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TMI Blog2017 (8) TMI 1467X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the same, the decision rendered in Ultratech's case is valid. The cenvat credit availed by the assessee on catering services is admissible and therefore, no interference is called for - appeal dismissed - decided against Revenue. - C.M.A. No. 2707 of 2017 - - - Dated:- 31-8-2017 - MR. S. MANIKUMAR AND MRS. V. BHAVANI SUBBAROYAN, JJ. For The Appellant : Mr. A. P. Srinivas JUDGMENT ( Judgement of this Court was made by S.MANIKUMAR, J.) Commissioner of Central Excise, Coimbatore, has filed the instant Civil Miscellaneous Appeal, against the Final Order No.41146 of 2015, dated 03.09.2015, on the file of Customs, Excise and Service Tax Appellate Tribunal (CESTAT), South Zonal Bench, Chennai 600 006. 2. Short facts leading to the appeal are that M/s.Pricol, Unit-I, Coimbatore, assessee and holder of Central Excise Registration Certificate No.AABCP2380CXM001, is the manufacturer of various mechanical appliance, automobile parts, measuring instruments and parts thereof, falling under Chapter 84, 85, 87 and 90 of the schedule, to the Central Excise Tariff Act, 1985. As manufacturer of the above excisable goods, the assessee availed credit of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he incidence of service tax embedded in the value received from the employees towards the cost of food supplied to them, that was sourced from the caterer; b) the-lower authority may re-compute the eligible service tax credit on the catering service in terms of (a) above. c) The appeal filed by the department is rejected and the order of the lower authority is modified to the above extent. 7. Testing the correctness of the Order-in-Appeal, dated 30.11.2011, of Commissioner (Appeals), vide Final Order No.41146 of 2015, dated 03.09.2015, the CESTAT, Chennai, has ordered as follows: The only dispute in this appeal is whether Cenvat Credit on the service of Man-Power Recruitment or Supply Agency availed by respondent is permissible to the respondent. There is no finding in the appellate order, as to the use of such service nor also any finding as to the requirement of man-power for running the canteen, which was the part of the factory. Therefore, there is no need to interfere with the order of learned Commissioner (Appeals), for which, the Revenue appeal is dismissed. 8. Being aggrieved by the same, instant Civil Miscellaneous Appeal has been filed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned), consists of three categories of services. The first category, covers services which are directly or indirectly used in or in relation to the manufacture of final products. The second category, covers the services which are used for clearance of the final products up to the place of removal. The third category, includes services namely; a) Services used in relation to setting up, modernization, renovation or repairs of a factory, b) Services used in an office relating to such factory, c) Services like advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, d) Activities relating to business such as, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit relating, share registry and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal. Thus, the definition of 'input service' not only covers services, which fall in the substantial part, but also covers services, which are covered under the inclusive part of the definition. 28. In the present case, the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items as input and to avoid such contingency the Legislature has incorporated the inclusive part after the substantive part qualified by the place of use. For example, one of the categories mentioned in the inclusive part is used as packing material . Packing material by itself would not suffice till it is proved that the item is used in the course of manufacture of final product. Mere fact that the item is a packing material whose value is included in the assessable value of final product will not entitle the manufacturer to take credit. Oils and lubricants mentioned in the definition are required for smooth running of machines, hence they are included as they are used in relation to manufacture of the final product. The intention of the Legislature is that inputs falling in the inclusive part must have nexus with the manufacture of the final product. 16. In our earlier discussion, we have referred to two considerations as irrelevant, namely, use of input in the manufacturing process, be it direct or indirect as also absence of the input in the final product on account of the use of the expression used in or in relation to the manufacture of final product . Similarly, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusive part of the definition of input service extends to services used prior to/during the course of/after the manufacture of the final products. The fact that the definition of input service' is wider than the definition of input' would make no difference in applying the ratio laid down in the case of Maruti Suzuki Ltd. (supra) while interpreting the scope of input service'. Accordingly, in the light of the judgment of the Apex Court in the case of Maruti Suzuki Ltd. (supra), we hold that the services having nexus or integral connection with the manufacture of final products as well as the business of manufacture of final product would qualify to be input service under Rule 2(l) of 2004 Rules. 32. As rightly contended by Shri Shridharan, learned Counsel for the respondent-assessee, in the present case, the assessee carrying on the business of manufacturing cement by employing more than 250 workers is mandatorily required under the provisions of the Factories Act, 1948 to provide canteen facilities to the workers. Failure to do so entails penal consequences under the Factories Act, 1948. To comply with the above statutory provision, the assessee had engaged t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices would be allowable. 35. The argument of the revenue, that the expression such as in the definition of input service is exhaustive and is restricted to the services named therein, is also devoid of any merit, because, the substantive part of the definition of 'input service' as well as the inclusive part of the definition of 'input service' purport to cover not only services used prior to the manufacture of final products, subsequent to the manufacture of final products but also services relating to the business such as accounting, auditing ....... etc. Thus, the definition of input service seeks to cover every conceivable service used in the business of manufacturing the final products. Moreover, the categories of services enumerated after the expression 'such as' in the definition of 'input service' do not relate to any particular class or category of services, but refer to variety of services used in the business of manufacturing the final products. There is nothing in the definition of 'input service' to suggest that the Legislature intended to define that expression restrictively. Therefore, in the absence of any intention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40. For all the aforesaid reasons, the question of law framed by the revenue is answered in the affirmative, i.e., in favour of the assessee and against the revenue. However, the CENVAT credit reversed by the assessee, belatedly, having not been verified by the Excise Authorities, the Excise Authorities are directed to verify the same and pass an appropriate order in that behalf. 10. Though several grounds have been raised in the instant Civil Miscellaneous Appeal and reliance made on Maruti Suzuki Ltd., v. CCE, Delhi [2009 (240) ELT 641 (SC)], Bombay High Court had discussed Maruti Suzuki's case (cited supra), thoroughly and distinguished the said decision. It has also held that for a service, to qualify as Input Service , the said service should be integrally connected with the business of the manufacture of final product. 11. Though it is stated that Ultratech's case is under appeal before the Hon'ble Supreme Court, there are no averments, as to whether, the decision of the Bombay High Court has been stayed or set aside. It is settled law that mere filing of an appeal does not amount to stay. Till a final decision is taken on the said appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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