TaxTMI 
TaxTMI 
2023 (9) TMI 297
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.... 2. Shri PD Rachchh, learned Counsel appearing 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 - ....
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....gs of the impugned order. He submits that the steel items on which the credit is availed by the appellant were used for repair of Barge 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) wh....
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....t credit. According to learned Counsel for the appellant, the appellant is not manufacturer and, therefore, the provisions of Explanation 2 of Rule 2(k) would be applicable only to the factory and manufacturer. 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 a....
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....ntion behind amendment was to clarify. The coverage under the input from where this intention has been gathered by the Tribunal has not been mentioned in the judgment. There is no material to support that there 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 w....
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....cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of final products 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, renovat....
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....ture of final product within the factory of production, the said item would not become an eligible input. The said expression "used in or in relation to the manufacture" have many shades and would cover various situations based on the purpose for which the input is used. However, the specified input would become eligible for credit only when used 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....
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....f any employee; and (F) any goods which have no relationship whatsoever with the manufacture of a final product. Explanation. - For the purpose of this clause, "free warranty" means a warranty provided by the manufacturer, the value of which is included in the price of the final product and is not charged separately from the customer; (l) "input service" means service, - (i) used by a provider of taxable service for providing an output service; or (ii) used 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 ....
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....d MBC Sleepers, which, in turn, has been constructed by using MBC Railway Sleepers and RLS Rails. 9. The respondent was issued show cause notice by the Commissioner on the ground that it has wrongly availed and utilized Cenvat credit and inadmissible Input Service Tax in Central Excise duty paid on Inputs and Capital Goods which have been used for construction of Railway Siding as the goods which were neither the Input Service nor the inputs and Capital Goods for providing "Cargo Handling Services". The Commissioner eventually concluded that the company cannot 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 acti....