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TMI Blog2023 (2) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... nses are having a connection with the provision of output services. Hon ble High Court of Judicature of Mumbai (Nagpur Bench) in the case of CCE, Nagpur Vs. Ultratech Cement Ltd. [ 2010 (10) TMI 13 - BOMBAY HIGH COURT ] , has held that for an input service 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 input service under Rule 2 (1) of the CCR, 2004. The definition of input service seeks to cover every conceivable service used in the business of manufacturing the final products. 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 final products. Nothing in the definition of input service to suggest that the legislature intended to define the expression such as restrictively. The inclusive part of the definition of input s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd (c) those specified in clause (ii) of this rule, when provided in relation to business or commerce, be provision of such services to a recipient located outside India and when provided otherwise, be provision of such services to a recipient located outside India at the time of provision of such service. In terms of the above, to qualify for the export of service, the service should have been provided in relation to business or commerce and the provision of such service should be to a recipient located outside India. As the tickets were sold in India and the recipients of service are in India and the condition of provision of such service to a recipient located outside India has not been fulfilled according to the show cause notices. For not satisfying the above condition, appropriate Service Tax was demanded on the overriding commission received by the appellant. 3.1 However, learned Advocate Ms. J. Vamini for the appellants have contended that in terms of Rule 3(3) of ESR, 2005, in relation to BAS services, it will be construed as export when such services are provided and used in or in relation to commerce or industry and the recipient of such service is located outs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble during different periods involved to be deemed to have been satisfied - Services rendered to foreign recipient to amount to export of Business Auxiliary Services and exempted from liability to Service Tax - Impugned orders cannot be sustained and set them aside in toto - Section 65(105)(zzb) of Finance Act, 1994 and Rule 3(3) of Export of Services Rules, 2005. - The C.B.E. C. Circular No. 111/5/2009-S.T., dated 24-2-2009 has advised in para-3, that the law has to be read harmoniously so as to avoid contradictions within a legislation and accordingly, the meaning of the terms used outside India has to be understood in the context of the characteristics of a particular category of service as mentioned in sub-rule (1) of Rule 3 of Export of Services Rules, 2005. The circular further gives an example of category of three services [Rule 3(1)(iii)] where it is possible that services may take place even when all the relevant activities take place in India so long as the benefits of the services accrue outside India. Board further clarifies that for Rule 3(1)(iii), the relevant factor is the location of the service receiver and not the place of performance. [paras 7, 7.1, 7.2, 7.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be allowed to take Cenvat credit paid on any input service received. Rule 3 of the CCR, 2004 reads as follows: (1) A manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of ... (ix) the service tax leviable under Section 66 of the Finance Act; (x) the Education Cess on taxable services leviable under Section 91 read with Section 95 of Finance (No.2) Act, 2004 (23 of 2004); and (xa) the Secondary and higher Education Cess on taxable services leviable under Section 136 read with Section 140 of the Finance Act, 2007 (2 of 2007); and paid on (i) any input or capital goods received in the factory of manufacture of final product or premises of the provider of output service on or after the 10th day of September, 2004; and (ii) any input service received by the manufacturer of final product or by the provider of output services on or after the 10th day of September, 2004. including the said duties, or tax, or cess paid on any input or input service, as the case may be, used in the manufacture of intermediat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses are having a connection with the provision of output services. Hon ble High Court of Judicature of Mumbai (Nagpur Bench) in the case of CCE, Nagpur Vs. Ultratech Cement Ltd. (2010 (20) STR 577 (Bom.), has held that for an input service 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 input service under Rule 2 (1) of the CCR, 2004. Further, elaborating the scope of definition of input service, the Court has held that the scope of input service is very wide. Input service covers not only services directly, in or in relation to the manufacture of final product but also various services used in relation to the business of manufacture whether prior to manufacture or after manufacture. The definition is not restricted to services used in or in relation to manufacture of final product but extends to all services having direct nexus or integrally connected with the manufacturing of final product. The definition of input ser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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