TaxTMI 
TaxTMI 
2023 (8) TMI 788
X X X X Extracts X X X X
X X X X Extracts X X X X
....thin the inclusive part of the definition. For an activity related to the business, it has to be an activity which is analogous to the activities mentioned after the words such as ...."By any stretch of interpretation, the credit on these services cannot be allowed to the appellant, as otherwise, this will lead to an all inclusive situation for Cenvat Credit eligibility, which is not intended by law. The appellant have also cited of departmental audits conducted. this argument cannot be of any help to the appellant. Seeking refutation of extended period invocation on this ground is not a valid argument. Will not agreeing with such a plea take all once audited units out of purview of 5 years extended period of demand? The statutory provision relevant for audit is clause (x) of Section 37 (2) and Rule 22 of the Central Excise Rules, 2002. While extended period provisions are provided under Section 11 A of CX Act. both are effect of separate authorities and should not be read in such a way that it makes a particular provision redundant. Fact of regular audit cannot be a ground for rejection of invocation of extended period, if some issues appear to audit. ... ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ertain agreed fees. They paid the Service Tax due in respect of these services imported by them, on reverse charge basis and availed the CENVAT credit of the service tax paid. 2.5 Revenue was of the opinion that these fees paid by the appellant to their principal in Japan for services received from the principal in Japan do not qualify as input services as defined by Rule 2 l of Cenvat Credit Rules, 2004, as amended from 01.04.2011. 2.6 Proceedings were initiated against the appellant and two show cause notices dated 11th April, 2016 and 16th November, 2016 were issued to the Appellant. The show cause notice dated 11th April 2016 asked appellants to show cause as to why; "(a) CENVAT credit amounting to Rs.38,53,886/- (Rupees Thirty eight lac fifty three thousand eight hundred eighty six only) irregularly availed on service Manuals and Annual Fee for Parts Catalogue should not be demanded and recovered along with interest from them under Rule 14 of CENVAT Credit Rules, 2004 read with Section 11A and Section 11AA of the Central Excise Act, 1944, respectively; (b) The amount of Rs.22,57,029/- (Rupees Twenty Two lac Fifty Seven Thousand Twenty Nine only) already....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rs. Eighty Seven lakh ninety three thousand two hundred fifty three only) upon M/s Honda Motors India Pvt. Limited in terms of Rule 15(2) of CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 for contravention of the provisions of Cenvat Credit Rules, 2004. (d) The adjudged dues shall be paid henceforth." 2.8 Aggrieved by the Order-in-Original Appellant filed an appeal before Commissioner (Appeals) who vide the impugned order referred in para 1 partially modified the Order-in-Original. 2.9 Aggrieved appellants have filed this appeal. 3.1 We have heard Shri Puneet Bansal, Advocate for the Appellant and Shri Sandeep Pandey, Authorized Representative for the Revenue. 3.2 Arguing for the Appellant, learned counsel submits: ➢ services received by them for preparation of the "Electronic parts Catalogue" and "Service Manual" qualify as input services. ➢ The Electronic Parts Catalogue codifies the various parts, for their effective identification by them and their dealers/ suppliers the parts, for the purpose of procuring, retrieving and dispatch of the parts as desired by their customers. This makes their b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lation to the manufacture of the final products up to the place of removal. ➢ appellant has not produce any evidence to the effect that they are using these manuals for manufacture of the finished goods. It is their dealers and distributors who are using these manuals for identification of the correct parts and then placing the order for the same. The services of these part and service manuals are being used by the dealers and not the appellants. Hence these cannot be termed as input services for availing the CENVAT credit of the service tax paid on the fees for developing these manuals. ➢ appellants have not been able to adduce any evidence to show that their business has been promoted by these manuals. 4.1 We have considered the impugned order alongwith submission made in appeal and during the course of argument. 4.2 The only issue to decide the present appeal is service admissibility of Cenvat Credit Rules paid on service tax under reverse charge mechanism by the appellant on the service fees paid by them to their principals namely Honda Motor Company Ltd., Japan for development of Part Manual and Service Manual. 4.3 Appellant entered int....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to as the "Services") with respect to the Repair or Maintenance Information in the following manner: 1) Collecting factual information necessary to create, update or customize the Repair or maintenance Information required by HMI or the Dealers; 2) Determining how best to present or convey the Repair or Maintenance Information; 3) Creating new Repair or Maintenance Information (including text, artwork and photograph) and updating and customizing existing Repair or maintenance Information; and 4) Such other services as parties hereto may from time to time agree upon in writing. 2.2 .... Article 4. (Results of Services) 4.1 Honda Motor shall make the results of the Services available in such form as will allow the HMI to enjoy such results. The method by which such results shall be made available shall be determined by agreement of the parties hereto in accordance with their requirements and circumstances. 4.2 The parties hereto acknowledge that the copyrights, patent rights and other intellectual property rights in and to the results of the Services shall remain the sole property of Honda Motor, and that nothi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iving the orders from the dealers/customers. Even the storage bins are to be identified as per these part catalogue. Orders are placed by referring to the part as codified in this manual and is essential uniform understanding of the part by all in the chain. Without this manual all the operations of the appellant will be haphazard. So we are firmly of the view that this part catalogue is essentially the part inventory management, procurement and supply system of the parts to the dealers and through them to the ultimate customers. We do not find any merits in the submissions or the observations made by the lower authority contrary to this. 4.6 On the first page of "Shop Manual -- Maintenance, Repair and Construction" which we examined on sample basis following is stated: "A Few Words About Safety Service Information The service and repair information contained in this manual is intended for use by qualified, professional technicians. Attempting service or repairs without the proper training, tools and equipment could cause injury to you or others. It could also damage the vehicle or create an unsafe condition. This manual describes the proper m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e manufacturer are achieved irrespective of the person or the dealer servicing the vehicle. This standardization will promote the sale of genuine parts which are supplied or sold by the appellants. Thus this manual is essential to the activities undertaken by the appellant through supply of genuine spare parts. 4.8 It is also noted that appellant are being assessed on MRP basis. The value of the entire services received by the appellant is shown as expense in the book of accounts of the appellant towards the sale of these parts. Without including the value of these services received by the appellant the MRP of the parts sold cannot be arrived at. Hon'ble Bombay High Court in the case of Coca Cola India Pvt. Ltd. [2009 (242) E.L.T. 168 (Bom.)] has held as follows: "38. Service tax therefore, paid on expenditure incurred by the assessee on advertisements sales promotion, market research will have to be allowed as input stage credit more particularly if the same forms a part of the price of final product of the assessee on which excise duty is paid. In other words, credit of input service must be allowed on expenditure incurred by the assessee which form a part of the asse....