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TMI Blog2023 (9) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... steel material used for repair of barges are admissible for Cenvat credit. Thus, the issue is no longer res-integra accordingly any material used for construction of building or fabrication of any equipment which is in turn used for providing output taxable service, on the material so used, the credit is correctly admissible. Therefore, considering the settled legal position on the issue in hand, the impugned order is not sustainable, hence the same is set-aside. Enhancement of penalty - HELD THAT:- As regards the Revenue s appeal, since it is only for enhancement of penalty which is nothing but consequential to confirmation of demand and when demand itself is not sustained there is no question of penalty. Hence the Revenue s appeal has no substance accordingly the same is liable to be dismissed. The assessee s appeal is allowed and Revenue s appeal is dismissed. - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. C.L. MAHAR, MEMBER (TECHNICAL) Shri PD Rachchh, Advocate for the Appellant Assessee Shri Tara Prakash, Deputy Commissioner (AR) for the Respondent-Revenue ORDER The issue involved in the present case is that whether the appellant is entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he barges were used for providing output service hence the material is input. Therefore, the issue is no longer res-integra. 3. Shri Tara Prakash, learned Deputy Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. 4. On careful consideration of the submissions made by both the sides and perusal of record we find that the issue that any material used for making some equipment or building and in turn that equipment and barge is used for providing output service, material which were used shall be treated as input in terms of Rule 2(k) of Cenvat Credit Rules, 2004. On this very issue, much water has flown and even in the identical facts in the case of M/s. Shreeji Shipping Services India Limited and M/s. Krishnaraj Shipping Company Limited, this Tribunal vide order No. A/11590-11591/2018 dated 09.07.2018 has held that steel material used for repair of barges are admissible for Cenvat credit. The said decision is reproduced below:- The issue involved in the present appeals is that whether the appellant is entitled for Cenvat credit in respect of steel items such as Steel Plates, HR Plates, Angels, Channels etc. used for repair of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l products or for any other purpose, within the factory of production; (ii) all goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing any output service. Explanation 1. - The light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever. Explanation 2. - Input includes goods used in the manufacture of capital goods which are further used in the factory of the manufacturer; (l) input service means any service, - (i) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal, and includes service 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 up to the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coachi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 2(k) would demonstrate that all the goods used in relation to manufacture of final product or for any other purpose used by a provider of taxable service for providing an output service are eligible for Cenvat credit. It is not in dispute that the appellant is a taxable service provider on port under the category of port services. Therefore, the appellant was entitled for input credit and the decision of the Division Bench of the Andhra Pradesh High Court squarely applies to the facts of the case and answered the question on which the appeal has been admitted. 8 . Mr. Y.N. Ravani, learned counsel for the Revenue has placed reliance on the decision of the Larger Bench of the Tribunal in Vandana Global Limited v. Commissioner of Central Excise, Raipur,2010 (253) E.L.T. 440. We have carefully gone through the decision of the Larger Bench of the Tribunal. We do not find that amendment made in Cenvat Credit Rules, 2004 which come into force on 7-7-2009 was clarificatory amendment as there is nothing to suggest in the Amending Act that amendment made in Explanation 2 was clarificatory in nature. Wherever the Legislature wants to clarify the provision, it clearly mentions intention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. No order as to costs. The similar issue has been considered by the Andhra Pradesh High Court in the case of Sai Sahmita Storages (P) Limited (supra) wherein the following order was passed:- 6 . The only allegation against the assessee is that they claimed CENVAT credit irregularly with reference to cement and TMT bars used in the construction of warehouses through which the storage and warehousing services are provided by the assessee. Section 65(102) of the Finance Act defines storage and warehousing as to include storage and warehousing services for goods including liquids and gases but does not include any service provided for storage of agricultural produce or in service provided by cold storage. As per Section 65(105)(zza), read with Section 66 of the Finance Act, there shall be levied tax on storage and warehousing services at 12% of the value of taxable service. The service tax payable is determined in accordance with Section 67(4) read with the Service Tax Rules, 1994 made in exercise of the powers under Section 94 of the Finance Act. There is no dispute that every provider of taxable service is entitled to claim CENVAT credit in relation to input service. Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Central Excise, Delhi-III, (2009) 9 SCC 193 = 2009 (240) E.L.T. 641 (S.C.) the Supreme Court laid down as follows. 9. Coming to the statutory definition of the word input in Rule 2(g) in the CENVAT Credit Rules, 2002, it may be noted that the said definition of the word input can be divided into three parts, namely: (i) specific part (ii) inclusive part (iii) place of use 10. Coming to the specific part, one finds that the word input is defined to mean all goods, except light diesel oil, high speed diesel oil and petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not. The crucial requirement, therefore, is that all goods used in or in relation to the manufacture of final products qualify as input . This presupposes that the clement of manufacture must be present. 8 . Yet again considering the inclusive part of the definition of input , it was held as follows. All these considerations become relevant only when they are read with the expression used in or in relation to the manufacture of final product in the substantive/specific part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court has passed the following order:- 5 . For dwelling on the issue, definition of Input and Input Service provided under Cenvat Credit Rules, 2004 needs reference : (k) input means (i) all goods used in the factory by the manufacturer of the final product; or (ii) any goods including accessories, cleared along with the final product, the value of which is included in the value of the final product and goods used for providing free warranty for final products; or (iii) all goods used for generation of electricity or steam for captive use; or (iv) all goods used for providing any output service; but excludes (A) light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol; (B) any goods used for (a) construction 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 any taxable service specified in sub-clauses (zn), (zzl), (zzm), (zzq), (zzzh) and (zzzza) of clause (105) of Section 65 of the Finance Act (C) Capital goods except when used as parts or components in the manufacture of a final product; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee; 6. The above definition of Input and Input service would manifest that all goods used for providing any output service excluding Light Diesel Oil, High Speed Diesel or Motor Spirit or any goods used for construction of a building or a civil structure or a part thereof or laying of foundation or making of structures for support of capital goods, except for the provision of any taxable service etc. are treated to be Input . 7 . Similarly, an Input service would mean any service used by a provider of taxable service for providing an output service includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output services or an office relating to such factory or premises are treated to be Input Service . 8 . In the case at hand, the respondent has constructed a Railway Siding which is a Low Speed Track distinct from a running line or through route such as a main line or branch line. It is used for marshaling, stabling, storing, loading and unloading vehicles and other goods. The Railway Siding o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cus. - 2015 (39) S.T.R. 726 (Guj.) has taken the same view by allowing Cenvat credit to the company who has constructed Jetty within the Port Area for providing Port Services. 13 . For the above stated reasons, we answer the substantial question of law against the Revenue and in favour of the Assessee Company. 14 . Consequently, the appeal fails and is hereby dismissed. 5. From the above consistent view of various High Courts and following the same by the Tribunal, the issue is no longer res-integra accordingly any material used for construction of building or fabrication of any equipment which is in turn used for providing output taxable service, on the material so used, the credit is correctly admissible. Therefore, considering the settled legal position on the issue in hand, the impugned order is not sustainable, hence the same is set-aside. 6. As regards the Revenue s appeal, since it is only for enhancement of penalty which is nothing but consequential to confirmation of demand and when demand itself is not sustained there is no question of penalty. Hence the Revenue s appeal has no substance accordingly the same is liable to be dismissed. 7. As a result, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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