TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 297
X X X X Extracts X X X X
X X X X Extracts X X X X
....ring on behalf of the appellant submits that as per the definition under Rule 2(k), all goods used for providing output service are eligible for inputs for allowing Cenvat credit. In the present case there is no dispute that Steel Plates etc. were used in the fabrication of barges and barges were used for providing output service. Therefore, directly or indirectly inputs were used in relation to providing output service through barges therefore, credit is admissible. He submits that this issue has been considered in various judgments and the same was decided in favour of the assessee. He placed reliance on the following decision and Board Circular:- (a) Circular No. 120/01/2010-ST dated 19.01.2010 (b) Mundra Ports and Special Economic Zone Limited vs. Commissioner of C.Ex. & Cus. - 2015(39) STR 726 (Guj.) (c) CCE, Vishakhapatnam- II vs. Sai Sahmita Storages (P) Limited. - 2011 (23) STR 341 (A.P.) (d) CCE&C. & ST, Raipur vs. Vimla Infrastructure India P. Limited. - 2018 (13) GSTL 57 (Chhattisgarh) (e) City Centre Mall Nasik Pvt. Limited vs. Commissioner of Central Excise and Service Tax, Nashik - 2017-TIOL- 4322-CESTAT-Mumbai (f) Adani Port & Special Economic Zone Limite....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rge and not for providing output service and therefore, credit is rightly denied by the lower authorities. 4. I have carefully considered the submissions made by both the sides and perused the record. I find that the steel items were used for repair of Barge and Barge is in turn used for providing output service. Therefore, the steel items such as Steel Plates, HR Plates, Angels, Channels were used for providing output service. The issue is squarely covered by the decision of Hon'ble Gujarat High Court judgment in case of Mundra Ports (supra) wherein the issue involved was whether the steel, cement used for construction of Jetty is admissible inputs against the provisions of output service i.e. Port Service. The Hon'ble High Court has allowed the credit. Therefore, following the ratio of the said judgment where identical facts were involved, I set-aside the impugned order and allow the appeals. A similar issue has been considered by the Hon'ble Gujarat High Court in the case of Mundra Ports & Special Economic Zone Limited (supra) wherein the court has passed the following order: 6. Before deciding the question, we deem it appropriate to extract Rule 2(k) and 2(l) of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ufacturer. The appellant is neither having any factory nor he is manufacturer. The appellant is a service provider of port. We need not go into this question as to whether the appellant is a factory or manufacturer or service provider in view of the fact that it is not disputed by Mr. Y.N. Ravani, learned counsel appearing for the Revenue in this Tax Appeal that the appellant provides service on port for which he is getting jetty constructed through the contractor and the appellant has claimed input credit on cement and steel. The cement and steel were not included in Explanation 2 from 2004 up to March, 2006. The Cenvat Credit Rules, 2004 were amended in exercise of the powers conferred by Section 37 of the Central Excise Act, 1944 with effect from 7-7-2009, the date on which it was notified by the Central Government from the date of the notification. According to learned Counsel for the appellant, this amended definition would apply only to the factory or manufacturer and would not apply to the service provider. According to him, either before the amendment made in the year 2009 or thereafter, the appellant was neither factory nor manufacturer and he has only constructed jetty by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere was any legislative intent to clarify any existing provision. For the same reason, as mentioned above, the decision of the Apex Court in Sangam Spinners Limited v. Union of India and Others, reported in (2011) 11 SCC 408 = 2011 (266) E.L.T. 145 (S.C.) would not be applicable to the facts of the instant case. 9. Mr. Ravani has also vehemently urged that since jetty was constructed by the appellant through the contractor and construction of jetty is exempted and, therefore, input credit would not be available to the appellant as construction of jetty is exempted service. The argument though attractive cannot be accepted. The jetty is constructed by the appellant by purchasing iron, cement, grid, etc., which are used in construction of jetty. The contractor has constructed jetty. There are two methods, one is that the appellant would have given entire contract to the contractor for making jetty by giving material on his end and then make the payment, the other method was that the appellant would have provided material to the contractor and labour contract would have been given. The appellant claims that he has provided cement, steel, etc., for which he was entitled for input cre....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or for any other purpose, within the factory of production; (ii) all goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing any output service; Explanation 1. - The light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever. Explanation 2. - Input include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer; (l) "input service" means any service,- (i) used by a provider of taxable service for providing an output service; or (ii) used by the 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 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, f....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in or in relation to the manufacture of final product. Hydrogen gas used in the manufacture of sodium cyanide is an eligible input, since it has a significant role to play in the manufacturing process and since the final product cannot emerge without the use of gas. Similarly, Heat Transfer Oil used as a heating medium in the manufacture of LAB is an eligible input since it has a persuasive role in the manufacturing process and without its use it is impossible to manufacture the final product. Therefore, none of the categories in the inclusive part of the definition would constitute relevant consideration per se. They become relevant only when the above crucial requirement of being "used in or in relation to the manufacture" stands complied with. In our view, one has to therefore read the definition in its entirety. 9. There is no dispute, in these cases, that the assessee used cement and TMT bar for providing storage facility without which storage and warehousing services could not have been provided. Therefore the finding of the original authority as well as the appellate authority are clearly erroneous, which was correctly rectified by the CESTAT. In so far as the levy of pen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed by a manufacturer, whether directly or indirectly, in or in relation to the manufacture and includes services used in relation to modernisation, 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), insofar as they are used for - (a) construction of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or (B) specified in sub-clauses (d), (o), (zo) and (zzzzj) of cla....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t provide any 'logistic services' viz., "Cargo Handling Services" without the facility of private Railway Side. Hence, it become essential for them to set/construct their own private Railway Side to facilitate smooth loading, unloading of materials like Coal, Iron Ore, Manganese Ore, Bauxite etc. Hence, 'inputs' and 'input services' used in setting up the Railway Private Siding which is further in use of "Cargo Handling Services" is eligible for credit under the Rules, 2004. This view of the Commissioner has been affirmed by the Tribunal. 10. Reverting back to the definition and the nature of construction activity carried on by the respondent company for erecting the facility of "Cargo Handling Services" it is to be kept in mind that the 'Inputs' have been used for providing output services which is taxable, therefore, by erecting the Railway Siding, the respondent is providing a taxable service for providing an output service, therefore, it is entitled to avail credit under Rule 2004. 11. In taking the above view, we are fortified by the law laid down by the Division Bench of Andhra Pradesh High Court in the matter of Commissioner of Central Excise, Visakhapatnam-II v. Sai Sah....