Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs ) Sri Kaliswari Fireworks on 19 April, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal Nos.ST/48 to 52/2010
[Arising out of Order-in-Appeal No.311-315/2009 dated 22.9.2009 and OIA No.316-321/2009 dt. 22.9.2009 passed by the Commissioner of Central Excise (Appeals), Madurai]
For approval and signature:
Honble Ms.JYOTI BALASUNDARAM, Vice-President
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? :
3. Whether the Member wishes to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
Commissioner of Central Excise, Tirunelveli
Appellant/s
Versus
1) Sri Kaliswari Fireworks
2) Sri Kaliswari Fireworks Pvt. Ltd.
Respondent/s
Appearance:
Shri T.H.Rao, SDR Shri M.Kannan, Advocate For the Appellant/s For the Respondent/s CORAM:
Honble Ms.Jyoti Balasundaram, Vice-President Date of hearing : 19.4.2010 Date of decision : 19.4.2010 Final Order No.____________ In this case, a total of 11 Orders-in-Original were passed involving the issue as to whether outward transportation, transit insurance of goods, motor vehicle insurance and tyre retreading charges were input services. All issues were decided by two Orders-in-Appeal. Revenue was aggrieved by the finding of the Commissioner (Appeals) that outward transportation and transit insurance of goods were to be treated as input services and hence Revenue filed Appeal Nos.ST/18,19,20, 21,22 & 23/2010.
2. In view of the fact that there were 11 Orders-in-Original, the Registry of the Tribunal directed the Revenue to file 5 more appeals. The response from the office of the Commissioner is reproduced herein below :-
Sir, Sub: Appeal No.ST/18-23, 48-52/2010 (11 appeals) before CESTAT, Chennai.
Ref : F.No.ST/18-23, 48-52/10 dated 12.04.2010 received from CESTAT, Chennai.
Please refer to the above.
2. Orders-in-Appeal Nos.311-315/2010 dated 22.09.2009 passed by the appellate Commissioner, Madurai relate to Sri Kaliswari Fireworks, Sivakasi and disposed of five Orders-in-Original. Orders-in-Appeal Nos.316-321/2010 dated 22.09.2009 relate to Sri Kaliswari Fireworks Private Limited, Sivakasi and disposed of six Orders-in-Original. All the original orders were passed by the Assistant Commissioner of Central Excise, Sivakasi Division.
3. Issue involved in all the eleven original orders is whether or not the following services qualify as input services as defined in CENVAT Credit Rules, 2004 :
i) outward transportation of finished goods from the factory gate to the buyers premises under transportation of goods by road service;
ii) insurance premium on open policy (falling under insurance auxiliary services) to cover the risk of finished goods in transit from the factory gate to the buyers premises;
iii) insurance auxiliary services availed under motor package policies;
iv) retreading of tyres for motor vehicles falling under maintenance or repair services;
v) overhauling and labour and service charges paid on motor vehicles falling under maintenance or repair services; and
vi) service tax paid on mobile phones.
4. It is noted that individually, the eleven original orders dealt with one or more of the disputed services.
5. The appellate Commissioner, Madurai vide the cited Orders-in-Appeal had ruled in favour of the assessees.
6. Upon review of the cited appellate orders, Committee of Commissioners vide Review Order Nos.03-07/TVL/2010 (in respect of O-in-A Nos.311-315/2009) and 08-13/TVL/2010 (in respect of O-in-A Nos.316-321/2009) both dated 08.01.2010 was of the considered opinion that the appellate authoritys conclusion that the services specified against Sl.No.(i) and (ii) in para 3 above qualify as input services was not legal and proper and directed filing of appeals against the appellate orders to that extent. To reproduce para 4 of both the Review Orders:
4. The decision of the learned appellate authority treating the outward transportation of finished goods from the factory gate to the buyers premises and insurance for transit of finished goods from the factory gate to the buyers premises as input services under rule 2 (l) of the CENVAT Credit Rules, 2004 (CCR) is not legal and proper for the reasons set out herein below.
7. As mandated by the Committee of Commissioners vide the cited Review Orders, appeal had been filed against the Orders-in-Appeal to the extent that the appellate authority held outward transportation and transit insurance as input services in respect of the Orders-in-Original, as tabulated below :
S.No. O-in-O No/Date O-in-A No/Date Issue for which appealed against
1.
13/2008 dated 25.3.2008 311-315/2009 dated 22.9.2009 Outward transportation of finished goods
2. 8/2009 dated 30.3.2009
-do-
Outward transportation of finished goods
3. 1/2009 dated 5.2.2009
-do-
Outward transportation of finished goods
4. 5/2009 dated 30.3.2009 316-321/2009 dated 22.9.2009 Transit insurance of finished goods from the factory gate
5. 12/2009 dated 31.3.2009
-do-
Transit insurance of finished goods from the factory gate
6. 14/2008 dated 17.4.2008
-do-
Outward transportation of finished goods (Sl.Nos.1-3 relate to Sri Kaliswari Fireworks, Sivakasi; Sl.Nos.4-6 relate toe Sri Kaliswari Fireworks Private Limited, Sivakasi)
8. The remaining five Orders-in-Original did not deal with the disputed services (not considered as input services by the Committee)
9. It is hereby informed that no appeal had been filed on an issue for which there is no authorization from the Committee of Commissioners.
3. From the above, it is clear that the Revenue is aggrieved only by the finding that outward transportation and transit insurance are input services under Rule 2 (l) of the CENVAT Credit Rules, 2004. These are the issues involved in Appeal Nos.ST/18,19,20,21,22 & 23/2010. Although these appeals are listed for hearing today, they cannot be disposed of as the issue regarding outward transportation being considered as an input service is pending decision by the Honble Karnataka High Court in the case of ABB Ltd. These appeals are hence adjourned to 23.7.2010 to await the Karnataka High Courts decision.
4. As regards the remaining 5 appeals namely ST/48,49,50,51 & 52/2010, the issue do not relate to outward transportation and transit insurance. They relate only to motor vehicle insurance and tyre retreading charges which have been held to be input service and which finding is not challenged by the Revenue. Therefore, these five appeals are dismissed as infructuous.
(Dictated and pronounced in open court) (JYOTI BALASUNDARAM) VICE-PRESIDENT gs 6