1. Present is an Appeal against the Order of Commissioner (Audit) dated 16.02.2018.
2. The appellant herein is engaged in providing the taxable services of accommodation in hotel for lodging purposes. The Department, during an audit for the period 01.04.2010 to 31.03.2015 and subsequently for April, 2015 to March, 2016 observed that the appellant has availed a total of cenvat credit on annual maintenance of lifts installed in the building. It is the case of the Department that the said service do not fall in the category of the input service. Resultantly, a Show Cause Notice dated 11.03.2016 was served upon the appellant calling them upon to explain as to why the credit wrongly availed be not recovered from the appellant alongwith the interest and the penalties in addition be not imposed. The said demand has been confirmed by the original Adjudicating Authority vide the Order dated 05.07.2016 and has been confirmed vide the Order under challenge. Being aggrieved thereof, the present Appeal has been filed.
3. I have heard Shri Narendra Patil, Ld. Advocate for the appellant and Shri H Saini, Ld. DR for the Department.
4. It is submitted on behalf of the appellant that the definition of input consists of two separate parts. First part thereof is inclusive in nature and the second part thereof is exclusive in nature. The Works Contract Services have been excluded. Department has alleged the credit as being wrongly availed on the ground that the services of getting the lifts in the premises of the appellant is a Works Contract Service as such fall in the exclusion clause of the input definition. It is submitted that the said allegation is not at all sustainable. The decision of Mumbai Tribunal in the case Redhat India Pvt. Ltd. vs. Principal Commissioner of Pune : 2016 (44) STR 45 (Tri.-Mumbai) has been impressed upon to submit that the maintenance of lift in the appellants premises is very much the part of the inclusive definition of the input services. The impugned Order is accordingly, prayed to be set aside and the Appeal is prayed to be allowed.
5. While rebutting these arguments, Ld. DR has impressed upon para 8 of the impugned order where the Commissioner (Audit) has explained the definition of Work Contract and has mentioned that the repair or renovation of a building or civil structure is included in the construction service. While justifying the said Order it is submitted by the Ld. DR that the decision of Tribunal Hyderabad has rightly been relied upon by Commissioner (Audit) and the decision has been judicially passed. Appeal is accordingly prayed to be rejected.
6. After hearing both the parties my considered opinion is as follows:
The moot question for the present adjudication is as to whether the service for getting the lift of the premises maintained and for getting the premises painted is an input service for the appellant on which the credit has rightly been availed or not. To adjudicate the same, it would be foremost necessary to know the definition of input service.
1) Rule 2(K) of Cenvat Credit Rules, 2004
"input service" means-
(i) services provided or agreed to be provided by a person located in non taxable territory to a person located in non taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India where service tax is paid by the manufacturer or the provider of output service being importer of goods as the person liable for paying service tax for the said taxable services and the said imported goods are his inputs or capital goods; or
(ii) any service used by a provider of output service for providing an output service; or
(iii) any service used by a 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 modernisation, 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, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal, but excludes:
(A) service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for-
(a) construction or execution of works contract of a building or a civil structure or a part thereof; or
(b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or
7. Though the impugned order has in detail discussed about the definition of Works Contract and the word repair, maintenance and renovation is very much the part thereof, but as has been held by the Hon'ble Supreme Court in the case Ramala Sahkari Chini Mills Ltd. vs. Commissioner, Meerut : 2010 (260) ELT 321 (S.C.) that the phrase "and includes" is not intended by legislature to impart a restricted meaning to the definition of inputs. As already mentioned above, the inclusive part of the definition specifically includes the renovation or repair of the premises of provider of output services. It is an apparent and admitted fact that the appellant is providing output services of accommodation/lodging from the said premises. The use of word repair and maintenance in the Works Contract, to my opinion, is not applicable to the given circumstances as the definition of Works Contract has to be read as a whole and the perusal thereof makes it clear that when the repair, maintenance, etc. is the part of a contract where construction is also an activity then that renovation will be covered under the definition of Work Contract else it will be very much inclusive part of the definition of input. It is observed that the India Cements Ltd. vs. CCE, Guntur has wrongly been relied in the impugned order. The issue therein was the cleaning and maintenance of garage which was held to be exclusive of the definition of input service. More pr
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ecisely applicable is the case of Red Hat India Pvt. Ltd. vs. Principal Commissioner, Pune : 2016 (44) STR (Tri.-Mum.) to the facts of the present case. 8. In view of the above discussion, I am of the opinion that the Adjudicating Authorities below have formed a very rigid opinion about the definition of input services which has strictly been denied by the Hon'ble Apex Court in Chini Mills case (supra). The Apex Court has rather warned the Adjudicating Authorities to be utmost reasonable while interpreting the provisions of Law especially when the provisions are expressly mentioned. 9. Resultantly, the Order under challenge is opined to suffer infirmity and is accordingly set aside. Appeal stands allowed.