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TMI Blog2015 (9) TMI 1160X X X X Extracts X X X X X X X X Extracts X X X X ..... elvan, AC (AR) ORDER Assessee is in appeal in respect of following three issues in the batch of appeal listed as E/00450 to 00453/2008:- (i) Denial of credit on outward transportation; (ii) Denial of Cenvat credit on mobile phone services; and (iii) Denial of Cenvat credit the documents showing the payment of tax addressed to Head Office. 2. Revenue is in appeal against only on the issue of denial of Cenvat credit on Outward transportation to the assessees. 3. So far as the claim of Cenvat credit in respect of service tax paid on the Outward Transport Services is concerned, law is well settled by Hon ble Madras High Court in the case of Commissioner of Central Excise, Chennai Vs M/s. Borg Warner Morse Tec. Murugappa Pvt. Ltd. and CESTAT, Chennai reported in 2015-TIOL-831-HC-MAD-CX, to allow such claim in para 11 of the judgment, which reads as under:- 11. With regard to the outward freight charges, the Kanartaka High Court in the case of CCE V. ABB Ltd., Bangalore reported in [2011] 44 VST 1, 2011-TIOL-395-HC-KAR-ST which was rendered on the appeal filed by the Department as against the decision of the full Bench of the Tribunal, while answering the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has used the word 'includes'. Therefore, the later portion of the definition has to be construed liberally. Specifically what are the services which fall within the definition of 'input service' has been clearly set out in that portion of the definition. Thereafter, the words 'activities relating to business' an omni-bus phrase is used to expand the meaning of the word 'input service'. However, after using the omni-bus phrase, examples are given. It also includes transportation. The words used are (a) inward transportation of inputs or capital goods (b) outward transportation upto the place of removal. While dealing with inward transportation, they have specifically used the words 'inputs' or 'capital goods'. But, while dealing with outward transportation those two words are conspicuously missing. The reason being, after inward transportation of inputs or capital goods into the factory premises, if a final product emerges, the final product has to be transported from the factory premises toll the godown before it is removed for being delivered to the customer. Therefore, 'input service' includes not only the inward transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluded, it is impermissible to read those words as in the earlier portion of the definition, it is specifically provided for. It is a well known rule of interpretation that when the statute uses words and phrases in a particular section, meaning has to be given in each of those sections. When the statute provides specifically for a particular contingency, it is to be so interpreted and after so interpreting, it cannot be said in another portion where general words are used, it also includes what is specifically provided. Therefore, the finding recorded by the CESVAT that the phrase and expression 'activities relating to business' admittedly covers transportation upto the customer's place was entirely unnecessary. This interpretation of ours find support from the subsequent conduct on the part of the Central Government, which amended Rule 2 (i)(ii). By notification No.10/2008-C.E.(N.T.) dated 1.3.2008, the words 'clearance of final products upto the place of removal' were substituted in the place of the words 'clearance of final products from the place of removal'. The intention of the legislature is thus manifest. Till such amendment, the words 'cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Gujarat Ambuja Cements' case, the Principal Bench of CESTAT, New Delhi, had taken the view '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 from the place of removal and service used for outward transportation up to 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 up to the place of removal. When these two clauses are read together, it becomes clear that transport service credit cannot go beyond transport up to the place of removal. The two clauses, one dealing with general provision and another dealing with a specific item, are not be read disjunctively as to bring about conflict and it defeat the laws scheme. The purpose of interpretation is to find harmony and reconciliation among the various provisions'. Giving effect to the said judgment, when the circular was issued by the Board dated 23.8.2007 the circular came up for consideration before the Punjab and Haryana High Court where it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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