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TMI Blog2017 (11) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... ace/premises) insurance services, rent a cab services and auction services in respect of which the Assessee has availed the CENVAT credit of service tax, as eligible "Input Services" within the meaning of the definition of "Input Service" provided under CENVAT Credit Rules, 2004? Appeal No. 44/2015 admitted on 23.11.2016 1. Whether the impugned services namely outdoor Catering. Rent-a-cab, Auction, Club or Association and the GTA (outward freight upto buyer's place/premises) in respect of which the assessee had availed the Cenvat Credit of service tax during the period from April 2010 to September 2011, are eligible 'input services' within the meaning of 'input services' defined under Cenvat Credit Rules, 2004 and the assessee had availed the Cenvat Credit correctly or not?" Appeal No. 49/2017 admitted on 06.07.2017 1. Whether the impugned services namely Outdoor Caterer of Factory Canteen, Clearing & Forwarding (C&F) Agent of Depot, Business Auxiliary Service of Depot and the GTA (outward transportation of cement) in respect of which the assessee had availed the Cenvat Credit of Service Tax during the period from January 2005 to July 2005, are eligible 'input ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the absence of legislative intention to restrict definition to particular class or category of services used in business. Definition of input service is construed widely in CBE & C Circular dt. 23.8.07. Revenue cannot argued against stand taken by CBE & C." 5. He also taken us to the decision of Gujarat High Court in Commissioner of Central Excise and Customs vs. Ultratech Cement Ltd. (2014) 46 taxman.com 180(Guj.) wherein it has been held as under:- To our mind, though there is somewhat difference in the nature of services involved in the present appeals, insofar as all material aspects are concerned, the entire issue has been discussed threadbare and decided in the above-mentioned judgment in the case of Gujarat Heavy Chemicals Ltd. As already noted, in the case of Gujarat Heavy Chemicals Ltd., the Court was considering the eligibility of the manufacturer to avail Cenvat credit on the Service Tax credit on security services in residential colony of the Company. In the present case, the issue presented before us pertains to Service Tax credit on insurance of the vehicles. We may notice that such vehicles are used only for the residents of the colony and not for the business pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture of final products and clearance of final products up to the place of removal, and includes services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal; but excludes,- (A) service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for - (a) construction or execution of works contract of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or (B) servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de applicable for the purpose of Cenvat Credit Rules, 2004 unless it relates to the issues of Section-4 of the Central Excise Act ibid. I agree with the findings of adjudicating authority that the credit of service tax on the services effected after clearance from the place of removal was not available to the appellant. Therefore, credit received on the invoices of persons managing depot and registered under the categories of Business Auxiliary service, Clearing & Forwarding Service and Cargo Handling Service was not available. As regards to reliance placed by the appellants on Circular dated 2.2.2006. I find that this is related to eligibility of Cenvat Credit of Service tax paid on goods transport from factory to depot and sold therefore, the same is not for the eligibility of impugned services. I agree with the findings of the adjudicating authority that business auxilliary services provided by marketing agents are not covered under input services. I also agree with the findings of the adjudicating authority that the appellant has utilized Cenvat Credit on service tax of Rs. 35,93,965/- and Education Cess of Rs. 72,836/- (Total Rs. 36,66,801/-) during the period from January, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification, specify person or class of persons who may not require such registration. (3) The registration under sub-rule (1) shall be subject to such conditions, safeguards and procedure as may be specified by notification by the Board. 5.10 He has also taken us to the relevant issue where the issue is pending before the Supreme Court in the case of Commissioner vs. Ultra Tech Cement Ltd. (2017) 47 STR J216 (SC) where the decision of Karnataka High Court in 2016 (44) STR 227 (Kar.) Commissioner vs. Ultratech Cement Ltd. decided is subject matter of SLP regarding place of removal. 5.11 He also relied upon decision of Calcutta High Court in Commissioner of Central Excise, Koktata V-I vs. Vesuvious India Ltd. 2014 (34) STR 26 (Cal) wherein it has been held as under:- "5. The aforesaid reasoning, we are sorry to say, has not appealed to us. 'Input service' as defined in Rule 2(1)(ii) does not include the expenses with regard to post-manufacturing stage except for the purpose of transportation of goods from one place of removal to another place of removal. It is, however, true that relaxation in that regard was made by the Circular issued by the Board on 23rd August, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the definition of "input service" provided in rule 2(1) of the Cenvat Credit Rules, 2004. The Hon'ble Division Bench expressed their aforesaid opinion, but no reasons or appropriate reasons are ascertainable by us for the purpose of aforesaid proposition. (b) There are more reasons. In paragraph 30, the Hon'ble Division Bench of the Karnataka High Court opined that. The definition of "input service" contains both the word means' and includes, but not 'means and includes'. The portion of the definition to which the word means applies has to be construed restrictively as it is exhaustive. However, the portion of the definition to which the word includes applies has to be construed liberally as it is extensive. The exhaustive portion of the definition of 'input service' deals with service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products, it also includes clearance of final products from the place of removal. Therefore, services received or rendered by the manufacturer from the place of removal till it reaches its destination falls within the definition of 'input service.' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is answered in favour of the Department and against the assessee 6.2 He also relied upon the circular which has been sought to be relied upon by the tribunal in one of the appeals. 6.3 Mr. Pathak has taken us to Insurance Services in appeal no.23/2017 which reads as under:- Insurance Services: (P) That the learned CESTAT has failed to appreciate that the Adjudicating Authority has allowed the credit of service tax paid on insurance against erection of plant, insurance of company vehicles, burglary policy against company assets, policy for protection from fire, marline policies to protect goods during transportation through sea. However, the Adjudicating Authority and Learned Commissioner(Appeals) has disallow the credit of service tax paid regarding group accidental insurance policies, fidelity insurance of workers and policies for employees and Mds personal baggage, which are in no way connected with the manufacturing process of the final products by the Assessee. It is submitted that the Assessee did not produce any evidence to show the nexus between these insurance policies and manufacturer of final product, the learned CESTAT without going into the facts of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1944 as also in terms of the provisions under the sale of Goods Act, 1930) occurred at the said place." The assessee have categorically mentioned in their written reply that: "In their case the Service Tax relates to the freight from factory/ Depot to the place of buyer and since property in goods is getting passed on at destination. It is the case of sale taking place at FOR destination. They also submitted the copies of purchase order, invoices, LR and other relevant documents showing sale on FOR basis. Further it is submitted that in case of any damage/loss of goods during transit, the noticees as owners of the goods are liable to bear the same or to claim from insurance company". 7.2.1 As discussed in para 7.1 above, there is no doubt that depot is nothing but extension of the factory itself and sales made through depot of the manufacturer are eligible to be considered as sales made directly by the manufacturers as depot is defined as 'place of removal'. Therefore, clearances from Depot on FOR basis ot customer's premises can be equated to the sale made from factory on FOR basis. In view of the above clarification of Board and above discussion the only po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard I would like to refer to the Circular No. 97/8/2007 dated 23.8.2007 issued by the Board. Para 8.2 of the said circular reads as under: "8.2 In this connection, the phrase 'place of removal' needs determination taking into account the facts of an individual case and the applicable provisions. The phrase 'place of removal' has not been defined in CENVAT Credit Rules. In terms of sub-rule (t) of rule 2 of the said rules, if any words or expressions are used in the CENVAT Credit Rules, 2004 and are not defined therein but are defined in the Central Excise Act, 1944 or the Finance Act, 1994, they shall have the same meaning for the CENVAT Credit Rules as assigned to them in those Acts. The phrase 'place of removal' is defined under section 4 of the Central Excise Act, 1944. It states that-"place of removal" means- (i) a factory or any other place or premises of production or manufacture of the excisable goods; (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be stored without payment of duty; (iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the Board's Circular dated 23.6.2007, I find that there is no doubt that: i. in cases where the transaction value under section 4 is inclusive of freight charges upto the destination point (customer's place), the destination is to be treated as 'Place of removal' and CENVAT credit of the service tax paid on outward transportation will be admissible upto such destination point (customer's place). ii. In cases where the transaction value under section 4 is not inclusive of freight charges upto the destination point (customer's place), the factory or the depot, as the case may be from where the goods are sold, is to be treated as 'place of removal' and CENVAT credit of the service tax paid on outward transportation will not be admissible upto such destination point (customer's place). 6.4 He relied upon the decision of Supreme Court in Commissioner of Custom and Central Excise, Nagpur vs. Ispat Industries Ltd. 2015 (324) ELT 670 (SC) wherein it has been held as under:- "24. It will thus be seen that, in law, it is clear that for the period from 28.9.1996 up to 1.7.2000, the place of removal has reference only to places from which good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has satisfied the condition of the CBEC circular No.97/08/07 dated 23.8.2007 which has been supported by the decision of this Tribunal in the case of Lumax Automotives Systems Ltd.(supar). Therefore, I hold that appellant is entitled to take Cenvat credit on outward transportation service as the transportation charges have formed part of the assessable value and goods are to be delivered at the place of the buyers. 7.1 He contended that the findings are contrary to decision of the Supreme Court in M/s. Maruti Suzuki Ltd. Vs. Commissioner of Central Excise (2009) 9 SCC 193 wherein it has been held as under:- 18. It may be noted from the CENVAT Credit Rules of 2004 vis-a- vis CENVAT Credit Rules of 2002 that the word "for" in the inclusive part after the words "steam used" is substituted by the words "used in or in relation to the manufacture of final products". In other words, the crucial requirement of the definition clause is restated by the Legislature. We may note that the CENVAT Credit Rules of 2004 came in force in September, 2004. In some of the cases in batch before us the show cause notice goes right up to January 2005, hence, CENVAT Credit Rules, 2004 also apply to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity not being qualified by the phrase "within the factory of production" could be outside the factory. Therefore, whatever goes into generation of electricity or steam which is used within the factory would be an input for the purposes of obtaining credit on the duty payable thereon. 7.2 He invited our attention to the order passed by AO with regard to outward transportation under GTA Services which reads as under:- 'Outward transportation under GTA services' 5.4.1 Before any deliberationon the issue, I examine the definition of 'Inpur service' in force at the relevant point of time under Rule 2(1) of the Cenvat Credit Rules, 2004, which reads as: "inpur services" means any service (i) used by a provider of taxable service for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacturer of final products and clearance of final products upto the place of removal and includes services used in relation to modernization, renovationor repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture of the excisable goods; (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without [payment of duty;] (iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory; from where such goods are removed. I find that a factory/ place/premise of manufacture of excisable goods or a place where excisable goods permitted to store without payment of duty, depot, premise off a consignment agent have been declared as 'Place of removal' and thus, outward transportation upto the said designated place will get coverage under the purview of 'input service'. The impugned notice does not propose disallowance of input service credit on outward transportation from the factory of manufacture of the assessee to their depots or premises of consignment agents. It is not under dispute that the proposed ineligibility of credit is related to input service on outward transportation beyond the place of removal i.e. Factory to Customer, Depot to Customer and Railway siding to Godown, which cannot be termied as 'inp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... became redundant by change of legal position w.e.f. 1.3.2008. In view of the above the credit of service tax paid on outward GTA beyond the place of removal cannot be allowed to the assessee and thus, I hold that Cenvat credit amounting to Rs. 35,62,122/- availed in respect of GTA Service for outward transportation of goods from factory to customers, from depot to customers and from railway siding to godown is recoverable them. 5.5.1 Outdoor catering: The assessee's contention regarding admissibility of cenvat credit in respect of outdoor catering service is that it is mandatory to provide canteen facility to the employees working in the factory as per Factories Act, 1948. I observe that outdoor catering service was taken to perform a statutory obligation and thus, it was in the nature of employee welfare policy and not related to manufacture and clearance of the goods. The Advance Ruling Authority, in their decision reported in 2008(12)S.T.R. 388(A.A.R.), held that provision of buildings for housing, schooling, recreation etc. For workers is welfare measure having no nexus with manufacture, storage or sale, hence construction of quarters for workers is not an input serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng services was dened by the Hon'ble Tribunal in the case of CCE, Chennai Vs. M/s Sundram Brake Linings Ltd. Reported in 2010(019)STR0172(T) after discussing the issue in details. While passing the order in the case of M/s Sundram Brake (supra), Hon'ble Tribunal distinguished the decision of the Hon'ble Larger Bench of the Tribunal in the case of CCE, Mumbai Vs M/s GTC Ltd. Reported in 2008(12) STR 468(Tri-LB) and discussed the decision of the Hon'ble Mumbai High Court in the case of M/s Coca Cola India Pvt. Ltd. Vs commissioner reporter in 2009(015) STR 0657(T). More so, the service in relation to outdoor catering has since been put in exclusion clause of the definition w.e.f. 01.03.2011 (not from 1.4.2012 as claimed in defence), the credit taken after the said date is inadmissible by any means and the assessee has no right ot claim the benefit in the spirit of the Hon'ble Supreme Court of India judgment in the case of Sangam Spinner Ltd. Vs. UOI reported at 2011-TIOL- 31-SC-CX, wherein held as, "Since the product High Speed Diesel oil was excluded specifically from the list of eligible inputs in the nitifications, there was no question of creation of any ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after their clearance from the factory;] from where such goods are removed; 4[(cc) "time of removal", in respect of the excisable goods removed from the place of removal referred to in sub-clause (iii) of clause (c), shall be deemed to be the time at which such goods are cleared from the factory;] (d) "transaction value" means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods.] 8. He relied on the following decisions in respect of different aspects:- GTA Services (i) In CCE Bangalore vs. ABB Ltd. 2011 (23) STR 97 (Kar), it has been held as under:- 29. CENVAT Credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applies has to be construed restrictively as it is exhaustive. However, the portion of the definition to which the word includes applies has to be construed liberally as it is extensive. The exhaustive portion of the definition of 'input service' deals with service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products. It also includes clearance of final products from the place of removal. Therefore, services received or rendered by the manufacturer from the place of removal till it reaches its destination falls within the definition of input service. What are the services that normally a manufacturer would render to a customer from the place of removal? They may be packing, loading, unloading, transportation, delivery, etc. Though the word transportation is not specifically used in the said section in the context in which the phrase 'clearance of final products from the place of removal' is used, it includes the transportation charges. Because, after the final products has reached the place of removal, to clear the final products nothing more needs to be done, except transporting the said final products to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be construed as falling within the definition of 'input service'. It is a well settled rule of interpretation that, while interpreting a provision, the Court must take note of not only the express words used but also the words which are not used. If the legislature has expressly used the words 'in respect of the transportation' in a particular manner and did not choose to include within the ambit of the word 'transportation', certain aspects, having regard to the scheme of the section, the way it is worded, it is not open to the Court to include something which the legislature deliberately did not include in the definition. If the Courts indulge in such interpretation, it amounts to re-writing the provision which is impermissible. Yet another reason for coming to such a conclusion is, in the first part of the restrictive definition 'clearance of final products from the place of removal' is expressly stated. If transportation of final product from the place of removal is included in the phrase 'clearance of final products from the place of removal' again the same cannot be read into the provision under the words 'activities relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital goods and outward transportation upto the place of removal. The phrase "outward transportation upto the place of removal" used in the inclusive portion of the definition (the second part), has to be read along with the word inward transportation of input or capital goods. It has No. reference to 'clearance of final products'. However, when the claims are put forth on the basis of the said circular of 23-8-2007, for benefit of CENVAT credit, even in the cases where the aforesaid conditions are not satisfied relying on the words clearance of final products from the place of removal, the Central Government thought it fit to amend the provision from 1-4-2008 by substituting the word 'upto' in place of 'from', in Clause (ii) of Rule 2(l) making the intention clear i.e. whether it is an inward transportation of input of capital goods or clearance of final products upto the place of removal, any service rendered and service tax paid would fall within the definition of 'input service'. Therefore, it is clear that till such amendment made effective from 1- 4-2008 notwithstanding the clarification issued by the Central Government by way of their circula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory; from where such goods are removed. 8. It is clear from the definition that for a manufacturer/consignor the eligibility to avail credit of the service tax paid on the transportation during removal of excisable goods would depend upon the place of removal. The circular further contemplates compliance of certain conditions where the sale has taken place at the destination point. The aforementioned part of the circular reads as under: ...However, there may be situations where the manufacturer/consignor may claim that the sale has taken place at the destination point because in terms of the sale contract/agreement (i) the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods. In such cases, the credit of the service tax paid on the transpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the goods in acceptable condition to the purchaser at his door step. The aforesaid condition has to be considered to be fulfilled because the supply of cement by the appellant to its customer is 'FOR destination'. The appellant also bears the freight in respect thereof up to the door step of the customer. The freight charges incurred by it for such sale and supply at the door step of the customer are subjected to service tax which is also duly paid by the appellant. Moreover, the definition of expression 'input service' is available in Rule 2(1) of the CC Rules, which reads thus: 2(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 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 such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oust any activity from the main body of the definition if it is otherwise covered by the expression 'means'. In other words, the expression 'includes' followed by 'means' in any definition is generally understood to be expanding the definition of the term to make it exhaustive, but in no manner can the expression 'includes' be utilized to limit the scope of definition provided in the main body of the definition. To our mind this was also not the intention of the Legislature in the present case. 20. There, of course, are certain areas which still remain to be cleared. It was vehemently contended before us by the counsel for the Revenue that later portion of the definition which provides for the inclusion clause limits the outward transportation service up to the place of removal. That being so, according to them, the outward transport service utilized by the manufacturer beyond the place of removal would not qualify as an input service within the definition of Rule 2(1). We may only notice two things in this regard. Firstly, in our view, when we find that outward transport service is covered by the main body of the definition which provides for mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), it has been held as under:- 1. This appeal is admitted on the following substantial question of law. "Whether the learned Tribunal has committed any quasi judicial indiscipline by not following the judgment of the jurisdictional High Court and in following the judgment of the learned Tribunal, which was rendered while relying on the judgment of the Karnataka High Court and various other High Courts?" We have heard the learned Counsel for the parties. 2. We are of the view that the learned Tribunal should not have ignored the judgment of the jurisdictional High Court simply because the other High Courts have proceeded as observed in a judgment of the Tribunal without reading the judgment of Division Bench of this Court. On that ground, we allow the appeal and set aside the impugned order of the learned Tribunal. We remand the matter to the learned Tribunal for rehearing and for taking note of the judgment of the jurisdictional High Court or in the meantime, if any judgments are rendered by the Supreme Court on the issue in question. Such exercise shall be completed within a period of two months from the date of communication of a copy of this order. (v) In Madras Cement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surance coverage by the assessee." The sale was thus considered by the assessing officer to have been finalized at the factory gate and therefore the assessee was not found eligible for Service Tax credit availed by it on outward freight. No finding on merits with regard to such benefit being denied to the petitioner, was given by the Tribunal. 8. Having heard learned counsel for the parties and considering the facts and circumstances of this case, we are of the considered view that as long as the sale of the goods is finalized at the destination, which is at the door step of the buyer, the change in definition of 'input service' which came into effect from 01.04.2008 would not make any difference. A perusal of invoices makes it clear that the goods were to be delivered and sale completed at the address of the buyer and no additional charge was levied by the assessee for such delivery. From these facts it is clear that the sale was completed only when the goods were received by the buyer. The Circular dated 20.10.2014 issued by the Central Board of Excise and Customs also, in paragraph-6 makes it clear that 'payment of transport, inclusion of transport charges in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in or in relation to the manufacture of final products but also includes various services used in relation to the business of manufacture of final products, be it prior to the manufacture of final products or after the manufacture of final products. To put it differently, the definition of input service is not restricted to services used in or in relation to manufacture of final products, but extends to all services used in relation to the business of manufacturing the final product. 29. The expression "activities in relation to business" in the definition of "input service" postulates activities which are integrally connected with the business of the assessee. If the activity is not integrally connected with the business of the manufacture of final product, the service would not qualify to be a input service under Rule 2(1) of the 2004 Rules. 30. The Apex Court in the case of Maruti Suzuki Ltd. (supra) has considered the expression 'used in or in relation to the manufacture of final product" in the definition of "input" under Rule 2(k) of 2004 Rules and held as follows: 14. ...Moreover, the said expression, viz, "used in or in relation to the manufacture of the final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 "used in or in relation to the manufacture" stands complied with. In our view, one has to therefore read the definition in its entirety. 31. In our opinion, the ratio laid down by the Apex Court in the case of Maruti Suzuki Ltd. (supra) in the context of the definition of 'input' in Rule 2(k) of 2004 Rules would equally apply while interpreting the expression "activities relating to business" in Rule 2(1) of 2004 Rules. No doubt that the inclusive part of the definition of 'input' is res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectly in or in relation to manufacture of final products, but also includes services used in relation to the business of manufacturing the final products. Therefore, while interpreting the words used in the definition of 'input service', the ratio laid down by the Apex Court in the context of the definition of 'input' alone would apply and not the judgment in its entirety. In other words, by applying the ratio laid down by the Apex Court in the case of Maruti Suzuki Ltd. (supra), it cannot be said that the definition of 'input service' is restricted to the services used in relation to the manufacture of final products, because the definition of 'input service' is wider than the definition of 'input'. 34. Therefore, the definition of input service read as a whole makes it clear that the said definition not only covers services, which are used directly or indirectly in or in relation to the manufacture of final product, but also includes other services, which have direct nexus or which are integrally connected with the business of manufacturing the final product. In the facts of the present case, use of the outdoor catering services is integ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manufacture of final products constitutes input service. Various services are set out in the definition expressly, as constituting input service. It also includes transportation of inputs or capital goods and outward transportation up to the place of removal. Therefore the test is whether the service utilized by the assessee is for the manufacture of final product. Such service may be utilized directly or indirectly. Such service may be in the nature of transportation of inputs or capital goods, up to the factory premises or if the final product is removed from the factory premises for outward transportation up to the place of removal. It is only an inclusive definition. The services mentioned in the Section are only illustrative and it is not exhaustive. Therefore when a particular service not mentioned in the definition clause is utilised by the assessee/manufacturer and service tax paid on such service is claimed as Cenvat Credit, that the question is what are the ingredients that are to be satisfied for availing such credit. If the credit is availed by the manufacturer, then the said service should have been utilized by the manufacturer directly or indirectly in or in rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is defined under Rule 2(l) of the Rules, which insofar as the same is relevant for the purpose of the present appeal, reads thus: (l) 'input service' means any service,- (i) xxxx (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 the services in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal; 6. As noted hereinabove, under the provisions of Section 46 of the Factories Act, it is mandatory for the employer to provide canteen services to the staff. Thus, provision of canteen services is a statutory requirement. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the employer to the employees. It is an onerous legal obligation imposed on him. The cost incurred in rendering such service will be included in the cost of production. Clearing and Forwarding Services (i) In CCE vs. Cadila Health Care Ltd. 2013 (30) STR 3 (Guj.), it has been held as under:- 5.4 Clearing and Forwarding services: In this regard it was the case of the assessee that service rendered by C & F agents were in relation to sales promotion and, therefore, input service. The adjudicating authority after considering the definition of clearing and forwarding agent as defined under Section 65(25) of the Finance Act, 1994 found that the contention that the services rendered as C & F agents were in relation to sales promotion was not acceptable. The assessee in its reply had stated that CENVAT credit availed by it was towards C & F services provided by various C & F agents in different states in India for activities related to sale of goods in domestic market. The adjudicating authority was of the view that the role of C & F agent here is in the sale of goods as admitted by the assessee. Such service would commence only after clearance of final product. According to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted with the clearing and forwarding operations in any manner to any other person and includes a consignment agent. (iv) Ordinarily, a C & F agent receives goods from the factory or premises of the manufacturer (the Principal) or his agents and stores these goods, dispatches these goods as per orders received from the Principal, arranges transport, etc. for the purpose and prepares invoices on behalf of the Principal. In respect of such service, the C & F agent receives commission on the basis of agreed terms. Therefore, an essential characteristic of any service, to fall in the category of C & F agent, is that the relationship between the service provider and receiver should be in the nature of principal (owner) and agent. The C & F Agent carries out all activities in respect of goods right from the stage of their clearances from the premises of the principal to its storage and delivery to the customers. (v) At this stage reference may be made to the definition of the expression place of removal as defined under clause (c) of sub-section (3) of Section 4 of the Act which reads thus: (c) place of removal means - (i) a factory or any other place or premises of production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expression, wherein number of services used by manufacturer are included in the same, used directly or indirectly. 24. This Court in the case of Parth Poly Wooven (P.) Ltd. (supra) has held that when the manufacturer transports his finished goods from the factory, without clearance to any other place such as, godown, warehouse, etc. from where it would be ultimately removed, such service is covered in the expression "outward transportation up to the place of removal" since such place other than factory gate would be the place of removal. It had been in clear terms held that outward transport service used by the manufacturer for transportation of finished goods from the place of removal up to the premises of the purchaser is covered within the definition of 'input service' provided in rule 2(1) of the Cenvat Credit Rules. Taking this analogy further, the cargo handling service is availed essentially for the purpose of exporting the goods and in such case, the services of cargo handling used by the manufacturer for transportation of the finished goods from the place of removal shall have to be essentially the port from where goods are actually taken out of the country. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject to the provisions of the Act, all employees in factories or establishments to which this Act applies shall be insured in the manner provided by this Act. May be the employees also have to contribute but the employer is under an obligation to take an Insurance policy and contribute his share. Therefore, the said Group Insurance Health Policy taken by the assessee is a service which would constitute an activity relating to business which is specifically included in the input service definition." 9. Counsel for the appellant, Mr. Kinshuk Jain, stated as under: 1. That the expression relating to business used in the above said Rules 2 (I) clearly refers to the activities which are integrally related to the business activity of the assessee in relation to manufacture and clearances of the excisable goods. For example, recruitment services are required for procuring manpower to carry out manufacturing activities and in the office managing day to day work relating to such activities, similarly services relating to quality control is required to maintain/ ensure the quality of the goods to be manufactured, similarly inward / outward transportation service (GTA) is required in pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the respondents which are listed in the said table. The decision of the said case has been upheld by the Hon'ble Court, Madras [2014 (36) STR 112 (Mad.)] who had dismissed the petition/ appeal filed by the appellant against the said judgment of SBL Limited. In the said case, the CESTAT Chennai has distinguished the case of GTC Industries [2008 (012) STR 0468 (Tribunal- LB)] which was subsequently negated by the Hon'ble Apex Court in the case of Maruti Suzuki (under Para 14 of the order). For example, one of the food items "biscuits" is an excisable product on which duty is paid. Neither biscuits can be considered to be input for manufacture of cement, nor the duty paid on biscuits can be allowed as credit for paying duty on such cement. The department's case is that when biscuits are not inputs for cement, the service tax paid for supply of biscuits cannot be allowed for paying duty on the cement. Hence, supply of biscuits to the workers engaged in the manufacture of cement cannot be considered as an input service by any stretch of imagination unless the biscuits eaten by the workers can be said to be integrally connected to the manufacture of the finished goods like cemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearance of final product from the place of removal by clearance of final product upto the place of removal, inserted vide Notification No. 10/2008- CE (NT) dated 01.03.2008 in Rule 2 (I) of the Cenvat Credit Rules, 2004, the clarification issued vide Para 8.2 of the CBEC Master Circular number 97/8/2007 dated 23.08.2007, is applicable in the situation prior to the amendment of Rule 2 (I) of the Cenvat Credit Rules, 2004 by notification number 10/2008-CE (NT) dated 01.03.2008. 5. That in this case the Tribunal erred in allowing the credit of Service Tax paid on fright on outward transportation beyond the place of removal i.e. Factory gate or Depot as the case may be to the buyer's premises on FOR destination basis for the period from April 2010 to September 2011 i.e. after the amendment of Rule (I) of the Cenvat Credit Rules, 2004. The amendment by notification number 10/2008- CE (NT) dated 01.03.2008 w.e.f. 01.03.2008 in the Rule 2 (I) ibid, was changed from clearance of final product from the place of removal substituting by clearance of final product up to the place of removal ". Therefore, the credit of service tax paid on freight on outward transportation beyond the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to fulfill the conditions which are required to be operating under the Rules more particularly the input services which is defined under 2(L), taking into consideration 2(t), the interpretation put forth by the Tribunal issue wise, on the first issue GTA services in view of five High Court judgments referred above, taking view in favour of the assessee, the service which are required to be for the purpose of manufacturing and delivering will come within the purview of 2(L), outdoor catering services are also required to be carried out for delivering or manufacturing his also governed by the different four high courts judgments Bombay High Court and Gujarat. 14. In that view of the matter, the same is also required to be decided in favour of assessee. 15. Regarding clearing forward agency, the Tribunal has recorded a finding that from the verification of bills, it is found that transport charges are required to be borne out by the assessee.Therefore, that issue is also required to be decided in favour of assessee. 16. Regarding Cargo Handling services & Insruance, in view of Gujarat High Court decision (supra), the issue is required to be answered in favour of assessee. Regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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