TaxTMI 
TaxTMI 
2008 (9) TMI 56
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....inal 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;" The above definition stands in two parts i.e. main part contained in sub-clause (i) and (ii) and the inclusive clause part starting with the words "and includes services used in relation to setting up, modernization........... upto the place of removal." Both sides agreed that the services provided by the outdoor caterer is to be considered as one relating to business and therefore will fall under the inclusive part of the definition and not the main definition. However, while the revenue contended that the inclus....
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....5) SCC 281 wherein it was observed as under: "When an interpretation clause uses the word "includes", it is prima facie extensive. When it uses the word "mean and include", it will afford an exhaustive explanation to the meaning which for the purpose of the Act must invariably be attached to the word or expression. [See G.P. Singh's Principles of Statutory Interpretation, 10th Edition, Pages 173 and 175]." It was submitted that recently, in N.D.P. Namboodripad (Dead) by LRs. v. Union of India (UOI) and Ors. - 2007 (4) SCALE 361 the Apex Court held as under: "17. If the words 'and includes' were intended to rope in certain items which would, not be part of the meaning, but for the definition, then Rule 62 would have specified only 'dearness pay' as the item to be included but not 'pay'. If pay, dearness allowance and other allowances were already included in 'emolument' with reference to its general or normal meaning, as contended by appellant, there was no reason to specifically again include 'pay' in Rule 62. Inclusion of 'pay' and 'dearness pay' and non-inclusion of 'clearness allowance or other allowances' in the definition of 'emolument' is significant. The definition in Rul....
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....s listed in the inclusive clause and is neither akin to any of the five business activities enumerated in "such as" sub-clause falling under business activity, it cannot be considered to be covered by the inclusive definition and therefore cannot be considered as an input service. 4. Ld. advocate, Shri Sridharan, on behalf of the appellants submits that the definition of input services uses the term "such as" which is purely illustrative but not exhaustive. The term "such as" has been defined in the Concise Oxford Dictionary. "Such as" means for example or of a kind that and in Chambers Dictionary "such as" means for example. The word "such as" acts as an adjective prefixed to a noun indicative of the draftsman's intention that he is assigning the same meaning or characteristics to the noun as has been previously indicated, but it does not prohibit any other activity which can define noun in a similar way. Therefore, the term "such as" only connotes that whatever activities are given are illustrations that relate to the business. Hence, any activity relating to business of the assessee would be covered as an input service. The usage of the words "such as" after "activity relating ....
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....nstruction, advertising service, market research etc.) which are received in relation the offices pertaining to a manufacturer or service provider would also be allowed." It was submitted that from the above, it is clear that the object of the Legislature, while introducing Cenvat Credit Rules was to allow credit of all taxable services that go to form a part of the assessable value of the final product on which excise duty is to be charged or output service on which service tax is to be charged. This includes services received prior to commencement of manufacture, but the value gets absorbed in the value of goods and also the services, which are not directly related to manufacture but are related to the sale of manufactured goods and thus forms part of the assessable value of the product sold. Further the draft rules proposed to give full credit of service tax on services that are received in relation to the office pertaining to a manufacturer or service provider. 6. The above draft rules were circulated inviting comments from the trade and industry. The said draft rules define the term 'input service' as under: "(g1) "Input service" means any service (i) Received and consumed....
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....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." In view of the above, it was submitted that the argument of the department that the term "such as" is restricted to the terms "accounting, auditing, financing, recruitment and quality control" only is incorrect in as much as the scope of the term "activities relating to business" has been expanded and illustrated further with the addition of services such as coaching and training, share registry, credit rating etc. This conclusion is supported by the fact that under the draft credit rules, the term used was "activities relating to management of business". However, under the Cenvat Credit Rules, 2004 the term used is "activities relating to business", which is much wider in scope and application. Hence, even if one were to consider that activities such as accounting, auditing, financing, recruitment and quality control are activities which relate to management of business, the term "activities relating to business" is wider and hence the Legislature has included illustrat....
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....lations to futility. To be literal in meaning is to see the skin and miss the soul. The legislature never wastes its words or say anything in vain and a construction which attributes redundancy to legislation will not be accepted, as has been observed by the Supreme Court in the case of Union of India v. Hansoli Devi - (2002) 7 SCC 273. A similar observation was made by the Apex Court in the case of Peerless Finance (supra) referred to by the ld. Jt. CDR that the word "include" is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import, but also those things which the interpretation clause declares that they shall include. But the word "include" is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to show that it was not merely employed for the purpose of adding to the natural significance of the words or expressions defined. It may be equivalent to "mean and include", and in that case it may affor....