Custom, Excise & Service Tax Tribunal
M/S. Lear Automotive India Pvt. Limited vs Commissioner Of Central Excise & S.T., ... on 1 January, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad Appeal No. : ST/10254/2015 (Arising out of OIA-VAD-EXCUS-002-APP-496-14-15 dated 10.10.2014, passed by Commissioner (Appeals) Central Excise, & S.T., Vadodara) M/s. Lear Automotive India Pvt. Limited : Appellant (s) VERSUS Commissioner of Central Excise & S.T., Vadodara : Respondent (s)
Represented by :
For Appellant (s) : Shri Jigar Shah, Advocate For Respondent (s) : Shri T.K. Sikdar, Authorised Representative For approval and signature :
Mr. P.M. Saleem, Honble Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes 3 Whether their Lordships wish to see the fair copy of the Order?
Seen 4 Whether Order is to be circulated to the Departmental authorities?
Yes CORAM :
Mr. P.M. Saleem, Honble Member (Technical) Date of Hearing / Decision : 01.01.2016 ORDER No. A/10007/2016 Dated 01.01.2016 Per : Mr. P.M. Saleem The appellant herein M/s. Lear Automotive India Pvt. Limited is in appeal before us aggrieved by the impugned Order-in-Appeal of the Commissioner (Appeals) wherein he had denied the cenvat credit of service tax paid on Courier Services.
2. Heard both sides. The learned Counsel for the appellants should that they are manufacturer of automotive goods viz., seats, head liner, sunvisor etc. and availed services of Courier Agency namely Blue Dart and Professional Courier Agency. Their contention is that the said service of Courier Agency amounts to Input Service and they are eligible to take CENVAT credit of service tax paid on the said service. The learned Counsel takes us through the definition of input service and also relied upon the case laws of CCE, Vapi vs. Parle International Pvt. Limited 2012 (278) ELT 625 (Tri. Ahmd.). On the other hand, learned Authorised Representative for Revenue submits that definition of Input Service was amended with effect from 01.4.2008 wherein the words from the place of removal were amended to read as Up to the place of removal. He therefore, argues that Courier Services, which related to removal of goods after the place of removal, is not to be treated as input services, and CENVAT credit of service tax paid on Courier Service related to that portion of the service is not eligible. He relied upon the decision of Hon'ble Gujarat High Court in the case of CCE, Ahmedabad vs. Cadila Healthcare Limited 2013 (30) STR 3 (Guj.).
3. We find that Rule 2(l) of Cenvat Credit Rules, 2004 reads as follows :-
Input service means any service:-
(i) used by a provider of taxable service for providing an output service, or
(ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacturer of final products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output services or an office relating to such factor or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry and security, inward transportation of inputs or capital goods and outward transportation up to the place of removal. (emphasis added) This definition was amended with effect from 01.4.2008 to read as follows:-
(l) Input service means any service, -
(i) used by a provider of taxable service for providing an output service; or
(ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products, up to the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output services or an office relating to such factor or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry and security, inward transportation of inputs or capital goods and outward transportation up to the place of removal. (emphasis added) We find that input service was defined prior to 01.4.2008 to mean any services used by the manufacturer whether directly or indirectly in or in relation to manufacture of final product and clearance of final product from the place of removal. In view of the said definition, the Courier Services which are utilised for transportation of documents and goods from the place of removal would be covered by the definition. Hence, the Courier Service utilised by the appellant for the period prior to 01.4.2008 would be input service and they will be eligible for CENVAT credit on the service tax paid on the same.
4. With effect from 01.4.2008, the definition was amended and instead of the words, from the place of removal, up to the place of removal were introduced in the above mentioned sentence. This change in definition has resulted in restricting the coverage of input service. It has resulted in treating those input service which are used by the manufacturer till the place of removal only as input services. It is observed from the facts of the case, as admitted by the appellant in their own statement before the Commissioner (Appeals), that they utilised the Courier Service for the purpose of movement of inputs and finished goods, in addition to sending/ receiving documents related to the business. Therefore, after 01.04.2008, though the appellant would be eligible for CENVAT credit on the Courier Service used for sending/ receiving documents related to the business, or for movement of inputs and finished goods up to the place of removal, they would not be eligible for credit on Courier Services used in relation to movement of finished goods, after the place of removal.
5. The learned Counsel has relied upon the case law of Parle International Pvt. Limited (supra). On perusal of the same, it is observed that in that case the Courier Service was used for sending samples to the customers for approval and for communication with their head office to send documents and other correspondences. The Tribunal held that there is clear nexus with manufacture and hence credit is eligible. The Tribunal observed that credit can be denied only when the service has been received after the place of removal. Hence this case law is of no avail to the Appellants rather they only go to support what we have stated at Para 4 herein above.
6. We further observe that it is not clear from the facts of the case that the amount of service tax paid (and credit taken) on the Courier Service used by the appellants used for the movement of finished goods after the place of removal. Therefore, the adjudicating authority is directed to determine the same and restrict the demand to that extent only. The appellants would not be eligible for CENVAT credit of the said amount. We modify the impugned Order-in-Appeal to the said extent.
7. In view of the above the appeal is disposed by way of remand to the adjudicating authority to decide the issue as per the above directions.
(Order dictated and pronounced in the open Court) (P.M. Saleem) Member (Technical) .KL 2