TaxTMI 
TaxTMI 
2017 (5) TMI 390
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....o manufacture of final products in terms of the provisions of Cenvat Credit Rules, 2002. The case of the department is that during the course of audit for the period April, 2006 to December, 2010, it was noticed that the appellants have taken the Service Tax credit amounting to Rs. 2,38,57,646/- in respect of services received at other locations, whereas the registration under Service Tax is only for Larsen & Toubro (HED), Powai. The credit of such Service Tax paid for services received at other locations can be availed only if the unit has centralized registration under Rule 4(2) of Service Tax Rules, 1994 duly notifying the various locations of which Service Tax credit is to be taken. Accordingly, it was contended that the appellants have taken credit on inadmissible input services received at other locations in contravention of Rule 3, Rule 4 read with Rule 2 of Cenvat Credit Rules, 2004 and Rule 4(2) of the Service Tax Rules, 1994. Accordingly, a show-cause notice was issued proposing recovery of CENVAT Credit under Rule 14 of the Cenvat Credit Rules, 2004 read with provisions of Section 11A(1) of the Central Excise Act, 1944 along with appropriate interest in terms of Section ....
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.... either from the Powai unit or at site. Therefore, the CENVAT Credit in respect of input and input services used for providing the services at site including the services of sub-contractor are admissible input services. Therefore, there is no reason for denying the credit on such services. In the appellants own case, the jurisdictional Commissioner on similar issue has dropped the demand proceedings in the show-cause notice vide orders dated 27.12.2012 and 31.12.2013. Therefore, the issue is no longer res integra in the appellant's own case. Moreover on the identical issue, this Tribunal has also passed the following orders in the case of Areva T & D India Ltd. (supra): - "6. I have carefully considered the submissions from both sides and perused the records. The dispute relates to services rendered by the respondents to their customers utilizing engineering firms as sub-contractors. The original authority held that the respondents have not rendered any 'Repair Service'. It is not being disputed that the respondents are having contract for rendering services with the ultimate customers and they receive payment from them and ensure the quality of services rendered to t....
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....g the credit from the common kitty for payment of excise duty on goods manufactured and cleared by the respondents and for paying service tax on the services provided by the respondents. Therefore, the objection on this ground is also not valid. 8. In view of the above, the appeal by the department is devoid of merits and the same is rejected." In the case of Alidhara Textool Engineers (supra), this Tribunal has held as under: - "4.1 In this case erection and commissioning charges have been included in the cost of the machines sold. The appellants have selected the agency to do this work and once the purchaser enters into an agreement for supply of the machine including the erection and commissioning charges, the responsibility for erection and commissioning is of the manufacturer. Therefore what is happening in this case is that the supplier of the machine is not only selling the machine but is also providing the service of erection and commissioning. Once erection and commissioning cost is included, in the transaction value, the natural conclusion that would emerge is that the processes undertaken in the buyer's premises are actually incidental to manufacturing activity ....
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.... purpose of completion of this whole transaction has to be treated to have been rendered in or in relation to the manufacture. 4.3 I am also not able to accept the argument that erection and commissioning service is provided to the buyer in this case and therefore if at all any credit is available, it has to be claimed by the buyer. Since the responsibility for erection and commissioning is with the appellant and the agency which has done the work has been nominated by them it can be said that they are working as a sub contractor. Therefore it cannot be said that service was provided to the buyer of the machinery and therefore this contention has to be rejected. 4.4 Similarly it is also not correct to say that the appellant is not the service provider. As per the contract the responsibility for providing erection and commissioning is with the appellant and has already mentioned earlier even if we treat erection and commissioning activity as a separate service activity, the service provider would be the appellant and the receiver would be the buyer. The sub contractor is actually working under the manufacturer and therefore he is a provider of service to the appellants. 5. In ....
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....d outward transportation up to the place of removal" Before 1-4-2008, for the words 'up to the place of removal' the words 'from the place of removal' were existing in the inclusive portion of definition of 'Input Services' under Rule 2(l) of the Cenvat Credit Rules, 2004. 4.2 It is observed from the case records that appellant enters into comprehensive contracts with the customers which includes activities from Designing, Engineering, Manufacturing, Transporting to Erection, Installation and Commissioning of 'Gasifier Plant' to the customer's premises. A lump sum amount as contracted is charged by the appellant from the customers including all the elements and excise duty is paid on the entire amount so recovered. There is a specific Clause in the contract that it is the responsibility of the appellant to depute engineers for Erection, Installation and Commissioning of 'Gasifier Plant' free of cost. There is no evidence on record that any extra amount is recovered by the appellant from the customer. Therefore, reliance placed by the first appellate authority, in Para 8 of the OIA, dated 6-6-2012, upon some general clauses printed on t....
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....re of the machine and therefore, the erection and commissioning services provided also can be said to be in relation to the manufacture, since the process in this case is complete only after the erection and commissioning takes place. As rightly pointed out by the Learned Advocate, Rule 2(l) of Cenvat Credit Rules does not require that service has to be rendered at the factory of the manufacturer for the purpose of eligibility for Service Tax credit. Therefore, the stand of the revenue that since the service was provided at the buyer's premises credit is not admissible cannot be accepted. What has to be examined is whether the service provided is in or in relation to manufacture. 4.2 Another point that has been relied upon by the revenue is that Service Tax credit is not admissible since the erection and commissioning activity is a post removal/post manufacturing activity. I have already mentioned earlier that in the case of Service Tax what is required to be examined is whether the service has been used in or in relation to manufacture directly or indirectly. While the eligibility for Service Tax credit on outward transport services is to be examined in connection with plac....
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....ercial production. Thus the final product can be manufactured only upon approval of the regulatory authority after the product undergoes technical testing and analysis. Under the circumstances, it cannot be gainsaid that the activity of testing and analysis of the trial batches is in relation to the manufacture of final product. Unless such testing and analysis is carried out, it would not be possible to produce the final product inasmuch as unless the trial batches are sent for testing and analysis and approval is obtained, the final product cannot be manufactured. Under the circumstances, the services availed in respect of technical testing and analysis services are directly related to the manufacture of the final product. The contention of the department that unless the goods have reached the commercial production stage, Cenvat credit is not admissible in respect of the technical testing and analysis services availed in respect of the product at trial production stage, does not merit acceptance. Besides, the learned counsel for the assessee is justified in contending that when the product which is sent for testing and analysis is subject to payment of excise duty, the respondent....