9911796707
TMI Blog2007 (3) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... in relation to traded goods. 3. Applicant is having units at Sewn, Mumbai, Aurangabad and in Himachal Pradesh. The unit in Himachal Pradesh came into existence in April 2005 and the goods manufactured in that unit are completely exempted from duty. This unit in Baddi (H.P.) was only manufacturing tooth paste which was also being manufactured by Sewn unit. The Aurangabad unit on the other hand was manufacturing tooth power and shaving cream out of which tooth powder was exempt from duty. In addition to the above, the applicants were also purchasing duty paid goods manufactured for them by their contractor and were trading in the same. They were certain common input services which were being used for the manufacture of both dutiable as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow cause notice was accordingly issued proposing to deny the entire credit availed on common input services which was confirmed and penalty of equivalent amount imposed. 4. Heard both sides. 5. We have considered the submissions. The plea of the applicant is that the input service has been defined in Rule 2(1) of the Cenvat Credit Rules, 2004 which reads as under :- "(1) "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted goods or exempted services, except in the circumstances mentioned in sub-rule (2)." It was submitted that unlike Rule 2(1), Rule 6 seeks to deny the credit only in respect of such input service which is used in the manufacture of exempted goods and does not debar taking credit in respect of input service which is used in relation to the manufacture of exempted goods. Services provided by them i.e. advertisement, market research, share registry, event management are not such which are used in the manufacture of final product or in relation to the manufacture of final product and therefore the credit cannot be denied. It was submitted that these services cannot be considered to be used in relation to the manufacture of final exempted pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that credit shall not be allowed on inputs and input services used exclusively for the manufacture of exempted goods. Surely it cannot be the applicants' case that even in respect of service used exclusively for manufacture of exempted goods, services which are used in relation to manufacture of exempted goods will nevertheless be entitled to credit. Once input service itself has been denied as being service used in or in relation to the manufacture of final product, the word 'input service' wherever it occurs will mean "service used in or in relation to manufacture of final product" and not otherwise. 8. In view of above, no prima facie case for complete waiver of pre-deposit has been made. We however find that the applicants have stated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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