Decided on July 14,2015

Piramal Glass Ltd. Appellant
C.C.E. And S.T. Respondents


H.K.THAKUR,MEMBER (T) - (1.)WHEN this case was called out for hearing, Shri Mehul Jiwani, learned Counsel appearing on behalf of the appellant argued that the issue involved in this appeal is regarding certain services availed at the Wind Mills which are situated away from the factory premises.
(2.)It was his case that earlier there were contrary decisions on the issue but the Hon'ble Bombay High Court (Bench at Aurangabad), vide order dated 02.12.2014 in the case of CCE, Aurangabad vs. Endurance Technology Pvt. Limited [2015 -TIOL -1371 -HC -MUM -ST] has framed question No. I as follows: -
[I] Whether the CESTAT is correct in holding that the assessee is entitled to avail the CENAVT credit on management, maintenance or repair services provided on services provided to Windmills installed and situated away from factory and factory premises?

He further made the Bench go through Para 5 of this judgment to argue that credit on input service regarding maintaining Windmills is allowed by the Hon'ble High Court.

(3.)HEARD both sides and perused the case records. From the Question -I framed by the Hon'ble High Court, it is observed that input services provided in the present appeal were the same as discussed in Para 5 in the case law of the Hon'ble Bombay High Court. Para 5 and 6 of case law CCE vs. Endurance Technology Pvt. Limited (supra) are reproduced below: -
5] On perusal of these Rules, it becomes clear that the management, maintenance and repair of windmills installed by the respondents is input service as defined by clause I of Rule 2. Rule 3 and 4 provide that any input or capital goods received in the factory or any input service received by manufacture of final product would be susceptible to CENVAT credit. Rule does not say that input service received by a manufacturer must be received at the factory premises. The judgments referred to above, also interpret the word input service in similar fashion.

In the case of Commissioner of Central Excise, Nagpur Versus Ultratech Cement Ltd. [cited supra], the Division Bench of this Court held that the definition of input service is very wide and covers not only services which are directly or indirectly used in or in relation to manufacture of final product but also includes various services used in relation to business of manufacture of final product. The expression activities in relation to business is also discussed in this judgment by referring to judgment of Apex Court.

In the case of Deepak Fertilizers & Petrochemicals Corporation Ltd. Versus C.C.Ex. Belapur [cited supra] the Division Bench held as under:

The definition of the expression input service covers any services used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products. The words directly or indirectly and in or in relation to are words of width and amplitude. The subordinate legislation has advisedly used a broad and comprehensive expression while defining the expression input service. Rule 2(1) initially provides that input service means any services of the description falling in sub -clauses (i) and (ii). Rule 2(1) then provides an inclusive definition by enumerating certain specified services. Among those services are services pertaining to the procurement of inputs and inward transportation of inputs. The Tribunal, proceeded to interpret the inclusive part of the definition and held that the Legislature restricted the benefit of Cenvat credit for input services used in respect of inputs only to these two categories viz. for the procurement of inputs and for the inward transportation of inputs. This interpretation which has been placedly the tribunal is ex -facie contrary to the provisions contained in Rule 2(1). The first part of Rule 2(1) inter alia covers any services used by the manufacturer directly or indirectly, in or in relation to the manufacture of final products. The inclusive part of the definition enumerates certain specified categories of services. However, it would be farfetched to interpret Rule 2(1) to mean that only two categories of services in relation to inputs viz. for the procurement of inputs and for the inward transportation of inputs were intended to be brought within the purview of Rule 2(1). Rule 2(1) must be read in its entirety. The Tribunal has placed an interpretation which runs contrary to the plain and literal meaning of the works used in Rule 2(1). Moreover as we have noted earlier, whereas Rule 3(1) allows a manufacturer of final products to take credit of excise duty and Service Tax among others paid on any input or capital goods received in the factory of manufacturer of the final product, insofar as any input service is concerned, the only stipulation is that it should be received by the manufacturer of the final product. This must be read with the broad and comprehensive meaning of the expression input service in Rule 2(1). The input services in the present case were used by the appellant whether directly or indirectly, in or in relation to the manufacture of final products. The appellant, it is undisputed, manufactures dutiable final products and the storage and use of ammonia is an intrinsic part of that process.

6] In view of this discussion, we have no hesitation to hold that the answer to question No. (I) is in affirmative. Despite this settled position, learned counsel for the appellant tried to submit that the judgment cited at Sr. No. (2) is being challenged before Supreme Court. This submission does not really help us in deciding the appeals. Both appeals are dismissed.


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