K.K. Agarwal, Member - (1.)WE have heard both sides on the issue referred to us viz. whether the senses provided by the outdoor caterers in the canteen of the manufacturer is input service, in respect of which credit can be taken by the manufacturer. For this purpose, it would be useful to reproduce the definition of input services as defined under Rule 2(l) of Cenvat Credit Rules, 2004. The said Rule reads as under.
(l) "input service" means any service, -

(i) used by a provider of taxable service for providing an output service, or

(ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and [clearance of final products upto the place of removal,]

and includes 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, 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 above definition stands in two parts i.e. main part contained in Sub -clause (i) and (ii) and the inclusive clause part starting with the words "and includes services used in relation to setting up, modernization... upto the place of removal." Both sides agreed that the services provided by the outdoor caterer is to be considered as one relating to business and therefore will fall under the inclusive part of the definition and not the main definition. However, while the revenue contended that the inclusive clause is limited to only to services enumerated in the inclusive clause and not more and since the disputed services i.e. outdoor catering is not one of them, it will not qualify as an input service and will have to be tested against the main definition in Clause (ii), pertaining to main definition clause in Rule 2(l), the Ld. advocate for the appellant submitted that the term "includes" enhances the scope of definition as it is inclusive in nature and therefore the definition cannot be taken one of restrictive approach as held by the Apex Court in the case of Regional Director v. High land coffee Works , where at page 619, the Apex Court has held as under:

The word "include" in the statutory definition is generally used to enlarge the meaning of the preceding words and it is by way of extension, and not with restriction. The word 'include' is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used, these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import but also those things which the interpretation clause declares that they shall include. [See (i) Stroud's Judicial Dictionary, 5th edn. Vol.3, p. 1263 and (ii) C.I.T. v. Taj Mahal Hotel 1, (iii) State of Bombay v. Hospital Mazdoor Sabha

(2.)IT was submitted by the Ld. Jt. CDR that the case laws relating to interpretation of an inclusive definition are mainly relating to definitions which are purely inclusive in nature such as "goods" defined in the Clause 2(22) of the Customs Act or Sub -section 2(f) defining manufacturer in Central Excise Act. These definitions do not contain a mixture of an express definition and an inclusion part; they are purely inclusive in nature. They do no have a preceding part of express definition (main definition) in the manner "input service" has been defined in the Cenvat Rules, 2004, which says ""input service" means any service... and includes..." ; whereas purely inclusive definition reads as manufacture includes any process ...; inputs include ...; cooked food includes...; where there is no main definition but only an inclusive definition. He referred to the decision of the Apex Court in the case of Hamdard (Wakf) Laboratory v. Dy. Labour Commissioner wherein it was observed as under:
When an interpretation clause uses the word "includes", it is prima facie extensive. When it uses the word "mean and include", it will afford an exhaustive explanation to the meaning which for the purpose of the Act must invariably be attached to the word or expression. [See G.P. Singh's Principles of Statutory Interpretation, 10th Edition, Pages 173 and 175].

It was submitted that recently, in N.D.P. Namboodripad (Dead) by LRs. v. Union of India (UOI) and Ors. the Apex Court held as under:

17. If the words 'and includes' were intended to rope in certain items which would not be part of the meaning, but for the definition, then Rule 62 would have specified only 'dearness pay' as the item to be included but not 'pay'. If pay, dearness allowance and other allowances were already included in 'emolument' with reference to its general or normal meaning, as contended by appellant, there was no reason to specifically again include 'pay' in Rule 62. Inclusion of 'pay' and 'dearness pay' and non -inclusion of 'dearness allowance or other allowances' in the definition of 'emolument' is significant. The definition in Rule 62 is intended to clarify that only pay and dearness pay would be considered as 'emolument' for purposes of calculating pension. The words 'and includes' have been used in Rule 62, as meaning 'comprises' or 'consists of'.

Attention was also invited to the Supreme Court decision in the case of Reserve Bank of India v. Peerless Finance wherein it was observed as under:

Much argument was advanced on the significance of the word 'includes' and what an inclusive definition implies. Both sides relied on Dilworth's case. Both sides read, out the well known passage in that case where it was stated, "The word "include" is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import, but also those things which the interpretation clause declares that they shall include. But the word "include" is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to show that it was not merely employed for the purpose of adding to the natural significance of the words or expressions defined. It may be equivalent to "mean and include", and in that case it may afford an exhaustive explanation of the meaning which, for the purposes of the Act, must invariably be attached to these words or expressions.

In view of the above it was submitted that the examples given in the inclusive definition are exhaustive in nature and no other service can be considered as an input service unless it is enumerated by name in the inclusive definition. He then referred to one of the services enumerated in the inclusive definition i.e. "activities relating to business, such as accounting, auditing, financing, recruitment and quality control". He submitted that the conjunction 'and' used in the sub -clause is significant and it limits the examples following "such as" to only five services and no more. Thus, an activity relating to business should be one such as accounting, auditing, financing, recruitment and quality control or akin to accounting, auditing etc. but no further services which is not akin to any of these five services can be added to "such as" list. Since outdoor catering is not one of services listed in the inclusive clause and is neither akin to any of the five business activities enumerated in "such as" sub -clause falling under business activity, it cannot be considered to be covered by the inclusive definition and therefore cannot be considered as an input service.

(3.)LD . advocate, Shri Sridharan, on behalf of the appellants submits that the definition of input services uses the term "such as" which is purely illustrative but not exhaustive. The term "such as" has been defined in the Concise Oxford Dictionary. "Such as" means for example or of a kind that and in Chambers Dictionary "such as" means for example. The word "such as" acts as an adjective prefixed to a noun indicative of the draftsman's intention that he is assigning the same meaning or characteristics to the noun as has been previously indicated, but it does not prohibit any other activity which can define noun in a similar way. Therefore, the term "such as" only connotes that whatever activities are given are illustrations that relate to the business. Hence, any activity relating to business of the assessee would be covered as an input service. The usage of the words "such as" after "activity relating to business" under the inclusive part of the definition further supports that definition of the term "input service" would not be restricted to services specified thereafter. He referred to the Supreme Court decision in the case of Good Year India Ltd. v. Collector of Customs wherein it was held that "The words "such as stainless steel, nickel monel, incoloy, hostelloy" in sub -heading (2) are only illustrative of the various metals from which valves can be made but the said description is not exhaustive of the metals." Similar view has been taken in the case of Jalal Plastic industries v. Union of India , wherein Gujarat High Court has held that the products which follow the expression "such as" are illustrative and not exhaustive. Therefore, in the present case also the term "such as" cannot limit the scope of the definition of the input service once the term is used after the usage of the word "includes" in the said definition.