Custom, Excise & Service Tax Tribunal
M/S. Wabco Tvs (India) Limited vs Cce, Chennai Ii on 22 April, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
Appeal No. E/40751/2015
(Arising out of Order-in-Appeal No.13/2015 (CXA-II) dated 2.1.2015 passed by the Commissioner of Central Excise (Appeals - II), Chennai)
M/s. Wabco TVS (India) Limited Appellant
Vs.
CCE, Chennai II Respondent
Appearance Ms. Nandita S. Das, Advocate for the Appellant Shri K.P. Muralidharan, AC (AR) for the Respondent CORAM Honble Shri D.N. Panda, Judicial Member Date of Hearing / Decision: 22.04.2016 Final Order No. 40642 / 2016 Submission of the learned counsel is that appellant having an open premises was using that for the purpose of testing the vehicle as well as generators prior to delivery which in connection with the manufacture. Rent realized from the premises has been subjected to service tax and service of the security availed to protect that property has suffered service tax. The service tax so suffered when claimed as CENVAT credit, that has been denied by the adjudicating authority for no good reason even though there is integral connection of the service with manufacture. Quality testing of the manufactured goods was done thereat as an essential requirement of the delivery of the vehicles and generators. There exists nexus between the service availed and object of manufacture achieved protecting the property of the goods which is undeniable.
2. Revenue relies on the findings of the adjudicating authority in page 77 as well as page 41 of the appeal folder to say that there is no integral connection between the two to allow CENVAT credit of the service tax paid on security service availed. They also say that Revenue relies on the decision in the case of Maruti Suzuki Ltd. Vs. Commissioner of Central Excise, Delhi 2009 (240) ELT 641 (SC) of the Apex Court.
3. Heard both sides and perused the records.
4. What that is the proposition of the learned counsel as afore stated appears to be reasonable when the buyer always opt to take delivery of the goods only upon pre-dispatch testing. The place where such testing was carried out was subjected to security provision for protection of the goods. Therefore the service tax suffered in respect of security service availed cannot be said to be out of the zone of consideration of the input service. Accordingly, the service tax paid availing the security service entitles the appellant to the CENVAT credit. This can be said following the larger Bench decision of the Supreme Court in Ramala Sahkari Chini Mills Ltd. Vs. Commissioner of Central Excise in Civil Appeal No. 3976/2007 disposed on 19.2.2016.
5. In the result, appeal is allowed.
(Dictated and pronounced in open court) (D.N. Panda) Judicial Member Rex 3