Custom, Excise & Service Tax Tribunal
M/S Sri Sarvaraya Sugars Ltd vs Cce, C & St, Visakhapatnam on 28 September, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No. E/30153/2016 (Arising out of Order-in-Appeal No. VIZ-EXCUS-002-APP-060-15-16 dt. 30.10.2015 passed by CCE, C & ST (Appeals), Visakhapatnam) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member (Judicial) 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 their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s Sri Sarvaraya Sugars Ltd., ..Appellant(s) Vs. CCE, C & ST, Visakhapatnam ..Respondent(s)
Appearance Sh. R. Raghavendra, Advocate for the Appellant.
Sh. Guna Ranjan, Superintendent (AR) for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Date of Hearing: 28.09.2016 Date of Decision: 28.09.2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The appellants are engaged in manufacturing of Aerated and Carbonated Water and are availing the facility of CENVAT Credit of service tax paid on input services and duty paid on inputs. During the period from March 2012 to September 2012 the appellant used LPG Cylinder for transporting the final goods from factory to store room (within the factory) using forklifts. Apart from this, they also availed input services namely telecom services, marketing services and maintenance/repair services for an amount of Rs. 7,07,168/-. Department entertained a view that LPG cylinders did not satisfy the definition of inputs and therefore denied the credit availed on them. The credit availed on above stated input services was denied on the ground that these services did not quality as input services. A show cause notice was issued proposing for recovery of the credit of Rs. 9,07,132/- along with interest and also proposing imposition of penalty. After due process of law, the original authority confirmed the demand, interest and penalty. In appeal the Commissioner (Appeals) upheld the same. Hence this appeal.
2. On behalf of the appellant Ld. Counsel Sh. R. Raghavendra submitted the details of the credit availed, the amount involved and the grounds for denial of credit which is tabulated as under:
Sl.No. Credit details Credit Amount (Rs. Including cesses) Ground for denial of credit 1 Input credit on LPG Cylinders used in forklifts 1,99,964/-
Role of fork lift is exterior to process of manufacture; LPG is a fuel like petrol, diesel etc., excluded from definition under Rule 2(k) of CCR 2004 and clarified in CBEC circular 943/4/2011 CX dated 29.04.2011; hence inadmissible.2
Input services credit on ISD invoices issued by Sarvaraya Sugars, Vemagiri 7,07,168/-
ISD invoices cover services related to marketing / cell phones and maintenance of refrigerators, unrelated to manufacture of final product, hence inadmissible.
He submitted that the issue whether credit is admissible on LPG cylinders as inputs is covered by the decision of the Tribunal laid in CCE, Mumbai Vs Bajaj Auto Ltd., [2011-TIOL-162-CESTAT-Mumbai]. The Ld. Counsel thereafter explained that the subject services like telecom services, marketing services and maintenance and repair services fall within the inclusive part of the definition of inputs and the denial of credit is without basis. He relied upon the judgment laid in M/s Hindustan Coca Cola Beverages (P) Ltd., Vs CCE & ST, Hyderabad reported in [2010 (19) STR 356 (Tri-Ban)] to canvass the proposition that the said services have been utilized for development/ sales promotion /marketing and therefore is eligible for credit.
3. On behalf of the department the Ld. AR Sh. Guna Ranjan supported the findings in the impugned order.
4. I have heard the submissions made before me. The issue whether the LPG cylinders used for transporting finished goods from factory to store room in forklifts is eligible for credit is decided in the case relied by the Ld. Counsel as stated above. In Bajaj Auto Ltd., case, the credit on LPG cylinders used for running canteen, which was maintained for workers under the Factory Act, 1948 was held to be eligible. In the present case, the LPG cylinders were used to function the forklifts in order to facilitate movement of goods within the factory. Following the judgment I hold that credit on LPG cylinders is admissible. In the case of the input services which are disallowed, it is seen that these services fall within the inclusive part of the definition. The original authority has denied the credit stating that, maintenance and repair services were availed in respect of vendors premises. On perusal of the definition of input service it can be seen that the marketing/sales promotion services fall within the inclusive part of the definition. The same has been considered and analysed in the judgment referred in M/s Hindustan Coca Cola Beverages (P) Ltd., (supra). Following the decisions laid in the above case I am of the view that the disallowance of credit on inputs as well as input services is unjustified. The impugned order is set aside.
5. In the result, the appeal is allowed with consequential reliefs, if any.
(Pronounced & dictated in open court) (SULEKHA BEEVI C.S.) MEMBER (JUDICIAL) Jaya.
5