B.S.V. Murthy, Member (T)

1. Appellants are engaged in the manufacture of medicaments falling under Chapter 30 of the first schedule of the Central Excise Tariff Act, 1985. The appellants had availed cenvat credit of service tax paid on Technical and Analysis Services, Commission paid to the foreign agents, Courier services and C & F Agent services. The Revenue has taken a stand that cenvat credit of Rs. 2,06,32,908/- availed as cenvat credit of service tax paid on the above services is not admissible and impugned order has been passed, whereby the cenvat credit on service tax has been ordered to be recovered with interest. Penalty of Rs. 10,000/- has also been imposed on the appellants.

2. Shri J.C. Patel. Learned Advocate on behalf of the appellants submitted that input services has been defined in Rule 2(1) of Cenvat Credit Rules 2004 and he specifically drew our attention to following portion in the definition "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".

3. He submits that services on which tax has been paid and credit has been taken, can be related to the activities listed in the definition and therefore, the appellants are eligible for the credit taken by them. He also relied upon the decision of the Larger Bench of the Tribunal in ABB Limited case 2009-TIOL-830-CESTAT-BANG-LB. He also relied upon several other decisions in support of his contention that there is no need for a particular service to be directly related for the manufacture, for the purpose of eligibility of service credit. These cases are as under:

(a) CCE Mumbai v. GTC Industries Ltd. : 2008(12) STR 468 (Tri.LB)

(b) CCE Rajkot v. Rolex Rings P. Ltd. 2008 (86) RLT 201 (CESTAT. Ahmd.)

(c) Manikgarh Cement v. CCE & C Nagpur : 2008 (9) STR 554 (Tri.-Mumbai)

(d) CCE&C Guntur v. CCL Products (I) Ltd. 2009 TIOL 656 CESTAT-BANG.

(e) CCE Hayderabad-IV v. Deloitte Tax Services India Pvt. Ltd. : 2008(11) STR 266 (Tri.- Bang.)

(f) Millipore India Ltd. v. CCE Bangalore-II 2009 (236) ELT 145 (Tri. - Bang.)

(g) Aditya Birla Nuvo Ltd. v. CCE, Bhavnagar : 2009 (14) STR 304 (Tri.-Ahmd.)

(h) Sanghi Industries Ltd. v. CCE Rajkot 2009 (234) ELT 367 (Tri.-Ahmd.)

4. Learned SDR, on the other hand submits that the Technical Testing and Analysis services was rendered in respect of a product which was produced on the trial basis and has not been manufactured and sold at all. Therefore, the credit taken in respect of this product can be used only in relation to the manufacture of that product and therefore credit is clearly not admissible. As regards other services, he submits that the same have to be considered in the light of the Larger Bench decision of the Tribunal.

5. We have considered the submissions made by both the sides. As rightly submitted by the Ld. Advocate on behalf of the appellants, the manufacturing process of medicaments is not comparable to other products. A medicine before it is released in the market has to under go several stages of testing and technical analysis etc. and it is clear that all the products taken up by the Company for production may not reach to the customers as a commercial production as such, at all. Even the trial manufacture and R&D conducted in respect of such drugs which did not reach to the market has to be considered as part of the manufacturing process and business activity. Therefore, we are unable to agree with the view taken by the department that in case the goods have not reached commercial production stage, credit is not admissible. The reliance of the Commissioner on the observations of the Tribunal in the case of M/s. Crompton Greaves Limited also seems to be misplaced, in view of the fact that there was no detailed findings. In any case, as rightly pointed out by the learned advocate and also seen from the several decisions of the Tribunal, what is to be seen for considering the eligibility of service tax paid as cenvat credit is as to whether they are covered by the inclusive definition or not. Definition as reproduced shows that it is a wide definition and in terms of the definition, credit is admissible. As regards C & F Services also, we find that observation of the Commissioner is that a service of C&F cannot be considered as a sale promotion, is not correct. C&F has a definite role to play in promotion of sales by storing the goods and supplying the same to the customers, thus he is actually promoting the sales. Further the decision of the Larger Bench of the Tribunal in the ABB Limited case has made it clear that the benefit of credit on service tax is admissible even where the services rendered is beyond the place of removal. The benefit of the decision of the Larger Bench was not available to the Commissioner at that point of time. As regards courier services, the Tribunal decisions in the case of Deloitte Tax Services (India) Pvt. Limited : 2008 (11) STR 266 (Tri.- Bang.) and CCL Products (I) Limited 2009 TIOL 656-CESTAT-Bangalore squarely cover the specific service and therefore the same is admissible. Similarly, Foreign Commission Agent services are also admissible, since it is a sale promotion. Without maintenance and repair or management, the factory cannot be run and therefore, service tax paid on these services is also admissible. The credit of repair and maintenance of photo copier, Air Conditioner, Water Cooler etc. has also been disallowed but in view of the several decisions cited by the learned advocate wherein Tribunal has allowed the benefit of service tax credit in respect of maintenance or repair as held by the Supreme Court in the case of Hansraj Gordhandas v. H.H. Dave, and the credit is available.

6. In view of the above discussion, we find that the cenvat credit of service tax paid on different services and availed by the appellant is in order and accordingly, we set aside the impugned order and allow the appeals with consequential benefit.

(Pronounced in the Court)