Custom, Excise & Service Tax Tribunal
Hindustan Coca Cola Beverages Pvt Ltd vs Bhopal on 23 February, 2022
Author: Dilip Gupta
Bench: Dilip Gupta
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. 1
Excise Appeal No. 53065 of 2018
(Arising out of Order-in-Original No. 13-14/COMMR/CEX/BPL-IV/2018 dated 27.04.2018
passed by Commissioner, CGST and Central Excise, Bhopal)
Hindustan Coca-Cola Beverages Pvt. Ltd. .... Appellant
Plot No. 169/175, Industrial Area, Pilukhedi,
District-Rajgarh (MP)
VERSUS
Commissioner of CGST & Central Excise,
Bhopal ....Respondent
WITH E/53186/2018 E/51040/2019 E/52338/2019 E/52339/2019 E/52340/2019 E/52341/2019 E/52342/2019 E/52343/2019 E/52344/2019 E/52345/2019 E/52346/2019 E/50026/2020 E/50027/2020 E/50028/2020 E/50029/2020 E/50030/2020EE/50031/2020 E/50032/2020 E/50033/2020 E/50034/2020 E/50035/2020 E/50036/2020 E/50037/2020 E/50038/2020 E/50039/2020 E/50040/2020 E/50041/2020 E/50042/2020 E/50043/2020 E/50044/2020 E/50045/2020 APPEARANCE:
Shri Monish Panda, Advocate for the Appellant Shri O.P. Bisht, Authorized Representative of the Department CORAM: HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT HON'BLE MR. P.V.SUBBA RAO, MEMBER (TECHNICAL) FINAL ORDER NO. 50175-50206/2022 DATE OF HEARING/DECISION : February 23, 2022 JUSTICE DILIP GUPTA M/s Hindustan Coca-Cola Beverages Pvt. Ltd., Philukhedi, Industrial Area, Pilukhedi, District- Rajgarh1 manufactures various types of aerated water, fruit juice and pulp based drink and packaged
1. the appellant 2 Excise Appeal No. 53065 of 2018 drinking water2 which are sold under various brand names such as Coca-Cola, Fanta, Limca, Mazza, Nimbooz, etc. It availed and utilized input service credit in respect of services received by various offices of the appellant registered with the Central Excise and Service Tax Department as „Input Service Distributors‟3 for distribution of service tax credit on the services received by them. The services are as follows:-
a. Telecommunication b. Maintenance and Repair c. Courier d. Photocopying (Business Auxiliary) e. Security f. Architect g. Insurance h. Real Estate/Properties i. Rent-a-Cab j. Outdoor Catering
2. All the thirty two appeals are being decided by this order as the issue involved in all the appeals is regarding the eligibility of the appellant to avail CENVAT credit distributed by such ISD‟s of the appellant. The credit has been denied by the Department on the ground that after the amendment to the definition of „input service‟ w.e.f. 01.03.2001 in section 2(l) of the CENVAT Credit Rules, 20044, the appellant was not entitled to avail CENVAT Credit on such services.
3. A show cause notice dated 18.03.2016 was issued to the appellant proposing to deny CENVAT credit on such input services. This show cause notice was issued for the periods 2012-2013, 2013-
2. manufactured products
3. ISD
4. the Credit Rules 3 Excise Appeal No. 53065 of 2018 2014 and 2014-2015. This show cause notice was followed by show cause notices dated 20.07.2016, 19.04.2018 and 05.07.2019 for the period April 2015 to March 2016, April 2016 to March 2017 and April 2017 to June 2017 respectively.
4. A chart giving particulars of the four show cause notices relating to the appellant, with the corresponding orders and appeal numbers and period of dispute is reproduced below:-
Particulars Show cause Show cause Show cause Show cause notice-1 notice-2 notice-3 notice-4 Date of show 18.03.2016 20.07.2016 19.04.2018 05.07.2019 cause notice Date of O-I-O 27.04.2018 27.04.2018 01.05.2019 11.12.2019 Appeal 53065/2018 53186/2018 51040/2019 50737/2020 Number Period of 2012-13 to 2015-16 2016-17 April, 2017-
Dispute 2014-15 June,2017
Demand Rs.4,87,98,633/- Rs.6,03,84,290/- Rs.6,17,33,667/- Rs.5,58,15,418/-
Penalty Rs.4,87,98,633/- Rs.6,03,84,290/- Rs.6,17,33,667/- Rs.5,58,15,418/-
Penalty on Rs.25,00,000/- Rs.25,00,000/- Rs.1,00,000/- Rs. 1,00,000/-
each ISD
ISD (Co- Mumbai Mumbai Mumbai Mumbai
Noticees) (50028/2020) (50032/2020) (52343/2019) (50731/2020)
with Appeal Gurgaon Pune Pune Pune
Number (50027/2020) (50040/2020) (52347/2019) (50733/2020)
Jaipur Jaipur Jaipur Jaipur
(50029/2020) (50026/2020) (52345/2019) (50732/2020)
Gujarat Gujarat Gujarat Gujarat
(50042/2020) (50033/2020) (52340/2019) (50735/2020)
Noida Noida Noida Noida
(50038/2020) (50034/2020) (52338/2019) (50736/2020)
Hebbal, Hebbal, Hebbal, Hebbal,
Bangalore Bangalore Bangalore Bangalore
(50043/2020) (50036/2020) (52344/2019) (50734/2020)
Bhopal Bhopal Bhopal Pilukhedi,
(50044/2020) (50035/2018) (52339/2019) Rajgarh
(50738/2020)
Jalpaiguri Pilukhedi, Pilukhedi Goa
(50030/2020) Rajgarh Rajgarh (50737/2020)
(50029/2020) (4234/2019)
Hyderabad Goa Goa Kanpur
(50041/2020) (50037/2020) (52342/2019) (50740/2020)
Kanpur Kanpur Kanpur Kanpur
(50045/2020) (50039/2020) (52341/2019) (50739/2020)
Other ISD Gurgaon
(52346/2019)
5. The appellant filed replies to the aforesaid show cause notices. As noticed above, the first two show cause notices were adjudicated 4 Excise Appeal No. 53065 of 2018 upon by a common order dated 17.04.2018 passed by the Commissioner, CGST Central Excise Bhopal,5 by which the amount of CENVAT credit wrongly availed by the appellant was directed to be recovered with interest and penalty. The third show cause notice was adjudicated upon by order dated 01.05.2019 and the fourth show cause notice was adjudicated upon by order dated 11.12.2019.
6. Shri Monish Panda, learned counsel appearing for the appellant submitted that the impugned orders deserve to be set aside as they are non-speaking orders and do not take into consideration the replies filed by the appellant to the issues raised in the show cause notice. In this connection, learned counsel pointed out that the appellant had specifically stated as to why the appellant was entitled to avail CENVAT credit on each of the services, but without considering the submissions and without giving any reason, credit has been denied to the appellant. Learned counsel also pointed out that the quantification of demand is erroneous and though the appellant had explained this portion in the reply, but the adjudication order does not deal with this issue at all. Learned Counsel also submitted that the show cause notice could not have been served on the recipient of service distributed by an ISD and that the extended period of limitation could not have been invoked. Learned counsel pointed out that in respect of these two issues also the adjudicating authority did not consider the reply submitted by the appellant and in fact on the former issue no finding has been recorded while the latter issue has been decided by a cryptic order.
5. the Commissioner 5 Excise Appeal No. 53065 of 2018
7. Shri Om Prakash Bisht, learned authorized representative appearing for the department has, however, supported the impugned order.
8. To examine the contentions advanced by learned counsel for the appellant, the file of Excise Appeal No. 53065 of 2018 has been examined. It has been stated by the learned counsel appearing for the appellant and the learned authorized representative of the Department that the remaining orders passed by the adjudicating authority are similar.
9. A perusal of the impugned order dated 27.04.2016 in regard to the issue as to whether the appellant was justified in availing CENVAT credit mentions the following reason for denying CENVAT credit:
" In view of the said provisions, to be an admissible service for CENVAT credit, the essential condition is that it should be used by a manufacturer, directly or indirectly, in or in relation to manufacture and clearance of final products. Hence, the manufactụrer who intends to avail CENVAT Credit on these services has to establish their use in relation to manufacture and clearance of their final products. It is alleged in the show cause notice that these services have not been used for the same. On the other hand, the party No. 1 has not been able to show any nexus between „the use of these services' and „manufacture and clearance of the final products‟.
xxxxxxxxxxxxxx As the party No. 2 has not discharged the onus cast on them and has not produced any evidences regarding „usage' of the said services, in relation to manufacture and clearance of their final products, it can be safely concluded that the CENVAT Credit on the above services have been wrongly availed and utilized by the party No. 1. Therefore, the CENVAT Credits of Rs. 4,87,98,633/- availed by them during the period April, 2012 to March, 2015 and amounting to Rs. 6,03,84,290/-, availed during the financial year 2015-16 are not admissible to the party No. 1 and are liable to be recovered from them. Held accordingly. "
10. Learned counsel for the appellant has placed before us the reply given by the appellant to the show cause notice to all the services namely communication, maintenance and repair, courier 6 Excise Appeal No. 53065 of 2018 services, security services, photocopy services, architect services, insurance services, real estate/ actuarial charges, rent-a-cab and outdoor catering. This reply runs from pages 126 to 142 of the appeal memo. All that has been stated by the adjudicating authority is that the appellant has not been able to show any nexus between „the use of the service‟ and „manufacture and clearance of the final products‟. The adjudicating authority was required to examine the reply and deal with it rather than rejecting the contention by merely stating that the appellant has not been able to show any nexus. It has fairly been stated by learned counsel for the appellant that in regard to two services namely, rent-a-cab and outdoor catering, the appellant is not assailing the order on merits, but is assailing the order only on the quantification.
11. It is also seen that the reply filed by the appellant regarding the quantification of the demand of duty has not been considered at all by the adjudicating authority and in fact no finding has been recorded by the Commissioner.
12. Likewise, the Commissioner has not considered the issue raised by the appellant that notice could not have been issued to the recipient of service distributed by an ISD and no finding has been recorded.
13. The issue relating to invocation of the extended period of limitation has been dealt with by the Commissioner in a very cryptic manner, though a detailed reply had been filed by the appellant. The order passed by the Commissioner on this aspect is as follows:-
" In view of the above settled legal position, I find that this contention is not tenable. Apart from the above, in view of the said specific ruling given by Hon‟ble High Court and Hon‟ble Tribunal on this issue, the party‟s contentions are not sustainable."7
Excise Appeal No. 53065 of 2018
14. It is, therefore, a fit case where the matter should be remitted to the adjudicating authority for passing a fresh reasoned order after taking into consideration the reply submitted by the appellant. However, as stated by learned counsel for the appellant, the adjudicating authority need not examine on merits whether the appellant was entitled to take credit on rent-a-cab or outdoor catering, as it has been stated by the learned counsel appearing for the appellant that it is not assailing the demand of credit on these two services. The Commissioner shall, for these two services, examine the quantification part only.
15. The impugned orders dated 27.04.2018, 01.05.2019 and 11.12.2019 passed by the Commissioner are accordingly set aside and all the thirty two appeals are allowed. Needless to say, it will be open to the appellant to submit fresh submissions within six weeks from today, which shall be also taken into consideration by the adjudicating authority while deciding the matter.
(Order dictated and pronounced in the open Court) (JUSTICE DILIP GUPTA) PRESIDENT (P. V. SUBBA RAO) MEMBER (TECHNICAL) Rekha