TaxTMI 
TaxTMI 
2017 (4) TMI 951
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....filed the present appeal. 3. On behalf of the appellant, the Ld. Counsel Sh. R. Muralidhar appearing for the appellant argued both on merits as well as on the ground of limitation. The arguments are summarized as under: i) The definition of inputs underwent a change w.e.f. from 01.04.2011. Even Prior to 01.04.2011 sub-clause (ii) of the definition of inputs is relevant for a person, engaged in providing output services. The appellant is engaged in providing output services of Renting of Immovable Property. The definition of inputs with regard to providing of output services, read as all goods except light diesel, high speed diesel oil and motor spirit, commonly known as petrol and motor vehicles used for providing any output services. That, therefore all goods used by the provider of output services other than the goods mentioned in sub-clause (ii) of the definition of inputs in Rule 2(k) of CENVAT Credit Rules, 2004 is eligible for credit. The appellants are a provider of output services and not a manufacturer. The credit has been availed on items such as, iron and steel, electrical panels, cement, sanitary items, fabricated iron trusses, ready mix concrete, scientific....
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.... In the demand raised, the input services are not availed for setting up of premises. The disputed services are services availed for laying charges for flooring, Erection services in regard to Erection of Machinery, Electrical Installation works, Electrical Consultancy Charges etc. These fall within the category of input service of modernization/renovation services. Such services were availed by appellant to renovate the premises after handing over the premises to the tenant. That services of modernization and renovation of premises are eligible for credit even after 01.04.2011. That these services are minor construction services for modernization, and renovation, and do not come within the category of setting up or construction of civil structure or part thereof. To canvass this argument, the Ld. Counsel has relied upon the judgment in the case of Infosys Ltd., Vs. CST, Bangalore [2015 (37) S.T.R. 862 (Tri. Bang.)]. iv) The next point argued by the Ld. Counsel is that the Show Cause Notice is time barred. The Show Cause Notice dated 22.04.2014 covers the period October 2008 to March 2012. The appellant has been filing regular returns as well as disclosing the credit avail....
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....ses of output service provider. In the present case the input services are availed by appellant after 01.04.2011. Therefore the same has been rightly disallowed by the Commissioner as these are services used for setting up of premises of the appellant. In regard to limitation, the Ld. AR submitted that, but for the detailed verification and scrutiny of the records, the availment of irregular credit would not have to come to light. That it is not an inadvertent or genuine mistake and the credit has been availed with intention to evade payment of duty. That the Show Cause Notice issued invoking the extended period of limitation is therefore correct and proper. 7. I have heard the submissions made before me. 8. The details of the disputed credit availed on inputs and input services is shown in the table below: Description Period Demand as per SCN CENVAT allowed CENVAT denied on inputs October 2008 to March 2012 42,04,945 14,23,551 27,81,394 on input services October 2008 to March 2012 1,52,08,848 1,47,33,576 4,75,272 Total: 1,94,13,793 1,61,57,127 32,56,666 9. The first issue is with regard to the....
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....oods used for providing any output service; But excludes- A) light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol; B) any goods used for- a) construction of a building or a civil structure or a part thereof; or b) laying of foundation or making of structures for support of capital goods, except for the provision of any taxable service specified in sub-clauses (zn), (zzl), (zzm), (zzo), (zzzh) and (zzzza) of clause (105) of Section 65 of the Finance Act; C) capital goods except when used as parts or components in the manufacture of a final product; D) motor vehicles; E) any goods, such as food items, goods used in a guesthouse, residential colony, club or a recreation facility and clinical establishment, when such goods are used primarily for personal use or consumption of any employee; and F) any goods which have no relationship whatsoever with the manufacture of a final product. 10. The major objection put forward by the Department is that w.e.f. from 07.07.2009 an amendment is brought forth in the definition of inputs, restricting the eligibility of credit on cement an....
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....In short, Clauses (i) and (ii) are applicable for manufacturer and output 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-clauses (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. Clauses (i) and (ii) of Rule 2(l) cover the service provider and the manufacturer respectively. The present case relates to output service provider. The ex....
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....: (i) specific part (ii) inclusive part (iii) place of use 10. Coming to 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 rela....
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....1 and an exclusion part has been newly introduced. The definition thus excludes all goods used for construction of a building or a civil structure or a part thereof; or for laying of foundation, making of structure for support of capital goods, except for the provision of service specified in sub-clauses (zn) (zzi) (zzm) (zzo) (zzzh) and (zzzza) of clause 105 of Section 65 of Finance Act, 1994. Sub-clause (zn) relates to port services, (zzi) relates to services of technical inspection and certification, (zzm) relates to services rendered by airport authority, (zzo) relates to services of organizing exhibition (zzzh) relates to services of construction of complex, (zzzza) relates to execution of works contract services. This exclusion part in my view, is applicable for both manufacturer as well as provider of output services. Therefore the credit availed on cement, steel as inputs after 01.04.2011 for construction of premises is not eligible. 13. Another argument put forward by the Ld. Counsel in regard to the credit availed on inputs after 01.04.2011 is that the appellant has completed the construction of the premises before 2009. That after 2009 the credit on inputs like iron, ....
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....rely renovation/modernization works. The services in the table show that these are construction services for laying the flooring, Erection of Machinery, Electric Installation Works, Single Leaf Door, Installation Boom Barriers, Electrical Consultancy Charges. Since these services would fall within the category of modernization, renovation services which come within the inclusive part of the definition of input services, I am of the view, that the services are eligible for credit. The judgment in the case of Infosys Ltd., Vs. CST, Bangalore (supra) is also applicable to the said issue. In para 5.8 of the said judgment, the Tribunal held that after 01.04.2011 services used in modernization, renovation or repairs alone would be admissible for credit. 16. The appellant has put forward arguments on the ground of limitation also. The Ld. Counsel submitted that credit was availed by appellant on bonafide belief that credit is admissible. Further, that since the Commissioner has allowed credit on major part of the disputed demand (almost 86%) the same has to be considered as an interpretational issue and therefore appellant cannot be held guilty of suppression of facts with intent to ev....
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....hort payment was detected when during visit by the audit team, the records maintained by the appellant and made available by them to the audit officers were examined by them, - something which should have been done by the Jurisdictional Range Officers and Divisional Assistant Commissioner/Deputy Commissioner much earlier. The assessee cannot be penalized by invoking extended period under proviso to Section 11 A (1) for demand of duty and penal provisions of Section 11AC for indolence on the part of the jurisdictional Central Excise officers. Moreover Apex Court in a series of judgments CCE vs. Champher Drugs & Liniments reported in 1989 (40) E.L.T. 276 (S.C.) ; Padmini Products vs. Collector reported in 1989 (43) E.L.T. 195 (S.C.) ; Pushpam Pharmaceuticals vs. CCE reported in 1995 (78) E.L.T. 401 (S.C.) ; Anand Nishikawa Co. Ltd. vs. CCE, Meerut reported in 2005 (188) E.L.T. 149 (S.C.) ; Continental Foundation Jt. Venture vs. CCE, Chandigarh reported in 2007 (217) E.L.T. 177 (S.C.) has held that something positive other than mere inaction or non payment of duty is required for invoking extended period under proviso to Section 11A (1) and that sup....