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Custom, Excise & Service Tax Tribunal

Hero Motor Corp Ltd vs Delhi-Iii on 6 June, 2024

                                            1      E/59431/2013 & 13 others




          pCUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
                             CHANDIGARH
                                           ~~~~~
                       REGIONAL BENCH - COURT NO. 1

                      Excise Appeal No.59431 Of 2013

[Arising out of OIO No.86-91/SA/CCE/2013 dated 29.05.2013 and corrigendum dated
20.06.2013 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon]

M/s Hero Motor Corp Ltd.                                   : Appellant
(formerly known as M/s Hero Honda
Motors Ltd.), 37, KM Stone, Delhi-Jaipur
Highway, Sector-33, Gurgaon

                                       VERSUS


The Commissioner of Central Excise,
Delhi-III                                                   : Respondent

Plot No.36-37, Sector-32, Gurugram-122021 WITH

2. Excise Appeal No.59432 of 2013 [Hero Motor Corp Ltd.] [Arising out of OIO No.86-91/SA/CCE/2013 dated 29.05.2013 and corrigendum dated 20.06.2013 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon]

3. Excise Appeal No.59433 of 2013 [Hero Motor Corp Ltd.] [Arising out of OIO No.86-91/SA/CCE/2013 dated 29.05.2013 and corrigendum dated 20.06.2013 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon]

4. Excise Appeal No.59434 of 2013 [Hero Motor Corp Ltd.] [Arising out of OIO No.86-91/SA/CCE/2013 dated 29.05.2013 and corrigendum dated 20.06.2013 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon]

5. Excise Appeal No.59435 of 2013 [Hero Motor Corp Ltd.] [Arising out of OIO No.86-91/SA/CCE/2013 dated 29.05.2013 and corrigendum dated 20.06.2013 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon]

6. Excise Appeal No.59436 of 2013 [Hero Motor Corp Ltd.] [Arising out of OIO No.86-91/SA/CCE/2013 dated 29.05.2013 and corrigendum dated 20.06.2013 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon]

7. Excise Appeal No. 60160 of 2013 [Hero Honda Motors Ltd.] [Arising out of OIO No.102/SA/CCE/2013 dated 29.07.2013 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon]

8. Excise Appeal No.50753 of 2014 [Hero Motor Corp Ltd.] [Arising out of OIO No.140-142/SA/CCE/2013 dated 23.10.2013 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon] 2 E/59431/2013 & 13 others

9. Excise Appeal No.50754 of 2014 [Hero Motor Corp Ltd.] [Arising out of OIO No.140-142/SA/CCE/2013 dated 23.10.2013 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon]

10. Excise Appeal No.50755 of 2014 [Hero Motor Corp Ltd.] [Arising out of OIO No.140-142/SA/CCE/2013 dated 23.10.2013 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon]

11. Excise Appeal No.51618 of 2014 [Hero Motor Corp Ltd.] [Arising out of OIO No.149-153/SA/CCE/2013 dated 29.11.2013 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon]

12. Excise Appeal No.51619 of 2014 [Hero Motor Corp Ltd.] [Arising out of OIO No.149-153/SA/CCE/2013 dated 29.11.2013 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon]

13. Excise Appeal No.51620 of 2014 [Hero Motor Corp Ltd.] [Arising out of OIO No.149-153/SA/CCE/2013 dated 29.11.2013 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon]

14. Excise Appeal No.51864 of 2014 [Hero Motor Corp Ltd.] [Arising out of OIO No.149-153/SA/CCE/2013 dated 29.11.2013 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon] APPEARANCE:

Shri Srinivas Kotni and Shri Akshay Kumar, Advocatesfor the Appellants Shri Pawan Kumar, Shri Shivam Syal, Shri Raman Mittal and Shri Ravinder Jangu, Authorised Representatives for the Respondent CORAM: HON'BLE Mr. S. S. GARG, MEMBER (JUDICIAL) HON'BLE Mr. P. ANJANI KUMAR, MEMBER (TECHNICAL) FINAL ORDER Nos.60303-60316/2024 DATE OF HEARING: 03.06.2024 DATE OF DECISION: 06.06.2024 PER: P. ANJANI KUMAR The appellants are engaged in the manufacture and clearance of two-wheelers and spares thereof; the appellants are availing CENVAT credit of duty/ tax paid on inputs, input services and capital goods as per CENVAT Credit Rules, 2004; various SCNs have been issued to the appellants, covering the period 01.12.2004 to March 2013 disputing the credit availed by them on various input services, alleging that they have no nexus with the final products manufactured and cleared; these SCNs have been confirmed by the impugned orders along 3 E/59431/2013 & 13 others with interest; penalty was also imposed. Hence, these 14 Appeal Nos.E/59431/2013; E/59432/2013; E/59433/2013; E/59434/2013;

E/59435/2013; E/59436/2013; E/60160/2013; E/50753/2014; E/50754/2014;E/50755/2014;E/51618/2014;E/51619/2014;E/51620/20 14;E/51864/2014. The issue involved in all these appeals is about the admissibility of CENVAT credit on various input services. Hence, these appeals are heard together and taken up for decision.

2. Shri Srinivas Kotni, assisted by Shri Akshay Kumar, learned Counsels for the appellants, presented elaborate written submissions and submits that the definition of input service as per Rule 2(l) of CENVAT Credit Rules, 2004 is an all-encompassing definition and covers all the activities related to the business of the appellants; the situation is not much different prior to 01.04.2011 or after 01.04.2011 when the input service excluded from the scope of credit have been mentioned. He submits that the SCNs are very vague and do not specify the reasons as to why the said credit availed by the appellants is not available under the particular heading. He submits that the SCN and adjudication order simply give the definition of the input service and hold that the credit availed by the appellants is not admissible. Learned Counsel submits that the issue is no longer res integra having been decided by various Benches of the Tribunal and High Courts; in their own case, learned Commissioner (Appeals) vide OIA No.348-349/MA/GGN/2009 dated 17.11.2009 and the Original Authority vide OIO No.29-33/AC/Demand/Div-Rewari/202324 dated 27.05.2023; OIO No.103-109/SA/CCE/2013 dated 30.07.2013 and OIO No.140-142/SA/CCE/2013 dated 23.10.2013 have decided that 4 E/59431/2013 & 13 others various input services discussed in the impugned orders have a nexus with their business and thus are eligible for CENVAT credit.

3. He further relies on the following cases in respect of the various input services on which they have availed credit were held to be admissible by Courts and Tribunals. He also relies on some cases to augment his submissions on the discrepancies in the SCN. 3.1. Credit on Construction Service; Learned Counsel submits that the appellants are an old factory started in 1997 and thus needed Repair and Maintenance from time to time; the credit was availed on Repair, Renovation etc. and not on new construction; the services were not utilized in new construction and therefore, the exclusion after 01.04.2011 is not applicable in their case. He relies on:

 Commissioner of Central Excise, Delhi-III Vs. Bellsonica Auto Components India P. Ltd. 2015 (40) STR 41 (P & H)  M/s Rico Auto Industries Ltd. Vs. Commissioner of C. Excise- Delhi-III, Central Excise Appeal No. 1677 of 2012 (CESTAT Chandigarh)  M/s NGK Spark Plugs India Private Limited Vs. The Commissioner of Central Excise, Delhi-III, Excise Appeal No.55978 of 2013 (CESTAT Chandigarh)  M/s Keihin Fie Private Limited Vs. The Commissioner of Central Excise, Delhi-III, Excise Appeal No.55905 of 2013 (CESTAT Chandigarh)  Hi-Tech Power & Steel Ltd. Vs. CCE [2014 (34) STR 276]  Ion Exchange (1) Ltd., Vs CCE, Customs and Service Tax, Surat-II, 2018 (12) G.S.T.L. 302 (Tri. - Ahmd.).

 Commissioner of Central Excise, Customs & Service Tax, BBSR. Vs. M/s Infosys Technologies Ltd., Excise Appeal No. 390 of 2012 (CESTAT Kolkata) 5 E/59431/2013 & 13 others  Bhagwati Power & Steels Ltd. Vs. Commissioner, CGST, Customs & Central Excise-Raipur (C.G.), Excise Appeal No. 50001/2023  Infosys Ltd. Vs. Commissioner of Service Tax, Bangalore, 2015 (37) STR 862  Commissioner of C. Ex. & Service Tax (LTU) Vs. Lupin Ltd., 2012 (285) ELT 221  Castrol India Ltd. Vs. Commissioner of Central Excise Vapi, 2013 (291) ELT 469  M/s. General Motors India P Ltd. [Central Excise Appeal No. 11124 of 2015]  Satyam Auto Components Ltd. Vs. CCE [2014 (34) STR 68] 3.2. Credit availed on Works Contract Service:

 WM Global Sourcing India Pvt. Ltd. Vs. Commissioner of Central Tax, Bengaluru East, 2022 (56) G.S.T.L. 411 (Tri. Bang)  Honda Motorcycle & Scooter (1) Pvt. Ltd. Vs. Commr. Of c. Ex., Delhi-III, 2016 (45) S.T.R. 397  Alliance Global Services IT India (P.) Ltd. Vs. Commissioner, [2016] 44 STR 113  Mahindra & Mahindra Ltd. Vs. Commissioner of Central Excise, Hyderabad, [2016] 45 STR 92  Devraj Luxury Hotels Pvt. Ltd. Vs. Commr. of C. EX. & CGST, Jaipur, 2022 (67) G.S.T.L. 76  Rearden Commerce India (P.) Ltd. Vs. Commissioner of Service Tax, [2016] 54 GST 332  Lemon Tree Hotel (Cyber Hills Developers (P.) Ltd.) Vs. Commissioner of Customs & Central Excise, Hyderabad-IV, [2017] 63 GST 364  KCP Ltd. Vs. Commissioner of Central Excise, Guntur, [2014] 33 STR 598 3.3. Credit availed on Interior Decorator's Service:

 Bharat Fritz Werner Ltd. vs. Commissioner of C. Ex., Bangalore [2011 (22) S.T.R. 429 (Tri.-Bangalore)] 6 E/59431/2013 & 13 others  Commissioner of Service Tax, Ahmedabad Vs. Lambda Therapeutic Research Ltd., [2014] 43 GST 333  Commissioner of Central Excise and Service Tax Vs. Lupin Ltd., [2012] 28 STR 291  Commissioner of C. EX., Ahmedabad-II Vs. Cadila healthcare ltd., 2013 (30) S.T.R. 3 3.4. Credit availed on Architect Service or Architect and Interior Designer Service:

 Bharat Fritz Werner Ltd. vs. Commissioner of C. Ex., Bangalore [2011 (22) S.T.R. 429 (Tri.- Bangalore)]  Nvidia Graphics Pvt Ltd Vs. Commissioner of Service Tax Bangalore-service Tax, [2016 SCC Online CESTAT 4508] refer para 4  Godawari Power & Ispat Ltd. Vs. CCE, 2018 SCC Online CESTAT 3596  Pepsico India Holdings Pvt. Ltd. Vs. Commissioner of Central  Excise, Bangalore, CESTAT) [2011 24 STR 491 (Bangalore CESTAT)] para 3  Maruti Suzuki India Ltd. Vs. Commissioner of C. Ex Delhi- III, [2017 (47) STR 273]  J.P Morgan Services (I) Pvt. Ltd. Vs. Commissioner of S.T. Mumbai, [2016 (42) STR 196]  Commissioner of Central Excise and Service Tax Vs. Lupin Ltd. [2012 28 STR 291 (Mumbai - CESTAT)] 3.5. Credit availed on Mandap Keeper's Service and Mandap with catering Service:

 Omega Healthcare Management Services Pvt. Ltd. Vs. Commissioner of Central Tax, Bengaluru East [2022 (67) G.S.T.L. 588 (Tri. - Bang.)]  Commissioner of Central Excise, Delhi-III Vs. Maruti Suzuki India Ltd [Punjab and Haryana High Court]MANU/PH/2055/2016 : 2017 (49) STR 261 7 E/59431/2013 & 13 others  Commissioner of S.T., Mumbai-VI Vs. DBOI Global Services P. Ltd., 2019 (20) G.S.T.L. 351  Accenture Services (P.) Ltd. Vs. Commissioner of Service Tax, Mumbai II, [2015] 63 taxmann.com 235 (MumbaiCESTAT)  Jaypee Rewa Plant Vs. CCE-2009 (16) STR 707.

3.6. Credit availed on Pandal and Shamiana Service:

 Bechtel India Private Limited Vs. Commissioner of Service Tax, Delhi, Service Tax [CESTAT, Chandigarh in Appeal No. 1451 of 2011 in Order No. A/60377/2023 dated 13.09.2023]  Toyota Kirloskar Motor (P.) Ltd. Vs. Commissioner of Central Excise, LTU, Bangalore, [2012 35 STT 303]  Pfizer Ltd. Vs. Commissioner of Central Excise, Belapur,[2013] 39 STT 707  Commissioner of S. T., Mumbai-VI Vs. DBOI Global Services P. Ltd., 2019 (20) G.S.T.L. 351  H.E.G. Ltd. Vs. Commissioner of Central Excise Raipur [2009 23 STT 157 : MANU/CE/0420/2009], confirmed in Union of India v. H.E.G. Ltd. [T.C. No. 53/2010] 3.7. Credit availed on Photography Service:

 Fidelity Business Services India (P.) Ltd. Vs. Commissioner of Central Tax, Bangaluru East, [2021] 127 taxmann.com 5451.

 Sarita Handa Exports (P) Ltd. V. Commissioner of C. EX., Gurgaon-II [2016 (44) S.T.R. 654 (Tri. - Chan.)]  Microsoft Global Services Center (1) Pvt. Ltd. Vs Commr of Cus., C. EX. & S.T., Hyderabad-IV, 2021 (44) G.S.T.L. 264  Honda Motorcycle & Scooter (I) Pvt. Ltd. Vs. Commr. of C. Ex., Delhi-III, 2016 (45) S.T.R. 397  Cadmach Machinery Co. (P) Ltd. v. Commr. of C. Ex., Ahmedabad [2013 (31) S.T.R. 33 (Tri. - Ahmd.)]  Commissioner of Central Excise, Jaipur-II Vs. J.K. Cement Works [2009 (14) S.T.R. 538 (Tri. - Del.)] 8 E/59431/2013 & 13 others  Toyota Kirloskar Motor Pvt. Ltd. Vs. CCE 2011 (24) STR 645 3.8. Credit availed on Club or Association Service:

 Fidelity Business Services India (P.) Ltd. Vs. Commissioner of Central Tax, Bangaluru East, 2021 (50) G.S.T.L. 315 (Tri. - Bang.)  Pam Pharma. & Allied Machinery Co. P. Ltd. Vs. C.C.E., Mumbai-V, 2016 (42) S.T.R. 757  Chevron Phillips Chemicals India Pvt. Ltd. Vs Commr. of CGST & C. EX., Mumbai East, 2021 (53) G.S.T.L. 268  ITC Ltd. Vs. Commissioner of Central Excise, Kolkata-VI [2018 (12) G.S.T.L. 182 (Tri. - Kolkata)]  Warburg Pincus India Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai [2018 (364) E.L.T. 159 (Tri. -

Mumbai)]  Commissioner of Central Excise, Pune-III Vs. Zensar Technologies Ltd., [2016] 42 STR 570 3.9. Credit availed on repairing of motor vehicles or after sale service:

 Bharat Fritz Werner Ltd. vs. Commissioner of C. Ex., Bangalore [2011 (22) S.T.R. 429 (Tri.- Bangalore)]  Commissioner of Central Excise, Jaipur Vs. J.K. Cement Works, [2009] 14 STR 538  Cadmach Machinery Co. (p) Ltd. Vs. CCE [2013 (31) STR 33]  CCE vs. CCL Products (India) Ltd. 2009 (16) STR 305  Dr. Reddy's Lab Ltd. Vs. CCE [2010 (19) STR 71]  J.K. Sugar Ltd. Vs. Commissioner of Central Excise, Meerut-11, [2011] 31 STT 128 3.10. Credit availed on Outdoor catering Service:

9 E/59431/2013 & 13 others  Palmtech Institutions India (P.) Ltd. Vs. Commissioner of Central Excise & Service Tax, Jaipur, [2015] 38 STR 54  Commissioner of Central Excise Vs. HCL Technologies, [2015] 37 STR 716  Manhattan Associates (India) Development Centre (P.) Ltd. Vs. Commissioner of Service Tax, [2015] 52 GST 1032 3.11. Credit availed on Insurance Auxiliary Service:

 Birla Corporation Limited Vs. Commissioner of Central Excise, Bhopal [2016 (46) S.T.R. 430 (Tri.-Del)]  KIJIJI (India) Pvt. Ltd. Vs. Commissioner of C.EX., Mumbai-I [2013 (32) S.T.R. 661 (Tri. - Mumbai)]  DBOI Global Services Private Ltd. Vs. Commissioner of Service Tax, Mumbai [2017 (48) S.T.R. 157 (Tri. - Mumbai)]  AC Nielson Org. Marg Private Limited Vs. Commissioner of S.T., Mumbai-II [2018 (12) G.S.T.L. 322 (Tri. - Mumbai)]

4. Learned Counsel submits that the Show Cause Notices are vague and do not specify the reasons as to why the said credit availed by the appellants is not available under the particular heading. He relies on:

 CCE Vs. Brindavan Beverages (P) Ltd [2007 (213) ELT 487]  CCE Vs. Ballarpur Industries Ltd [2007 (215) ELT 489]  Punjab State Grains Procurement Corporation Ltd. Vs CCE & ST, Ludhiana in Service Tax Appeal No. 59406 of 2013

5. Learned Counsel further submits that the appellants have availed Asset Management Service to help the company to invest their profits in a proper manner so as to maximize the returns and to invest the same 10 E/59431/2013 & 13 others in the business of the appellant i.e. manufacture and clearance of two- wheelers. He takes us through the Memorandum and Articles of Association of Hero Motor Corp. Ltd. and submits that to invest and deal with the moneys and funds belonging to, entrusted with or borrowed by the Company not immediately required for the business of the Company in any manner is necessary for furtherance of the objectives of the Company. The activity has got a clear nexus with the business of the appellants and therefore, credit is admissible. He submits that in many cases, Tribunal has held that CENVAT credit is admissible on Banking and Financial Services. He relies on the following:

 Commissioner of Central Excise, Delhi-III Vs. Fiamm Minda Automotive Ltd., [2016] 43 STR 549  RMZ Infotech Pvt. Ltd. Vs. Commr. of Central Tax, Bengaluru East, 2022 (64) G.S.T.L. 599; and  GMR Infrastructure Ltd. Vs. Commissioner of Central Excise & Service Tax, 2022 (142) taxmann.com 188  Semco Electric Pvt. Ltd. Vs. CCE, 2012 (276) ELT 94  Commr. of C. Ex., Cus. & S.T., Visakhapatnam-I Vs. GMR Industries Ltd., 2015 (38) S.T.R. 509  Commissioner of C. Ex., Bhopal Vs. Rohit Surfactants Pvt. Ltd. 2009 (240) E.L.T. 472  Ahmednagar Forging Ltd. Vs. CCE, 2011 (23) STR261  Electronic Arts Games India Pvt. Ltd. Vs. C.C., C. EX. & S.T., Hyderabad, 2017 (3) G.S.T.L. 149  Hinduja Global Solutions Ltd. Vs. C.C.E., S.T. & Cus., Bangalore-II [2016 (42) S.T.R. 932 (Tri. -Bang)]  Commissioner of Central Excise & Service Tax, Surat Vs. Haubach Colour (P.) Ltd., [2016] 53 GST 334,  Olam Information Services (P.) Ltd. Vs. Commissioner of G.S.T. and Central Excise, [2022] 64 GSTL 485,  GMR Infrastructure Ltd. Vs. Commissioner of Central Excise & Service Tax, Service Tax Appeal Nos. 21325- 21326 of 2016,

11 E/59431/2013 & 13 others  Usha Martin Limited Vs. Commissioner of C. Ex. & S.T., Ludhiana, 2020 (37)G.S.T.L. 220  Cross Tab Marketing Services Pvt. Ltd. Vs. Commr. of CGST, Mumbai East, 2021(55) G.S.T.L. 29,  RMZ Infotech Pvt. Ltd. Vs. Commr. of Central Tax, Bengaluru East, 2022 (64) G.S.T.L. 599,  Commr. of C. Ex., Nagpur Vs. Indorama Synthetics (I) Ltd., 2009 (16) S.T.R. 410,  Commr. of C. Ex. & Cus., Guntur Vs. Madhu Steels, 2009 (14) S.T.R. 798.

6. Learned Counsel submits that the SCNs are issued on the basis of Audit Report; no independent investigation is done and therefore are not maintainable as held in Swastik Tin Works Vs. CCE, Kanpur [1986 (25) ELT 798]. He further submits that suppression cannot be alleged that when the SCN is based on Audit objection, suppression cannot be alleged and SCN issued after one year of investigation is unsustainable. He relies on the following:

 Gammon India Ltd. vs. CCE 2002 (146) ELT 173 [Affirmed by Supreme Court reported at 2002 (146) ELT A313]  Kathiravan Pipes Ltd. vs. CCE [2002 (147) ELT 1266]  JSL Industries Ltd. vs. CCE, [1999 (109) ELT 316]  Jalla Industries vs. CCE 2000 (117) ELT 429 Chief Engineer (IRR) vs. CCE 2000 (115) ELT 789  Chief Engineer (IRR) Vs CCE 2000 (115) ELT 789  CCE Vs. Punjab Chem & Pharma, 2001 (135) ELT 227  Asia Automotive Ltd. Vs. CCE, 1999 (113) ELT 841  Nadiad Silicate & Chem Vs. CCE, 1995 (80) ELT 891  Bharat Agriculture & Mechanical Engg. Co. Vs. State of Bihar, 2006 (148) STC 372  Shree Uma Foundries Pvt. Ltd. Vs. CCE, 2008 (222) ELT 317 12 E/59431/2013 & 13 others

7. Learned Authorized Representative for the Department reiterates the findings of the OIO/ OIA. He takes us to the definition of "Input Service" as contained in Rule 2(l) of CENVAT Credit Rules, 2004 as it existed before and after 01.04.2011 and submits that the learned Adjudicating Authority has dealt with each of the service elaborately and came to the conclusion that the input services on which the appellants have availed CENVAT credit has no nexus with the final product; some of the services availed are relatable to after-sale of the excisable products and therefore, credit is not admissible as they go beyond the place of removal. He submits that credit has been taken on Catering Services, Motor Vehicle Repairs, Rent-a-Cab Service which are used by the employees and which have no relation with the business of the appellant. He submits that the appellants have not disputed the confirmation of demand of credit to the tune of Rs.1,08,463/- on Rent-a- Cab Service which is not permissible as held in Cable Corporation of India - 2008 (12) STR 598 and J.K Cement Works - 2009 (14) STR 538. He relies on the clarification given by CBEC vide Circulars No.98/1/2008- ST dated 04.01.2008 and No.943/4/2011-CE dated 29.04.2011 in respect of various services. He relies on the following cases:

 VANDANA GLOBAL LTD. Versus COMMISSIONER OF C. EX., RAIPUR 2010 (253) E.L.T. 440 (Tri. - LB)  MARUTI SUZUKI LTD. Versus COMMISSIONER OF CENTRAL 33-44 EXCISE, DELHI-III (2009 (240) E.L.T. 641 (S.C.)  COMMISSIONER OF C. EX., MUMBAI-IV Versus HUTCHISON MAX TELECOM P. LTD. (2008 (224) E.L.T. 191 (Bom.)  Doypack Systems Ltd V/s UOI 1988 (36) ELT 201 (SC) 13 E/59431/2013 & 13 others  Advance Ruling, New Delhi in the case of VMT Spinning Co. Ltd. 2008(232) E.L.T. 169  C.C.E., Nagpur vs. Ultratech Cement Ltd.- 2010(20) 577(Mum.)  Sundram Fasteners case reported in 2011(271) ELT.

318(T)

8. Heard both sides and perused the records of the case. The dispute in these appeals is about to various input services i.e. Construction Service, Works Contract Service (for ISD), Interior Decorator's Service (for plant and ISD), Architect and Interior Designer Service (for plant), Mandap Keeper's Service (for ISD), Pandal and Shamiana Service (for plant and ISD), Mandap with Catering Service (for plant), Photography Service (for plant and ISD), Club Association Service (for ISD), Repairing of Motor Vehicles (for ISD), Architect Service (for ISD), Outdoor Catering Service (for ISD), After Sale Service (for plant), Insurance Auxiliary Services, Broadcasting Services, Fashion Designing Services, On-Line information and data base access/ retrieval, Share transfer Agent, Asset Portfolio and fund management.

9. In respect of the most of the above services, the issue is settled in favour of the appellants as per the cases cited above. However, the main objection of the Revenue appears to be in respect of services like Construction Service, Architect Service, Mandap Keeper and Outdoor Catering Service, Club or Association Service, Rent-a-Cab Service and Asset Management Service etc. In respect of the Construction Service, Architect and Interior Design Service, the Revenue relies on the amended definition after 01.04.2011. Learned Counsel for the appellants submits that these services of Construction Service etc. are not regard 14 E/59431/2013 & 13 others to any new construction but repair and re-design of the existing facilities and they are integral to the business of the appellant. The services in respect of Rent-a-Cab Service have been availed for use by the officers of the company to attend the office work; however, in respect of services availed after 01.04.2011, they have paid up the amount of Rs.1,08,463/- disputed in the SCNs and they are not in appeal against the same. In respect of Mandap Keeper and Outdoor Catering Services, it is the contention of the appellants that these services are availed for organizing conferences, field demonstrations, dealers' meetings, sponsored programs and training etc. Therefore, these cannot be set to be used by the officers of the company for private purposes. Similarly, the memberships of the clubs are taken in respect of Golf Club where the company sponsors a tournament or memberships of various international professional clubs are taken. We find that there is force in the argument of the appellant. We find that the definition of Input Service is vast and encompasses all the activities that are required for the furtherance of the business. The exclusion that is put in place from 01.04.2011 appears to be in respect of services which are not primarily used for personal use of the officers or staff. We find that no evidence to the effect that the disputed services are availed primarily for the personal use has been brought forth by the SCN and therefore, the submissions of the appellants cannot be brushed aside.

10. Coming to the issue of Asset Management Services, we find that Rule 2(l) includes services which are used in relation to "Financing" of the Company. We find that the definition further provides that the input services can be directly or indirectly in or in relation to the manufacture 15 E/59431/2013 & 13 others of final product. Financing is an integral activity not only in the manufacture of any excisable goods but also in any business activity.Therefore, we find that the services availed by the appellants in order to maximize the returns on the investments is for the purpose of furthering of the business. Thus, we are of the considered opinion that the appellants being a Public Limited Company has to take care of finances and such an activity includes proper investment. We find that Tribunal in the case of FIAMM Minda (supra) held that Banking and other financial services are covered in the inclusive part of definition of input service under the head "financing". Further, the said services have been used/ utilized for accomplishing the purpose of business. Thus, CENVAT credit of service tax paid on such service is available to the manufacturer/ service provider, in terms of Rule 2(l) of CCR, 2004.

11. Further, we find that, as submitted by the learned Counsel for the appellants, the Show Cause Notices issued in this regard do not bring out the reasons as to why credit availed by the appellants on certain services is not admissible to them. There is a bare reproduction of the definition of "Input Service" and averment that in view of the same, the services utilized by the appellants do not have any relation with the activity of the appellants up to the point of delivery/ removal as the case may be. The Adjudicating Authority also confirms the demands on the vague allegations leveled in the SCNs and presumptions. No investigation is done to ascertain the various services availed and the utility of the same to the business of the appellants. Under these circumstances, the impugned orders cannot be sustained on this legal point also, in addition to the fact that in view of our discussion as above, 16 E/59431/2013 & 13 others the services availed by the appellants are integrally connected to the furtherance of their business of manufacture and sale of two-wheelers. In view of the above, we find that the appellants succeed to the extent of the appeals preferred by them. However, amounts confirmed by the impugned orders and not agitated by the appellants like demand of credit of Rs. 1,08,463/- on Rent-a-Cab Service etc. shall have to be held to be payable by the appellants. The penalties imposed are, however, liable to be set aside.

12. In view of the above, the impugned orders are modified to the extent that demands which are contested by the appellant are set aside and demands which have been paid up by the appellants and not contested in the appeals are upheld. Hence, all the appeals are partly allowed in the above terms.

(Order pronounced in the open Court on 06/06/2024) (S. S. GARG) MEMBER (JUDICIAL) (P. ANJANI KUMAR) MEMBER (TECHNICAL) PK