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TMI Blog2025 (2) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Act, 1944 defines "factory" means any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured, or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on. Therefore, on an evaluation of the aforesaid statutory provisions and the definition of factory, which means any premises and includes precincts thereof, wherein or in any part of which excisable goods are manufactured or any manufacturing process connected with the production of these goods is being carried on, the chimneys, even though they were decommissioned in 1990, continue to be on the premises or precincts wherein or in any part of which the appellant's activity of manufacture is being carried out - the adjudicating authority erred in denying the cenvat credit on the demolition services used by the appellant for demolition of the decommissioned chimneys. Credit availed based on Input Service Distributor's (ISD) invoices, on services of transportation rendered by clearing and forwarding agents - HELD THAT:- The findings of the adjudicating authority, namely, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the view that the credit availed for demolition of chimneys decommissioned in the year 1990 by the appellants, the credit availed based on Input Service Distributor's (ISD) invoices on services of transportation rendered by clearing and forwarding agents, the credit distributed in respect of M/s.Chettinad Logistics, Chennai and M/s. Image Public Relations P Ltd, New Delhi, were ineligible credits availed by the appellants, issued a show cause notice (SCN) proposing recovery of the ineligible credits with appropriate interest thereon and proposing imposition of penalty. The appellants filed their reply contesting the allegations, pursuant to which they were granted a personal hearing and the adjudicating authority passed the impugned OIO confirming the demand of ineligible credits with appropriate interest thereon and imposing equivalent penalty. Aggrieved by the impugned OIO the appellants are before this Tribunal. 3. The Ld. Counsel Shri. M.N. Bharathi appeared and argued for the appellants. It is submitted that the adjudicating authority has erred in holding that the demolition of chimneys cannot be termed as modernization, renovation and repair of the factory, failing to ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on an invoice containing the details specified in Rule 4A (2) of Service Tax Rules, 1994 (STR, 1994). Further, Rule 7 of CCR, 2004 prescribes the manner of distribution of credit by ISD, as per which the ISD may distribute the CENVAT credit in respect of the service tax paid on the input service to its manufacturing units or units providing output service, subject to the specified conditions. It is submitted that the impugned invoices have been issued by the Appellant's Head Office and Regional offices which are duly registered with jurisdictional Service Tax authorities in accordance with the statutory provisions and complying with the requirements of registration, periodical return submission, audits etc. Hence the returns filed by the said ISD registered premises are subject to scrutiny by their local authorities and the returns/accounts maintained in these registered premises regularly audited by their jurisdictional Service Tax audit officials. The learned counsel submits that the eligibility or otherwise of the service tax credit has to be examined at the end of input service distributor only. Thus it is the responsibility of the jurisdictional officer with whom input ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit on the ISD invoices issued with respect to services provided by M/s. Chettinad logistics, the appellant without prejudice to their submissions on jurisdiction had also submitted statement containing details of ISD credit pertaining to M/s. Chettinad logistics to substantiate that the corporate office had complied with the provisions of ISD mechanism as per Cenvat Credit Rules, 2004. That the credit the appellant availed on ISD invoices pertaining to M/s. Image Public Relations ltd is for their advertisement made during IPL and such advertisements being for sales promotion they are entitled to avail cenvat credit as it is also covered by the term "in relation to" used in the inclusive part of the definition of input service as held by the decision of the Honourable Bombay High Court in M/s. Coca Cola India Pvt Ltd v CCE, Pune III, (2009) 242 ELT 168 (Bom). He also places reliance on the case laws in: 1) COMMR OF CIT., PUNE-I, COMMISSIONERATE V DERLIKON BALZERS COATING INDIA P. LTD, 2019 (366) ELT. 624 (Bom.) 2) CASTROL INDIA LIMITED V COMMISSIONER OF CENTRAL EXCISE, VAPI; 2013 (291) E.L.T. 469 (Tri. -Ahmd) 3) COMMR OF SERVICE TAX, AHMEDABAD V GODFREY PHILIPS INDIA LTD. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of chimneys decommissioned in the year 1990, the credit availed based on Input Service Distributor's (ISD) invoices on services of transportation rendered by clearing and forwarding agents, the credit distributed in respect of M/s. Chettinad Logistics, Chennai and M/s. Image Public Relations P Ltd, New Delhi, were ineligible credits availed by the appellants. 9. In order to appreciate the issue, it is necessary to examine the definition of input service as it existed in the CCR during the relevant period that is April 2013 to November 2013. The definition of "input service" in Rule 2(l) of the CCR came to be substituted by the Cenvat Credit First Amendment Rules, 2011 notified vide notification No.3/2011 C.E.(NT) dated 01.03.2011 with effect from 01.04.2011 and stood further amended vide Notification No.28/2012 C.E.(NT) dated 20-6-2012 with effect from 01-07-2012. 10. What constitutes 'input service' stood defined during the relevant period under Rule 2(l) as under: - "Input Service" means any service, - (i) used by a provider of output service for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of removal; Second part is the inclusive part of the definition which expands the scope beyond the coverage of the first part, the word 'includes' enlarging the scope, without being exhaustive or restrictive, and the Third part covers specific exclusions. The exclusions listed in sub-clause (A), sub-clause (B) and sub-clause (BA) have their exceptions; the service portion in the execution of a works contract and construction services including specified services in sub-clause (A) being permissible when they are used for provision of one or more of the specified services, that is, service listed under clause (b) of Section 66E of the Finance Act, namely the declared services of construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration is received after issuance of completion certificate by the competent authority. The services listed in sub-clause (B) is so far as they relate to motor vehicle are permissible when they are being provided in cases when the credit on the motor vehicle is available as capital goods. The service of general insurance bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld by the Apex Court in Collector of Central Excise v. Solaris Chemtech Limited, 2007(214) ELT 481 (SC) and Doypack Systems (Pvt) Ltd v. Union of India, 1988(36) ELT 201 (SC). 15. We also notice that, Rule 2(t) of Cenvat Credit Rules, 2004 provides that words and expressions used in these rules and not defined but defined in the Excise Act or the Finance Act shall have the meanings respectively assigned to them in those Acts. While factory is not defined in the Cenvat Credit Rules, 2004, it is seen that Section 2(e) of the Central Excise Act, 1944 defines "factory" means any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured, or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on. Therefore, on an evaluation of the aforesaid statutory provisions and the definition of factory reproduced supra, which means any premises and includes precincts thereof, wherein or in any part of which excisable goods are manufactured or any manufacturing process connected with the production of these goods is being carried on, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at this Tribunal has indeed rendered a finding as contended by the appellant. The said decision is also seen followed by this Tribunal in United Phosphorous Ltd v CCE, Surat II, 2013 (30) STR 509 (Tri-Ahmd). It is seen that both, the learned adjudicating authority and the learned A.R., have relied on a decision in Clariant Chemicals (I) Ltd of CESTAT, Mumbai, which being an interim order, again has no precedential value. No contrary decision was relied on or produced before us. So, on this ground alone the denial of cenvat credit taken by the appellant, on Clearing and forwarding agent services based on ISD invoices issued by depots at Chennai and Cochin, is not tenable in law. Even otherwise, we also find that the adjudicating authority has not rendered any finding controverting the appellant's contentions on facts regarding the nature of C & F agent services, namely, that the appellant was availing being not outward freight transportation and rather related to use of these services for clearances being only that upto the place of removal which is permitted under the aforementioned definition of input services. 17. Further, in respect of the services provided by M/s. Chettin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, consequential demand of interest and imposition of penalty cannot sustain and is liable to be set aside. We find that the entire dispute is on the entitlement to cenvat credit and premised on the interpretation of provisions of cenvat credit rules, 2004, and is also by placing reliance on the returns filed by the appellant. Thus, no positive act that would qualify as any of the ingredients required to invoke the extended period of limitation, has been evidenced as committed by the appellant. Therefore, we find the invocation of extended period of limitation and imposition of penalty on this count is also unsustainable. 20. In view of the foregoing facts borne out from the records and the discussions and findings stated above, we find that the appellant succeeds in its Appeal on merits as well as on its plea against invocation of extended period of limitation. The demand made in the impugned order in original being untenable, the demand of consequential interest and the penalty imposed also do not sustain. Hence the impugned order in original is set aside and the appeal is allowed with consequential relief, if any, in law. (Order pronounced in the open court on 17.02.2025) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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