Custom, Excise & Service Tax Tribunal
C.C.& C.Ex., Raipur vs M/ H.E.G. Ltd on 23 June, 2010
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-III SINGLE MEMBER BENCH Date of hearing/decision: 23.6.2010 Central Excise Appeal No.2130 of 2007-SM Arising out of the order in appeal No.72 & 73/RPR-II/2007 dated 28.3.2007 passed by the Commissioner (Appeals), Customs & Central Excise, Raipur. For Approval and Signature: Honble Shri M. Veeraiyan, Technical Member 1 Whether Press Reporter 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 CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 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 C.C.& C.Ex., Raipur . Appellant Vs. M/ H.E.G. Ltd. . Respondent
Appearance:
Shri I. Baig, Authorised Departmental Representative (SDR) for the Revenue Shri B.L. Narasimhan, Advocate for the respondent Coram: Honble Shri M. Veeraiyan, Technical Member Oral Order No.____________________ Per M. Veeraiyan:
This is an appeal filed by the Department against the order of the Commissioner (Appeals) No. 72 & 73/RPR-II/2007 dated 28.3.2007.
2. Heard both sides.
3. The Commissioner (Appeals) by the impugned order dealt with admissibility of cenvat credit on input services and allowed the credit in respect of certain input services and disallowed the credit in respect of other services. It is submitted that the party filed appeal in respect of certain services on which credit was denied and the same has been decided by the Tribunal in the case of H.E.G. Ltd. vs. C.C.E., Raipur reported in 2010 (17) STR 178. Against the impugned order, the Department has come on appeal in respect of some of the services on which the Commissioner (Appeals) allowed the credit.
4. The submissions on behalf of the Department and the appellant on the aspect of applicability of credit on the disputed services and the decisions, are recorded below:-
(i) Repair and Maintenance of power plant:
An amount of Rs.1,97,682/- has been allowed as credit of service tax on services utilised by the party in relation to generation of steam and electricity. The services were utilised towards maintenance of the plant. The Department contends that credit is not available as the steam and electricity produced are not subject to duty. Learned Advocate submits that this issue has been decided in favour of the assessee by the Tribunal in the case of Sanghi Industries Ltd. vs. C.C.E., Rajkot reported in 2009 (234) ELT 367. Learned SDR does not dispute that the facts of the case of Sanghi Industries are substantially the same as the facts of the present case in relation to input services utilised for generation of steam and electricity. It is also not being disputed that steam and electricity generated were being used within the factory of the party. In view of the above, the order of the Commissioner (Appeals) allowing the credit on this count does not call for interference .
(ii) Insurance of Cars and Two Wheelers:
The Departments contention is that the excise duty paid on the cars is not being allowed as credit and therefore, the service tax paid on cars insurance cannot be allowed as credit. The learned Advocate for the party submits that the Tribunal in the case of C.C.E., Jaipur II vs. J.K. Cement Works reported in 2009 (14) STR 538 has allowed the service tax paid on repair and maintenance of the vehicles as credit. In view of the above, he submits that the credit on service tax paid on insurance premium shall be available. I find that the said decision relates to maintenance and repair of capital assets and the same have been treated as input services. In the present case, the insurance of the vehicle also is in relation to maintenance related activities of the vehicles and therefore, following the same ratio, the credit has to be allowed. Therefore, there is no reason to interfere with the order of the Commissioner (Appeals) in allowing the credit of Rs.3, 661/-.
(iii) Repair and Maintenance and cleaning services:
A sum of Rs.42,110/- stands allowed by the Commissioner (Appeals) in respect of service tax paid on the above services. The submission of the Department is that the respondents had undertaken works like maintenance of air cooler, pay loader, dumper, repairing and changing of damaged asbestos sheet of canteen building. These services, according to the Department have not been used in relation to the manufacture of final product or clearance of the final product from the place of removal. However, the learned Advocate for the respondent submits that all these activities were undertaken within the factory and they have nexus to the business activity of the manufacture and clearance of the excisable goods and therefore, they are eligible for the credit as held by the Tribunal in the case of C.C.E., Jaipur II vs. J.K. Cement Works reported in 2009 (14) STR 538. In view of the above, I do not find any reason to interfere with the order of the Commissioner (Appeals).
(iv) Security Services:
A sum of Rs.15,652/- has been denied as credit on the ground that the security services were provided at a place other than the factory premises. As submitted by the learned SDR, it has not been established by the appellant that services provided has direct nexus with the activities relating to manufacture and clearance and therefore, the order of the Commissioner (Appeals) in allowing the credit is set aside and the order of the original authority in this regard is restored.
(v) Rent-a-cab Services:
A sum of Rs.11,951/- was allowed as credit by the Commissioner (Appeals) on service tax paid on rent-a-cab services. The Departments contention is that the same cannot be held to be related to directly or indirectly in manufacturing process of sponge iron. However, the statement of the authorised signatory relied upon in the show cause notice clearly indicates that these services have been utilised by the executives of the appellant only in relation to procurement of raw materials, sale of finished goods and connected business activities. Learned Advocate for the party relies on the decision of the Tribunal in the case of Ace Glass Containers Ltd. vs. C.C.E., Meerut I reported in 2010 (250) ELT 110. In view of the above, I do not find any reason to interfere with the order of the Commissioner (Appeals).
(vi) Commission on Sale:
A sum of Rs.1,56,317/- was allowed by the Commissioner (Appeals) being credit of service tax paid on the services of commission agent. From the record, it is noticed that the commission agent has been engaged in relation to sale activities of their finished goods namely, sponge iron. Procurement of order for sale of the finished goods definitely can be considered as part of the business activity and therefore, the services were rightly held to be input services by the Commissioner (Appeals) and therefore, I do not find any reason to interfere with the order of the Commissioner (Appeals).
(vii) Mobile Phones services:
The Commissioner (Appeals) has allowed the credit of service tax paid on mobile phones. This is being challenged by the Department. The learned Advocate for the party relies on the decision of the Honble Gujarat High Court in the case of C.C.E. vs. Excel Crop Care Ltd. reported in 2008 (12) STR 436 (Guj.) wherein the service tax credit in respect of mobile phones has been allowed. In view of the above, I do not find any reason to interfere with the order of the Commissioner (Appeals).
5. There is no plea challenging the allowance of credit by the Commissioner (Appeals) in respect of other services and therefore, the same are not being dealt with.
6. The appeal is disposed of in the above terms.
(M. Veeraiyan) Technical Member scd/ 6