1. This is revenue’s appeal.

2. Brief facts of the case are that the respondents have taken a credit of Rs. 59,706 for the period May 2006 to March 2007 in respect of Service Tax paid by the service provider, i.e., Rent-A-Cab Scheme Operator. This credit was sought to be denied as the same was not considered as provided in relation to the production/manufacture of finished products directly or indirectly. The matter was adjudicated by Deputy Commissioner who denied the credit and ordered recovery of interest and also imposed a penalty of Rs. 10,000 under rule 15 of Cenvat Credit Rules, 2004.

3. On appeal, Commissioner (Appeals) while referring to the definition of Input Service as given under rule 2(1) of CCR, 2004 stated that the definition of Input Service consists of two parts. Whereas the first part says that inputs service means 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 the place of removal, the 2nd part says Input Service 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 up to the place of removal, procurement of inputs, activities relating to business such as accounting, auditing, financing, share registry, security, etc. The word includes extends the scope of the main part by describing the items in the second part and puts the two parts at par, thereby widening the scope of the definition beyond doubt. The second part of the definition covers activities relating to business. It is followed by the words ‘such as’. The expression ‘such as’ is illustrative and not exhaustive as held by Supreme Court in the case of Royal Hatcheries v. State of A.P. 1994 AIR SC 666. The words following the expression ‘such as’ are only some of many like items covered within the fold of the expression business activity. These words/activities refer to the ones which are required for the purpose of or in the interest of running the business and/or improving it, whether under any statutory obligation or otherwise. Since, rent-a-cab service is exclusively for bringing and dropping the staff engaged in the production activity of the factory the same has to be considered in or in relation to the manufacturing business, as such hiring of cars would not have been required, if the respondents had not been manufacturing excisable goods in their factory.

4. Revenue in its appeal has referred to some decisions of CESTAT wherein the term used in relation to manufacture or clearances of final product have been interpreted. It was submitted that the input service used must have some relation with the manufacturing activity and services for providing conveyance to the employees is no way a production or clearance related activity or service, because it is not playing any role in manufacture or clearance of goods and, therefore, cannot be considered as input service for which credit can be extended. If such a view is taken, then anything which is done for the benefit of the employees will have to be considered as input service, which certainly cannot be in the intention of Legislature.

5. Ld. Advocate for the respondents however, submitted that telephone services both mobile and landlines installed/used by the company and used for business purpose have been held to be eligible for Cenvat credit and in this regard referred to the decision of Tribunal in the case of Keltech Energies Ltd. v. CCE [2008] 14 STT 419 (Bang. - CESTAT) and Indian Rayon & Industries Ltd. v. CCE 2006 (4) STR 79 (Trib. - Mum.). Reference was also invited to the recent CESTAT decision in the case of Manikgarh Cement v. CCE [Final Order A/27 (Mum.) of 2008-WZB/C-IV (SMB), dated 13-12-2007] wherein the repair and maintenance service in respect of civil construction, in resi