Custom, Excise & Service Tax Tribunal
M/S. Mpi Machines Ltd vs Cce, Indore on 21 February, 2013
IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/ Decision:21.02.2013
For approval and signature:
Honble Shri Rakesh Kumar, Member (Technical)
1. Whether Press Reporters may be allowed to see the order for
Publication under 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 Lordships wish to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
authorities?
Excise Appeal No.E/427/2011-SM
(Arising out of Order-in-Appeal No.IND/340/2010 dated 28.10.2010 passed by the Commissioner of Central Excise (Appeals), Jaipur ).
M/s. MPI Machines Ltd. Appellants
Vs.
CCE, Indore Respondent
Appearance:
Shri V.R. Sethi, Advocate for the appellant. Shri Rakesh K. Mathur, AR for the respondent. Coram: Honble Shri Rakesh Kumar, Member (Technical) Final Order No.55642/2013 dated 21.02.2013 Per Rakesh Kumar:
The appellant are manufacturers of machinery and machinery parts chargeable to central excise duty. They availed various services like banking service like issue of guarantee, letter of credit, etc. from their bank for which the bank has debited the fees from them from time to time along with service tax. However, the debit advices regarding the value of banking and financial services for various period from 1.4.2006 to 30.06.2008 were issued by the bank- State Bank of India, Commercial Branch, City Centre, Gwalior on 29.8.2008. In all 9 advices were issued containing the details of the amount debited for the various services along with service tax. On the basis of these debit advices each dated 29.08.2008, the appellant took cenvat credit of Rs.87,857/- in September, 2008. There is no dispute that each of the debit advice issued by the bank mentions the banks service tax registration no, customers name i.e. name of the appellant, nature of the service rendered, and the fees charged along with service tax and education cess. The department, however, was of the view that the appellant are not eligible for this cenvat credit as neither the banking and financial services received by them is input service in terms of the Rule 2(l) of the Cenvat Credit Rules nor the documents on the basis of which this cenvat credit has been availed are valid documents for taking credit credit. In this regard, one of the objections of the department is that these debit advices have not been issued within 15 days from the date of rendering service as provided in Rule 4A of the Service Tax Rules, 1994. After issue of show cause notice, the jurisdictional Asstt. Commissioner vide order-in-original dated 13.12.2009 confirmed the cenvat credit demand of Rs.87,857/- along with interest and imposed penalty of Rs.2,000/- on the appellant. On appeal to the Commissioner (Appeals), this order of the Asstt. Commissioner was upheld vide order-in-original dated 28.1.2010, against which this appeal has been filed.
2. Shir V.R. Sethi, ld. Counsel for the appellant, pleaded that the banking and financial service availed by the appellant for various services like issue of letter of credit, bank guarantees, etc are the activities relating to business and are specifically covered by the definition of input services as given in Rule 2 (l) of the Cenvat Credit Rules, that just because the bank did not issue the debit advices in time as and when the amounts for providing various services were debited, the cenvat credit cannot be denied to the appellant, that in this regard he relies upon the judgement of the Honble Gujarat High Court in the case of Vimal Enterprises Vs. Union of India reported in 2006 (195) ELT 267 (Gujarat), wherein it was held that cenvat credit cannot be denied to an assessee for the faults for which the assessee is not responsible, that the documents on the basis of which the cenvat credit has been availed are valid documents as each debit advice contains the name of the service provider along with registration no., the nature of the service and the amount charged along with service tax that these debit advices are also to be treated as valid documents in view of the provisions of Rule 4A, according to which in case when the service provider is banking company or financial institution, the documents valid for cenvat credit would be the any document by whatever name called whether or not serially numbered and whether or not containing address of the person receiving taxable service but containing other information in such document as required under this sub-rule, that in this case all the information required to be included in the invoices is there in the debit advices issued by the bank and besides this, it also mentions the appellants name as the service recipient and that in view of this, the impugned order denying the cenvat credit and imposing penalty is not sustainable.
3. Shri Rakesh K. Mathur, ld. Departmental Representative, defended the impugned order reiterating the findings of the Commissioner (appeals) in it and emphasized that since the debit advices, in question, were not issued within the period of 15 days from the date of providing the service, the same cannot be treated as valid documents for availing cenvat credit. He, therefore, pleaded that there is no infirmity in the impugned order. He also emphasized that the banking service, i.e. issue of letter of credit, etc, cannot be treated as input service eligible for cenvat credit.
4. I have considered the submissions from both the sides and perused the records. As regards the first issue regarding the eligibility of the banking services of issue of letter of credit, bank guarantee, etc. availed by the appellant, I am of the view that these services are integrally connected with the manufacturing business of an assessee and hence have to be treated as covered by the expression activities relating to business in the definition of input service as given in Rule 2 (l) of the Cenvat Credit Rules. Therefore, I hold that the services availed by the appellant from the bank are eligible for cenvat credit. As regards the validity of the documents, the debit advices issued by the bank for different periods contain the name and address of the bank, service tax registration no, period during which services were provided, the nature of the service, amount charged for the services along with service tax and education cess. Thus, the debit advices issued by the bank on the basis of which cenvat credit has been taken, contain all the information which is required to be included in an invoice. Therefore, in my view, the debit advices have to be treated as valid documents for cenvat credit. Just because these advices were not issued by the bank within a period of 15 days from the date of providing the service, the cenvat credit cannot be denied to the appellant as, as held by the Honble Gujarat High Court in the case of Vimal Enterprises (supra) the cenvat credit cannot be denied to an assessee for faults for which he is not responsible. In view of this, the impugned order is not sustainable. The same is set aside. The appeal is allowed.
(Rakesh Kumar ) Member (Technical) Ckp.
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