Custom, Excise & Service Tax Tribunal
Bs & B Safety Systems India Ltd vs Commissioner Of Central Excise on 21 October, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH AT CHENNAI Appeal No.E/40417/2016 [Arising out of Order-in-Appeal No.389/2015 (CXA-II) dt. 26.11.2015 passed by the Commissioner of Central Excise (Appeals-II), Chennai] BS & B Safety Systems India Ltd. Appellant Vs Commissioner of Central Excise, Chennai-IV Respondent
Appearance:
Shri V.S. Manoj, Advocate For the Appellant Shri K.P. Muralidharan, AC (AR) For the Respondent CORAM:
Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of Hearing / Decision : 21.10.2016 FINAL ORDER No.41924/2016 Dispute in this appeal is denial of credit on Business Auxiliary Service, Banking and Other Financial Services and Technical Services.
2. Ld. Counsel submits the following :-
> Business Auxiliary Service pertains to sales commission paid to agents for procuring orders; > In respect of banking and other financial service, this pertains to services provided by the banks and charges thereon for finance/funding; > With respect to technical service, it is related to testing of finished products to maintain quality.
3. On the other hand, Ld. A.R reiterates the correctness of the impugned order.
4. Definition of input service in Rule 2 (l) of the Cenvat Credit Rules, 2004 w.e.f. 1.4.2011 consists of two portions. The second portion is exclusion portion (A) (B) (BA) and (C), listing out specific services which are not to be considered as an eligible input service. The first portion of the definition, however, is an inclusive definition. The words used in an exclusive definition denotes exhaustive meaning and cannot be treated as restrictive in any sense. When we are dealing with an inclusive definition, it would be inappropriate to put a restrictive interpretation upon terms of wider denotation. This is the view that has been consistently taken by the Apex Court in a number of judgements. For example, in the case of Bharat Cooperative bank (Mumbai) Ltd. Vs Coop. Bank Employees Union, AIR 2007 SC 2320, the Honble Court held that on the other hand, when the word includes is used in the definition, the legislature does not intend to restrict the definition; makes the definition enumerative but not exhaustive. That is to say, the term defined will retain its ordinary meaning but its scope would be extended to bring within it matters which in its ordinary meaning may or may not comprise".
5. Viewed from this light, the inclusive part of the definition of Rule 2 (l) ibid should only be considered as examples of the genre of input service that would be permissible. Thus, if sales promotion has been mentioned in inclusive part of the definition, so also it would include the services attendant to such sales promotion, for example, renting of regional sales office, procuring orders and so on.
6. In the circumstances, when the services disputed in this case viz. Business Auxiliary Service, Banking and Other Financial Services and Technical Services are not specifically excluded by the exclusion portion of the definition and in any case they are services essential directly or in relation to manufacture or business activities, the same would definitely fall within the ambit of Rule 2 (l) ibid. In the event, I hold that all the services disputed herein are eligible input services for the purpose of Rule 2 (l) ibid.
Appeal is therefore is allowed with consequential benefit, if any, as per law.
(dictated and pronounced in open court) (MADHU MOHAN DAMODHAR) MEMBER (TECHNIAL) gs
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