Custom, Excise & Service Tax Tribunal
Chettinad Cement Corporation P Ltd vs Commissioner Of Gst&Amp;Cce(Chennai ... on 14 August, 2019
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL, CHENNAI
REGIONAL BENCH - COURT NO. - III
Service Tax Appeal No. 42029 of 2018
(Arising out of Order-in-Appeal No. 257/2018 (CTA - I) dated 24.5.2018 passed by
the Commissioner of GST & Central Excise (Appeals - I), Chennai)
M/s. Chettinad Cements Corporation Pvt. Ltd. Appellant
Chettinad Towers
603, Anna Salai
Chennai - 600 006.
Vs.
Commissioner of GST & Central Excise Respondent
Chennai North No. 26/1, Mahatma Gandhi Road Chennai - 600 034.
APPEARANCE:
Shri M. Karthikeyan, Advocate for the Appellant Shri S. Govindarajan, AC (AR) for the Respondent CORAM Hon'ble Ms. Sulekha Beevi C.S., Member (Judicial) Final Order No. 41022 / 2019 Date of Hearing: 14.08.2019 Date of Decision: 14.08.2019 Brief facts are that during the course of audit of the accounts of the appellant, which is an ISD, it was noticed that they have distributed credit of service tax paid on tour operator service in connection with the conducting of foreign tours to their dealers during the period November 2014 to February 2016. The department was of 2 the view that tour operator service does not qualify as input service and therefore Show Cause Notice was issued to the appellant proposing to demand the wrongly availed credit along with interest and for imposing penalty. After due process of law, the original authority confirmed the demand, interest and imposed equal penalty. In appeal, Commissioner (Appeals) upheld the same. Hence this appeal.
2. On behalf of the appellant, ld. counsel Shri M. Karthikeyan appeared and argued the matter. He submitted that certain incentives were provided to the dealers in the nature of foreign tour. For providing this incentive, tour operator services were availed by the appellant. The said services are as an incentive to the dealers and therefore is eligible for credit. To support his argument that the said services qualify as input service, he relied upon the decision in the case of M/s. Savita Oil Technologies Ltd. Vs. Commissioner of Central Excise, Belapur - 2017-TIOL-4604-CESTAT-MUM. The second argument put forward by him is that the appellant-company is an ISD who has distributed the credit to other units. The alleged credit has not been availed by the appellant company. Even if the credit is wrongly availed, the demand has to be made against the unit which has availed the credit and not the ISD. He relied upon the decision in the case of Mahindra & Mahindra Ltd. Vs. Commissioner of Service Tax, Mumbai - 2017-TIOL-2364-CESTAT-MUM, Kansai Nerolac Paints Ltd. Vs. Commissioner of GST, Mumbai - 2018-TIOL-2048-CESTAT- MUM and Indian Oil Corporation Ltd. Vs. Commissioner of Central Excise, Delhi - 2014 (35) STR 411 (Tri. Del.).
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3. The ld. AR Shri S. Govindarajan supported the findings in the impugned order. With respect to the argument put forward by the ld. counsel that the said services qualify as input services, the ld. AR submitted that foreign tour has been availed by the appellant for personal consumption and therefore is not eligible for credit. It is submitted by him that the decision in the case of M/s. Savita Oil Technologies Ltd. (supra) relied by the counsel is not applicable as in the said case, the tour operator services were availed for the staff of the company for official work.
4. Heard both sides.
5. The issue is whether the demand raised alleging that the credit availed on input services in the nature of tour operator service is eligible or not. As per the facts of the case, the said services were availed as incentive for the dealers who achieved the target sale. The counsel for the appellant has relied upon the decision in the case of M/s. Savita Oil Technologies Ltd. (supra) to argue that such tour operator services is eligible for credit when given as an incentive to dealers. From the facts narrated in the said decision, it is not clear that the said tour operator services were not availed for personal consumption. However, on perusal of the facts, it is seen that the Show Cause Notice is issued against the appellant-company who is only an ISD. The decisions relied by the ld. counsel in the case of Mahindra & Mahindra Ltd. (supra), Kansai Nerolac Paints Ltd. (supra) and Indian Oil Corporation Ltd. (supra) have discussed the said issue as to whether the demand can be raised against the ISD alleging wrong availment of credit when the credit has been availed by the 4 unit company and the ISD has only distributed the credit. The demand raised against the appellant-company who is an ISD cannot sustain. Following these decision, I am of the view that the demand cannot sustain. The impugned order is set aside and the appeal is allowed with consequential relief, if any.
(Dictated and pronounced in open court) (SULEKHA BEEVI C.S.) Member (Judicial) Rex