Custom, Excise & Service Tax Tribunal
Cce, Guntur vs M/S. Ccl Products (India) Ltd on 5 February, 2010
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench SMB
Court I
Date of Hearing: 05/02/2010
Date of decision:05/02/2010
Appeal No.E/835/08
(Arising out of Order-in-Appeal No.58/2008(G)CE
Dt. 14/8/2008 passed by CC,CE&ST(Appeals), Guntur )
For approval and signature:
Honble Mr. P.Karthikeyan, Member(Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
Yes
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
CCE, Guntur
..Appellant(s)
Vs.
M/s. CCL Products (India) Ltd.
Respondent(s)
Appearance Mr.M.M.Ravi Rajendran, JDR for the Revenue.
Mr.K.Vijaya Kumar, Advocate for the respondent.
Coram:
Honble Mr. P.Karthikeyan, Member(Technical) FINAL ORDER No._______________________2010 Per P.Karthikeyan This is an appeal filed by the Revenue. The respondents are a 100% EOU, engaged in manufacture of Instant Coffee. For packing their final products, they procured metal containers (tins) from manufacturers of such metal containers. For the safe and convenient transport of the metal containers, the respondents sent suitable plastic pallets to the supplier of metal tins. They paid service tax under the head GTA for transporting pallets to the suppliers of metal tins. The original authority denied the credit of service tax incurred under the head GTA for transport of these metal containers to the supplier. He denied credit of such service tax of Rs.27,969/- paid by the respondents during June, 2006. Vide the impugned order, the Commissioner(Appeals) found as follows:-
11.5. In the inclusive part of the definition of input service in Rule 2 of Cenvat Credit Rules 2004, services in relation to procurements of inputs are given to be input services. I find that the service of transport of pallets back to the supplier of tins is directly related to and in aid of the activity of procurements of inputs performed by CCL. I find from the material on record of the proceedings that, the pallets aid the efficient handling of tins supplied to CCL and since tins directly have a role to play in the manufacture of final products viz packing, the transport of pellets to and by CCL are services in relation to procurement of inputs by CCL, and for the same reason such transport activity becomes an input service and service tax paid on such transport charges would be available as credit for CCL. Considering the durable nature of the pallets, I find that their wear and tare would go into the costing of the tins arrived at by the supplier and duty paid by the supplier, on the value arrived on the basis of such costing is available to CCL, as input credit on purchase of Tins. For the sake of argument, I am inclined to presume a situation that the cost of transport of the pallets in question is borne by the supplier of tins, which would then naturally go into the co1sting of his tins and add to the cost of tins which would result in incremental increase in the duty on these tins resulting in proportionate increase in duty paid on these tins, which would inturn be available to CCL. For this reason alone, I find the dispute under consideration to be revenue neutral in nature.
2. In the appeal filed by the Revenue, the ground raised is that the credit in relation to service tax paid on transportation cannot go beyond transport up to the place of removal. This is because as per Rule 2(l) of the Cenvat Credit Rules, 2004, input 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.
3. I have heard the JDR for the Revenue and the ld. Advocate for the respondents. The Commissioner(Appeals) has found that the respondents require metal tins for packing its final product and to procure the metal tins, it has to use plastic pallets. In order to transport the metal tins, the pallets are sent back to the supplier by the respondents and it incurs service tax under GTA for such transportation. I find that the service involved is in relation to procurement of inputs and is covered by the definition of input service in Rule 2(l) of the Cenvat Credit Rules. This activity would also get covered by activities relating to business, which is also defined as input service. I find that the Revenue has not raised any valid ground to upset the findings in the impugned order. In the circumstances, I find no merit in the appeal filed by the Revenue and reject the same.
(Pronounced and dictated in open court) (P.KARTHIKEYAN) Member (Technical) Nr 4