2023 (9) TMI 642

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.... CENVAT credit of Rs.66,76,056/- along with interest while also seeking to impose penalty under Section 11AC of the Central Excise Act, 1944. The show-cause notices were adjudicated vide OIO No. 124- 127/SA/CCE/2012 dated 26.11.2012. The appellants are before us against this order. 2. Ms. Krati Singh, learned Counsel for the appellants, submits that the definition of Input Services during the relevant period allowed credit of services which are used by the manufacturer whether directly or indirectly, in relation to the manufacture and clearance of final products up to the place of removal; the definition also included services used in relation to business activity till 01.04.2011; the only exception was to the Outdoor Catering Service used for personal consumption of any employee w.e.f 01.04.2011. She submits that there is no exclusion for allowing credit of input services used for construction; in fact, the services used in setting up of the factory is specifically included in the definition of Input Service; Construction Services were excluded only w.e.f 01.04.2011 whereas the issue pertains to the period February 2008 to December 2008. She further submits that the Service of ....

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....espondents, that the Cenvat credit taken of the tax paid in respect of the said input services can be utilized by the respondents in accordance with the Cenvat Credit Rules. Mr. Amrinder Singh rightly analysed Section 2(l) by dividing it into two parts terming them the 'mean' part and the 'includes' part and that the present case would fall under both the parts of the definition as the phraseology is wide enough to cover the said services, the same being directly or indirectly or in any event in relation to the manufacture of the respondents' final product. 8. The land was taken on lease to construct the factory. The factory was constructed to manufacture the final product. The land and the factory were required directly and in any event indirectly in or in relation to the manufacture of the final product and for the clearance thereof up to the place of removal. But for the factory the final product could not have been manufactured and the factory needed to be constructed on land. The land and the factory are used by the manufacturer in any event indirectly in or in relation to the manufacture of the final product, namely, metal-sheets. The respondents' case, therefore, fa....

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....person authorised by the builder before grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force shall be deemed to be service provided by the builder to the buyer." 11. If in fact the said services were not covered by Rule 2(l), it would not have been necessary to introduce the amendment. It is clear, therefore, that prior to the amendment the setting up of a factory premises of a provider for output service relating to such a factory fell within the definition of 'input service.' The amendment of 2011 is not retrospective and is not applicable to the respondents' case. 5. In respect of Rent-a-Cab Service, Hon'ble High Court of Punjab & Haryana in the case of Maruti Suzuki India Ltd. (supra) observed that: 27. In Commr. of C. Ex., Chandigarh-II v. Federal Mogul Goetze (India) Ltd., 2015 (39) S.T.R. 735 (P&H), the question was whether the CESTAT was correct in holding that the service of transportation of employees of the factory to the factory was an input service within the definition of input service in Rule 2(l) of the 2004 Rules. This Court affirmed the finding of the Tribunal that the t....

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....e manufacturing activity. In fact, the employee is also entitled to conveyance allowance. It also would form part of a condition of service and the amounts spent on the conveyance of the employees is also a factory which will be taken into consideration by the employees in fixing the price of the final product. By no stretch of imagination can it be construed as a welfare measure. It is a basic necessity. To ensure that the work force comes on time at the work place, the employers have taken this measure which has a direct bearing on the manufacturing activity. At any rate it is an activity relating to business." This judgment has been followed in Commissioner of C. Ex., Bangalore-III v. TATA Auto Comp. Systems Ltd., 2012 (277) E.L.T. 315 (Kar.), Commissioner of Central Excise, Bangalore-I v. Graphite India Ltd.,2012 (27) S.T.R. 130 (Kar.) and Commissioner of Central Excise, Bangalore-I v. Bell Ceramics Ltd., 2012 (25) S.T.R. 428 (Kar.). 6. In respect of Outdoor Catering Services, Hon'ble High Court of Bombay in the case of Ultratech Cement Ltd. (supra) held as follows: 31. In our opinion, the ratio laid down by the Apex Court in the case of Maruti Suzuki Ltd. ....

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....pted because unlike the definition of input, which is restricted to the inputs used directly or indirectly in or in relation to the manufacture of final products, the definition of "input service' not only means services used directly or indirectly in or in relation to manufacture of final products, but also includes services used in relation to the business of manufacturing the final products. Therefore, while interpreting the words used in the definition of 'input service', the ratio laid down by the Apex Court in the context of the definition of 'input' alone would apply and not the judgment in its entirety. In other words, by applying the ratio laid down by the Apex Court in the case of Maruti Suzuki Ltd. (supra), it cannot be said that the definition of 'input service' is restricted to the services used in relation to the manufacture of final products, because the definition of 'input service' is wider than the definition of 'input'. 34. Therefore, the definition of input service read as a whole makes it clear that the said definition not only covers services, which are used directly or indirectly in or in relation to the manufacture of final product, but also include....