C.N.B. Nair, Member - The appellant manufactures cement in its factory at Ropar, Punjab Cement is liable to Central Excise duty under Chapter 25 of the Tariff. The appellant is also entitled to cenvat credit in regard to excise duty and service tax paid on input materials and input services. The appellant is also availing itself of that benefit.

2. The dispute in the present appeal is in regard to service tax paid on the freight incurred on the transportation of cement sold by the appellant. The sale is on FOR destination basis and freight is paid by the appellant. The appellant also pays the service tax in regard to the said freight. It claimed input service credit in respect of the service tax so paid. That claim was rejected by the Central Excise. The present appeal is directed against the order of Commissioner of Central Excise rejecting the claim for cenvat credit.

3. There is no dispute that service tax paid on transport (GTA) is an eligible input credit; but the revenue authorities have taken the view that service tax credit is available only in respect of inward transportation (inputs) or outward transport of final products up to the place of removal. In the present case, since the goods were removed (upon payment of duty) for sale from the factory depots, revenue has taken the view that service tax paid on the cost of transportation from the factory/depots to the buyers’ premises, would not be available as credit.

4. We have perused the record and heard both sides at length.

5. We may first note the definition of input service under Cenvat Rules:-

"2(l) ‘input service’ means any service,-

(ii)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,

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;"

6. The contention of learned Counsel for the appellant is that under the general definition in Sl No. (ii) "any service used by the manufacturer in relation to clearance of final products from the place of removal" is eligible for input service credit. The contention is that transportation of goods from the place of removal to the buyers premises remains covered by the expression "Clearance from the place of removal" and thus, credit is specifically provided for in respect of service tax paid on transport to buyers. It is also being contended that the mention of ‘outward transportation upto the place of removal’ in inclusion clause of the definition does not have any effect on the claim of the appellant as its claim is in terms of the main definition.

7. The learned Counsel would also argue that an inclusion clause cannot restrict the scope of the main definition in the Statute. Reliance in this connection is being placed on the judgment of the Hon’ble Supreme Court in the case of Black Diamond Beverages v. Commercial Tax Officer [1998] 1 SCC 458.

8. The learned Counsel also contended that the inclusion clause makes the scope of input service credit broad by including a larger number of services which are only indirectly or remotely connected to manufacture, such as accounting, marketing, advertisement, sales promotion etc. The submission is that the provision for input service credit in relation to clearance should also be allowed in its broadest scope.

9. The learned SDR would contend that there is no basis for treating ‘transportation’ as part of