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TMI Blog2019 (2) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture. Any activity which relates to business of manufacture falls within the definition of input service. The definition of input service has a 'means part' and an ‘inclusive part’. In the means part, the second sub-clause says that any service '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'. The, phrase 'whether directly or indirectly, in or in relation' is so wide so as to include all activities pertaining to manufacture of finished product. In the case of M/s. Mahindra & Mahindra Ltd., [2012 (8) TMI 530 - CESTAT, MUMBAI], it was observed that after sale service activities rendered by the dealers as part of warranty offered by manufacturer would qualify as input services, when such expenses have been included in the assessable value - In the present case, the department does not deny the fact that such charges have been included in the assessable value of the appellants. Since, during the relevant period, the definition of 'inputs' included the words "all activities relating to the business", we have to safely conclude that the said activity re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... servicing the products within the territory allotted to the dealers. They had entered into a Memorandum of Understanding [hereinafter referred to as MOU ] with TVSFS for financing the purchase of two wheelers manufactured by the appellants. The purpose of MOU was that TVSFS have to exclusively finance the purchase of two wheelers manufactured by the appellants to the ultimate consumers and thereby promote sale of TVS two wheelers. The salient feature of the agreement was that TVSFS should not enter into similar agreements with other two wheeler manufacturers. That they should not extend financial assistance to purchasers for purchasing two wheelers not manufactured by appellants. As per the MOUs entered for the year 2005-06 to 2007-08, TVSFS was required to set up infrastructure in semi-urban and rural areas to promote the business of the appellants. As consideration for such activity, the appellants were required to pay TVSFS an amount calculated on per vehicle basis subject to a maximum of ₹ 10 crores per annum. The intention of the agreement was to provide loan to purchasers of TVS vehicle and thereby promote sale of two wheelers manufactured by appellants. Thus, the ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red. 2.2 He relied upon the decision of Hon'ble Apex Court in M/s. RamalaSahakariChini Mills Ltd., Vs Commissioner of Central Excise reported in 2016 (334) E.L.T.3 (S.C.) to argue that the word 'include' used in the definition of input services is to be interpreted so as to enlarge the meaning of the preceding words and cannot be used to restrict the same. The department does not have a case that TVSFS is not providing BAS. TVSFS is also paying service tax on the said services. Hence, the credit being eligible, the demand may be set aside. The Ld. Counsel also argued on the grounds of limitation. He submitted that the credit was disclosed in ER-1 returns and, therefore, there is no suppression of facts. Hence, the demand raised invoking extended period is incorrect, both legally and factually. 3.0 The learned Authorised Representative Ms. Usha Devi supported the findings in the impugned order. She submitted as under: 3.1. The services rendered by TVSFS is not a service in relation to promotion or marketing or sale of goods, produced or provided or belonging to the appellants. The goods have been cleared from the factory to the dealers and then these goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g loans is not disputed. The allegation of the department is that such activity carried out by TVSFS does not amount to promotion of sale or marketing of the goods belonging to appellants. According to department, the goods already having been cleared and sold to dealers, the goods (vehicles) no longer belong to appellants. As per definition, the sales promotion or marketing of goods belonging to client only would come within BAS. Thus, services are not used for manufacture of final products (vehicles) and, therefore, is not input service for appellants. Let us proceed to examine this allegation. 7. Prior to 01.04.2011, the definition of 'input services' included the words activities relating to business . The appellants being engaged in manufacture of motor vehicle looks upon the authorised dealers to sell their vehicles. The loan facility available at the dealer's premises would naturally enhance the sale of motor vehicles. Thus, the agreement entered by the appellants with TVSFS for arranging and disbursing of loans to customers at the dealers premises is indeed a sales promotion activity rendered by TVSFS to the appellants. Such services cannot be considered as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds received in the factory of manufacture of the final product. Such a restriction, however, is not imposed in regard to input services since the only stipulation in clause (ii) is that the input services should be received by the manufacturer of the final product. Hence, even as a matter of first principle on a plain and literal construction of Rule 3(1) the Tribunal was not justified in holding that the appellant would not be entitled to avail of Cenvat credit in respect of services utilized in relation to ammonia storage tanks on the ground that they were situated outside the factory of production. The definition of the expression 'input service' covers any services used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products. The words 'directly or indirectly' and 'in or in relation to' are words of width and amplitude. The subordinate legislation has advisedly used a broad and comprehensive expression while defining the expression 'input service'. Rule 2(1) initially provides that input service means any services of the description falling in sub-clauses (i) and (ii). Rule 2(l) then provides an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... customers. Sales promotion and market research helps to plan strategies of manufacture as well as for improvement of the product. It also helps to understand the competitors in the field. For these type of services a definite line cannot be drawn between pre or post-manufacturing activity. An advertisement of a product is launched after the manufacture is complete. The places of dealers are included in the advertisement so as to facilitate customers to buy products and this may be considered as an activity after clearance of goods also. Market research is done not only in case of procurement of inputs but also on feedback of customers who have purchased the product. Activities like, auditing, financing, accounting, training etc., are availed and necessary even after clearance of goods. All this would go to show that the definition of 'input service' is wide enough to extend to services availed even after clearances of goods. 10. In the case of M/s. Mahindra Mahindra Ltd., (supra), it was observed that after sale service activities rendered by the dealers as part of warranty offered by manufacturer would qualify as input services, when such expenses have been include ..... X X X X Extracts X X X X X X X X Extracts X X X X
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