TaxTMI 
TaxTMI 
2021 (8) TMI 872
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....the final product and so prime facie eligible for CENVAT credit, remanded the case to the Adjudicating Authority to examine the nexus between the services and the final product. 3. The Commisssioner has, by the impugned order dated 25.05.2018, disallowed input CENVAT credit and ordered for recovery of the same under rule 14 of the CENVAT Credit Rules, 2004 [the Credit Rules] with interest and penalty. 4. Details of the period of dispute and the duty demanded in the three Excise Appeals are contained in the following table; Appeal No. E/50326/2019 E/50328/2019 E/50327/2019 Order date 25.05.2018 Date of Show Cause Notices 01.10.2013 28.10.2015 31.03.2016 Period of dispute October 2012 to March 2013 October 2014 to March 2015 April 2015 to September 2015 Duty Demand Rs. 97,08,776 Rs. 4,46,13,883 Rs. 3,11,35,434 Penalty Rs. 5,00,000 Rs. 20,00,000 Rs. 15,00,000 5. The appellant is engaged in the manufacture of Zinc and Lead Concentrates falling under Chapter 26 of the First Schedule to the Central Excise Tariff Act, 1985. It availed CENVAT credit on various inputs, capital g....
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....the mines for the purpose of ventilation. To carry out weighment of the ore, weigh bridge was constructed with the platform. To supply the electricity in the mines, the sub-station was constructed. Fixed phone line was not available in the mining area, so mobile phone was provided to the workers and staff offices. In these circumstances, it appears that the services were carried out to obtain sufficient quantity of raw material, of course outside the factory premises but within the mining area. So, these services are connected with the manufacture of the final product and prima facie eligible for CENVAT Credit. When it is so, then we set aside the impugned order and remand the case back to adjudicating authority for fresh decision after examining the nexus between the services and the final product of the appellant. Adjudicating Authority to examine the issue afresh but by providing a reasonable opportunity to the appellant. Fresh evidence may be admitted as per law. In the result, appeal filed by the appellant is allowed by way of remand." (emphasis supplied) 8. The subsequent show cause notices dated 28.10.2015 and 31.03.2016 were adjudicated by a common order dated 2....
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....construction services has been omitted and has been put into exclusion part of the definition of input services w.e.f. 01.04.2011. Thus, credit is not admissible. • There is no mention that input service credit is not available for services utilized outside factory. • Services are related to construction, development and setting up of Kayad mines. The activities were for construction and all such activities relating to construction or execution of a works contract of a building or a civil structure have been excluded from the definition of input service w.e.f. 01.04.2011 under Rule 2(l)(a)(A). Thus, credit is not admissible. Oct 2014 to March 2015 28.10.2015 Services are in relation to 'setting up' of mines which stands omitted w.e.f. 1.04.2011 from the 'includes' clause of input service. Further, the services are in relation to 'construction' and 'execution of a works contract of a building or a civil structure', which is excluded under Rule 2(l)(A) Order dated 7.03.2017 Services are in relation to 'setting up' of mines which stands &nbs....
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.... any service,- (i) used by a provider of taxable service for providing an output service; or (ii) used by a 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 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, 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 services,- A. specified in sub-clauses (p), (zn), (zzl), (zzm), (zzq), (zzzh) and (zzzza) of clause (105) of section 65 of the Finance Act (hereinafter referred as specified services), in so far as they are used for- a. construction of a building or a ci....
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.... 01.04.2011 and it provided that services specified in certain sub-clauses of clause (105) of section 65 of the Finance Act in so far as they were used for construction of a building or a civil structure or a part thereof were excluded w.e.f. 01.04.2011. It is also seen that the 'excludes' part of the definition of 'input service' was further amended w.e.f. 01.07.2012. 15. Learned Counsel for the appellant has placed emphasis on the 'means' clause of rule 2(l) of the Credit Rules. It continued to remain the same whether before 01.04.2011 or after 01.04.2011. In this connection, learned Counsel emphasized that 'input service' would mean 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. 16. To appreciate whether the impugned order has travelled beyond the directions contained in the two orders passed by the Tribunal, it would be necessary to examine the orders. 17. The show cause notice dated 01.11.2013 alleged that CENVAT credit was inadmissible as the services were received outside the factory premises. The first order dated....
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.... or execution of a works contract of a building or a civil structure, but such activities had been excluded from the definition of 'input service' w.e.f. 01.04.2011 under Rule 2(l) of the Credit Rules. 20. Whether this was at all required to be examined by the Commissioner after remand by Tribunal is the bone of contention between the appellant and the respondent. 21. Learned Counsel for the appellant submitted that once the order passed by the Tribunal on 14.08.2017 remanding the case to the Commissioner had attained finality, the Commissioner could have examined only that particular issue that was remanded. Learned Authorized Representative for the Department, however, contended that the remand order was a very wide order and when the Adjudicating Authority was directed to examine the issue fresh by providing a reasonable opportunity to the appellant, it implies that all the issues were left open to be decided by the Commissioner and, therefore, it cannot be urged that the Commissioner went beyond the directions contained in the remand order. 22. This submission advanced by the learned Authorized Representative for the Department cannot be accepted. The....
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.... of the definition of 'input service' under rule 2(l) of the Credit Rules. They also mention that the services were in relation to 'construction and 'execution' of a works contract of a building or a civil structure', which service was excluded under rule 2(l)(A) of the Credit Rules. The Commissioner, in the first order dated 27.03.2017, confirmed the demand. However, the Tribunal in the order dated 17.11.2017, after making reference to the order dated 14.08.2017 earlier passed by the Tribunal in Excise Appeal No. 51849 of 2015, issued the same direction to the Adjudicating Authority to take a fresh decision after examining the nexus between the services and the final product of the appellant. The Department did not file any appeal against this order dated 17.11.2017 of the Tribunal and so the order passed by the Tribunal attained finality. The Commissioner was, therefore, required to examine only this limited issue on remand, but as the order would indicate, the Commissioner denied CENVAT credit observing that the work was basically of development of a civil structure of mining area by way of construction of decline/ramp and the same would merit classification as 'construction ser....
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....unal observed that it was not open to the Commissioner (Appeals) to make out a new case and, therefore, the order passed by the Commissioner (Appeals) deserved to be set aside on this ground alone. 33. The order passed by the Commissioner adjudicating the first show cause notice dated 01.10.2013 for the period October 2012 to March 2013, therefore, deserves to be set aside for this reason also. 34. The order passed by the Commissioner denies CENVAT credit for the reason that the services were construction related services which had been excluded from the definition of 'input service' and also for the reason that services in relation to 'setting up' of a mine had been deleted from the definition of 'input service' w.e.f. 01.04.2011. 35. Learned Counsel for the appellant submitted that the appellant would be eligible for CENVAT Credit on the input services in question under the 'means' clause of the definition of 'input service' that provides "used in or in relation to the manufacture of final products". The submission is that even post the amendment in the definition of input service w.e.f. 01.04.2011, the 'means clause' continues to remain the same. It is....
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.... part of the definition which specifically provided for credit of service tax paid on services used in setting up of the plant. After 1.4.2011, the definition was revised and it had three parts, the main part, an inclusion part and an exclusion part. The cenvat credit on input services used in setting up of the plant was neither in the inclusive part of the definition nor in the exclusive part of the definition. However, he would argue that these services were necessary to set up the plant and manufacture the goods. Thus, these services are directly connected to the manufacture of the goods and hence they are covered in the main part of the definition of the 'input service' after 1.4.2011 and therefore credit is available even though such services were no longer specifically in the inclusive part of the definition. Such a view was taken in the case of Kellogs by this Bench and in other cases cited above. He, therefore, prays that the appeals may be allowed and the impugned orders may be set aside. 12. Learned Departmental Representative vehemently opposes these arguments and supports the impugned orders and asserts that since the services related to setting up of a factory....
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.... to manufacture (i.e., in relation to 'a' and 'b' above); d) Activities indirectly in relation to manufacture (i.e., in relation to 'a' and 'b' above); 22. All four of the above qualify as input service as per Rule 2(l) (ii) as applicable post 1.4.2011. Although setting up the factory is not manufacture in itself, it is an activity directly in relation to manufacture. Without setting up the factory, there cannot be any manufacture. Services used in setting up the factory are, therefore, unambiguously covered as 'input services' under Rule 2 (l) (ii) of the CENVAT Credit Rules, 2004 as they stood during the relevant period (post 1.4.2011). The mere fact that it is again not mentioned in the inclusive part of the definition makes no difference. Once it is covered in the main part of the definition of input service, unless it is specifically excluded under the exclusion part of the definition, the appellant is entitled to CENVAT credit on the input services used. This Bench has already taken this view in Kellogs. Similar views have been taken by the other Benches in the other cases mentioned above." (emphasis supplied) 39. It needs to be noted....