9911796707
TMI Blog2022 (11) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... ons in a time bound manner. Failure to make any inquiry specific to availment of CENVAT Credit on taxable and exempted services by the department cannot be ground for invocation of extended period of limitation by alleging charge of suppression against the appellant. For its own failure to make inquiry and investigations within the prescribed period of time, department cannot invoke extended period of limitation. The demand to this extent cannot be sustained and needs to be set aside. Computational Errors - HELD THAT:- As regards computational error as stated by the revenue in the appeal the issue do not involve any specific question of law to be agitated upon. Appellant have also pointed out certain computational errors in calculating the amounts to be confirmed. These are matter of factual verification for which we would remand the matter back to the original authority for re- computation of demand if any in accordance with the principles of law. The applicability of Rule 6 (3) by treating the 34 services as has been held by the Commissioner as common input services for providing the exempted and taxable services of brand promotion - the present case is not for determination of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance Act, 1994 against M/s. Tata Sons Ltd. The balance amount of demand is ordered to be dropped as discussed in para 4.3, 4.6 and 4.10 supra. 5.2 I hereby order the payment of interest at the appropriate rate under Rule 14 of the CCR, 2004 read with Section 75 of the Finance Act, 1994 on the above service tax amount of Rs. 36,42,20,169/- confirmed against M/s. Tata Sons Ltd as above. 5.3 I impose penalty equal to 100% of CENVAT credit wrongly availed and utilized which comes to Rs. 36,42,20,169/- Penalty would be payable under Rule 15(4) of CCR period from 1.10.2008 to 27.02.2010 and under Rule 15(3) of CCR for the period from 1.3.2010 to 31.3.2013. 6. This order is issued without prejudice to any other action that may be initiated against the noticee under the provisions of the Finance Act, 1994 or rules framed there under or any other law for the time being in force in India." 2.1 Appellant is registered service provider providing taxable services under the category of Intellectual Property Services [Section 65 (105) (zm)] and Banking and Financial Services [Section 65 (105) (zzr)] of the Finance Act, 1994. 2.2 During course of audit it was observed that appellant was regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit Rules, 2004 read Section 75 of the Finance Act, 1994 should not be recovered from them. c. Penalty should not be imposed on them under the provisions of Rule 15 (3) or 15 (4) of Cenvat Credit Rules, 2004 as applicable during the relevant period read with Section 78 of the Finance Act, 1994" 2.5 The show cause notice was adjudicated as per the impugned order referred in para 1 above. 2.6 Aggrieved by the order, both Appellant and Respondent have filed appeal before the tribunal. 3.1 We have heard Shri Vikram Nankani, Sr. Advocate, with Shri Rohit Jain, Shri Nawz Pal, Advocates and Shri Jignesh Ghelani, C.A. for the appellant and Shri Shamboo Nath, Principal Commissioner, Authorized Representative for the revenue 3.2 Arguing for the appellant learned counsel submits: In this regard, pursuant to the hearing on 20.07.2022, the Appellant makes the following submissions, which are without prejudice to each other, and the submissions made in the appeal. * The Appellant is a CIC and the same is an admitted fact as evident from para. (2 of the SCN and para. 4.2 of the OIO). The expression CIC, is defined by the RBI in exercise of powers conferred under the Reserve Bank of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ESTAT AHMEDABAD] * Panacea Biotec Ltd. [2019 (1) TMI 1245 - CESTAT NEW DELHI] * As per the Department appeal, value of exempt service on account of trading in securities must be the sale value of the securities during the period prior to 01.04.2011 and the margin scheme introduced vide Explanation to Rule 6(3D) will only apply for the period post 01.04.2011. * In M/s Mercedes Benz India Pvt. Ltd [2020 (3) TMI 146 - CESTAT MUMBAI]. it was held that the entire sale value of the securities cannot be regarded as the value of exempt service. In paras. 19 and 20 it is stated that the principle incorporated vide formula introduced as per amended Rule 6 w.e.f. 01.04.2011 shall apply for the period prior to 01.04.2011 also. The OlO has however allowed the benefit of the margin scheme for the entire disputed period. * 34 services on which credit is sought to be modified are exclusively used for provision of taxable output services of intellectual property rights and have direct nexus with the taxable output services. Accordingly, entire CENVAT Credit attributable to 34 services should be eligible. In this regard, it is submitted that the finding in para. 4.11.1 of the OIO that promot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Excise, Pune-III, 2019 (6) TMI 1327 - CESTAT MUMBAI where it was held that extended period is not invokable in respect of the present issue in question even for the period post 01.04.2011 * There are computational errors in the order. The Cenvat credit availed by the Appellant has been considered higher by Rs. 1,77,99,483/-. the percentage of credit attributable to taxable services arrived at by the OIO in para. 4.9 was applied in reverse order in para 4.10 to arrive at the proportionate credit allowed on 34. * Audit observations were issued to the Appellant vide letter ST/HQ/EA-2000/Gr.03/Tata Sons/12-13/3824 dated October 29, 2013, stating that CENVAT Credit amounting to Rs. 9,93,774/- is to be reversed. Pursuant to the EA- audit, the Appellant had reversed the said Cenvat credit. However, the same was not considered in the OlO computation. * Miscellaneous receipts (details given in Exhibit 10 of Appeal) are not in nature of exempt services. Only renting of residential accommodation is exempt service and due reversal of the same has been made under Rule 6(3A) of Credit Rules. * Renting of residential accommodation is an exempt service provided by the Appellant and due r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for its core business and certain services i.e construction related service are excluded from the definition u/r 2(1) of CCR. The total credits on this count denied are Rs. 2.05 cr. * Commissioner has held (at para 4.4 of OIO) that the period of demand from 1/4/2008 to 30.08.2008 is time barred which involved input service credit of Rs.6.14 Cr. The Appellant in their submissions dated 12.5.2015 have stated that credit involved during the period April 2008 to Sep. 2008 was only Rs.3.58 cr, thus, excess credit of Rs.2.56 Cr. was erroneously allowed by adjudicating authority. * During the hearing it was brought to the notice of the Bench that Annexure to the Show cause notice have tabulating wrongful credit of Rs 66.96 cr. The appellants have taken credit on 59 items which are used for earning income for the Core activity as well as Brand promotion activities. Out of 59 items there are 21 items involving input service credit of Rs.2.05 cr which was categorically disallowed by the Adjudication Authority, being exclusively used for exempted service. * Adjudication Order held trading of investments, miscellaneous receipts, income from long term immovable property, guarantee commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) such other instruments as may be declared by the Central Government to be securities; and (iii) Rights or interest in securities," * It was admitted by the Appellant that they are selling and buying the securities from / to their group Companies. It may be seen from the P/L statement for F.Y. 2008 09 extracted at para 3 ibid, that the Appellant have shown Net Profit of Rs. 206485 Lakhs on sale of investment. The Appellant investment portfolio contain share, debenture, units in mutual funds, etc. It was argued by AR that during the year 2008-09 and subsequent years the income generated from the sale of investments, interest, dividends constitute around 93% of total income and the appellant have use the common credit of Rs 66.96 cr for earning this income. It is erroneous on the part of the Appellant to state that input services has not been used for exempted/non taxable activity. * The definition of exempted services under CENVAT Credit Rules, 2004 prior to 1.4.2011 is as under: Rule 2 (e) "exempted services" means taxable services which are exempt from the whole of the service tax leviable thereon, and includes services on which no service tax is leviable un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercedes Benz India Pvt Ltd. [2016 (41)STR 577 (Bom.)] * Delcam Software India Pvt Ltd [2016(43) STR 103 (Tri. Mum)] * AVL India pvt Ltd. - 2017 (4) GSTL 59 (Tri.Del.) * CESTAT Excise, Common Appeal - Final Order No. A/85162-85165/2020 dt. 31.01.2020 * Credit of input service can be taken for providing output service either taxable or exempted and taxable both. The CCR, 2004 do not provide for taking credit on non-service activity. If input service on which credit have been taken for the taxable service as well as non-service activity, then assessee is bound to reverse the credit on the portion of non service activity on pro-rata basis. * Subsequently, demand amounting to Rs. 36,42,20,169 was confirmed vide the old based on the following grounds: * Credit amounting to Rs 2,05,14,207/- in respect of 21 services was disallowed fully on the ground that they did not qualify as 'input service' under Rule 2(1) of the CCR having no nexus with the output service provided by the Appellant or specifically barred under the exclusionary clause of Rule 2(1). (para. 4.7 of the OlO) * Appellant is engaged in trading of securities of the group Companies and the same constitute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. On going through the description of input services, which is available in the Annexure to the show cause notice, I find that there may be some substance in the argument of the Noticee, because on the face of it some of the services appear to have been used in providing brand promotion services. Illustration of such service could be telephone services, Chartered Accountant services, Security Agency Services etc., which could have been used for providing brand promotion services as well as other services. In other words, these services could be considered as common input services. However, I also find that only on this basis СENVAT credit cannot be allowed for the entire amount because availment of CENVAT credit is governed by different provisions of the CENVAT Credit Rules. Therefore, in order to take a judicious view, I would be examining other provisions of the CENVAT credit Rules. In fact some of these provisions are beneficial to the Noticee. 4.3. I propose to discuss the following issues: (i) Issue about the time bar i.e. demand being issued for a period beyond 5 years; (ii) Issue about the eligibility under Rule 6(5) of the CENVAT credit Rules; (iii) Issue about t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed CENVAT credit for full amount even though part of these services were used for provision of exempted services. This rule was omitted with effect from 1st April, 2011. I have gone through the list of input services available in the Annexure to the show cause notice and found that five services were covered in the said Rule 6(5). Accordingly, I ordered to allow CENVAT credit on those services for full amount as these appeared to have been used partly used in the taxable output service namely brand promotion services. The details of these services and credit availed is given below: (Amount in Rs.) Sr No Description of input service Clause of Section 65(105) 2010-11 2009-10 1.10.08 to 31.3.09 Total credit availed 1 Security Agency 65(105)(w) 280431 129337 40712 450480 2 Bank & Financial Services 65(105)(z m) 2062215 2685253 1943688 6691156 3 Management Consultant's Services 65(105)(r) 19835269 27424506 20988146 68247921 4 Management, Maintenance & Repair 65(105)(zzg) 409903 627170 839596 1876669 5 Scientific & Technical consultancy service 65(105)(za ) 0 0 2629 2629 Total Credit availed 22587818 30866266 23814771 77268855 In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning, 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; 4.7.3. Thus, vide the Notification No. 3/2011-CE(NT), the scope of "input services" was restricted to keep general activities relating to business' out of the purview of said definition. 4.7.4. Further, from 1st April, 2011 certain services were also specifically excluded from the definition of "Input Services" and these services are given below: (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; b. or 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) services provided by way renting of a motor vehicle, in so far as they relate to a motor vehicle which is not a capital goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices not having direct nexus with the provision of output services. (ii) Services excluded from the definition of input services with effect from 1st April, 2011. (iii) Construction related services. (iv) Restricted meaning of Input Service with effect from 1st April, 2011. [These are being mentioned that as category reasons (i) to (iv) in the table given below ]: (Amount in Rs.) S r n o Description of input service 2012-13 2011-12 2010-11 2009- 10 1.10.0 8 to 31.3.2 009 Total credit availed Reason for denial of the credit 1 Air Travel Agent 147012 994720 101205 225513 135951 1604401 categor y-(i) 2 Event Manageme nt Service 3419654 1117475 1259434 168199 407867 6372629 categor y-(i) 3 Fashion designing 0 0 0 0 389 389 categor y-(i) 4 Mandap Keepers 2348995 1916286 994555 394425 405033 6059294 categor y-(i) 5 Outdoor Caterer's Services (event related) 37 0 0 1107 0 1144 categor y-(i) 6 Photograph y 1410 13261 2529 7672 967 25839 categor y-(i) 7 Printing & stationery 0 72615 0 0 0 72615 categor y-(i) 8 Real Estate Agent 726205 670219 315580 213438 78952 2004394 categor y-(i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty, Exchange gain etc. I need to examine as to whether any of those income has been arising out of an activity which can be considered as provision of service or not. This would be necessary to determine whether those activities can be considered as 'exempted service or taxable service. Further, for the purpose of proportionate reversal under Rule 6(3A) of the CCR, the said determination is necessary, Before discussing these aspects in detail, the definition of term 'exempted service as given in Rule 2(e) of the CCR, 2004, is given below: Definition up to 30.6.2012 (e) "exempted services" means taxable services which are exempt from the whole of the service tax leviable thereon, and includes services on which no service tax is leviable under section 66 of the Finance Act and taxable services whose part of value is exempted on the condition that no credit of inputs and input services, used for providing such taxable service, shall be taken". Explanation: For the removal of doubts, it is hereby clarified that "exempted services includes trading; Definition from 01.07.2012 (e) "exempted service" means a - 1) taxable service which is exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f removal of doubts, therefore, this Explanation would also be applicable for the period prior to 1st April, 2011. This view has also been held by the Hon'ble Supreme Court in the case of M/s. Oblum Electrical Industries V/s. CC, Bombay (1997(94)ELT 449 (SC) wherein it was held that " It is a well settled principle of statutory construction that the Explanation must be read as to harmonize with an clear up any ambiguity in the main provision". Further In the case of H & R JOHNSON (INDIA) LTD. V/S CBEC, [2002 (144) E.L.T. 506 (Kar.)] the Karnataka High Court, in Para 14 held as under "........ One of the recognized principles of interpretation of statutes is that if there is ambiguity in an earlier legislation, a subsequent legislation may fix the proper interpretation which is to be put upon the earlier (vide : State of Bihar v. S.K. Roy (AIR 1966 SC 1995)...". Thus, an Explanation should not be so construed as to widen the ambit of the section. Thus it is a settled position that when the Explanation is added which is not widening the scope of tax or is not in substantive in nature, the same has be read as clarificatory nature and has retrospective effect. 4.8.2.2. Next que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1% of purchase Value of Exempted Service Rs. in Crs* TATA MOTORS 4720637195 9558344838 4837707643 47206372 483.77 ADVINUS THERAPEUTI CS LTD 62607600 78259500 15651900 626076 1.57 TATA SKY 1909822478 3245909337 1336086859 19098225 133.61 TATA CAPITAL 454490781 572763360 118272579 4544908 11.83 TOTAL 7147558054 1345527703 5 6307718981 71475581 631 (Amount in Rs. For col 2 to 5) FY-2011-12 BOOKVALUE OF SHARE SALE PROCEEDS PROFIT/LOS S ON SALE 1% of purchase Value of Exempted Service Rs.in Crs* TATA MOTORS 4393244522 996214576 4 5568901242 4393244 5 556.89 ADVINUS THERAPEUTICS LTD 95700000 149242645 5 3542645 957000 5.35 TATA INVESTMENT 19909716 35451820 15542104 199097 1.55 TATA GLOBAL BEVERAGES 662662160 2107070900 1444408740 6626622 144.44 TOTAL 5171516398 12253911129 7082394731 51715164 708 (Amount in Rs. For col 2 to 5) FY-2012-13 BOOKVALUE OF SHARE SALE PROCEEDS PROFIT/LOS S ON SALE 1% of purchase Value of Exempted Service Rs. in Crs* 1 2 3 4 5 6 TATA MOTORS 640108746 172916504 4 1089056298 6401087 108.91 ADVINUS THERAPEUTICS LTD 97597200 100792649 3195449 975972 0.32 COMUT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income from 'service' because interest on loan' has been excluded from the scope of "value of taxable service" in terms of Rule (2) of the Service Tax (Determination of Value) Rule 2006. Further, under Negative list era from 1 July, 2012, the activity of extending loan on deposit has been placed under Negative list under Section 66 (D)(N) 9. On the basis of above discussion the percentage of the credit attributable to the taxable services and exempted service is quantified as under (Amount Rs, in Crores) Pe rio d Divi den d Inc om e Inco me fro m the taxa ble serv ices (Bra nd Pro moti on Sch eme ) (TS) Profit on sale of term inves tmen ts and and lapse of warr antie s (ES) Mis c Rec eip ts (ES ) Inco me from long term inves tmen ts in mov able prop ertie s (ES) Exc han ge Gai ns (NS ) Guar antee Com missi ons (Exp orts) (TS) Pro fit on sal e of Cu rre nt As set s (N S) Pr ofi t on sal e of fix ed As se ts (N S) Int ere st Inc om e (N S) Tot al inc om e fro m tax abl e ser vic es (3 +8 ) Valu e of exe mpt ed serv ice (4+ 5) Tot al val ve of ser vic e inc om e (1 2+ 13 ) % of tax abl e ser vic e 1 2 3 4 5 6 7 8 9 10 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s Service 852 0 0 0 0 852 2 1 Sponsorship service 105784 68 14166 996 16969 810 7526053 8912050 58153377 2 2 Telephone 388173 46301 5 29253 3 480999 301260 1925980 2 3 Video Tape Services 70860 34426 3 20117 44352 8181 487773 2 4 Bank & Financial Services 214124 29124 6 0 0 0 505370 2 5 Business Support Services 422686 40 23890 047 22338 368 1886678 7 9786127 117149969 2 6 Interior Decorator 24039 47297 55426 22701 74943 224406 2 7 Internet Café 182539 18402 89200 223910 134783 648834 2 8 Insurance Auxiliary Service 931079 84029 8 93934 9 1074153 106721 3891600 2 9 Management Consultant's Services 121645 43 53956 894 66121437 3 0 Management, Maintenance & Repair 112282 2 26901 09 3812931 3 1 Business Exhibition Services 2379 74749 40423 25959 27598 171108 3 2 Commercial Training & Coaching 378290 8 28208 87 78836 2 2598587 31827 10022571 3 3 Convention Services 123473 1 18196 42 84465 5 675960 1230371 5805359 3 4 Hiring of charter 350961 42 48028 57 34568 35 959026 558020 44872880 Total Credit Availed 165620 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... input services used for provision of taxable and exempted service and as per rule 6(3), proportionate reversal of credit is necessary. Similarly, the expenses incurred in advertising agency are also meant for advertising TATA brand. The logic given for service provided by 'Vaishnavi' would be equally applicable for this service also. Other services like Chartered Accountant services or telephone services or security services etc., can be said to be used for providing brand promotion services as well as it will help in provision of other exempted service like service of trading shares. Same logic would be applicable for other services also. Therefore, I do not agree with the Noticee's contention that these services are exclusively used for brand promotion services. To repeat, the telephones have been used for carrying out business of TATA Sons as a whole and it cannot be said that the said service is used only for brand promotion and not for any other activity. 4.11.2. The total amount demanded in Show Cause Notice is summarized as below: TEXT AMOUNT (Rs) RELEVANT PARA OF THE ORDER A CORRECTED DEMAND AMOUNT OF SCN 670080012 4.5 B LESS AMOUNT TIME BARRED 614683 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed Annual Reports, details of CENVAT credit attributable to exempted services, information for preparing the profile of the company, 3CD Income Tax Audit report etc. Submitting the Balance Sheet or 3CD report or reversal of credit information does not mean that department was aware of availing of CENVAT credit of various services which are used in taxable as well as non-taxable services. If the information is given by a well reputed group like of Noticee, department cannot believe that those information would be incomplete. Simply giving copy of the Balance Sheet does not mean that all relevant information has been provided to the department. I could have accepted their view, if any inquiry specific to availment of CENVAT credit on exempted and taxable service was initiated by the department and if they have provided information with regard to use of services in the taxable and exempted service. In fact when they have submitted the information regarding use of input services in the exempted output services, department can very well accept their version that whatever services they have used in the exempted services they have declared to the department. Therefore, I find that submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of demand if any in accordance with the principles of law determined by us in this order. Merits of the Case: 4.8 The demand in the present case has been made by referring to the incomes indicated by the appellant in their book of accounts. The case against the appellant is that substantial portion of the business income earned by the appellant is from trading of securities, which is exempt from payment of service tax. Even if it is held that appellants were trading in securities, then also for the benefit of Rule 6 (3D)(d) of CCR will have to be allowed, and impugned order cannot be faulted to that extent. The department appeal in this respect do not hold any merits. For making the observation to this effect learned Authorized Representative has marshaled is arguments based definition of Securities in the Securities Contract (Regulation) Act, 1956 and Sale of Goods Act. The definitions under these Acts have been adopted under Finance Act, 1994. However while making the above submissions while both as per show cause notice and impugned order accept that the appellant is CIC and as per RBI Directions they are barred from trading in securities. In our view the appellants do not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 66 of the Finance Act (and taxable services whose part of value is exempted on the condition that no credit of inputs and input services, used for providing such taxable service, shall be taken. Explanation - For the removal of doubts, it is hereby clarified that "exempted services" includes trading)" 12. It can be seen from the above definition that in order to be termed as "Exempted Services", the following is required: (i) Taxable service which is exempted from whole of service tax leviable thereon or (ii) Service, on which no service tax is leviable under section 66(B) of Finance Act; or (iii) Taxable service whose part is exempted on the condition that no credit on input and input services used for providing such taxable services shall be taken but shall not include the service which is exported. 13. The definitive meaning attributable to the above would mean that an exempted service means no tax should have been leviable on the same and a person undertaking trading of securities on his own account does not discharge any tax qua other activity. However, under the Finance Act, 1994, insurer is not only liable to service tax of that portion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) demanding the reversal of credit on the exempted services. I also find that substantial demand is time-barred as during the audit, the Department entertained the view that the appellant is engaged in providing the exempted services and consequently issued the show-cause notice. The appellant has been filing the returns under the taxable service of 'Commercial Training and Coaching and has provided all the records to the Department during the course of investigation and has not suppressed any material fact from the Department and in view of the various decisions relied upon by the appellant, extended period cannot be invoked where the Revenue's case is based on Balance Sheet and income return and other records of the assessee. In view of my discussion above, I am of the considered view that the impugned order is not sustainable in law and the same is set aside by allowing the appeal of the appellant." * Space Matrix Design Consultants Pvt. Ltd. [2019 (4) TMI 1599 - CESTAT BANGALORE] "5. After considering the submissions of both the parties and perusal of the material on record, I find that the appellants are not in the business of buying and selling of Mutual Fund secu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determination of common input services, but revenue needs to identify those services which have been exclusively used for providing the taxable service and those which have been used for management of investments. Thus for reconsideration of the common inputs used for providing the exempted and taxable service as determined in para 4.8 of the impugned order the matter needs to be remanded back to the original authority. Authorized representative has relied upon certain decisions rendered by the tribunal in case of trading f goods wherein it has been held that proportionate reversal as per the rule 6 (3) should be applicable to the case of trading of goods during the period prior to the amendments made in 2011. We do not have any quarrel with the above proposition to the extent of trading of goods. However as we have held that investment management is not trading of services these decisions do not advance the case of revenue. 4.10 In the case of Hinduja Global Solutions Ltd [2016 (42) STR 932 (T-Ban)] following has been held: "5.1 The issue involved in this case is whether the appellant has correctly availed Cenvat credit or otherwise in respect of the Service Tax paid on the ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... syndication fee for arranging loan of Rs. 200 crores to appellant. 5.4 It can be seen from the above reproduced services which were received by the appellant were in respect of raising of finance for the expansion of the business of the appellant. This specific plea taken by the appellant before adjudicating authority has not been controverted in the impugned order which would mean that the adjudicating authority has accepted that the appellant had embarked upon expansion of the business. It is to be recorded that for expanding any business, there is always requirement of working capital which needs to be raised by the assessee and in this case, it is undisputed that the appellant had raised such finances by investment and divestment and disinvestment of the business interest they had in various entities. 5.5 The plain reading of the definition of input services (as hereinabove reproduced) would indicate that the activities relating to business which is in the second portion of the definition includes the activity of financing which would mean that if an assessee pays Service Tax for the various services received by them for raising the finance, Cenvat credit can be availed. In o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces 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(1) then provides an inclusive definition by enumerating certain specified services. Among those services are services pertaining to the procurement of inputs and inward transportation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udes 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 ….. 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 to 33 &helli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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