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TMI Blog2013 (9) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... period 2006-07 to 2010-11. The amount that is demanded is Rs. 1,84,920/- along with interest. Further, a penalty of Rs. 1,84,920/- is imposed on the appellant under section 11AC of the Central Excise Act read with Rule 15 (2) of Cenvat Credit Rules, 2004. 3. The credit in question is taken by the corporate office at Chennai in their capacity as input service distributor as envisaged in Rule 2 (m) of Cenvat Credit Rules, 2004 and passed on to their factory at Papanasam, Thanjavur for utilization for payment of excise duty. 4. The adjudicating authority held that the definition of input service in Cenvat Credit Rules can extend only to services which have a proximate nexus to manufacturing activity; the definition cannot be extended to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 4.2 and 4.3 of the order is re-produced below: 4.2 Rent a cab, telephone and Contract bus services are used by the officers and executives at their corporate office of the company and the appellants did not produce any evidence either direct or corroborative to show that such service used by the officers and executives is in or in relation to manufacturing activity. Therefore, it is clear that the claim made by appellants is not authentic as the impugned services for officers and executives was purely for personal reasons like comfort & is a welfare measure only as a part of the employment. On the other hand, the appellants failed to prove that providing of such service resulted either in completion of the manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri-Bang credit on rent a cab services and outdoor catering services were allowed when it was not in dispute that the services were received in the factory premises. Contrary to this the services pertaining to the appellants were not received in the factory premises. In the case of Commissioner of C. Ex Nasik Vs Cable Corporation 2008 (12) STR 598, only when Rent a cab service used for bringing employees working in the factory for manufacture of goods, the said service was considered to be used indirectly in relation to manufacture or as part of business activity. In the case of Commissioner of C. Ex., Jaipur II Vs. J.K. Cement Works, 2009 (14) STR 538 citing on the above case law of C. Ex Nasik Vs Cable Corporation, the respondents therein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epairs 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, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal; 9. The Counsel argues that an input service being intangible cannot be seen in the final product unlike in the case of most of the inputs. He argues that their corporate office is managing their business but for which the manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply to transportation of executives and employees from residence to corporate office and back. This argument is almost like the argument that a factory worker may take during wage negotiation that the entire business depends on them which is not correct. If there is no management by the corporate office, a manufacturing organization cannot survive finance cannot be procured, raw materials cannot be purchased, manufactured goods cannot sold and so on. So the argument to separate the corporate office from manufacturing activity, for the purpose of deciding eligibility to Cenvat credit on services received, is flawed especially having regard to the fact many services usually received by corporate office is listed specifically in the inclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 13. Further I note that the decisions relied upon by the Ld. A. R. for Revenue are in relation to services availed in residential colonies of assessees and not corporate office. I find no reason to extend this distinction made in respect of residential colonies to services received in corporate office. 14. Though the matter is examined above with reference to rent-a-cab service similar logic should apply to contract bus service and telephone service. In the case of telephone service the clarification issued by Ministry vide para 8.3 of Circular No. 97/8/2007-S.T., dated 23-8-2007 is very relevant. However the Commissioner (Appeal) has recorded that the appellant has not produced evidence to show the nexus between the manufacturing activ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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