Manmohan Singh, J. - (1.) THIS appeal is filed by appellants against Order -in -Appeal No. IND/App/212/2011 dated 31.05.2011 wherein Order -in -Original No. V(18) 15 -84/Adj/2008/8477 dated 30/8/2010 has been set aside and appeal of the revenue has been accepted. Facts are briefly stated below: - - The Assessee are engaged in the manufacture of Cocoa & Cocoa & Cocoa products and Water Products falling under Chapter No. 18 and 19 of the First Schedule to the Central Excise Tariff Act, 1985. During the audit of the records of the assessee, it was observed that, the assessee had availed CENVAT credit on telephone Service and Courier services availed by them, which were not the input service as per the definition of the input service provided under Rule 2(1)(ii) of the Cenvat Credit Rules 2004. A Show Cause Notice dated 14.11.2008 was issued.
(2.) THE Adjudicating Authority after due deliberation, decided the above show cause notice vide Order -in -Original No. 43 to 45/CEX/Demand/AC/2010 dated 15.11.2010 thereby the denial of CENVAT Credit proposed in the show cause notice was dropped. On a review order passed by the department, appeal against Order -in -Original was filed before Commissioner (Appeal) on the ground that: The Appellant referred the definition of input services defined in Rule 2(1) of Cenvat Credit Rules 2004. The first leg of the definition clearly says that any service to be qualified as input service, should be used either, by a provider of taxable service for providing an output service or by a manufacturer, whether directly or indirectly in or in relation to the manufacture of final products ad clearance of final products from the place of removal. The second part of the first leg which deals with manufacturer stipulates that input service should be that which is used directly or indirectly (a) in or in relation to the manufacture of the final products and (b) for clearance of final products from the place of removal. The basic criteria to be examined for qualifying any service to be an input service, is that the first leg of the definition should be satisfied. For an output service provider services which are used for providing such output service will constitute input service, whereas for a manufacturer services which are either used in or in relation to the manufacture of the final products or which are used for clearance of final products from the place of removal, constitute input services.
(3.) IN the second leg of the definition, apart from the services which meet the above criteria, some specific services have been included which may or may not meet the criteria prescribed in the first leg of the definition. This is the so called inclusive part of the definition which specifies the services to be treated as input service irrespective of the criteria stipulated in the first leg of the definition. These are: - - i. Services 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. ii. Advertisement or sales promotion, iii. Market research, iv. Storage up to the place of removal, v. Procurement of inputs. vi. Activities relating to business, such as (a) accounting. (b) auditing. (c) financing. (d) recruitment and quality control. (e) coaching and training. (f) computer net working. (g) credit rating. (h) share registry. (i) security. (j) inward transportation of inputs or capital goods, and (k) outward transportation up to the place or removal.;