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TMI Blog2007 (4) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... d was availing the Cenvat credit even on input services. It was noticed by the Revenue that, the assessee had availed Cenvat credit of Service Tax paid on outward freight. Two show cause notices were, therefore, issued on 6-3-2006 and 21/24-4-2006 to deny the respondent Cenvat credit availed by it on outward transportation. 4. It appears from the record that, it was alleged against the respondent that, the goods were sold by it at its factory gate and hence the place of removal was the factory and, therefore, the outward transportation from its factory was not an input service as defined in Rule 2(1) of the Cenvat Credit Rules, 2004. 4.1 The respondent contested the matter by asserting that, on the correct interpretation of Rule 2(l)(ii) of the Cenvat Credit Rules, 2004, clearance of final products from the place of removal included transportation to their destination and such input service of outward transport was eligible for taking of the credit by the manufacturer. 5. The adjudicating authority on the basis of the material on record and on interpretation of Rule 3(1) read with Rules 2(l) of the Cenvat Credit Rules, 2004, held that, input service , as defined, covers ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, which was located in the industrial area Malanpur in District Bhind (MP). He relied upon the decision of the Division Bench of this Tribunal rendered on 14th March, 2007 in M/s. Gujarat Ambuja Cements Ltd. v. CCE, Ludhiana, (Excise Appeal No. 66/2007), 2007 (212) E.L.T. 410 (Tribunal) = 2007 (6) S.T.R. 249 (Tribunal) in which, considering an identical issue, the Tribunal, on interpretation of definition of input service , held as under : 14. The interpretation canvassed by the appellant is also contrary to the rule on the subject contained in the judgment of Hon ble Supreme Court in the Reserve Bank case. A statute is to be read as a whole and words used interpreted taking into account the context in which they are used. Definitions are to be looked at as a whole. Clauses of a definition are not to be read disjunctively. In the present case, the statute deals with a tax on manufacture. The definition is in the context of relief in regard to duty/tax paid on input services. Post sale transport of manufactured goods is not an input in manufacture. The two clauses in the definition take care to circumscribe input credit by stating that service used in relation to the clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Tax Officer, Central Section, Assessment Wing, Calcutta Ors., reported in (1998) 1 SCC 458, rendered in the context of West Bengal Sales Tax Act, 1954, in para 7 of which it was held that, the first part of the definition of sale price of Section 2(d) of that Act used the words means and includes . The first part of the definition defined the meaning of the word sale price . It was held that, the interpretation thereof was in no way controlled or affected by the second part, which would include certain other things in the definition. 7.1 The learned Counsel then tried to argue a case, totally different, tried to be placed on record in the so-called synopsis, and contended that, the manufacturer had other units at Gurgaon and Chennai, and since a manufacturer was entitled to take credit of input service , even in respect of such outward transport, he could not be denied the credit for his units at Gurgaon and Chennai, which was in the nature of inward transportation. The practice of bringing about totally a new case on different factual parameters, by inserting it in a synopsis, is deprecated. Nowhere, till the appeal memo was filed, before the Commissioner (Appeals) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val. In Gujarat Ambuja Cements Ltd. v. CCE, Ludhiana (supra), the Division Bench of this Tribunal, while considering the two clauses in the definition of input service has held that, they take care to circumscribe input credit by stating that service used in relation to the clearance from the place of removal and service used for outward transportation upto the place of removal, are to be treated as input service . The first clause does not mention transport service in particular. The second clause restricts transport service credit upto the place of removal. When these two clauses are read together, it becomes clear that transport service credit cannot go beyond transport service upto the place of removal. 8.1 The expression clearance of final product from the place of removal has to be understood in the context of the preceding words, which refer to service used by the manufacturer in relation to the manufacture and clearance of final products, from the place of removal, which itself may require input service. Outward transport of final products would start after the clearance of the final product from the place of removal. The clearance of final product, is an ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which it has been used. Therefore, applying the ratio of the decision of the Division Bench in M/s. Gujarat Ambuja Cements Ltd. v. CCE, Ludhiana (supra), the impugned order of the Commissioner (Appeals), holding that the Service Tax paid on transportation of finished goods from the factory to the premises of the customer, can be taken as Cenvat credit by the respondent, cannot be sustained. 9. On the issue of penalty imposed under Rule 15(3), it is pointed out by the learned Counsel that, in the background of facts, similar to the facts in the present case, while following the ratio of the decision in M/s. Gujarat Ambuja Cements Ltd. v. CCE, Ludhiana (supra), and upholding the order confirming the denial of Cenvat credit, the Division Bench in J.K. Cement Works v. CCE, Jaipur, decided on 16-4-2007, set aside the penalty. It was also pointed out that, the learned Single Member, while deciding the Service Tax Appeal No. 470 of 2006-NB(SM), had taken a similar view on 30th March, 2007, while confirming the denial of Cenvat credit by following the decision in M/s. Gujarat Ambuja Cements Ltd. v. CCE, Ludhiana (supra), set aside the penalty, which was imposed under Rule 15(3). Since, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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