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TMI Blog2025 (3) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... s Auxiliary Services, Clubs and Association, Storing and Warehousing, Maintenance and Repair etc. Show Cause Notices were issued to the appellant for the said three periods holding that the services provided by them appear to be ineligible for availing CENVAT credit and hence the CENVAT credit availed along with interest merits recovery and for imposing penalties. After due process of law, the Ld. Commissioner partially allowed CENVAT credit and partially disallowed the credit in each of the appeals. Hence the appellant is before this Tribunal. 3. Shri Raghavan Ramabhadran, Ld. Advocate appeared for the appellant and Smt. O.M. Reena, Ld. Authorized Representative appeared for the respondent. 4. The Ld. Advocate for the appellant summarised the appeal-wise issues as in the table below. Table Particulars E/40964/2016 E/40761/2018 E/41036/2019 Order-in- Original reference OIO No. 12/2016 (C) dated 05.02.2016 OIO No. 02/18 (C) (C. Ex) dated 31.01.2018 OIO No. 01/2019 (C) (C. Ex) dated 29.03.2019 Show Cause Notice reference SCN No. 52/2014 (C) dated 24.09.2014 SCN No. 05/2017 (C) dated 01.09.2017 SCN No. 01/2019 (C) dated 16.01.2019 Period May 2011 to Septem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onals, the Bangalore Chamber of Industry and Commerce, etc. The Appellant had paid service tax paid on such membership which had been obtained. v. Storing and Warehousing Charges (INR 4,593/-) May 2011 to September 2013 The Appellant utilizes warehousing services for storing various documents related to the accounts of the Appellant Company and also other back- up files which are integral for carrying on the operations of the Appellant effectively The Ld. Advocate stated that the undisputed and admitted facts in the present appeals are; i) Credit pertaining to the appellant have been distributed in line with rules laid down under the CCR. ii) AMC obligations or repair obligations qualify as common input services used in both manufacturing unit as well as in exempted service. iii) The quantum and manner of credit availed is not disputed. It is not the case of Department that credit pertaining to exempted activities (trading) has been distributed to the manufacturing unit. iv) Membership services have been availed with manufacturing association in order to know the latest developments in the industry. The Ld. Advocate submitted the issues mentioned in the table ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal" The issues involved are discussed below. 5.1 AMC & Warranty Charges: The Appellant has stated that the issue of annual maintenance service (Management, Maintenance or Repair Service) received from authorized service providers beyond the warranty period for their traded goods being an eligible input service under Section 2(l) of CCR 2004 has been settled in favour of the assessee. They have placed reliance on a) Carrier Airconditioning & Refrigeration Ltd vs CCE Gurgaon 2016 (41) S.T.R. 1004 (Tri. - Del.), b) M/s. Acer India Private Limited vs CCE 2023 (11) TMI 720- CESTAT Chennai 5.2 We find that the Ld. Original Authority was of the view that AMC service rendered beyond the warrant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5.5 The Hon'ble Supreme Court in a catena of judgments has interpreted the phrase 'in or in relation to'. In CCE V/s Rajasthan State Chemical Works [1999 (55) ELT 444 (SC)] and Union of India V/s Ahmedabad Electricity Co. Ltd [2003 (158) ELT 3 (SC)], it was held that services which are integrally connected with the process of manufacture without which such manufacture would be impossible or commercially inexpedient shall be covered within the definition of 'input service'. In J. K. Cotton & Wvg. Mills Ltd. [1997 (91) ELT 34 SC], "in the manufacture of goods" normally covers the entire process of conversion from raw materials to finished products. In the case of Commissioner Of C. EX., Nagpur Vs Ultratech Cement Ltd. [2010 (260) E.L.T. 369 (Bom.)], the Hon'ble Bombay High Court, has dealt with the scope of the said phrase and held as under : "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 Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f proof while claiming the benefit of a scheme provision is on the assessee. It is for him to show that he is compliant to the same. In Martin Burn Ltd. Vs The Corporation of Calcutta, [AIR 1966 SC 529], the Apex Court, held; 'A result flowing from a statutory provision is never an evil. A Court has no power to ignore that provision to relieve what it considers a distress resulting from its operation. A statute must of course be given effect to whether a Court likes the result or not.' [Also see: A.V. Fernandez Vs. The State of Kerala, AIR 1957 SC 657; Bengal Immunity Co. Ltd. Vs State of Bihar & Ors., AIR 1955 SC 661]. 5.9 It is the appellants view that the Original Authority having upheld the manner of distribution, is incorrect in denying credit on Warranty and AMC services only for want of identification of the amounts pertaining to warranty and AMC separately. They have expressed difficulty in splitting the accounts for operational reasons. We feel that, difficulty in segregating the tax credits is a lame excuse. Accounting procedures have been able to track and segregate more complicated transactions. In any case as stated by the Apex Court in Martin Burn Ltd. (su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is eligible to avail CENVAT credit. We find that the reference to the case law is misleading. In the said case the dispute was whether the appellant would be eligible for CENVAT credit of the service tax paid on the business auxiliary service received by them from their subcontractors. There was no dispute that the appellant during the period where paying service tax on their output service on repair and maintenance under AMC contract. The tribunal held that the service received by the appellant from their subcontractors of business auxiliary service was to be treated as 'input service' for the output service of repair and maintenance under AMC. In other words when the output service was not disputed to be repair and maintenance under AMC contract, business auxiliary service was recognised as an eligible 'input service'. In the present case the issue is that the manufacturing unit is not providing any output service of repair and maintenance under AMC and hence is not eligible for availing the tax paid on the services of the sub-contractors to their HO. The case is hence distinguished on facts and law. 5.14 In Acer India Private Limited (supra), the issue pertaining to warran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstallation charges ('ITSS') which was also common to both the Appellant (Pondicherry unit) and Lenovo (Bangalore unit). In impugned order No. 12/2016(C) dated 05.02.2016 the Adjudicating Authority came to the conclusion that the service is common to both Pondicherry unit and Bangalore unit and therefore credit cannot be denied so long as the proportionate distribution under Rule 7 of the CENVAT Credit Rules, 2004 has been followed. In the said case ITSS is an eligible credit for both manufacturing units and since there is no one to one correlation between the input and the final product the Ld. Adjudicating Authority has found the credits eligible. The facts are hence distinguished. This being so the judgments cited by the appellant do not come to their help. 5.16 We find that the appellant has failed to establish its case on this issue and hence its appeals in this regard fails and the confirmation of demand relating to AMC and warranty charges [Management, Maintenance or Repair Services] with respect to the manufacture unit is sustained. Business Auxillary Service : Though the input service credit towards sales commission is disallowed stating that sale commission paid for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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