TaxTMI 
TaxTMI 
2017 (11) TMI 483
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....tering, GTA (outward transportation from factory to buyer's place/premises) insurance services, rent a cab services and auction services in respect of which the Assessee has availed the CENVAT credit of service tax, as eligible "Input Services" within the meaning of the definition of "Input Service" provided under CENVAT Credit Rules, 2004? Appeal No. 44/2015 admitted on 23.11.2016 1. Whether the impugned services namely outdoor Catering. Rent-a-cab, Auction, Club or Association and the GTA (outward freight upto buyer's place/premises) in respect of which the assessee had availed the Cenvat Credit of service tax during the period from April 2010 to September 2011, are eligible 'input services' within the meaning of 'input services' defined under Cenvat Credit Rules, 2004 and the assessee had availed the Cenvat Credit correctly or not?" Appeal No. 49/2017 admitted on 06.07.2017 1. Whether the impugned services namely Outdoor Caterer of Factory Canteen, Clearing & Forwarding (C&F) Agent of Depot, Business Auxiliary Service of Depot and the GTA (outward transportation of cement) in respect of which the assessee had availed the Cenv....
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.... Expression 'such as' in the inclusive part of definition is to be construed as illustrative and not exhaustive in the absence of legislative intention to restrict definition to particular class or category of services used in business. Definition of input service is construed widely in CBE & C Circular dt. 23.8.07. Revenue cannot argued against stand taken by CBE & C." 5. He also taken us to the decision of Gujarat High Court in Commissioner of Central Excise and Customs vs. Ultratech Cement Ltd. (2014) 46 taxman.com 180(Guj.) wherein it has been held as under:- To our mind, though there is somewhat difference in the nature of services involved in the present appeals, insofar as all material aspects are concerned, the entire issue has been discussed threadbare and decided in the above-mentioned judgment in the case of Gujarat Heavy Chemicals Ltd. As already noted, in the case of Gujarat Heavy Chemicals Ltd., the Court was considering the eligibility of the manufacturer to avail Cenvat credit on the Service Tax credit on security services in residential colony of the Company. In the present case, the issue presented before us pertains to Service Tax credit on insurance....
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.... of output service for providing an output service; or (iii) any service used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal, and includes services used in relation to 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, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal; but excludes,- (A) service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for - (a) construction or execution of works contract of a building or a civil structure or a part ....
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....is section (ii) place of removal means It is therefore, clear that the place of removal provided in Sub-section 3 of Section 4 of the Central Excise Act, 1944 has its scope limited only for the purpose of Section 4 of the said Act. The scope of term "place of removal" can not be made applicable for the purpose of Cenvat Credit Rules, 2004 unless it relates to the issues of Section-4 of the Central Excise Act ibid. I agree with the findings of adjudicating authority that the credit of service tax on the services effected after clearance from the place of removal was not available to the appellant. Therefore, credit received on the invoices of persons managing depot and registered under the categories of Business Auxiliary service, Clearing & Forwarding Service and Cargo Handling Service was not available. As regards to reliance placed by the appellants on Circular dated 2.2.2006. I find that this is related to eligibility of Cenvat Credit of Service tax paid on goods transport from factory to depot and sold therefore, the same is not for the eligibility of impugned services. I agree with the findings of the adjudicating authority that business auxilliary services p....
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....74 of the Central Excise Rules, 1944 or rule 9 of the Central Excise (No. 2) Rules, 2001 shall be deemed to be as valid as the registration made under this sub-rule for the purpose of these rules. (2) The Board may by notification and subject to such conditions or limitations as may be specified in such notification, specify person or class of persons who may not require such registration. (3) The registration under sub-rule (1) shall be subject to such conditions, safeguards and procedure as may be specified by notification by the Board. 5.10 He has also taken us to the relevant issue where the issue is pending before the Supreme Court in the case of Commissioner vs. Ultra Tech Cement Ltd. (2017) 47 STR J216 (SC) where the decision of Karnataka High Court in 2016 (44) STR 227 (Kar.) Commissioner vs. Ultratech Cement Ltd. decided is subject matter of SLP regarding place of removal. 5.11 He also relied upon decision of Calcutta High Court in Commissioner of Central Excise, Koktata V-I vs. Vesuvious India Ltd. 2014 (34) STR 26 (Cal) wherein it has been held as under:- "5. The aforesaid reasoning, we are sorry to say, has not appealed to us. 'Input....
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.... been held as under:- 5. Views taken by the Karnataka High Court do not appear acceptable for the following reasons: (a) Be that as it may, we are of the opinion that the outward transport service used by the manufacturers for transportation of finished goods from the place of removal upto the premises of the purchaser is covered within the definition of "input service" provided in rule 2(1) of the Cenvat Credit Rules, 2004. The Hon'ble Division Bench expressed their aforesaid opinion, but no reasons or appropriate reasons are ascertainable by us for the purpose of aforesaid proposition. (b) There are more reasons. In paragraph 30, the Hon'ble Division Bench of the Karnataka High Court opined that. The definition of "input service" contains both the word means' and includes, but not 'means and includes'. The portion of the definition to which the word means applies has to be construed restrictively as it is exhaustive. However, the portion of the definition to which the word includes applies has to be construed liberally as it is extensive. The exhaustive portion of the definition of 'input service' deals with service ....
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....f destination, an assessee is only enti tled to claim Cenvat credit on service tax paid for the goods transportation agency service provided amount paid was integral part of the price of the goods; (b) In this case, the amount paid for the GTA service was not integral part of the price of the goods; and (c) The assessee was not entitled to claim Cenvat credit of the service tax paid; (d) The question is answered in favour of the Department and against the assessee 6.2 He also relied upon the circular which has been sought to be relied upon by the tribunal in one of the appeals. 6.3 Mr. Pathak has taken us to Insurance Services in appeal no.23/2017 which reads as under:- Insurance Services: (P) That the learned CESTAT has failed to appreciate that the Adjudicating Authority has allowed the credit of service tax paid on insurance against erection of plant, insurance of company vehicles, burglary policy against company assets, policy for protection from fire, marline policies to protect goods during transportation through sea. However, the Adjudicating Authority and Learned Commissioner(Appeals) has disallow the credit of service tax ....
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.... bore the risk of loss of or demage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods. In such cases, the credit of the service tax paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the definition as under section 2 of teh Central Excise Act, 1944 as also in terms of the provisions under the sale of Goods Act, 1930) occurred at the said place." The assessee have categorically mentioned in their written reply that: "In their case the Service Tax relates to the freight from factory/ Depot to the place of buyer and since property in goods is getting passed on at destination. It is the case of sale taking place at FOR destination. They also submitted the copies of purchase order, invoices, LR and other relevant documents showing sale on FOR basis. Further it is submitted that in case of any damage/loss of goods during transit, the noticees as owners of the goods are liable to bear the same or to claim from insurance company". 7.2.1 As discussed in ....
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.... of outward freight element. 16.5 From the definition of 'input service' as given above it is apparent that the input service includes inward transportation of inputs or capital goods and outward transportation upto place of removal. I fina that admissibility of CENVAT Credit on outward transportation upto the place of removal is unambiguous as is held by the CESTAT in a number of cases. Now the question arises what will be the place of removal of goods. In this regard I would like to refer to the Circular No. 97/8/2007 dated 23.8.2007 issued by the Board. Para 8.2 of the said circular reads as under: "8.2 In this connection, the phrase 'place of removal' needs determination taking into account the facts of an individual case and the applicable provisions. The phrase 'place of removal' has not been defined in CENVAT Credit Rules. In terms of sub-rule (t) of rule 2 of the said rules, if any words or expressions are used in the CENVAT Credit Rules, 2004 and are not defined therein but are defined in the Central Excise Act, 1944 or the Finance Act, 1994, they shall have the same meaning for the CENVAT Credit Rules as assigned to them in those ....
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.... High Court, I find that it is clear that for the goods chargeable to central excise duty on the basis of transaction value under section 4 of Central Excise Act, 1944, the eligibility to avail credit of the service tax paid on outward transportation for removal of excisable goods would depend upon the determination of the place of removal as per the definition given under section 4 of Central Excise Act, 1944. Thus in view of the definition of the place of removal as given under section 4 of Central Excise Act, 1944 read with the Board's Circular dated 23.6.2007, I find that there is no doubt that: i. in cases where the transaction value under section 4 is inclusive of freight charges upto the destination point (customer's place), the destination is to be treated as 'Place of removal' and CENVAT credit of the service tax paid on outward transportation will be admissible upto such destination point (customer's place). ii. In cases where the transaction value under section 4 is not inclusive of freight charges upto the destination point (customer's place), the factory or the depot, as the case may be from where the goods are sold, is to be t....
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....n services for the officials visiting outside the city and same has been paid in the case of business of appellant. Therefore, I hold that on this auction and club and association services, the appellant is entitled to take Cenvat credit. 4. Outward transportation services, I find that in this case the purchase order shows that goods are to be delivered at the place of buyer on FOR basis and in the invoice, the transportation cost has formed part of the assessable value as the goods are to be delivered at the buyers place. Therefore. The appellant has satisfied the condition of the CBEC circular No.97/08/07 dated 23.8.2007 which has been supported by the decision of this Tribunal in the case of Lumax Automotives Systems Ltd.(supar). Therefore, I hold that appellant is entitled to take Cenvat credit on outward transportation service as the transportation charges have formed part of the assessable value and goods are to be delivered at the place of the buyers. 7.1 He contended that the findings are contrary to decision of the Supreme Court in M/s. Maruti Suzuki Ltd. Vs. Commissioner of Central Excise (2009) 9 SCC 193 wherein it has been held as under:- 18. It may....
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....f this Court in the case of Collector of Central Excise v. Solaris Chemtech Limited (2007) 214 ELT 481 (SC). Further, our view is supported by the observations of this Court in the case of Vikram Cement v. Commnr. Of Central Excise, Indore 2006 (194) ELT 3 (SC) which is quoted below: It appears to us on a plain reading of the clause that the phrase "within the factory of production" means only such generation of electricity or steam which is used within the factory would qualify as an immediate product. The utilization of inputs in the generation of steam or electricity not being qualified by the phrase "within the factory of production" could be outside the factory. Therefore, whatever goes into generation of electricity or steam which is used within the factory would be an input for the purposes of obtaining credit on the duty payable thereon. 7.2 He invited our attention to the order passed by AO with regard to outward transportation under GTA Services which reads as under:- 'Outward transportation under GTA services' 5.4.1 Before any deliberationon the issue, I examine the definition of 'Inpur service' in force at the relevant point....
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....removal. Further, the inclusive part of the definition expending the scope of inpur service upto the activities relating to business also restricts the 'outward transportation upto the place of removal' and as such any service tax paid on 'outward transportation beyond the place of removal' do not come in the purview of 'input service' for the purpose of taking credit under the Cenvat Credit Rules, 2004. I find that 'place of removal' has been defined under clause (c) of Sub-section (3) of Section 4 of the Central Excise Act, 1944 as: (i) a factory or any other place or premises of production or manufacture of the excisable goods; (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without [payment of duty;] (iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory; from where such goods are removed. I find that a factory/ place/premise of manufacture of excisable goods or a place where excisable goods permitted to store without payment of duty....
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....ding cost of freight in the assessable value. More so the impugned show cause notice only proposes disallowance of input service credit on outward freight availed by the assessee and by raising the valuation issue which is neither under dispute nor relevant also, the assessee is trying to digress from the issue. Therefore, I do not find any of the case laws mentioned by them in Para 3.1.14 above, relevant in this case being relevant to the definition as existed before 1.3.2008. Regarding argument that when two different interpretation are available simultaneously, benefit of doubt be given to the assessee, I do not find two interpretations as the Board's clarification became redundant by change of legal position w.e.f. 1.3.2008. In view of the above the credit of service tax paid on outward GTA beyond the place of removal cannot be allowed to the assessee and thus, I hold that Cenvat credit amounting to Rs. 35,62,122/- availed in respect of GTA Service for outward transportation of goods from factory to customers, from depot to customers and from railway siding to godown is recoverable them. 5.5.1 Outdoor catering: The assessee's contention regarding admis....
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....nce are answered Accordingly. The above decision shows that in taxation statutes, a business activity is always understood to be such activity, which is carried on by the assessee to earn profit. The statutory obligation, in providing for such Canteen service, would not be an activity integral or connected with the principal activity of manufacture. The expansiveness provided by the inclusive part of the definition under Rule 2(1) of the Cenvat Credit Rules 2004 was to, consequently, include only such activities relating to business, which have such direct or indirect nexus with themanufacture and clearances of the excisable goods. I further find that availment of Cenvat credit on outdoor catering services was dened by the Hon'ble Tribunal in the case of CCE, Chennai Vs. M/s Sundram Brake Linings Ltd. Reported in 2010(019)STR0172(T) after discussing the issue in details. While passing the order in the case of M/s Sundram Brake (supra), Hon'ble Tribunal distinguished the decision of the Hon'ble Larger Bench of the Tribunal in the case of CCE, Mumbai Vs M/s GTC Ltd. Reported in 2008(12) STR 468(Tri-LB) and discussed the decision of the Hon'ble Mumbai High Court in the....
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.......... (t) words and expressions used in these rules and not defined but defined in the Excise Act and the Finance Act shall have the meanings respectively assigned to them in these Acts. 7.4 Therefore, 2(t) and Section 4 of Central Excise Act more particularly clause (c) provides as under:- Section 4....... (c) "place of removal" means - (i) a factory or any other place or premises of production or manufacture of the excisable goods; (ii) a warehouse or any other place on premises wherein the excisable goods have been permitted to be deposited without 3[payment of duty;] 4[(iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory;] from where such goods are removed; 4[(cc) "time of removal", in respect of the excisable goods removed from the place of removal referred to in sub-clause (iii) of clause (c), shall be deemed to be the time at which such goods are cleared from the factory;] (d) "transaction value" means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged a....
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....paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit, that the sale and the transfer of property in goods (in terms of the definition as under Section 2 of the Central Excise Act, 1944 as also in terms of the provisions under the Sale of Goods Act, 1930) occurred at the said place. Therefore if the service tax is paid on transportation charges, in such cases, it fell within the phrase "clearance of final products from the place of removal" and therefore, the Assessee was entitled to CENVAT credit. 30. The definition of 'input service' contains both the word 'means' and 'includes', but not 'means and includes'. The portion of the definition to which the word means applies has to be construed restrictively as it is exhaustive. However, the portion of the definition to which the word includes applies has to be construed liberally as it is extensive. The exhaustive portion of the definition of 'input service' deals with service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products. It also includes clearan....
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....f a final product emerges, that final product has to be transported from the factory premises till the godown before it is removed for being delivered to the customer. Therefore, 'input service' includes not only the inward transportation of inputs or capital goods but also includes outward transportation of the final product upto the place of removal. Therefore, in the later portion of the definition, an outer limit is prescribed for outward transportation, i.e., up to the place of removal. 31. The phrase 'activities relating to business' is an omni-bus one and it finds a place in the inclusive definition. The question is, by a judicial interpretation, outward transportation of the final product from the place of removal till it is delivered to the customer, could be construed as falling within the definition of 'input service'. It is a well settled rule of interpretation that, while interpreting a provision, the Court must take note of not only the express words used but also the words which are not used. If the legislature has expressly used the words 'in respect of the transportation' in a particular manner and did not choose to include ....
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....ce of final products upto the place of removal' were substituted in the place of the words 'clearance of final products from the place of removal'. The intention of the legislature is thus manifest. Till such amendment, the words 'clearance from the place of removal' included transportation charges from the place of removal till it reached the destination, namely the customer. Therefore, the said input service was included in the early part of the definition 2(l)(ii). Consequently, we cannot read what is expressly provided in the early part of the rule as having been included in the later part of the rule while interpreting the words 'activities relating to business', though it has been amplified by saying it is only an inward transportation of inputs or capital goods and outward transportation upto the place of removal. The phrase "outward transportation upto the place of removal" used in the inclusive portion of the definition (the second part), has to be read along with the word inward transportation of input or capital goods. It has No. reference to 'clearance of final products'. However, when the claims are put forth on the basis of the said....
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....g into account the facts of each case. According to the circular, the expression 'place of removal' has been defined by Section 4 of the 1944 Act and according to Sub-rule (t) of Rule 2 of the CC Rules, if any words or expression used in those rules are not defined but are defined in the 1944 Act or the 1994 Act then they are to be given the same meaning for the CC Rules as assigned to them in those Acts. Accordingly, reliance on Section 4 of the 1944 Act has been made where place of removal has been defined as under: "place of removal" means (i) a factory or any other place or premises of production or manufacture of the excisable goods; (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be stored without payment of duty; A depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory; from where such goods are removed. 8. It is clear from the definition that for a manufacturer/consignor the eligibility to avail credit of the service tax paid on the transportation during removal of excisabl....
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....lars. Therefore, it is clear that so far as the Department is concerned, whatever action it has to take, the same will have to be consistent with the Circular which is in force at the relevant point of time. 10. It is, thus, evident that the revenue is precluded from challenging the correctness of the circular even on the ground of the same being inconsistent with statutory provisions. It goes further to limit the right of the revenue to file an appeal against the correctness of the binding nature of the circular. Therefore, there is no escape from the conclusion that the circular is binding on the revenue. 11. The only question then is whether the appellant fulfills the requirement of circular. The first requirement is that the ownership of the goods and the property therein is to remain with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step. The aforesaid condition has to be considered to be fulfilled because the supply of cement by the appellant to its customer is 'FOR destination'. The appellant also bears the freight in respect thereof up to the door step of the customer. The freight charg....
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....44) STR 253 (Guj.), it has been held as under:- The issue pertains to Cenvat credit on outward goods transportation agency service availed by the assessee for transportation of manufactured goods. This issue is covered by the judgment of Division Bench of this Court in case of Commissioner of Central Excise & Customs v. Parth Poly Wooven Pvt. Ltd. reported in MANU/GJ/1454/2011 : 2012 (25) S.T.R. 4, in which the following observations have been made: 19. When we hold that outward transportation would be an input service as covered in the expression 'means' part of the definition, it would be difficult to exclude such service on the basis of any interpretation that may be offered of the later portion of the definition which is couched in the expression 'includes'. As already observed, it is held in several decisions that the expression 'includes' cannot be used to oust any activity from the main body of the definition if it is otherwise covered by the expression 'means'. In other words, the expression 'includes' followed by 'means' in any definition is generally understood to be expanding the definition of the term to make it e....
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....t clearance to any other place, such as godown, warehouse etc. from where it would be ultimately removed, such service is covered in the expression 'outward transportation up to the place of removal' since such place other than factory gate would be the place of removal. We do appreciate that this could be one of the areas of the application of the expression 'outward transportation up to the place of removal'. We are unable to see whether this could be the sole reason for using such expression by the Legislature. 22. Be that as it may, we are of the opinion that the outward transport service used by the manufacturer for transportation of finished goods from the place of removal up to the premises of the purchaser is covered within the definition of "input service" provided in Rule 2(1) of the Cenvat Credit Rules, 2004. (iv) In Commissioner vs. Andhra Sugars Ltd. 2016 (44) STR J 143 (AP), it has been held as under:- 1. This appeal is admitted on the following substantial question of law. "Whether the learned Tribunal has committed any quasi judicial indiscipline by not following the judgment of the jurisdictional High Court and in follo....
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....tion". FOR herein stands for Tree On Road', meaning thereby that the buyer need not pay for the transportation as the goods were to be supplied by the seller at the address of the buyer at cost of the seller. 7. The assessing officer as well as the appellate authority both have considered the invoices which were submitted before them. In his order, the assessing officer has recorded "that on perusal of the invoices it is found that the Price Terms mentions as FOR destination" but has proceeded to record as under: "I find that the assessee has not been able to establish the fact that: (i) the ownership of the goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his doorstep; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; since there is no documentary evidence to establish the fact of insurance coverage by the assessee." The sale was thus considered by the assessing officer to have been finalized at the factory gate and therefore the assessee was not found eligible for Service Tax credit av....
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....tering services are covered under the inclusive part of the definition of "input service". The services covered under the inclusive part of the definition of input service are services which are rendered prior to the commencement of manufacturing activity (such as services for setting up, modernization, renovation or repairs of a factory) as well as services rendered after the manufacture of final products (such as advertisement, sales promotion, market research etc.) and includes services rendered in relation to business such as auditing, financing...etc. Thus, the substantive part of the definition "input service" covers services used directly or indirectly in or in relation to the manufacture of final products, whereas the inclusive part of the definition of "input service" covers various services used in relation to the business of manufacturing the final products. In other words, the definition of "input service" is very wide and covers not only services, which are directly or indirectly used in or in relation to the manufacture of final products but also includes various services used in relation to the business of manufacture of final products, be it prior to the manufacture....
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.... packing material, input used as fuel, input used for generation of electricity or steam, input used as an accessory and input used as paint are per se also not relevant. 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 relation to the manufacture of final product within the factory of production, the said item would not become an eligible input. The said expression "used in or in relation to the manufacture" have many shades and would cover various situations based on the purpose for which the input is used. However, the specified input would become eligible for credit only when used in or in relation to the manufacture of final product. Hydrogen gas used in the manufacture of sodium cyanide is an eligible input, since it has a significant role to....
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.... facts of the present case, use of the services of an outdoor caterer has nexus or integral connection with the business of manufacturing the final product namely, cement. Hence, in our opinion, the Tribunal was justified in following the Larger Bench decision of the Tribunal in the case of GTC Industries Ltd. (supra) and holding that the assessee is entitled to the credit of service tax paid on outdoor catering service. 33. It is argued on behalf of the Revenue that not only the ratio but the decision of the Apex Court in the case of Maruti Suzuki Ltd. (supra) must be applied ipso facto to hold that the credit of service tax paid on outdoor catering services is allowable only if the said services are used in relation to the manufacture of final products. That argument cannot be accepted because unlike the definition of input, which is restricted to the inputs used directly or indirectly in or in relation to the manufacture of final products, the definition of 'input service' not only means services used directly or indirectly in or in relation to manufacture of final products, but also includes services used in relation to the business of manufacturing the final p....
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....restrict the definition of 'input service' to any particular class or category of services used in the business, it would be reasonable to construe that the expression 'such as' in the inclusive part of the definition of input service is only illustrative and not exhaustive. Accordingly, we hold that all services used in relation to the business of manufacturing the final product are covered under the definition of 'input service' and in the present case, the outdoor catering services being integrally connected with the business of the manufacture of cement, credit of service tax paid out on catering services has been rightly allowed by the Tribunal. (ii) In CCE vs. ACE Designers Ltd. 2012 (26) STR 193 (Kar), it has been held as under:- 5. While considering the issue whether the services utilised by the assessee is in the course of manufacturing of a final product or not, the Court held as follows: As is clear from the definition any service used by the manufacturer whether directly or indirectly in or in relation to the manufacture of final products constitutes input service. Various services are set out in the definition expressly, as ....
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....to take credit. The service tax is leviable under Section 66 of the Finance Act and paid on any input service received by the manufacturer of a final product. Therefore under the scheme of the Cenvat Credit Rules, 2004, the service tax paid on all those services which the assessee has utilized directly or indirectly in or in relation to the final product is entitled to claim the credit. Therefore, the Judgment of the Tribunal is legal and valid and is in accordance with law and does not suffer from any legal infirmity which calls for any interference. Hence, the substantial questions of law framed in these appeals are answered against the revenue and in favour of the assessee. 6. Therefore, the question that arises for consideration in this appeal having since been answered by the Division Bench of this Court in the aforesaid judgment, this appeal is disposed off on the very same terms as in CEA Nos. 96/2009 c/w 97/2009, 98/2009, 99/2009, 124/2009 and 125/2009. (iii) In CCE vs. Ferromatik Milacron India Ltd. 2011 (21) STR 8 (Guj.), it has been held as under:- 5. 'Input Service' is defined under Rule 2(l) of the Rules, which insofar as the same is releva....
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....ckground, the Tribunal was justified in holding that the service tax paid on outdoor catering services by the canteen located in the respondent's manufacturing premises has to be considered as an input service relating to business and that Cenvat credit is admissible in respect of the same. The view taken by the Tribunal being in consonance with the provisions of the Rules does not suffer from any legal infirmity so as to warrant interference. In absence of any question of law, much less any substantial question of law, the appeal is dismissed. (iv) In CCE vs. Stanzen Toyotetsu India Pvt. Ltd. (2011) 32 STT 244 (Kar), it has been held as under:- 12. It is in this context that when the Assessee provides outdoor canteen facilities because of a statutory obligation imposed on him under Section 46 of the Factories Act, it becomes a condition of service as far as the employees are concerned. He has paid the service tax on outdoor canteen services. The said expenses incurred by the Assessee will also be taken into consideration before fixing the price of the final product. It may be a welfare measure but certainly it is not a charity provided by the employer to the employ....
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....nt appointed C & F agents in different States for the purpose of sale of the respondents final products. The goods are stock transferred to the C & F agents who store the same and thereafter sell them. In these cases there is no sale from the respondents factory gate. The goods are sold from the premises of the C & F agents. Accordingly, in these cases the place of removal is the premises of the C & F agents. As per Section 4(3)(iii) of the Central Excise Act, where goods are sold from the premises of the consignment agent or any other place or premises after clearance from the factory, such premises from where the goods are sold is the place of removal. The services of the C & F agents are, therefore, received for clearance of goods at the place of removal. The same is, therefore, input service in terms of the means potion of the definition. (iii) In the backdrop of the above facts and contentions reference may be made to the definition of clearing and forwarding agent as defined under Section 65(25) of the Finance Act, 1994 which reads thus: Clearing and forwarding agent means any person who is engaged in providing any service, either directly or indirectly conn....
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....nt with the view adopted by the Tribunal that such services would amount to sales promotion and is, therefore, an input service. For the reasons stated while discussing the issue as regards service commission paid to foreign agent, the services rendered by the C & F agents cannot be said to be in the nature of sales promotion. This issue stands answered accordingly, in favour of the assessee and against the revenue. Cargo Handling Services (i) In CCE vs. Inductotherm India Pvt. Ltd. 2014 (36) STR 994 (Guj.), it has been held as under:- 23. Admittedly, cargo handling services are utilized for the purpose of export of final product where the place of removal for the purpose of export shall necessarily have to be the port and therefore any service availed by the exporters until the goods left India from the port are the service used in relation to clearance of final products upto the place of removal. If at this stage, the definition of input service is recollected, it includes services used by the manufacturer directly or indirectly in or in relation to manufacture of the final product and in relation to clearance of final product from the place of removal. Definition ....
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....comes on time at the work place, the employers have taken this measure which has a direct bearing on the manufacturing activity. At any rate it is an activity relating to business." Insurance (I) In CCE vs. Stanzen Toyotetsu India Pvt. Ltd. (2011) 32 STT 244 (Kar), it has been held as under:- "Insofar as Insurance coverage to the employees is concerned in the course of employment if the employees suffer injury or dies, there is a vicarious liability imposed on the employer to compensate the employee. If the employer employs its own transportation facility in order to cover the risk which also includes the risk of workers who are covered in that statutory establishment. He has to take the insurance policy without which the vehicle cannot go on the road. Under the workman's compensation Act he has to obtain the insurance Policy covering the risk of the employees. The employee State Insurance Act takes care of the health of the employees also and casts an obligation on the employer to provide insurance services. Under these circumstances, this Group Insurance Health Policy though is also a welfare measure is an obligation which is cast under the Statute that the employe....
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....lly connected with the manufacturer of the final product. The input service must have nexus with the process of manufacturer. It has to be necessarily established that the input service is used in or in relation to the manufacturer of the final product. The relevant test would be can the final product emerge without the use of input service in question. When these tests are applied following the decision of the Hon'ble Supreme Court in Maruti Suzuki (supra), one finds that the impugned outdoor catering service does not meet the same in relation to manufacturer of the finished excisable goods listed in the table in Paragraph 2 (Para no. 19 of the Judgment) 2. That on the issue of Cenvat Credit pertaining to Outdoor Catering Service, the Hon'ble CESTAT, Chennai in the case of CCE Chennai vs. Sundaram Brake Lining Limited (hereinafter SBL in short) and Others [2010 (019) STR 0172 (T)] has held that the outdoor catering service cannot be considered as " input service" relating to the business. The CESTAT has observed, inter alia, that the caterers engaged by the respondent supply various food items for consumption by the workers and the staff. It is no one's case that the ....
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....excisable goods would depend upon the place of removal as per the definition. In case of a factory gate sale, from a non duty paid warehouse, or from a duty paid depot (from where the excisable goods are sold, after their clearance from the factory ), the determination of the place of removal does not pose much problem. However, there may be situations where the manufacturer/ consignor may claim that the sale has taken place at the destination point because in terms of the said contract /agreement (i) the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his doorstep; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination and; (iii) the freight charges were an integral part of the price of goods. In such cases, the credit of the service tax paid on the transportation up to such place of sale would be admissible if it case be established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the definition as under section 2 of the Central Excise Act, 1944 as also in terms of the provision ....
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....loyee outside city area in relation to business finds no substance as the expenses incurred relates to recreation and entertainment of the employees. 10. We have heard both the sides. 11. Before coming to the issues of services which are anciliary to the activities which are carried out by the assessee is the main core of the argument of the whole appeal. 12. The question come first is whether rule 4 (c) will come into operation or not. In view of Section 2(t), it is very clear that the meaning does not define under the Cenvat Credit Rules, 2004 then the meaning is to be derived from the provisions of the Act. 13. In that view of the matter, though Mr. Ranka contended that 3(2) prohibits it only for the purpose of defence services under 4(c) since no other place, the word 'removal' has been defined. In that view of the matter to come out to a conclusion for removal of the goods, the meaning which has been defined under 4(c) is required to take into account. Regarding Rule 9 which is for the registration, in our considered opinion, the Rule 9 of Registration will apply only in a case where assessee deferred payment of excise duty at the time of delivery. In that case, th....