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TMI Blog2017 (4) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... vices w.e.f. from 01.04.2011 also underwent amendment, whereby the services relating to setting up of factory/premises of provider of output service was deleted from the definition - From the table itself it is clear that the services are not per se for construction of building or setting up of premises and these are merely renovation/modernization works. The services in the table show that these are construction services for laying the flooring, Erection of Machinery, Electric Installation Works, Single Leaf Door, Installation Boom Barriers, Electrical Consultancy Charges. Since these services would fall within the category of modernization, renovation services which come within the inclusive part of the definition of input services, the services are eligible for credit. Extended period of limitation - credit availed on inputs after 01.04.2011 - Held that: - the eligibility of credit was interpretational issue, and appellants were under bonafide belief that credit is admissible while availing the credit - there is no evidence to establish that appellant had availed the irregular credit on inputs after 01.04.2011 by suppression of facts with an intention to evade payment of dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant to Hindustan Unilever Company Ltd. Thus the appellant is engaged in providing output services of Renting of Immovable Property service. As per definition prior to 01.04.2011, the appellant is eligible for credit on the inputs which have been used for construction of the premises used by the appellant for providing the output services. Major part of the demand falls within the period prior to 01.04.2011. ii) That the Commissioner has erred in relying upon Explanation (2) brought forth w.e.f. 07.07.2009 to the definition of inputs to deny the credit to the appellant, for the reason that this Explanation relates only to a manufacturer and not to a provider of output service. Further that even after 01.04.2011, the credit is admissible, for the reason that the goods in question on which CENVAT credit was taken after 01.04.2011 have not been used for construction of building, civil construction or for laying foundation. To canvass his arguments, he relied upon the judgments in the case of CCE, Visakhapatnam-II Vs Sai Sahmita Storages (P) Ltd.,[2011 (270) ELT 33 (A.P.)], Mundra Ports Special Economic Zone Ltd., Vs. CCE Cus, [2015 (39) STR 726 (Guj.)], ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is without any basis. It is submitted by the Counsel that out of the demand of ₹ 1,34,07,214/- raised in the Show Cause Notice, about 86% of the credit was allowed by the Commissioner at the stage of adjudication itself. That this alone would show that the issue of eligibility of credit was interpretational one, and that the appellant had availed the credit only on bonafide belief that the credit is admissible. The appellant cannot be saddled with intent to evade payment of duty/ tax alleging suppression of facts. Therefore, the Show Cause Notice issued invoking the extended period alleging suppression of facts is unsustainable. 4. Against this, the Ld. AR, Sh. P.S. Reddy reiterated the findings in the impugned order. It is pointed out by the Ld. AR, that the inputs on which the credit is availed by appellant, are iron and steel, cement, ready mix concrete etc. These items are generally used for construction of premises. As per the amendment brought forth w.e.f. 07.07.2009 an Explanation was inserted in the definition of input. As per this Explanation, cement, angles, channels, CTD or TMT bars etc., used for construction of factory shed, building or laying of foundation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,75,272 Total: 1,94,13,793 1,61,57,127 32,56,666 9. The first issue is with regard to the credit availed on inputs to the tune of ₹ 27,81,394/-. The amount of credit availed on inputs prior to 01.04.2011 is ₹ 14,89,763/- and after 01.04.2011 is ₹ 12,91,631/-. It is brought out from the records that the main inputs on which credit has been availed and is disputed is on items like iron and steel, cement, ready mix concrete, etc. At this juncture, for better appreciation, the definition of inputs prior to 01.04.2011 as well as after 01.04.2011 is noticed as under: Prior to 01.04.2011. As per Rule 2 (k) of CENVAT Credit Rules, 2004 input means i) all goods except light diesel oil, high speed diesel oil and motor spirit, commonly known as petro, used in or relation to manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oils, coolants, accessories of final products cleared along with the final product, goods used as paint or as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rward by the Department is that w.e.f. from 07.07.2009 an amendment is brought forth in the definition of inputs, restricting the eligibility of credit on cement and steel items used for construction of building, factory shed etc. The Commissioner has relied upon the judgment laid in the case of Vandana Global Limited Vs. CCE, Raipur [2010 (253) ELT 440 (Tri-LB)] to deny the credit on inputs such as cements and steel used prior to 01.04.2011 and also for the period after. On bare perusal of the definition of inputs and the Explanation-2, introduced w.e.f. 07.07.2009 makes it clear that Explanation-2 deals with the use of cement and steel as inputs by a manufacturer only and not by a provider of output service. In Vandana Global Ltd., case (supra) the issue was with regard to use of such items by manufacturer and not service provider. The second Explanation in the definition as noticed above uses the words goods used in manufacture of capital goods and further used in the factory of manufacture. It is clear from the language of the Explanation that it is applicable only to manufacturer and not service provider. Therefore the finding of the Commissioner that credit on inputs such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in two parts. Clauses (i) and (ii) of Rule 2(l) cover the service provider and the manufacturer respectively. The present case relates to output service provider. The expression any service, if read with used by a provider of taxable service for providing an output service in Clause (i) of Rule 2(l) of the Rules, 2004 had widened the scope of input service in respect of output service provider. It is well-settled that literal interpretation would prevail, where the plain words of statute are clear, unambiguous and not absurd or unjust. An attempt was made by the learned authorised representative for the Revenue, to read the above definitions in respect of output service provider with the help of words as referred in the context of manufacturer, supported by the earlier decision of the Tribunal in the appellants own case by Final Order dated 8-5-2008. The said decision cannot be sustained as the Hon'ble High Court set aside the said decision. Further, when words of statute are clear and meaning is unambiguous, intention of statute gets irrelevant. In our view, the plain meaning of the statute should not be distorted by following the interpretation based on intention. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he functional utility of the said item which would constitute the relevant consideration. Unless and until the said input is used in or in relation to the manufacture of final product within the factory of production, the said item would not become an eligible input. The said expression used in or in relation to the manufacture have many shades and would cover various situations based on the purpose for which the input is used. However, the specified input would become eligible for credit only when used in or in relation to the manufacture of final product. Hydrogen gas used in the manufacture of sodium cyanide is an eligible input, since it has a significant role to play in the manufacturing process and since the final product cannot emerge without the use of gas. Similarly, Heat Transfer Oil used as a heating medium in the manufacture of LAB is an eligible input since it has a persuasive role in the manufacturing process and without its use it is impossible to manufacture the final product. Therefore, none of the categories in the inclusive part of the definition would constitute relevant consideration per se. They become relevant only when the above crucial requirement of being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 01.04.2011 is that the appellant has completed the construction of the premises before 2009. That after 2009 the credit on inputs like iron, steel, cement, etc., has been availed for the purpose of modernization and renovation, work of the premises of the appellant and that therefore, the credit is eligible. I cannot agree with these arguments. The credit availed on cement, steel etc., as inputs which are used for construction of building after 01.04.2011 is not admissible as per definition of inputs w.e.f. 01.04.2011. From the above, I hold that the credit availed on inputs by appellant after 01.04.2011 is not eligible for credit. 14. The next issue to be addressed is the credit availed on input services. The period involved in this issue is after 01.04.2011 only. The definition of input services w.e.f. from 01.04.2011 also underwent amendment, whereby the services relating to 'setting up of factory/premises of provider of output service' was deleted from the definition. The input services on which the appellant has availed credit, is shown in the table below: Details of credit availed on input services relating to setting up of the premises of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the definition of input services, I am of the view, that the services are eligible for credit. The judgment in the case of Infosys Ltd., Vs. CST, Bangalore (supra) is also applicable to the said issue. In para 5.8 of the said judgment, the Tribunal held that after 01.04.2011 services used in modernization, renovation or repairs alone would be admissible for credit. 16. The appellant has put forward arguments on the ground of limitation also. The Ld. Counsel submitted that credit was availed by appellant on bonafide belief that credit is admissible. Further, that since the Commissioner has allowed credit on major part of the disputed demand (almost 86%) the same has to be considered as an interpretational issue and therefore appellant cannot be held guilty of suppression of facts with intent to evade payment of duty. The appellant has been filing returns regularly disclosing the credit details. The Department has no case that the investigation conducted by DGCEI has unearthed any transactions which were suppressed by the appellant. The appellants have disclosed the entire credit availed on inputs and input services in their ST-3 returns filed regularly. In fact, the documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod under proviso to Section 11 A (1) for demand of duty and penal provisions of Section 11AC for indolence on the part of the jurisdictional Central Excise officers. Moreover Apex Court in a series of judgments CCE vs. Champher Drugs Liniments reported in 1989 (40) E.L.T. 276 (S.C.) ; Padmini Products vs. Collector reported in 1989 (43) E.L.T. 195 (S.C.) ; Pushpam Pharmaceuticals vs. CCE reported in 1995 (78) E.L.T. 401 (S.C.) ; Anand Nishikawa Co. Ltd. vs. CCE, Meerut reported in 2005 (188) E.L.T. 149 (S.C.) ; Continental Foundation Jt. Venture vs. CCE, Chandigarh reported in 2007 (217) E.L.T. 177 (S.C.) has held that something positive other than mere inaction or non payment of duty is required for invoking extended period under proviso to Section 11A (1) and that suppression means failure to disclose full information with intent to evade the payment of duty and mere omission to give certain information is not suppression of fact unless it is deliberate with intention to evade the payment of duty. The above condition for invoking extended period prescribed in these judgments is not satisfied in this case. 17. From the above discussions a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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