Custom, Excise & Service Tax Tribunal
M/S Century Plyboards (I) Ltd vs Commissioner Of Central Excise, ... on 16 January, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
EAST REGIONAL BENCH : KOLKATA
SP-717/12
& Ex. Appeal No.430/12
Arising out of O/A No.28/Kol.VII/2012 dated 03.04.2012 passed by Commr. of Central Excise (Appeals), Kolkata.
For approval and signature:
DR. D. M. MISRA, HONBLE JUDICIAL MEMBER
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 His Lordship wishes to see the fair copy
of the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s Century Plyboards (I) Ltd.
APPELLANT(S)
VERSUS
Commissioner of Central Excise, Kol.VII
RESPONDENT (S)
APPEARANCE Shri S. P. Siddharta, Consultant for the Appellant (s) Shri S. Chakraborty, Asstt. Commr. (A.R.) for the Department CORAM:
DR. D. M. MISRA, HONBLE JUDICIAL MEMBER DATE OF HEARING & PRONOUNCEMENT : 16. 01. 2013 ORDER NO.S-8,A-19/Kol/2013 Per Dr. D. M. Misra :
This This is an application for waiver of predeposit of cenvat credit of Rs.95,398/- and equal amount of penalty.
2. After hearing both sides for some time, I find that the issue involved in the present case revolves in a narrow compass which relates to eligibility of cenvat credit on the input service availed by the applicant. Thus, after waiving the requirement of predeposit of dues adjudged and with the consent of both sides, the appeal itself is taken up for final disposal.
3. Narrating the facts, the ld. Consultant for the applicant, has submitted that they have availed cenvat credit on the input services, namely, IPR service, on the amount of service tax paid to M/s Sharon Veneers (P) Ltd. for using their brand name Sharon by an agreement dated 29th June, 2005 for the plywood manufactured at their factory at Kolkata. On the said input services, cenvat credit was denied to them on the ground that it does not satisfy the definition of inputs services as the said service had not been utilized/used in the manufacture of plywood, but for trading of the said branded plywood. He has submitted that the ld. Commissioner (Appeals) has not considered the definition of input services prescribed under the first part of Clause (ii) of Rule 2 (l) of Cenvat Credit Rules, 2004, but considered only the second part of the said definition. Secondly, he has categorically submitted that the said input service has been used in the manufacture of Sharon branded plywood and not for trading purpose.
4. Per contra, the ld. A.R. for the Department, has fairly accepted that the input services viz. IPR Services used by them were not in the trading of Sharon branded plywood, but in the manufacture of Sharon branded plywood at their factory as reported by the Range Superintendent vide his letter dated 11.01.2013.
5. Heard both sides and perused the records. Undisputedly, the appellants are engaged in the manufacture of plywood bearing their own brand name and also brand name of Sharon. Initially, the cenvat credit on the input services viz. the amount of royalty charges paid to M/s Sharon Veneers (P) Ltd., was disallowed on the ground that the said input service was not used in the manufacture of plywood but on trading of the branded plywood and hence, was not used in or in relation to the manufacture of their final product. However, from the report of the Range Superintendent submitted by the ld. A.R. for the Department, it is now clear that the appellants were engaged in the manufacture of Sharon brand plywood along with their own brand, that is, in the manufacture of plywood, they had affixed the brand name of Sharon and cleared it from their factory. Therefore, it can be inferred that the service tax paid on the royalty, (IPR Services) were used in or in relation to the manufacture of their Sharon branded plywood. Thus, it is squarely covered under the definition of input services laid down under Rule 2 (l) (ii) of Cenvat Credit Rules, 2004. I agree with the ld. Consultant that the ld. Commissioner (Appeals) has decided the appeal without considering the first part of Clause (ii) of definition of input services, viz. used by the manufacturer whether directly or indirectly in or in relation to the manufacture of final product. In these circumstances, I do not find any merit in the order passed by the ld. Commissioner (Appeals). Consequently, the same is set aside and the appeal filed by the appellant is hereby allowed with consequential relief, if any, as per law.
6. The appeal is allowed and the stay petition is disposed off.
Dictated and pronounced in the open Court.
Sd/
(DR. D.M. MISRA) JUDICIAL MEMBER
mm
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Ex.Appeal No.430/12
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