TaxTMI 
TaxTMI 
2017 (9) TMI 1317
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....ariff Act, 1985. It has been alleged that the assessee wrongly availed Cenvat Credit of Service Tax paid by M/s.Mahalaxmi Enterprises on mounting activities on the said vehicles at the premises of M/s.Tata Motors Ltd.. The adjudicating authority disallowed the Cenvat Credit alongwith interest and imposed penalties against show cause notice dated 15.06.2012 and 24.01.2013. By the impugned order, the Commissioner(Appeals) set aside the adjudication order. I find from the record that M/s.Tata Motors Ltd. in their premises are mounting these bodies supplied by the assessee on their own chassis for which they are availing the services of the assessee, who in turn engaged M/s.Mahalaxmi Enterprises for the mounting on the vehicles. The said Mahala....
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.... cannot become Input Services for the products manufactured and cleared under chapter heading 8707, which is a different product. The manufacturing activity in respect of body of Motor vehicles (under chapter 8707) is complete and full at M/s.HIPL premises itself and hence the finding of Ld.Adjudicator that mounting is not an essential and integral part of manufacture of body is factually correct and the Commissioner(Appeals) has not put forward anything substantive to alter this position and hence the OIA is not proper and legal on this aspect. d. The Commissioner(Appeals) has erred in his observation that since the cost of mounting has been included in the value of body so the Cenvat Credit can be allowed on this ground also as the Cenva....
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.... as under:- (l) 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 2[clearance of final products upto 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 upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, com....
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....tivity and this activity cannot and does not have any relation to the manufacture of body for motor vehicles . The Commissioner(Appeals) mainly proceeded on the basis of agreement and failed to appreciate the actual activities undertaken by the assessee. In my considered view, erection and commissioning of the machine is different from the mounting activities of body for motor vehicles . The agreement between the parties to engage the assessee for mounting activities is at the convenience of M/s.Tata Motors Ltd., which cannot be the basis for admissibility of the Cenvat Credit ignoring the provisions of Cenvat Credit Rules, 2004. The adjudicating authority have given a detailed finding on this issue as under:- "I have gone through the case....
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....ter 87 states For the purpose of this chapter, building a body, or fabrication or mounting or fitting of structures or equipment on the chassis falling under heading 8706 shall amount to manufacture of a motor vehicle . From the above, I find that there are two distinct manufacturing activities involved in the instant case, one the manufacture of Body for motor vehicles at Hyva premises and the other one is manufacture of motor vehicles falling under heading 8701 to 8705 in Tata Motor s premises. There is no denying that mounting of body on chassis of Tata Motors within Tata Motors premises is an activity of manufacture. Tata Motors shows the said products as manufactured products in their records and removes the same after payment of cent....