TaxTMI 
TaxTMI 
2021 (8) TMI 1112
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....to the appellant was payment towards services of Financing/Sales Promotion provided to the appellant. The said input Service Distributor had distributed the cenvat credit of service tax charged by these Finance companies, to their manufacturing/spare parts division' units. Therefore, a recurring show cause dated 23.09.2019 for the period Nov 2016 to June 2017 was issued to the appellant. The matter was adjudicated and the cenvat credit was denied. Against the said order, the appellant is before me. 3. The Deputy General Manager has appeared before me who submits that in the show cause notice as well as in the order in original, it is stated that term "financing" used in the definition of "input service" would refer to issue of stocks, shares, bonds, promissory notes, and arranging of loans for smooth functioning and "sales promotion" would refer only to services such as advertising, personal selling, direct marketing, publicity / public relations. It is also stated that FIs have neither promoted /marketed any of the motor vehicles manufactured by the Appellants nor carried process of evaluation or development of prospective customers but they are only providing finance to th....
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....er. 5. It is his submission that the inclusive part of the definition of "Input service" under Rule 2 (l) of the Cenvat Credit Rules, 2004 (in short 'said Rules') makes it clear that credit of service tax paid on 'Advertisement &sales promotion' activity is admissible to the Appellants. The very object of the Cenvat Scheme is to allow credit of taxes paid on inputs used in or in relation to the manufacture of the final product and service tax paid on services used in relation to the manufacture of final products as well as the services used in relation to the business of the manufacture. The expression "such as" in Rule 2 (l) of the said Rules is merely illustrative and not exhaustive. Therefore, credit of service tax paid on any service used in relation to the business of manufacturing automobiles has to be allowed. As per Rule 2(l) of the said Rules, the term "input service" has been defined by the method of "means and includes". Such a definition is very specific in its scope. While the "means" part of the definition lays down the meaning of the term, the "includes" portion brings within its ambit certain more activities, though such activities could not be covered under the ....
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....e, assuming other variables remain constant. Utility preferences and choices underlying demand can be represented as functions of cost, benefit, odds and other variables. In this case, the FIs arranges loan to the prospective customers so as to ensure that the customers purchase the excisable goods manufactured and cleared by the manufacturer. Thus the activity of arranging loans by the FIs has a direct nexus with the manufacturing activity 7. In support of above submissions, Appellants is relying upon following judicial pronouncements: • Commissioner of Central Excise, Nagpur vs Ultra tech Cement Ltd. as reported in 2010-TIOL-745-HC-MUM-ST • Bharat Coop. Bank (Mumbai) Ltd vs Coop. bank Employees union as reported in (2007) 4 SCC 685 • Collector of Central Excise vs Solaris Chemtech limited as reported in 2007 (214) ELT 481 (SC) • State of Karnataka vs Azad Coach Builders (P) Ltd & ANR as reported in 2010-TIOL-70-SC-CST-CB • Commr. of C. Ex. & Service Tax, LTU, Bangalore v. Micro Labs Ltd. as reported in (2011) 270 E.L.T. 156 (Kar.) 8. In the identical situation, recently Hon'ble High Court of Madras in the case....
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....FC and that too, is silent on the aspect of 'consideration'/'any fixed mechanism for consideration', tendering it void. Thus in absence of any legal documentary evidence that service received(if at all) by the appellant from NBFC is in nature of input service as contemplated under rule 2(l) of CCR,2004 , the appeal may be dismissed in the interest of justice. 12. Heard the parties and considered the submissions. 13. The issue before me is that whether the appellant is entitled to take cenvat credit on commission paid to the various financers for selling their vehicles or not in terms of Rule 2 (l) of the Cenvat Credit Rules, 2004. 14. For better appreciation, Rule 2 (l) of the Cenvat Credit Rules, 2004 is extracted herein below:- [(l) ―"input service" means any service, - (i) used by a provider of [output 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 modernisation, renovation or repairs of a factory, premises o....