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TMI Blog2014 (7) TMI 1196X X X X Extracts X X X X X X X X Extracts X X X X ..... nected to the business purpose of the assessee. Therefore, in view of the definition of input service and the ratio laid down by the Hon'ble Bombay High Court, any service received and which is commercially required for the purpose of carrying on the business of the service provider, will be covered by the expression 'activity relating to business' contained in Rule 2(l) of the Cenvat Credit Rules, 2004. The nature, purpose and use of the disputed services by JBL establish the fact that the expenditure incurred for those purported disputed services are commercially required to be incurred with a view to facilitate the carrying on the business of providing the taxable service, and thus, confirming to the expression 'activities relating to business' as contained in the definition clause of 'input service'; as the word 'business' is one of wide import and in fiscal statutes, it must be construed in a broad rather than a restricted sense. Therefore, denial of refund benefit to JBL under Rule 5 ibid by the authorities below is not justified. I am also of the considered view that there are no merits in the appeals filed by the Revenue, because of the fact that the nexus between the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. ST/1388/2012 ST/1359/2012 8. ST/1393/2012 ST/1358/2012 9. ST/1394/2012 ST/1403/2012 10. (Already decided) ST/1402/2012 11. -do- ST/1404/2012 12. No appeal filed ST/1405/2012 2. The brief facts of the case are that JBL is a 100% EOU under the jurisdiction of Cochin Special Economic Zone (CSEZ) and is also registered with the Department of Scientific and Industrial Research (DSIR). It renders early drug discovery services, for which it is registered with the Service Tax Department under taxable category of Scientific and Technical Consultancy Service, which is mostly exported by M/s JBL to its overseas clients. To provide the said output service, JBL receives various input services and avails CENVAT credit of the service tax paid on such input services. Since JBL is engaged in exporting the output service on which no service tax is leviable, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of input service contained in Rule 2(l) of the Cenvat Credit Rules, 2004. He further submitted that since the disputed services have been used for the business related activities of JBL, service tax paid on those services qualify for availment of Cenvat credit. To support his submissions that Cenvat credit cannot be denied on the aforementioned disputed services, the ld. Advocate has placed reliance on the Final Order No. 26721-26723/2013 dated 09.01.2013 passed by this Tribunal in their own case. Further, the ld. Advocate also relied on the decisions of this Tribunal in the case of Dell International Services India Pvt. Ltd. Vs. CCE, Bangalore [2010(17) STR 540 (Tri. Bang.)], Convergys India Services Pvt. Ltd. Vs. CST, New Delhi [2012(25) STR 251 (Tri. Del.)] and in the case of CCE, Hyderabad Vs. Deloitte Tax Services India Pvt. Ltd. [2008(11) STR 266 (Tri.)], to justify his stand that denial of Cenvat credit on the disputed services is not justified, and thus, JBL is entitled for refund claim filed under Rule 5 of the Cenvat Credit Rules, 2004. 7. With regard to appeal No. ST/782/2010, the submissions of the ld. Advocate are that the refund applications in most of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 (SC) have discussed the basic principles of 'commercial expediency'. The Hon'ble Apex Court have laid down the law that if an expenditure is commercially required to be incurred with a view to benefit the trade and to facilitate the carrying on the business, such expenditure will be allowed as deduction under Section 37 of the Income Tax Act, 1961. 11. The business activities in the case of a service provider are not only confined to mere proving the service directly, but also include other activities, which he may be required for accomplishing the purpose of business. For smooth functioning of the business of providing the service and other like activities, the service provider may use other services, which are ancillary and incidental for accomplishing the main purpose. In such an eventuality, it cannot be said that the function of those ancillary services are not connected to the business purpose of the assessee. On perusal of the definition of 'input service', it would transpire that the substantive part covers services used directly or indirectly, in or in relation to manufacture of final product/provision of service; whereas, the inclusive part covers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he phrase activities relating to business further signifies the wide import of the phrase activities relating to business . The Rule making authority has not employed any qualifying words before the word activities, like main activities or essential activities etc. Therefore, it must follow that all and any activity relating to business falls within the definition of input service provided there is a relation between the manufacturer of concentrate and the activity. Therefore, the phrase activities relating to business are words of wide import. 12. Further, on perusal of the statute book, it reveal that 'input service' is not restricted to services used in or in relation to providing the output service, but the same extends to all the services used by the service provider, in relation to business of providing the output service, involving numerous activities. It is not practically possible to specify each and every activity of business in the definition clause, for which, the words 'such as' have been used, meaning thereby that the list provided therein is only illustrative and not exhaustive. In the case of Commissioner of Central Excise, Nagpur - Vs. - Ultr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e phone service is admissible provided the mobile phone is used for providing output service or used in or in relation to manufacture of finished goods. Mobile phone service is neither used in the manufacture of final product nor it is specifically included in the definition of input service. Even then, the C.B.E.C. has construed the definition of input service widely so as to cover not only the services specifically enumerated in the definition of input service but also cover all services which are used in relation to the business of manufacturing the final products. Therefore, the argument of the revenue which runs counter to stand taken by the C.B.E.C. cannot be accepted. 13. The ratio laid down by the Hon'ble Bombay High Court as referred above in context with the definition of 'input service' is that the definition is exhaustive and is not confined to the services itemized therein after the phrase such as; rather the said definition takes within its ambit every possible service used by the service provider in providing the output service. It has been ruled that the term 'business' in context with the definition of 'input service' cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by JBL against the impugned order No. 42 to 44/2010 dated 19.01.2010 is concerned, the submission of the ld. Advocate is that the refund applications were filed within the prescribed time limit, which were not properly verified by the refund sanctioning authority. At this juncture, it is not appropriate for the Tribunal to ascertain the dates, when the refund applications were filed by JBL for the purpose of computation of the limitation. Therefore, I am of the opinion that the matter should be remanded back to original authority for ascertainment of fact regarding the date of filing of the refund applications and if the applications were filed within the stipulated time limit, then to decide the matter in line with the observations recorded above. 19. In view of the foregoing, the appeals filed by both JBL and the Revenue Department are disposed of in the following terms: (a) Appeal Nos. ST/783, 784, 1392, 1390, 1419, 1388, 1393, 1394/2012 filed by JBL are allowed. (b) Appeal No. ST/782/2010 filed by JBL is allowed by way of remand to the original authority for de-novo adjudication in the light of the observations in para 18 above. The appellant should be given ..... X X X X Extracts X X X X X X X X Extracts X X X X
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