COMMISSIONER Vs. DYNAMIC INDUSTRIES LTD.

JUDGEMENT

(1.) THE Revenue has preferred present appeal under Section 35G of the Central Excise Act, 1944 (hereinafter referred to as 'the Act') against the order dated July 6, 2012 passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad (hereinafter referred to as 'the Tribunal'), raising the following substantial question of law:

(2.) THE issue thus pertains to availment of Cenvat credit of service tax paid on Custom House Agent Service, Shipping Agent and Container Services and services of overseas commission. We have heard in extenso the learned counsel appearing for the Department Mr. Y.N. Ravani, who has vehemently argued that the facts are not in dispute as could be revealed from the letter of the respondent -assessee dated March 7, 2009 that they had availed the services of Terminal Handling Charges, Documentation, Agency Charges, Transportation, etc. under the head of "Custom House Agent Services". The invoices raised by the various service providers clearly indicate that they have charged service tax on these services. However, such services since are rendered at the port of export after the goods have been cleared from the place of removal, the said services are not in relation to the manufacturing activities nor are they pertaining to the activities of clearance of goods from the place of removal. It is emphasised by the learned counsel for the Revenue that the term "input service" as given in Rule 2(1) of the Rules defines that any service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from/upto the place of removal, and includes services used in relation to setting up, modernisation, etc., it is beyond dispute that these services were utilised after removal of the goods from the factory. Thus, it cannot be said that these services have been used by the respondent -assessee, directly or indirectly, in or in relation to the manufacture of final products or clearance of final products from/upto the place of removal, as the place of removal is a factory gate in the present case, as defined under Section 4(3)(c) of the Act. He further argued that the respondent -assessee had availed Cenvat credit in Part 4 and Part 5 of the ER -1 Returns filed by it. On the basis of submissions of the respondent -assessee, it was not possible for the scrutinizing officer to demarcate the nature of input service as Part 5 contains total of all input services. Only during the course of the audit, when the details were furnished, it was realised that the respondent -assessee had suppressed the vital facts and availed Cenvat credit on the services which did not qualify as 'input services'. Therefore, the Revenue has rightly invoked the larger period of limitation in terms of provision of Section 11A(1) of the Act. He further urged that the show cause notice can be issued invoking the extended period of five years from the relevant date in terms of provision of Section 11A(1) of the Act.

(3.) UPON thus hearing both the sides and on close perusal of the material on record, at the outset the definition of 'input service' which is enumerated in Rule 2(1) of the Rules requires reproduction, which reads as under: