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TMI Blog2016 (6) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... foundation - Held that:- The works contract service in relation to building, civil structure, laying of foundation etc. has been brought within the ambit of exclusion to exclude not only setting up but something more. - The credit availed on services used for laying foundation of tank/cooling tower is disallowed. Decided partly in favor of assessee. - E/22719/2014 - A/30482/2016 - Dated:- 25-5-2016 - Ms. Sulekha Beevi, C.S., Member (Judicial) Shri Karan Talwar and Shri G. Prahlad, Advocate for the appellant. Shri Kamal Puggal, Assistant Commissioner (AR) for the respondent. ORDER The appellants are manufacturers of motor vehicles and components. They are availing CENVAT credit facility of duty paid on inputs, capital goods and input services. On verification of records it was found that during the period April 2011 to December 2012appellants availed credit for an amount of ₹ 1,36,352/- on services like works contract service which according to department was not admissible. A show cause notice was issued to appellants and after due process of law, the original authority vide order dated 30.12.2013, allowed credit of ₹ 1,24,954, disallowed credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f motor vehicles. That original authority rightly held that these services are used for repairs, renovation or modernisation and would fall within the inclusive portion of the definition of input service and that they do not fall under the exclusive portion of the definition. In the appeal filed by department, the Commissioner (appeals) held that these works fall within the exclusion portion of the definition. 5. The learned counsel drew attention to the definition of input service as it stood prior to 1.04.2011, and also after 1.4.2011 to 30.06.2012 and the definition w.e.f. 01.07.2012. The definitions are noticed as under for better appreciation. 1. Definition of input service upto 31-3-2011 :- Rule 2(I) 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, upto the place of removal; and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch as leave or home travel concession, when such services are used primarily for personal use or consumption of any employee. 6. The argument advanced for the appellant is that the works undertaken do not fall in the exclusion portion of the definition of input service . That prior to 01.04.2011 the inclusive portion f the definition of input service had the words setting up besides the words, modernisation, renovation or repairs of a factory. Accordingly, prior to 01.04.2011 credit was admissible on input services used for setting up/ construction of new building of factory. By the amendment brought forth on 01.04.2011, the words setting up was deleted from the inclusive portion of the definition and an exclusion portion was newly introduced. It is submitted by the counsel for appellant that this exclusion portion is pari materia to the words setting up which was deleted from the definition. Form 01.04.2011 upto 30.06.2012 the exclusion part dealt only with specified services as listed therein so far as they are used for construction of building or civil structure or part thereof or laying of foundation. That when credit became not admissible for services relating to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he inclusive part of the definition. That by applying principle of harmonious construction, when the words modernisation, renovation, repairs appearing in the inclusive part is read together with the exclusion part of the definition, what is excluded can be only works contract service with regard to new building, new civil structure, laying of new foundation etc. 9. The learned Counsel drew attention to the definition of works contract service contained in section 65(105) (zzzza), as it stood prior to 01.07.2012 and thereafter [Section 65 B (54)]. The second sub clause of the definition (such contract is for the purpose of carrying out-) has five limbs. The first limb deals with erection, commissioning of plant, machinery, equipment etc. This limb is not included in the exclusion part of the definition of input service. A portion of second limb is included. That this portion is the definition of works contract service which is included in the definition of input service is construction of new building or a civil structure or part thereof. The third limb is regarding construction of new residential complex or part thereof. This again is not included. The learned counsel submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rest. The true principle undoubtedly is, that the sound interpretation and meaning of the statute, on a view of the enacting clause, saving clause, and proviso, taken and construed together is to prevail. 12. It is also contended that CENVAT Credit Rules being beneficiary legislation, and objective being to extend CENVAT Credit, the appellant should be given the benefit of credit. The counsel drew support from the judgment laid in CCE, Rohtak Vs. J.B. Fashions Ltd. [(2010)262 ELT 122 (P H)]. 13. Sri. Karan Talwar appearing for the appellant lay thrust on para 35 to 38 in the case of Coca Cola India Ltd. Vs. CCE [ 2009-TIOL-449] to canvass the argument that service tax in India is levied on destination cum consumption principle. That therefore the service tax paid on input service consumed by assesse which have formed part of price of product, if denied credit, would defeat the purpose of the legislation of CENVAT Credit. The judgment of the Tribunal in the case of Sri Chaithanya educational Committee [SCEC] Vs CCE ST, Guntur was quoted by the counsel. Para 80 of the judgment deals with interpretation of the definition of Commercial Training or Coaching Centre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore are eligible for credit. I hold that appellant is eligible for credit of ₹ 37,389/- ₹ 63,873/-. 16. The issue remaining to be addressed is whether appellant is eligible for credit of ₹ 927/- being the service tax paid towards works contract service of fabrication of pipelines, erection of cooling tower and laying foundation. Though as per table contained in records this amount is seen clubbed with other amounts relating to works of fabrication of pipelines, fixing of valves of cooling tower, etc; the learned counsel for appellant asserted that out of ₹ 2,912/-, an amount of ₹ 927/- is with regard to service tax paid for works contract service of laying foundation for storage tank. The learned counsel has attempted to establish that the works contract service with regard to laying of foundation for storage tank would not fall within the exclusion portion of the definition of input service, as the work was not for laying new foundation but the work was for repair of existing foundation to erect the new cooling tower. I am not able to accept this contention. The exclusion portion expressly states that works contract service so far as they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 65 (105) (zzzza). The contention that services relating to setting up was excluded and therefore the exclusion confines only to new building, civil structure etc. done not appear to be the intention of the legislature. If that be so, the deletion of word setting up would have been adequate. The works contract service in relation to building, civil structure, laying of foundation etc. has been brought within the ambit of exclusion to exclude not only setting up but something more. 18. The first and primary rule of construction is that the intention of the Legislature must be found in the words used by Legislature itself. (New Piece Goods Bazar Co. Ltd. Vs. CIT, Bombay [AIR 1950 SC 165]) The question is not what may be supposed to have been intended but what has been said. In the case of British India General Insurance Co. Ltd. Vs. Captain Itbar Singh [AIR 1959 SC 1331], while holding that Section 96 (2) of the Motor Vehicles Act, 1939, is exhaustive of defences open to an insurer, the Hon ble Apex court refused to add word also after the words on any of the following grounds and observed : Thus, the rules of interpretation, do not permit us to do unless section as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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