Custom, Excise & Service Tax Tribunal
M/S. Hinduja Foundries Ltd vs Cce, Chennai-I on 7 October, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH AT CHENNAI E/40844/2015 & E/40845/2015 (Arising out of Order-in-Appeal No. 18 & 19/2015 (CXA-I) dated 03.02.2015passed by the Commissioner of Central Excise (Appeals-I), Chennai). M/s. Hinduja Foundries Ltd. : Appellant Vs. CCE, Chennai-I : Respondent
Appearance Shri M. Kannan, Adv., For the appellant Shri P. Anbuchelvan, Supdt. (AR), For the respondent CORAM Honble Shri MADHU MOHAN DAMODHAR, Technical Member Date of Hearing/Decision: 07.10.2016 FINAL ORDER No. 41980-41981/2016 The dispute involved in these appeals relate to denial of Cenvat credit in respect of the following input services on the ground that they are not eligible services for the purpose of Rule 2 (l) of Cenvat Credit Rules, 2004.
In respect of appeal No.E/40844/2015, the eligibility of the following input services is in dispute:
Sl.No. in Table-A Description of services as per Annex. Category of Service 4 AMC for pest-o-flash and Pest Control charges Pest Control 5 Godown rent for Maruti Castings Renting of immovable property 6 Courier charges Courier service 7 Maintenance charges for RO plant and Erection and Commissioning of RO plant and services related RO plant, AMC charges of spectrometer Maintenance charges for Reverse Osmosis plant.
Sl.No. in Table-B Description of services as per Annex. Category of Service 9 Service and maintenance charges for staff bus Maintenance charges 10 Man power charges provided to Executive Mess Manpower recruitment 11 CAMC charges for Franking machine Postal charges 12 Car hire charges Rent a cab service 13 Cell phone/Telephone services Telecom charges In respect of appeal No. E/40845/2015, the eligibility of the following input services is in dispute:
Sl.No. in Table-A Description of services as per Annex. Category of Service Amount of credit involved 3 AMC for pest-o-flash and pest control charges, issue of fumigation certificate charges Pest control 10349 4 Godown rent for Maruti castings Renting of immovable property 10504 5 Courier charges Courier service 5929 6 Operation and maintenance charges for RO plant, water analysis charges, water analysis charges of RO plant. Maintenance charges for Reverse Osmosis plant for drinking water 73923 Sl.No. in Table-B Description of services as per Annex. Category of Service Amount of credit involved 7 Man power charges for Exe./MD mess expenses Mess charges 125270 8 AMC charges of photo copier Photo copier charges 1854
2. Ld. Counsel submits that all the above input services have been utilised only in relation to manufacturing activity.
3. On behalf of the department Shri P. Anbuchelvan, Supdt. supported the orders of the authorities below.
4. Heard both sides and perused the records.
5. In respect of services mentioned under Table-A in both the appeals, I am of the considered opinion that Pest control service, Courier service and Maintenance of RO plant service are very much in the nature of services that are required in relation to the manufacturing activity, their utilisation is also not debarred by the definition under Rule 2 (l) of CCR, 2004, hence these are very much eligible input services.
6. However, in respect of Godown rent for Maruti castings mentioned under Table-A in both the appeals, I am of the considered opinion that the godown rent was paid for storage of castings manufactured by them and sold to their customer M/s. Maruti Castings. By no stretch of imagination can it be accepted that this is an input service in or in relation to the manufacturing activity. It is only a facilitation provided to the customer. Hence, this service cannot come within the ambit of Rule 2 (i) of CCR, 2004, and therefore not an eligible input service.
7. In respect of services mentioned under Table-B in both the appeals, I am of the considered opinion that CAMC charges for Franking machine, it is seen that the same relate to the service and maintenance charges of franking machine, which is an admissible input service. Postal charges are very much admissible for the purpose of Rule 2 (l) of CCR. However, in respect of the following other services mentioned under Table-B such as-
i) Man power charges provided to Executive Mess
ii) Car hire charges
iii) Cell phone/Telephone services
iv) Service and maintenance charges for staff bus
v) AMC charges of photo copier availed by the appellant, no clarity about their nature and purpose, is forthcoming from the records, including, in the impugned order. Nor is the ld. Counsel able to throw more light thereon whether or not these are indeed utilised in or in relation to the manufacturing activity or whether they have been utilised by the employees and/or by their families or any other persons who are not concerned with the appellant.
8. In the result, except for Credit relating to godown rent for 'Maruti Castings' and the services discussed in para-7 above, the remaining disputed services are held as eligible input services for the purpose for Rule 2 (l) of CCR. In respect of services listed at para-7, the matter is remanded to original authority for denovo consideration for the limited purpose to enable the appellant to adduce sufficient proof, if any, to satisfy the requirement that they are eligible input services used by them for the purpose of Rule 2 (l) ibid.
9. Both the appeals are partly allowed as above.
(Dictated and pronounced in open Court) (MADHU MOHAN DAMODHAR) TECHNICAL MEMBER BB/RKP 4