory authority after technical testing and analysis. It is noted that the facts of the said case law is different from the present case, in so far as in the instant case, the Appellants are service provider and not manufacturer. 26. Normally, the Appellate authority should dispose of the appeal finally on the basis of available material, either by confirmation or setting aside or by modification of the order. In case, the Appellate authority had examined law in detail and had gone to the facts in depth on the basis of evidence on record, Appellate Authority should not remand the matter to the lower authority, unless absolutely necessary. The power of remand is to be exercised only sparingly. In the present case, we find that the allegation in the show cause notice is that there is no nexus/relationship between the input service and output service. The Appellant expla....
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....eeper Service, Membership of Clubs, Passenger Embarking for Foreign Travel, and Sponsorship service, it is not clear from data to what extent they are in relation to the business activities of output services viz. Port service. Hence, the issue of whether these six services can be treated as input services for providing output services namely Port services and whether the Appellant is eligible to avail CENVAT Credit of Service Tax paid on these six services have to be examined by the Adjudicating authority. However, as regards other services mentioned in this category, it is clearly evident from the record that the nexus of these Input Services with output service are covered in the inclusive part of the definition viz. services used in relation to business activities. The nexus of inputs Service used in the business related activities would be established by the narration of the services in their accounts. In any event, all the services were duly recorded in the books of accounts, which were audited under the companies Act and other authorities. Further, the services coming under Professional Services (0.67%) and Construction Services (0.10%) are evidently eligible for CENVAT Cr....
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....g and the land over which they have erected or constructed are only the tools of such business. Assets and liabilities including goodwill are the necessary ingredients to constitute a business, besides the stocks and other movable and immovable items connected with the said business. In Mazgaon Dock Ltd. v. Commissioner of Income tax and Excess Profits Tax - AIR 1958 SC 861 the Hon'ble Supreme Court held as follows : 14. The word "business" is, as has often been said, one of the wide import and in fiscal statutes, it must be construed in a broad rather than a restricted sense. 15. "The word "business connotes", it was observed by this court in Narain Swadeshi Weaving Mills v. Commissioner of Excess Profits Tax, 1955 1 SCR 952 "some real, substantial and systematic or organised course of activity or conduct with a set purpose." The term "business" therefore, particularly in fiscal statutes, is of wide import. 26. The definition of input service employs the phrase activity relating to business. The words relating to further widens the scope of the expression activities relating to business. This is in view of following observat....
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.... the manufacturer can demonstrate that the advertisement services availed have an effect of or impact on the manufacture of the final product and establish the relationship between the input service and the manufacture of the final product. The manufacturer thereby can avail the credit of the service tax paid by him. Once the cost incurred by the service has to be added to the cost, and is so assessed, it is a recognition by Revenue of the advertisement services having a connection with the manufacture of the final product. This test will also apply in the case of sales promotion. 44. Having thus arrived at the conclusion on the meaning of the expression of input services and that manufacturer can avail of the credit of the services tax paid by him for payment of CENVAT duty, the question referred for our consideration will have to be answered as under : Question (a) is answered in the affirmative in favour of the assessee and against Revenue and question (b) again answered in the affirmative in favour of the assessee and against revenue." 28. The other aspect of the present case is that the appellants have rendered services within Special Economic Zone (SEZ). In terms ....