TaxTMI 
TaxTMI 
2023 (1) TMI 506
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....at pursuant to audit conducted for the material period, certain audit observations were made, interalia, to the effect that the Appellant had wrongly availed Cenvat Credit and vide letter dated. 20.10.14, the Appellant inferred that they reversed the entire alleged wrongly availed Credit. Further, he claimed that the Appellant had reversed the entire Credit on account of insistence by the Audit Party along with amount of penalty of Rs. 1,28,38,089/- under protest. That the Appellant had neither agreed, nor voluntarily paid any such amount during the course of Audit at all as evident from their letter dated 02.04.2015. 2.2 Learned Counsel argued that the Appellant had not sought closure of the issue, since penalty was also imposed on them by audit party, and their request to close the issue under Section 11A(2B) / Section 73(3) was not adhered to by audit party. In fact, vide letter dt.7.4.15, the Audit Commissioner categorically stated that the Appellant is free to litigate the matter. Pursuant to this, SCN dt.27.7.15 was issued to the Appellant, seeking to recover and appropriate the credit and penalty amounts paid under protest. 2.3 Learned Counsel argued that Cenvat Credit has....
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....nd of that it has no nexus with production activity within factory and it is a part of setting up of plant and machinery. He pointed out that the actual list of services as mentioned at Para 37.4 of the impugned order is at Sr. Nos.1 to 12 below, but since impugned order also discusses general service heads as part of findings, the same too are explained and discussed, as hereunder from Sr. Nos.13 and 14. SI. No. Nature of Services Services used for Legal Authority 1 Erection, Commissioning and Installation 1. Without erection, commissioning of plants and machines, it is not possible to undertake production activity. 2. The very fact that erection, commissioning was of valid capital goods, the nexus with production activity stands established. 3.Absence of words "setting up" in definition of the term "input service" does not affect concept of "in relation to" to qualify as input service a. Hollister Medical India P. Ltd. 2017 (49) STR 426 (Tri.-del) b. M/s. Sai life science Ltd. 2017 (51) STR 55 (Tri. Hyd.) c. M/s. Musaddilal Projects Ltd., 2....
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....EMS LTD 2013 (31) S.T.R. 684 (Tri. - Del.) 8 Intellectual Property Right other than copyright Technology transfer, technical guidance, assistance and training a. MANGALORE REFINERY & PETROCHEMICALS LTD 2015 (319) E.L.T. 121 (Tri. - Bang.) 9 Legal Consultancy Fees for management consultancy or technical consultancy for production and manufacturing operation Getting approvals for starting business/ land clearance etc. a. M/s. Heartland Bangalore Transcription Services (P) Ltd. vs. CST: 2011 (21) STR 430 (Tri.-Bang.) b. Deloitte Tax Services India Pvt. Ltd.: 2008 (11) STR 266 (Tri.-Bang.) c. Megma Design Automation India P. Ltd. 2015 (40) S.T.R. 800 (Tri. - Bang.) d. HCL TECHNOLOGIES LTD 2015 (40) S.T.R. 1124 (Tri. - Del.) 10 Rent-a-cab Services pertain to car rental for transportation of employees to the Dahej Site. (exclusively for official purposes) a. StenzenToyotetsu India P. Ltd. 2011(23) STR 444(Kar) b. NORTHERN COALFIELDS LTD 2020(2) TMI 1004 CESTAT New Delhi c. CHEMPLAST SANMAR LTD. (....
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....le on the issue, neither extended period of limitation be invoked nor any penalty can be imposed on the Appellant. He further argued that the whole of demand is time-barred, given the fact that there are plethora of decisions covering the issue in the favour of the Appellant. That the bonafide belief entertained by the Appellant cannot be doubted in the circumstances. 3. Learned AR relied on the impugned order. 4. We have considered the rival submissions, we find that the appellants are engaged in manufacture of steel, coils. The appellants were setting up their new plants and while setting up their new plant, the appellant availed various services. The revenue has sought to deny input credit of various services used by the appellant on the ground that the definition of input service was amended with effect from 01.04.2011 to exclude the services used for setting up of factory premises of output service provider or office relating to such factory or premises. It is seen that the definition of input service was amended with effect from 01.04.2011. Definition Prior to 01.04.2011, read as follows: "[(l) "input service means any service,--- (i) used by a provider of taxable serv....
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....or vehicle which is not a capital goods, or [(BA) service of general insurance business, servicing, repair and maintenance, in so far as they relate to a motor vehicle which is not a capital goods, except when used by- (a) a manufacturer of a motor vehicle in respect of a motor vehicle manufactured by such person; or (b) an insurance company in respect of a motor vehicle insured or reinsured by such person; or]] (C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use consumption of any employee.] 4.1 The Commissioner in the impugned order has observed as follows: "37.5 Further I find that as per the change in the definition of input service after 01.04.2011, the initial 'setting up' word has been omitted and only modernization /renovation/repairs of such premises /office already existing is covered in the definition of input service after 01.04.2011. With effect ....
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....the proposed new building at Dahej unit. Also the services received from M/s. Sanguine Management are Land related services which had been received in relation to the land that was already identified for setting up of New Plant and Machinery at Dahej. Therefore, I find that all these services have no relevance / nexus directly/ indirectly with the manufacturing activities and they are used for and during the setting up of their new plant and machinery/ factory, office premises. The case laws relied upon by the assessee are not applicable to the present case. 37.8 I find that these services received by the assessee were not in the nature of input services in terms of Section 37 (2) (xviaa) of Central Excise Act, 1944 which provide for credit of Service Tax leviable under Chapter V of the Finance Act 1994 (32 of 1994) paid or payable on taxable services used in, or in relation to, the manufacture of Excisable goods to the extent that the services appeared to fall under specific exclusion clause of 2) (A), 21) B. 21) (BA), and 2(1) C) of the Cenvat Credit Rules 2004. The same were used in setting up of their New Plant and factory and office premises etc. at Dahej. Renting of motor ....
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....r the services in question, Cenvat credit will be available, otherwise it will not be available. The main part includes "services 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." The term manufacture is not defined in the Rules. 18. The definitions as per Rule 2 of CCR, 2004 reads as follows: RULE 2. Definitions. (1) In these rules, unless the context otherwise requires, (a) XX XX XX (b) XX XX XX (1) XX XX XX (2) The words and expressions used in these rules and not defined but defined in the Excise Act shall have the meanings respectively assigned to them in the Excise Act. 19. Since the term 'manufacture' is not defined in the Rules, the definition under the Central Excise Act, 1944 must be considered. Section 2(f) of the Central Excise Act defines 'manufacture' as follows: 2 (f) "manufacture" includes any process (1) incidental or ancillary to the completion of a manufactured product. (ii) which is specified in relation to any goods in the Section or Chapter notes of the Fourth Schedule as amounting to manufactur....
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....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. 23. In view of the above, the impugned orders denying Cenvat credit and ordering its recovery along with interest and imposing penalties cannot be sustained. The impugned orders are set aside and the appeals are allowed with consequential reliefs, if any." The impugned order does not examine the admissibility of Cenvat Credit of these services in the main part of the definition, but relies solely on the changes made in the inclusive part of definition. In terms of the decision in the case of Pepsico India Holdings (Pvt.) Ltd (supra), it is apparent that if the services provided in relation to setting up in unit would be covered under the main part of the definition. Unless specifically excluded by exclusion clause. 4.3 The impugned order also examines the specific exclusions made in the definition of input service. Para 37.9 of the impugned order deals with this specific exclusion made in the definition of input service. The said para reads as follows: "37.9 In view of the discussion in the aforesaid paras, the....