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TMI Blog2017 (3) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... d - decided in favor of appellant-assessee. - ST/3459/2012, 59493/2013 & 55592/2014-CU[DB] - ST/A/70238-70240/2017-CU[DB] - Dated:- 1-2-2017 - Mr. Anil Choudhary, Member (Judicial) And Mr. Anil G. Shakkarwar, Member (Technical) Shri Devinder Sharma, Advocate for the appellants. Shri B.K. Singh, Advocate (Special Counsel), for the Department Per Mr. Anil Choudhary : The issue in these three appeals by the assessee manufacturing drugs and having their manufacturing facilities at different places in India like Gajraula in Uttar Pradesh, Nanjungad in Karnataka and Roorkee in Uttrakhand etc. is that the appellant for the purpose of Pharmaceutical formulation and manufacture of drugs, maintains two Research Developmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion the appellant submitted that Cenvat credit involved on input services used in R D activities is admissible to them as the said R D units are integral units of the company, serving the different manufacturing locations (Primarily for Polymer and Adhesive and Active Pharmaceutical Ingredient) located at Nanjungad and Roorkee. It was also submitted that the R D units neither manufacturers nor remove any excisable products nor provides any output taxable service to any outsider. 3. It appeared to Revenue that credit of Service Tax attributable to service used in a unit exclusively engaged in the manufacture of exempted goods or providing of exempted services, shall not be distributed as provided in Rule 7 of CCR, 2004. It further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notices were adjudicated vide separate Orders-in-Original passed by learned Commissioner, confirming the proposed demands also imposed penalty. Being aggrieved, the appellants have preferred appeals before this Tribunal. 4. The learned counsel for the appellant Mr Devendra Sharma urges that the definition of input service under Rule 2(l) of CCR, 2004 provides- Input service means any service used by a provider of taxable service or 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. It is further urged that it is admitted fact that the service provided by the R D centres of the appellant to their manufacturin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , wherein the question before the Hon'ble Court was whether the Tribunal was correct and justified in holding that the appellants-assessee would not be entitled to credit of service tax paid on input services received for setting up of storage tanks; and whether under the facts and circumstances the Tribunal was correct and justified in holding that services used in relation to storage of inputs outside the factory would not be eligible for credit as services are received outside the factory. The Hon'ble High Court observed that the words used directly or indirectly and H in or in relation to are words of width and amplitude. Inclusive definition of Cenvat Credit Rules is not restricted to input services used only for procurement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of input service which is intended for use for providing taxable output service as per provisions of Rule 6(2) of CCR, 2004. On finding that the appellant had not followed the procedure laid down, proceedings were initiated and demand was confirmed as per provision of Rule 6(3)(i) of CCR, 2004 on the value exempted services which were worked out to ₹ 14,50,720/- this Tribunal has held that in respect of clearances to SEZ, United Nations, there was no need for reversal of Cenvat credit or payment of the percentage of the amount prescribed under Rule 6(3) of CCR, 2004. 6. Having considered the rival contentions, we find that the appellant have rightly taken Cenvat credit as permissible under Rule 3 read with Rule 2(i) of CCR, 2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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