TaxTMI 
TaxTMI 
2025 (12) TMI 1667
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....and & Two Hundred Seventy Seven only) for the period February 2016 to June 2017 on the grounds mentioned hereinabove and order to recover the same from the party under the provisions of Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11A(1)(a) of the Central Excise Act, 1944. 2. I order for recovery of interest at appropriate rate as applicable on the amount of demand of CENVAT credit confirmed as above under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11AA of the Central Excise Act, 1944. 3. I impose penalty of Rs.2,59,564/- (Rupees Two Lac Fifty Nine Thousand & Five Hundred Sixty Four only) upon the party under Rule 15 (1) of the CENVAT Credit Rules, 2004 read with Section 11AC(1)(a) of the Central Excise Act, 1944. The adjudged dues shall be paid forthwith. This order is issued under the provisions of the Central Excise Act, 1944 and Rules made there under read with Section 174(2) (e) of the CGST Act, 2017." 2.1 Appellant was registered as a Large Taxpayer Unit (LTU), having membership no.LTU/MUM/0118 and one of its units is registered under Central Excise Registration No. AAACA3622KXM005 at A-1, UPSIDC In....
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....; 5103 121 0 0 0 5224 Dec-16 2067 16 0 325 0 2408 Jan-17 41229 49585 0 0 0 90814 Feb-17 73756 17216 0 0 0 90972 Mar-17 12548 5382 0 0 44 603 18577 Apr-17 9038 42194 0 0 0 55069 May17 51343 722 2397547 0 0 2449612 Jun-17 29894 30853 332009 1762' 0 394518 Total 561755 281634 4325974 15526 6388 5191277 2.4 Statement of demand dated 23.03.2018 was issued to the appellant, asking them to show cause as to why:- "(i) Inadmissible CENVAT credit of Service Tax amounting to Rs.51,91,2771- (Rupees Fifty One Lac Ninety One Thousand & Two Hundred Seventy Seven only) wrongly availed by them should not be demanded and recovered from them under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11A(1)(a) of the Central Excise Act, 1944; (ii) Interest should not be recovered from them on the amount of inadmissible CENVAT credit demanded as above und....
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....bsp;No. 34/LTU/MUM/CX/GLT-7/APL/2016-17 dated. 30.12.2016 passed by Assistant Commissioner, Ceritral Excise & Service Tax, Large Tax Payer Unit, Mumbai, is modified to the above extent." • Thus Cenvat credit in respect of Air Travel Agent Service, Rail Travel Agent Service, Club or Association Service has been denied, should be admissible. • Real Estate Agent Service has been used by them as indicated in the impugned order for the purpose of hearing hiring the depot/branches/shore house for storage, distribution and sale of their products. These are used directly in or in relation for the sale of the goods, hence the same are covered by the definition of input services and the credit should be allowed. 3.3 Learned Authorized Representative reiterates the findings recorded in the orders of the lower authorities. 4.1 We have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 Impugned order records as follows in respect of each of the services:- "5.2 Now, I proceed to determine the admissibility of CENVAT credit on various services in question, one by one, as unde....
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....rvice' by the appellant under reverse charge mechanism. Also, there are associations which hold various meetings and conferences to increase the skill and knowledge of the workers/staff. Being a member of association is a need of hour in business today. No company can work in isolation. Association plays important role in setting guiding principles and business practices for the industry. Further, member can also raise their grievances at ministerial and other legal forums through association. This expenditure has been incurred in connection with the business of manufacture activity of paints and not for personal use or consumption of employee Thus, the membership fees paid is an activity exclusively related to business and credit on same would be thus rightly admissible. In support of their claim, they submitted sample copies of invoice no S1P/Jul-16/04/04 dated 15.07.2016 issued by M/S FICCI for Annual subscription fee for corporate membership for 2016-17 and invoice MO/2016-17/568 dated 12.08.2016 issued by M/s Bombay Chamber Commerce & Industry for Annual subscription for the period Apr-2016 to March 2017, before the adjudicating authority. On perusal of the above sample co....
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....al will adversely result in not achieving the desired dutiable final product. Thus, I find that the Real Estate Agent Service received is not critical to the manufacture of dutiable Baal product. 1. therefore, considerably note that I have convinced myself to form a considered opinion that the Instant issue is not sufficiently covered by case laws relied upon by the appellant. Hence credit of this service is not allowable and to be recovered from them along with interest. (iv) Outdoor Catering Services: The appellant have contended that they have engaged outdoor caterers for supply of food and beverages in their canteens situated in different factories. These outdoor caterers are registered with the service tax department under taxable head of "Outdoor Catering service as defined under the Finance Act, 1994, In terms of Section 46 of the l'actories Act 1948, it is mandatory on part of the Company to provide canteen facility to the employees within the factory premises. Failure to comply with the provisions of Section 46 attracts prosecution and penalty under Section 92 of the Factories Act, 1948. Hence, the company has incurred canteen expenses directly or indirectly f....
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....ailed to substantiate their contention as to how facts of their gets identically fit into the facts of those relied upon cases especially in the light of the description mentioned on the sample invoices provided by them. In this regard, I find support from the decision of Hon'ble Supreme Court in the case of CCP, Calcutta Vs. Al Noori Tobacco Products (2004) (170) ELT. 135 (S.C.) wherein it has been observed as under: 11. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact sination of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context These observations must be read in the context in which they appear to have been stated Judgments of Courts are not to be construed us statutes" 13. Circumstantial flexibility one additional or different fact may make a world of difference between conclusions in two cases Disposal of cuses hy blindly placing reliance on a decision is not proper 14. The following wards of Lord Denning in the matter of applying precedents ha....
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....e, I also rely on the decision of Hon'ble Tribunal Mumbai Bench in the case of CEMCO Electrical Pvt. Ltd. vs CCE Pune [2010(18)S.T.R. 177 (Tri.-Mumbai) and the decision in the case of Force Motors Limited Vs CCE [2009(13) S.T.R. 692) and the decision of Hon'ble Tribunal, Bangalore in the case of Arm Embedded Technologies Pvt. Ltd (2016 (45) S.T.R. 133 (Tri.- Bang)). Rail Travel Agent Service: In respect of Rail travel Agent Service, the Appellants' argument is similar to that in the case of Air Travel Service, they have availed this service for travel arrangements for their employees/staff travel to different locations for various business requirements. Since Air Travel Agent Service is akin to Rail Travel Agent, except for the mode of travel, my view, when the Cenvat Credit on Air Travel Agent Service is allowable, I hold that Credit of this service is also allowable. Club or Association Service: The Appellants submit that being members of various associations, they have availed subscription of various associations. For the association the membership fee is paid along with Service Tax. The Appellants contend that the membership in this association enh....
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....as input service and the Cenvat Credits in above service is allowable. Real Estate Agent Service: This service was received for providing accommodation to their employees who were responsible for planning and purchase of their raw materials & packing materials, canvassing sales, marketing promotions and various other business related activities. They contend that services received were purely in relation to their manufacturing activity. The expenditure incurred by them in the aforesaid service forms a part of the cost of the final product. Notwithstanding the fact that the Appellants rely on plethora of decisions on the issue, I proceed to determine whether their exist the nexus between the input service and to the manufacture of dutiable final products and clearance of the same up to the place of removal, in the test whether sufficient nexus exists, it has to be established whether absence of such input/input service, adversely impacts the manufacture of dutiable final productup to the place of removal. I find the Appellants have not substantiated in their submission as to how in absence of receipt of Real Estate Agent Service, the manufacture of the dutiable final produc....
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.... directly or indirectly in relation to manufacture of various final products and clearance of final products. The text laid down have been interpreted by various Courts and Tribunal in numbers of decisions holding that even a loose nexus between input services and their use in manufacture/clearance of products is enough to hold in favour of admissibility of credit. Hon'ble Gujarat High Court in the case of Parth Poly Wooven Pvt. Ltd. [2012 (25) STR 4 (Guj)] have held as follows:- "18. Bearing in mind the above judicial pronouncements, if we revert back to the definition of the term 'input service', as already noticed, it is coined in the phraseology of "means and includes". Portion of the definition which goes with the expression means, is any service used by the manufacturer whether directly or indirectly in or in relation to the manufacture of final products and clearance of final products from the place of removal. This definition itself is wide in its expression and includes large number of services used by the manufacturer. Such service may have been used either directly or even indirectly. To qualify for input service, such service should have been used for the manuf....
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....moval upto the place of depot only that was claimed and if there was any such tax again paid from the place of depot to the place of customers, the Cenvat credit thereof was not claimed and there is no dispute about it. 6. The aforesaid approach of the Full Bench of the CESTAT, as affirmed by the High Court, appears to be perfectly correct and we do not find any error therein. For the sake of convenience, we would like to reproduce the following discussion contained in the judgment of the High Court. "30. The definition of 'input service' contains both the word 'means' and 'includes', but not 'means and includes'. The portion of the definition to which the word means applies has to be construed restrictively as it is exhaustive. However, the portion of the definition to which the word includes applies has to be construed liberally as it is extensive. The exhaustive portion of the definition of 'input service' deals with service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products. It also includes clearance of final products from the place of removal. Therefore, services received or rendered by the manufa....
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....service' includes not only the inward transportation of inputs or capital goods but also includes outward transportation of the final product upto the place of removal. Therefore, in the later portion of the definition, an outer limit is prescribed for outward transportation, i.e., up to the place of removal. 7. As mentioned above, the expression used in the aforesaid Rule is "from the place of removal". It has to be from the place of removal upto a certain point. Therefore, tax paid on the transportation of the final product from the place of removal upto the first point, whether it is depot or the customer, has to be allowed. 8. Our view gets support from the amendment which has been carried out by the rule making authority w.e.f. 1-42008 vide Notification No. 10/2008-C.E. (N.T.), dated 1-32008 whereby the aforesaid expression "from the place of removal" is substituted by "upto the place of removal". Thus from 1-4-2008, with the aforesaid amendment, the Cenvat credit is available only upto the place of removal whereas as per the amended Rule from the place of removal which has to be upto either the place of depot or the place of customer, as the case may be. Thi....
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....oducts and clearance of final products, up to the place of removal, and includes services used in relation to 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 up to 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 up to the place of removal; but excludes. - (A) service portion in the execution of a works contract and construction services including service listed under clause (b) of Section 66E of the Finance Act (hereinafter referred as specified services insofar as they are used for - (a) construction or execution of works contract 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) Ser....
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....y exclude the services provided in relation to "outdoor catering service". Admittedly, such services prior to 1-42011 have been held to be covered by the definition of 'input service'. In fact, the need for exclusion would arise only when the services are otherwise covered by the definition. The Legislature in its wisdom has excluded certain services from the availment of Cenvat credit w.e.f. 1-4-2011, when such services are otherwise covered by the main definition clause of the 'input service'. To interpret, the said input clause, in such manner so as to hold that such services have direct or indirect nexus with the assessee's business and thus would be covered by the definition, would amount to defeat the legislative intent. 7.2 It is well settled that the legislative intent cannot be defeated by adopting interpretation which is clearly against such intent. Further, we find that from the Budget Speech of the Finance Minister dated 28-2-2011 wherein the Hon'ble Minister has categorically stated that due to complexities there has been many legal issues on the availability of credit on a number of inputs or input services which are being rationalized by laying down clear de....