Custom, Excise & Service Tax Tribunal
Cargill India Private Ltd vs Commissioner Of Central Excise, ... on 13 November, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/25706/2013-SM, E/25708/2013-SM [Arising out of Order-in-Appeal No. 466-468/2012 dated 26/12/2012 passed by Commissioner of Central Excise (Appeals), BANGALORE. ] Cargill India Private Ltd No.99, Hope Farm, Hoody- Whitefield Road BANGALORE DIST - KARNATAKA Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax BANGALORE-I POST BOX NO 5400, CR BUILDINGS, BANGALORE, - 560001 KARNATAKA Respondent(s)
Appearance:
Ms. Sandhya Sarvode, Advocate For the Appellant Mr. Naveen Kushalappa, AR For the Respondent Date of Hearing: 13/11/2017 Date of Decision: 13/11/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 22765-22766 / 2017 Per : S.S GARG These two appeals have been filed by the appellant against the impugned order dated 26.12.2012 passed by the Commissioner (A), whereby the Commissioner (A) has disposed of three appeals by upholding the Order-in-Original and rejected the appeals of the appellant.
2. Assessee filed three appeals but one appeal was disposed of by the Tribunal vide its order dated 23.1.2014 for the subsequent period pertaining to April 2011 to November 2011. These two appeals pertain to the period prior to April 2011. The details of both the appeals are given herein below:
Appeal No. Period Amount involved Penalties Imposed E/25706/2013 December 2009 to August 2010 Rs.48,483/-
Rs.10,000/-
E/25708/2013 September 2010 to March 2011 Rs.73,409/-
Rs.15,000/-
3. Briefly the facts of the present case are that the appellants are registered under Central Excise and engaged in the manufacture of Excisable goods viz., Food Flavours falling under Chapter 33 of the Central Excise Tariff Act. They are availing the facility of CENVAT Credit under the CENVAT Credit Rules, 2004 (CCR). During the course of the audit of their records by the departmental officers it was noticed that he appellants have availed CENVAT Credit of service tax paid in respect of courier, housekeeping, rent and maintenance services rendered at M/s. Cargill Flavour Systems, Eco Space Campus, 3B Sarjapur Road, Bangalore during the period from 12/2009 to 08/2010, 09/2010 to 03/2011 and 04/2011 to 11/2011. It appeared that the appellants Head Office has taken centralized service tax registration for payment of service tax and also taken registration as Input Service Distributor (ISD) and passed on the service tax credit taken in respect of courier services rendered at M/s. Cargill Flavours Systems, Eco Space Campus to their Hoody Unit who availed credit based on ISD invoices for the services rendered at Eco Space Campus. In view of the Rule 2(l) of CCR, it appeared that the services rendered to Eco Space Campus are not used directly or indirectly, in or in relation to the manufacture and clearance of final products. As such, the appellants are not eligible to avail the credit on the services rendered at the premises of Eco Campus. Therefore, three show cause notice dated 4.1.2011, 3.10.2011 and 8.12.2011 were issued to the appellants with a proposal to disallow and recover the irregularly availed credits, demanding interest and penalty. The adjudicating authority after observing the principles of natural justice in the Orders-in-Original has confirmed the demanded irregular CENVAT credit availed under Rule 14 of CCR read with Section 11A of the Act along with the interest under Section 11AA on the said amount and also imposed penalty under Rule 15(1) of the CCR. Aggrieved by the Order-in-Original, appellant filed three appeals before the Commissioner (A), which were dismissed by the Commissioner (A) vide the impugned order.
4. Heard both the parties and perused the records.
5. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without considering the binding judicial precedent on the same issue. She further submitted that the credit distributed through ISD invoices cannot be denied on the ground that services have been received at the R & D Centre instead of the factory. For this purpose, she has relied upon the following decisions including the decision rendered in appellants own case.
* Cargill India Pvt. Ltd. vs. CCE: Final Order No.20081/2014 dated 23.1.2014 in Appeal No.E/25707/2014.
* Cargill India Pvt. Ltd. vs. CCE: Final Order No.21073/2015 dated 1.5.2015 in Appeal No.E/2704/2012.
* Sunbeam Generators Pvt. Ltd. s. CCE: 2016 (45) STR 424 (Tri.-Chennai) 5.1 She Further submitted that the courier service and housekeeping service are utilized in or in relation to the manufacture of final products and for this submission, she relied upon the decision rendered in the case of Wabco TVS (India) Ltd. vs. CCE, Chennai: 2016 (44) STR 417 (Tri.-Chennai).
6. On the other hand, the learned AR reiterated the findings of the impugned order and submitted that the credit was denied on the ground that the input services have been received at the premises other than the appellants premises. He further submitted that the services have not been used in or in relation to the manufacture of final product by the appellant and thus not an input service in terms of Rule 2(l) of CCR. He also submitted that the courier services and housekeeping service are not relating to the manufacturing process and clearance of final product.
7. After considering the submissions of both the parties and perusal of the material on record and also the earlier decision allowing the appeal of the appellant vide Final Order dated 23.1.2014, I find that there is nothing wrong in distributing the credit through ISD invoices; simply on the ground that the services have been received at the R & D Centre instead of factory. This issue has been covered in appellants own case in the Final Order cited supra. Further, the courier service and housekeeping service have been held to be input service in view of the decisions cited supra. Therefore, by following the ratios of the decisions cited supra, I am of the view that the impugned order is not sustainable and therefore, set aside the same b allowing the both the appeals of the appellant.
(Operative portion of the Order was pronounced in Open Court on 13/11/2017) S.S GARG JUDICIAL MEMBER rv...
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