TaxTMI 
TaxTMI 
2016 (3) TMI 401
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....iness, the appellants Head Office had generated funds, for financing the expansion by way of various sale of properties, shares, advisory services in respect of investment and divestment and syndication fee for loan from banks. On audit of the records of the appellant at Bangalore, the audit party came to an conclusion that availment of CENVAT credit of service tax paid on these services by Head Office and subsequently distribution to appellant as an Input Service Distributor (ISD) is not in accordance with law; accordingly show-cause notice was issued for demanding such credit availed along with interest and it was also proposed to impose penalties. Appellant contested the show-cause notice on merits as well as on limitation. The adjudicating authority after following due process of law did not agree with the contentions raised and confirmed demands with interest and imposed penalties. 3. Learned CA after taking us through the show-cause notice, the adjudication order and various other documents would submit that the appellant had embarked upon expansion of their business for which working capital is required and the financing is arranged by bank borrowings, issue of shares an....
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....t was availed in 2006 while show-cause notice is issued in 2009. He would submit that they had in their returns very clearly mentioned that these credits are availed on the basis of the invoices raised by their Head Office as an ISD. It is his further submission that the Department has not issued any show-cause notice to their Head Office seeking them to explain as to why such credit availed by them and distributed is not to be demanded. It is his submission that when the original CENVAT credit availed of the service tax paid by the Head Office is not contested, subsequent credit availed by them is correct. 4. Learned Departmental Representative on the other hand would draw our attention to the facts that the appellants are rendering the services to various clients in the category of Manpower Recruitment and Supply Agency services, Business Auxiliary Services, Commercial Training or Coaching Services and Business Support Services. It is his submission that the service tax paid by the service providers are not in respect of any of the services which are rendered by the appellant. He would draw our attention to the findings recorded by the adjudicating authority and submit that th....
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....clearance of final products upto the place of removal, 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, advertisement or sales promotion, 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; It is seen from the records that the CENVAT Credit paid by the appellant is in respect of the service tax paid by various service providers who had rendered the services of raising the finance by pledging of the shares on behalf of the appellant for borrowing from IDFC Ltd.; advisory service provider in relation to divestment of stakes in Indus Ind Telecom Network Ltd.; advisory services provided for acquisition of shares in a company; advisory services provider for disinvestment of stakes owned by the appellant and its subsidia....
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....ove view that the services which are rendered for the business activities as per the definition of the input service under Rule 2(l) of CCR, 2004 has been fortified by the judgment of the Hon'ble High Court of Bombay in the case of Deepak Fertilizers and Petrochemicals Corpn. Ltd. vs. CCE: 2013 (32) S.T.R. 532 (Bom.) and Commissioner vs. Ultractech Cement Ltd.: 2010 (260) E.L.T. 369 (Bom.). Relevant facts are reproduced below: In the case of Deepak Fertilizers (supra): 5. Now at the outset it must be noted that Rule 3(1) allows a manufacturer of final products to take credit inter alia of Service Tax which is paid on (i) any input or capital goods received in the factory of manufacturer of the final product; and (ii) any input service received by the manufacturer of the final product. The subordinate legislation in the present case makes a distinction between inputs or capital goods on the one hand and input services on the other. Clause (i) above provides that the Service Tax should be paid on any input or capital goods received in the factory of manufacture of the final product. Such a restriction, however, is not imposed in regard to input services since the only sti....
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....of excise duty and Service Tax among others paid on any input or capital goods received in the factory of manufacturer of the final product, insofar as any input service is concerned, the only stipulation is that it should be received by the manufacturer of the final product. This must be read with the broad and comprehensive meaning of the expression input service in Rule 2(l).The input services in the present case were used by the appellant whether directly or indirectly, in or in relation to the manufacture of final products. The appellant, it is undisputed, manufactures dutiable final products and the storage and use of ammonia is an intrinsic part of that process. In the case of Ultractech Cement: 27. The definition of "input service"as per Rule 2(l) of 2004 Rules (insofar as it relates to the manufacture of final product is concerned), consists of three categories of services. The first category, covers services which are directly or indirectly used in or in relation to the manufacture of final products. The second category, covers the services which are used for clearance of the final products up to the place of removal. The third category, includes services na....