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TMI Blog2015 (8) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rule 2 (1) of the Cenvat Credit Rules, 2004 ? 2. Whether the cenvat credit of the service tax, so paid for receiving the outdoor caterer's services by them for providing canteen services to their employees, was eligible for availment and utilization in terms of Rule 3 read with Rule 2 (1) ? and 3. Whether the Customs, Excise and Srvice Tax Appellate Tribunal, South Regional Bench, Chennai, was correct in relying on the impugned Final order on the ratio of the decisionof the Larger Bench in the case of CCE, Mumbai, vs. GTC Industries Limited, reported in 2008 (12) STR 468 (Tri.L.B.) without recording any findings as to the applicability of the ratio of the relied on case to the facts of the presen cast and allow the credit of service tax paid ont he outdoor catering services to M/s. M.M.Forging Limited, Viralimalai ? 2. The brief facts of the assessee's case are as follows: "The assessee is a manufacturer of forgings (machined and unmachined) falling under Ch.7326 19 10 and 7326 90 99. The assessee is availing credit on inputs, capital goods and input services in terms of provisions contained in CCR '04 and utilize such credit for payment of duty on the final p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... catering services, provided in the factory for its employees, as input service. 6. In an identical circumstance, this Court dealt with the issue in a batch of appeals in C.M.A.Nos.2 of 2010 batch and vide judgment dated 13.02.2015 held in favour of the assessee by following the decision of the Bombay High Court in the case of CCE V. Ultratech Cement Ltd. reported in 2010 -TIOL - 745 - HC- MUM - ST, wherein all the contentions raised by the respective parties have been considered in extenso including the definition of 'input service' as defined in the case of Maruti Suzuki Ltd. V. CCE reported in 2009 (240) ELT 641 (SC) . The Bombay High Court came to the conclusion that the decision of the Larger Bench of the CESTAT in the case of CCE V. GTC Industries Ltd. 2008 (12) STR 468 is a correct law, however, with a rider that where the cost of the food is borne by the worker, the manufacturer cannot take credit of that part of the service tax which is borne by the consumer. 7. For better clarity, the relevant portion of the decision of the Bombay High Court in the case of CCE V. Ultratech Cement Ltd. reported in 2010 -TIOL - 745 - HC- MUM - ST reads as follows: "28. In the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contingency the Legislature has incorporated the inclusive part after the substantive part qualified by the place of use. For example, one of the categories mentioned in the inclusive part is "used as packing material". Packing material by itself would not suffice till it is proved that the item is used in the course of manufacture of final product. Mere fact that the item is a packing material whose value is included in the assessable value of final product will not entitle the manufacturer to take credit. Oils and lubricants mentioned in the definition are required for smooth running of machines, hence they are included as they are used in relation to manufacture of the final product. The intention of the Legislature is that inputs falling in the inclusive part must have nexus with the manufacture of the final product. 16. In our earlier discussion, we have referred to two considerations as irrelevant, namely, use of input in the manufacturing process, be it direct or indirect as also absence of the input in the final product on account of the use of the expression "used in or in relation to the manufacture of final product". Similarly, we are of the view that consideration suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice extends to services used prior to/during the course of/after the manufacture of the final products. The fact that the definition of 'input service' is wider than the definition of 'input' would make no difference in applying the ratio laid down in the case of Maruti Suzuki Ltd. (supra) while interpreting the scope of 'input service'. Accordingly, in the light of the judgment of the Apex Court in the case of Maruti Suzuki Ltd. (supra), we hold that the services having nexus or integral connection with the manufacture of final products as well as the business of manufacture of final product would qualify to be input service under rule 2(l) of 2004 Rules. 32. As rightly contended by Shri Shridharan, learned Counsel for the respondent - assessee, in the present case, the assessee carrying on the business of manufacturing cement by employing more than 250 workers is mandatorily required under the provisions of the Factories Act, 1948 to provide canteen facilities to the workers. Failure to do so entails penal consequences under the Factories Act, 1948. To comply with the above statutory provision, the assessee had engaged the services of a outdoor caterer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. 35. The argument of the revenue, that the expression "such as" in the definition of input service is exhaustive and is restricted to the services named therein, is also devoid of any merit, because, the substantive part of the definition of 'input service' as well as the inclusive part of the definition of 'input service' purport to cover not only services used prior to the manufacture of final products, subsequent to the manufacture of final products but also services relating to the business such as accounting, auditing ....... etc. Thus, the definition of input service seeks to cover every conceivable service used in the business of manufacturing the final products. Moreover, the categories of services enumerated after the expression 'such as' in the definition of 'input service' do not relate to any particular class or category of services, but refer to variety of services used in the business of manufacturing the final products. There is nothing in the definition of 'input service' to suggest that the Legislature intended to define that expression restrictively. Therefore, in the absence of any intention of the Legislature to restr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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