TaxTMI 
TaxTMI 
2021 (2) TMI 870
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....taking and utilizing the Cenvat Credit of Service tax paid in respect of services which were not input service for them and the same were liable to be recovered from them along with interest under the provision of Rule 14 of the CCR read with Section 11A and Section 11AA of the Central Excise Act 1944 (herein after referred to as 'the Act'). Penalties under Rule 15(2) of CCR read with Section 11AC of the Act was also proposed for alleged contravention of the provisions of the CCR upon the Appellant. Vide impugned Order-in-original the said demands were confirmed by the respondent under Rule 14 of the CCR read with Section 11A of the Act along with interest under Section 11AA of the Act. Equal penalty under Rule 15(2) of CCR read with Section 11AC of the Act was also confirmed. 3. Being aggrieved, the Appellant have preferred this appeal contending, inter-alia, as under: (i) That as per Memorandum of Association of M/S Aditya Birla Management Corporation Limited (in short 'ABMCPL'), this company was formed to provide common facilities to its member companies with a view to optimize the benefit of specialization and achieve economies of scale in order to m....
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....ginal No.13/AC/DEMAND/RAN/2017 Dated 13.01.17, and Order-in-original No.16/CGST & C.EX/Deputy Commr/2018-19, Dt.-29.OI.19 have been filed within the time limit prescribed under Section 35 Of the Central Excise Act, 1944 and the mandatory pre-deposit have also been paid by the appellant under Section 35F of the Central Excise Act, 1944, hence I take these appeals for disposal on merits. 6. The main allegation for denying credit in impugned Order is that there was no service rendered by ABMCPL to the appellant which could be defined as input service for them as the arrangement between ABMCPL and its member companies (including appellant) was merely sharing of common expenses and there was no concrete proof that these expenses were made for such services provided by ABMCPL which were used by the appellant in manufacture of their final product. On going through the impugned order, I find that the confirmation of the demand has been made on the pretext of having no nexus, direct or indirect, between the impugned services and the manufacturing activities of the Appellant. The Adjudicating Authority has observed that the impugned bills/ invoices have been issued on the basis of perform....
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....ot be taken since there was no rendering of services which were utilized by the appellant for manufacturing their final product. Further the expression "input service" is defined in rule 2(l) of CCR as follows:- "(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 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, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal." (emphasis supplied) Here again, clause (ii) is of relevance. Under clause (ii) of rule ....
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....under the Companies Act, 1956 and they are separately assessed to Income tax. ABMCPL, being independent legal entities, such money collected from appellant for the services provided to them and also expenses recovered to compensate the cost of sourcing the services, would be taxable under BSS. There is no evidence to establish that there is no intention to provide service and it was mere understanding with the sister companies for sharing of common expenses. In CCF, Bangalore v. Stanzen Toyotetsu India (P) Ltd. - 2011 (23) S.T.R. 444 (Kar.), the Hon'ble High Court while considering the eligibility of credit on input service observed as under.' The services mentioned in the section are only illustrative and it is not exhaustive. Therefore, when a particular semice not mentioned in the definition clause is utilised by assessee/manufacturer and service tax paid on such service is c/aimed 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 utilised by the manufacturer directly or indirectly in or in relation to the manufacture of final p....