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TMI Blog2011 (4) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... on the service tax paid on the outward transportation of the goods from the factory gate to the customers' premises. The Tribunal in its short order, relied on the Larger Bench decision in the case of ABB Ltd. and Ors. v. C.C.E. & S.T., Bangalore & Ors. reported in 2009 (92) RLT 665 = 2009 (15) S.T.R. 23 (Tribunal-LB). 4. Though the question framed by the appellant is somewhat different, we re-frame the question for the purpose of deciding all appeals as follows :- "Whether in the facts of the case, the Tribunal was justified in holding that the assessee was entitled to avail Cenvat credit on the service tax paid on GTA service on outward transportation of the goods beyond the place of removal in view of definition contained in Rule 2(l) of the Cenvat Credit Rules, 2004 defining term 'input service' ?" 5. The respondent-assessee, in case on hand, is engaged in manufacture of printed film. During the course of audit of the records by the Excise Department, an objection was raised that the respondent had taken Cenvat credit of Rs. 1,46,417/- towards service tax paid on Goods Transport Agency (GTA for short) on outward transportation of the goods. Believing that the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny case, without establishing that the sale was on FOR basis, that the goods were delivered by the assessee at his cost at the door-step of the purchaser, the assessee cannot take the benefit of Board's circular dated 23-8-2007. 9. On the basis of the above facts, counsel appearing for either sides have made detailed submissions before us. Appearing for the Department, learned counsel Shri Darshan Parikh contended that in view of the definition of 'input service' under Rule 2(l) of the Cenvat Credit Rules, no credit can be availed for service tax paid on outward transportation beyond the place of removal. He drew our attention to the statutory provisions applicable and relied on the following decisions : (i) In the case of Maruti Suzuki Ltd. v. Commissioner of Central Excise, 2009 (240) E.L.T. 641 (S.C.) wherein the Apex Court was examining the assessee's claim of credit on the eligible inputs utilized in generation of electricity, part of which was cleared on the contractual rates in favour of joint ventures, vendors, etc. which was sold at a price. The Apex Court held that the assessee is entitled to credit on the eligible inputs in utilizatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitute the value of goods for the purpose of computation of excise duty. In that case, the assessee was engaged in manufacturing electric meters and supplied the same to the State Electricity Boards in terms of advertisement under which the value of electric meters was to be fixed at the factory gate and freight and insurance charges were to be charged on an average basis and not on actuals. In this background, the Apex Court held that : "In that view of the matter and for the reasons stated hereinabove, we have no doubt in our mind that the authority in appeal as also the Tribunal were correct in their view that the amount claimed by way of transportation charges and insurance cannot be considered for determining the value of the electric meters supplied." 10. On the other hand, appearing for the assessees, learned counsel Shri Devan Parikh submitted that the definition of the term 'input service' is sufficiently wide and Legislature has used the expression 'means and includes'. Since the outward service of transportation is covered in the main body of the definition "means", later portion of the definition which is inclusive in nature cannot be utilized to exclude such se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es are services provided by service providers like stock-brokers, practising chartered accountants, practising cost accountants, security agencies, tour operators, event managers, travel agents etc." (ii) In the case of Coca Cola India Pvt. Ltd. v. Commissioner of C. Ex., 2009 (15) S.T.R. 657 (Bom.) = 2009 (242) E.L.T. 168 (Bom.), the Bombay High Court was examining whether services of advertising and marketing procured by the appellant Coca Cola India Limited in respect of advertisement for aerated waters are covered by the definition of 'input service' in Rule 2(l) of the Cenvat Credit Rules, 2004. The High Court noticed that the definition is worded in the expression "means and includes". The Bench also put stress on the words "in relation to" manufacture of final products and clearance of final products used in the definition and observed that : "26. The definition of input service employs the phrase activity relating to business. The words relating to further widens the scope of the expression activities relating to business. This is in view of following observations of Supreme Court in Doypack Systems (P) Limited v. Union of India - 1988 (36) E.L.T. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usive part of the definition of "input service". The services covered under the inclusive part of the definition of input service are services which are rendered prior to the commencement of manufacturing activity (such as services for setting up, modernization, renovation or repairs of a factory) as well as services rendered after the manufacture of final products (such as advertisement, sales promotion, market research etc.) and includes services rendered in relation to business such as auditing, financing.... etc. Thus, the substantive part of the definition "input service" covers services used directly or indirectly in or in relation to the manufacture of final products, whereas the inclusive part of the definition of "input service" covers various services used in relation to the business of manufacturing the final products. In other words, the definition of "input service" is very wide and covers not only services, which are directly or indirectly used in or in relation to the manufacture of final products but also includes various services used in relation to the business of manufacture of final products, be it prior to the manufacture of final products or after the manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) "place of removal" means - (i) a factory or any other place or premises of production or manufacture of the excisable goods (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty; (iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory from where such goods are removed." Rule 2 of Cenvat Credit Rules defines several terms used in the Rules including the term "input service" as under : 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 from 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 relation to such factory or premise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re uses the expression 'means and includes', the definition is meant to be exhaustive. Such principles, however, are subject to exceptions. 17.1 In the case of V.F. & G. Insurance Co. v. M/s. Fraser & Ross, AIR 1960 SC 971, the Apex Court observed that when expression "means" is used, generally the definition is exhaustive. 17.2 In the case of State of Bombay v. Hospital Mazdoor Sabha, AIR 1960 SC 610, it was observed that "it is obvious that the words used in an inclusive definition denote extension and cannot be treated as restricted in any sense" "Where we are dealing with an inclusive definition it would be inappropriate to put a restrictive interpretation upon terms of wider denotation". 17.3 In the case of Ramanlal Bhailal Patel v. State of Gujarat, AIR 2008 SC 1246 the Apex Court found that 'person' is defined in an inclusive definition. It was observed that in such a case, the use of word 'includes' indicates an intention to enlarge the meaning of the word used in the Statute. 17.4 In the case of Bharat Cooperative Bank (Mumbai) Ltd. v. Coop. Bank Employees Union, AIR 2007 SC 2320, the Apex Court observed as follows : "On the other hand, when the wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the educational institutions falling in the categories specified in Rule 2(b) and other educational institutions are not comprehended." 17.6 In the case of M/s. Black Diamond Beverages v. Commercial Tax Officer, Calcutta, AIR 1997 SC 3550, wherein, interpreting the definition of 'sale price' the Apex Court observed as under : "7. It is clear that the definition of 'sale price' in Section 2(d) uses the words 'means' and 'includes'. The first part of the definition defines the meaning of the word 'sale price' and must, in our view, be given its ordinary, popular or natural meaning. The interpretation thereof is in no way controlled or affected by the second part which 'includes' certain other things in the definition. This is a well-settled principle of construction. Craies on Statute Law (7th Edn. 1.214) says : "An interpretation clause which extends the meaning of a word does not take away its ordinary meaning............ Lord Selborne said in Robinson v. Barton Eccles Local Board, (1883) 8 App Case 798 (801): An interpretation clause of this kind is not meant to prevent the word receiving its ordinary, popular, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f such owner. The owner cannot escape the liability by stating that any person is for the time being in charge of such vehicles, and, therefore, such person is the owner and not the permit holder. 20. The general rule of construction is not only to look at the words but to look at the context, the collocation and the object of such words relating to such matter and interpret the meaning according to what would appear to be the meaning intended to be conveyed by the use of the words under the circumstances. Sometimes definition clauses create qualification by expressions like "unless the context otherwise require"; or "unless the contrary intention appears"; or "if not inconsistent with the context or subject-matter". "Parliament would legislate to little purpose", said Lord Macnaghten in Netherseal Co. v. Bourne, (1889) 14 AC 228, "if the objects of its care might supplement or undo the work of leqislation by making a definition clauses of their own. People cannot escape from the obligation of a statute by putting a private interpretation on its language." The courts will always examine the real nature of the transaction by which it is sought to evade the tax, &e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the definition of the term to make it exhaustive, but in no manner can the expression 'includes' be utilized to limit the scope of definition provided in the main body of the definition. To our mind this was also not the intention of the Legislature in the present case. 20. There, of course, are certain areas which still remain to be cleared. It was vehemently contended before us by the counsel for the Revenue that later portion of the definition which provides for the inclusion clause limits the outward transportation service up to the place of removal. That being so, according to them, the outward transport service utilized by the manufacturer beyond the place of removal would not qualify as an input service within the definition of Rule 2(l). We may only notice two things in this regard. Firstly, in our view, when we find that outward transport service is covered by the main body of the definition which provides for means part, as specifically including any service directly or indirectly in or in relation to manufacture of final product or clearance of final product from the place of removal, no interpretation of the later part of the definition would permit us to exclud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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