Custom, Excise & Service Tax Tribunal
Agila Specialties Pvt. Ltd. (Formerly ... vs Commissioner Of Central Excise, ... on 2 January, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/28398/2013-SM [Arising out of Order-in-Appeal No. 449/2013 dated 30/08/2013 passed by the Commissioner of Central Excise, Bangalore-I (Appeals)] Agila Specialties Pvt. Ltd. (Formerly Part of Strides Arcolab Ltd.) (SPD) Plot No. 284-b, Bommasandra, Jigani Link Road, Jigani Road, Jigani Hobli, Anekal Taluk, Bangalore 560 076 Karnataka Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax Bangalore-I Post Box No. 5400, CR Buildings, Bangalore 560 001 Karnataka Respondent(s)
Appearance:
Shri Rajesh Kumar, CA #1010, 1st floor(Above Corp.Bank) 26th Main, 4th T Block, Jayanagar, Bangalore 560 041 Karnataka For the Appellant Shri Pakshi Rajan, AR For the Respondent Date of Hearing: 02/01/2017 Date of Decision: 02/01/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 20018 / 2017 Per: S.S GARG The present appeal is directed against the impugned order passed by the Commissioner (Appeals) dated 30.08.2013 wherein he partially allowed the appeal of the appellant and held that the appellants are eligible for refund of unutilized cenvat credit in respect of service tax paid on Clearing and Forwarding, Courier, Transportation of Employees, Manpower, Training Charges and are not eligible for refund in respect of service tax paid on Car Hire Charges, Foreign Travelling, Freight Outward, Fuel Interstate, Rent Charges. Facts of the case are that the appellant is a 100% EOU engaged in the manufacture of pharmaceutical products and formulations. Appellant filed a refund application for the period April 2010 to June 2010 seeking refund of unutilized cenvat credit on input services and inputs amounting to Rs. 11,35,590/- (Rupees Eleven Lakhs Thirty Five Thousand Five Hundred and Ninety only). Appellant was sanctioned the refund claim to the extent of Rs. 2,67,132/- (Rupees Two Lakhs Sixty Seven Thousand One Hundred and Thirty Two only) and the balance amount of Rs. 8,68,528/- (Rupees Eight Lakhs Sixty Eight Thousand Five Hundred and Twenty Eight only) was rejected on the ground that nexus between input services and manufactured goods was not provided and the appellant failed to produce the document in support of his claim. Aggrieved by the said order, appellant filed an appeal before the Commissioner who partially allowed the appeal of the appellant.
2. Heard both the parties and perused the records.
3. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without appreciating the decided case specifically holding the impugned service as input services. He further submitted that the definition of input service as contained in Rule 2(l) of Cenvat Credit Rules 2004 is very wide and includes any service in or in relation to business of manufacture. Now let me discuss each service on which refund has been denied. Firstly, Car Hire Charges. These services are used to pick and drop vendors and customers which are purely official and such services are very much essential for the business and therefore this service fall in the definition of input service and the appellant is entitled to refund. With regard to input credits, these credits are in the nature procurement of packing materials, consumables, components etc. towards manufacturing of final products. Though the appellant produced the documents but the same have not been considered. Further with regard to Foreign Travel, appellant submitted that these services are incurred by the production and marketing personnel for enhancement of business and therefore they are very much required for manufacturing and business activity and fall in the definition of input service. Similarly with regard to Freight outward, these services are used for export of goods and in case of export, place of removal is the port. Therefore, appellant is eligible for cenvat credit. In support of this, appellant relied upon the decision in the case of CC & CE Vs. Pokarna Ltd. 2013 (292) E.L.T. 316 (Tri.-Bang.). Similarly in the case of Rental Charges, rent of the factory building which was hired by the appellant in relation to manufacture of goods for export and without the factory it is not possible to manufacture the goods and export and the appellant have the documents to prove the same.
4. On the other hand the learned AR reiterated the findings in the impugned order.
5. After considering the submissions of both the parties, I find that as far as Car Hire Charges, Foreign Travel and Freight Outward and Rental Charges and Transportation Charges are concerned, they fall in the definition of input service as held in various decisions of the Tribunal. But in order to prove that appellant has incurred these expenditure, the appellant is required to produce the documents in support of the same before the original authority who will verify the same and thereafter will allow the refund as per law. In view of this, I am of the considered opinion that this case needs to be remanded back to the original authority with a direction to examine all the documents which may be filed by the appellant in support of his claim and thereafter pass a reasoned order keeping in view the decisions rendered by the Tribunal. The original authority before passing the impugned order will afford an opportunity of hearing to the appellant and also to produce documents.
(Operative portion of the Order was pronounced in Open Court on 02/01/2017) (S.S GARG) JUDICIAL MEMBER iss