AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2017 (8) TMI 354
X X X X Extracts X X X X
X X X X Extracts X X X X
....or which targets has been fixed for every developed country. 2. Both sides represented by Ld. Advocate, Ms. Sukriti Das for the appellant and Ld. DR, Shri G.R. Singh for the Revenue have been heard. 3. The main plea of the appellant is that they have availed subject input services namely 'Consultancy and Certification Services' provided by M/s Ernst & Young Pvt. Ltd., M/s Bureau Veritas Certification and M/s Contor CO2e India Pvt Ltd., which have been used for modernization of their power plant as a measure of increasing efficiency and profitability of their plant. The appellant further mentions the following : The United Nations Framework Conventions on Climate Change (UNFCC) has committed to limit/reduce the emissions of Green Ho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ules, 2004, which is reproduced herein below : ..... .... .... RULE 2. "input service" means any service, - (l) used by a provider of taxable service for providing an output (i) service, or used by the manufacturer, whether directly or indirectly, in (ii) 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, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, activities relating to business, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 namely; (a) Services used in relation to setting up, modernization, renovation or repairs of a factory, (b) Services used in an office relating to such factory, (c) Services like advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, (d) Activities relating to business such as, accounting, auditing, financing, recruitment and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....exhaustive. Therefore when a particular service not mentioned in the definition clause is utilised by the assessee/manufacturer and service tax paid on such service is claimed as Cenvat credit, the question is what are the ingredients that are to be satisfied for availing such credit. If the credit is availed by the manufacturer, then the said service should have been utilized by the manufacturer directly or indirectly in or in relation to the manufacture of final products or used in relation to activities relating to business. If any one of these two tests is satisfied, then such a service falls within the definition of "input service" and the manufacturer is eligible to avail Cenvat credit of the service tax paid on such service." Furt....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... way of entering into an agreement with the England based company gets profit by way of earning carbon credit, it cannot be held that said services of M/s. Ernst & Young Pvt. Ltd., were for the purpose of earning the credit. I fully agree with the learned Advocate that the above contention of the Revenue that the amount earned as a result of consultancy must be either subject to Excise duty or should be taxable under the Service Tax is nothing but a fallacy. The amount earned as a result of such service availed by the party is the income of the appellant and is not required to be leviable to Service Tax. As long as the services of consultancy engineering by the appellant are in relation to the development of the power plant, which in turn i....