Custom, Excise & Service Tax Tribunal
M/S.Tega Industries Ltd vs Commissioner Of Central Excise, ... on 8 July, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.EA-70745/13
(Arising out of Order-in-Appeal No.08/KOL-VII/2013 dated 30.03.2013 passed by the Commissioner(Appeal-I) of Central Excise & Service Tax, Kolkata.)
FOR APPROVAL AND SIGNATURE
HONBLE SHRI H.K.THAKUR, MEMBER(TECHNICAL)
1. Whether Press Reporters 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 the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s.Tega Industries Ltd.
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise, Kolkata-VII
Respondent (s)
Appearance:
Shri Rajiv Kr. Agarwal, C.A. for the Appellant (s) Shri J.Bose, AC(AR) for the Revenue CORAM:
Honble Shri H.K.Thakur, Member(Technical) Date of Hearing/Decision :- 08.07.2016 Date of Pronouncement :- 08.07.2016 ORDER NO.FO/A/75480/2016 Per Shri H.K.Thakur.
This Appeal has been filed by the Appellant against Order-in-Appeal No.08/KOL-VII/2013 dated 30.03.2013 passed by the Commissioner(Appeal-I) of Central Excise & Service Tax, Kolkata.
2. Shri Rajiv Kr. Agarwal (C.A.) appearing on behalf of the Appellant argued that a Cenvat Credit of Rs.3,46,659/- was taken by the Appellant on the basis of services received by the Headquarters of the Appellant. That Cenvat Credit was taken on the basis of photocopy of such document of services rendered to the Head Office. That taking of credit on the basis of Service Tax invoices issued to the Headquarters is admissible in view of the following case laws.:-
a) Alarsin vs. CCE, Mumbai-I [2015-TIOL-766-CESTAT-MUM]
b) Commissioner of Central Excise, Vadodara vs. M/s.Modern Petrofils [2013-TIOL-659-CESTAT-AHM] It was also argued by the Learned C.A. that not issuing of ISD invoice is only a procedural lapse which cannot be taken as the grounds for denying Cenvat Credit. That there was no restrictions during the relevant period for taking proportionate credit of services availed by a particular unit of the Appellant. That such an amendment was carried out only w.e.f. 01.04.2012.
3. Shri J.Bose, AC(AR) appearing on behalf of the Revenue argued that the document prescribed for taking such credit under Rule 9 (1)(g) of the Cenvat Credit Rules, 2004 is only an ISD invoice required to be issued by the Head Office of the Appellant. That not taking credit on the basis of such ISD invoice is a credit improperly taken under a wrong document for which Cenvat Credit has been correctly denied and penalty correctly imposed upon the Appellant. It was also submitted by the ld.AR that the original duty paying document in the name of Headquarters of the Appellant was not produced during the adjudicating proceedings.
4. Heard both sides and perused the case records. The issue involved in the present proceeding is whether Cenvat Credit can be taken on the basis of document issued in the name of Head Office of the Appellant for services received by all the units of the Head Office. In the case of Alarsin vs. Commissioner of Central Excise, Mumbai-I, CESTAT-Mumbai held as follows:-
2. Heard both sides and perused the records.
3. The issue involved in this case is regarding eligibility of CENVAT credit of service tax paid by a Marketing Agency. The appellant has two units one is at Udhna in Gujarat and one in Mumbai. Gujarat Marketing Agency has provided the services of Business Auxiliary Services. For the products manufactured in Gujarat as well as in Mumbai. It is also undisputed that the goods were being manufactured and cleared from Udhana, Gujarat as well as Mumbai. It is the case of the Revenue that service tax paid on the services rendered for the marketing of the produced in Gujarat needs to be denied proportionately. Both the lower authorities recorded their findings that the appellant could not have utilized CENVAT credit at Mumbai for the products manufactured and cleared from Gujarat. The lower authorities have also held that marketing services are not interconnected with the manufacturing of the goods.
4. Learned Counsel would take me through the facts of the case and case law and submit that the issue is covered by the decision of the Division Bench in the case of Doshion Ltd. (288) ELT 291 (T) = 2013-TIOL-395-CESTAT-AHM.
5. Learned D.R. reiterated the findings recorded by the lower authorities and would rely upon the Tribunal's decision in the case of Mangalore Refinery and Petrochemicals vs. CCE 2013 (30) STR 475 and Market Creators Ltd. vs. CCE 2014 (36) STR 386 (Tri-Ahmd) = 2014-TIOL-2021-CESTAT-AHM and submit that as per the provisions of Rule 7 of Service Tax Rules 1994 the appellant should have registered and distributed the service tax credit availed as ISD.
6. On considering the submissions made by both sides and perusal of the records, I find that as to CENVAT Credit availed on the service tax paid by the service provider is not in dispute and the services were rendered to the appellant. The only dispute is that whether the service rendered by the service provider for the products manufactured in Gujarat and invoices raised can be availed as CENVAT Credit at Mumbai. I find that when there is no dispute as regards the services received by the appellant for the activity and service tax liability having been discharged by the service provider, omission to take registration as an Input Service Distributor is to be considered as procedure irregularity. The ratio of decision taken by the Bench in the case of Doshion Ltd. (supra) which is in para 5 is reproduced.:-
5. We have considered the submissions made by both sides. We find considerable force in the arguments advanced by the learned counsel. The registered office and Vatva office both are located in the same place and appellant has simply utilised the credit at Vatva instead of distributing it to various units. As submitted by the learned counsel, during the relevant period, there was no restriction for utilisation of such credit without allocating proportionately to various units. The omission to take registration as an Input Service Distributor can at best be considered as procedural irregularity and in view of the decisions cited, has to be considered sympathetically."
7. I find that both the decisions in the cases of Mangalore Refinery and Petrochemicals (supra) Market Creators Ltd. (supra) relied on by learned A.R. have rendered by the Single Member Bench. The judicial discipline, Division bench decision needs to be followed giving precedence over decision of Single Member Bench. Accordingly, the decision in the case of Doshion Ltd. (supra) of Division Bench is binding on me and following the same I find that the impugned order is liable to be set aside and I do so.
8. In view of the foregoing, the impugned order is set aside and the appeal is allowed.
5. The issue involved in the above relied upon case of Alarsin vs. Commissioner of Central Excise, Mumbai-I is identical to the issue involved in the present case. In the relied upon case CESTAT-Mumbai has relied upon the case of Doshion Ltd.[2013-TIOL-395-CESTAT-AHM]. Respectfully following the ratio laid by the co-ordinate Benches on the same issue Cenvat Credit is held to be admissible and on merit the Appeal filed by the Appellant is required to be allowed.
6. During the course of hearing Ld.AR argued that at no stage the original duty paying document was produced before the department. In this regard it is relevant to mention that in the second last para under assessees submission in Order-in-Original No.33/DC/CE/BPD/2009-10 dated 17.02.2010 during the adjudication proceedings Appellant made a submission that all the original documents mentioned in the proceedings are available at the Headquarters for inspection/review by the department.
7. In view of the above Appeal filed by the Appellant is allowed on merits subject to the condition that the original duty paying document, on the basis of which Service Tax credit was taken, should be produced before the Adjudicating Authority for perusal. For this limited purpose only the case is remanded back to the Adjudicating Authority for verification of the original duty paying document.
8. Appeal filed by the Appellant is allowed to the extent indicated hereinabove.
(Operative part of the order was pronounced in the open court.)
SD/
(H.K.THAKUR) MEMBER(TECHNICAL)
sm
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Appeal No.EA-70745/13