Custom, Excise & Service Tax Tribunal
Guala Closures (India) Pvt Ltd vs Ahmedabad-Ii on 23 August, 2018
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
West Zonal Bench, Ahmedabad
Appeal No. E/10692/2018-SM
(Arising out of Order-in-Appeal No. AHM-EXCUS-002-APP-199-17-18 dated
01.01.2018 passed by Commissioner of Service Tax-Service Tax -
Ahmedabad)
Guala Closures (India) Pvt. Ltd. - Appellant
Vs.
C.C.E., Ahmedabad-ii - Respondent
Represented by:
For the appellant : Shri Bishan R. Shah, Advocate For the respondent : Shri Amit Kumar Mishra, Dy. Commr. (AR) CORAM:
Hon'ble Mr. Ramesh Nair, Member (Judicial) Date of Hearing/Decision: 23.08.2018 ORDER NO. A/12117/2018 Per: Ramesh Nair The issue involved is that whether the applicant is entitled for CENVAT credit in respect of input services namely rent a cab service, courier service and Hotel Accommodation Services.
2. Shri Bishan R. Shah, Ld. C.A. submits that all the services were used by the appellant for the operation of overall business of the company. The appellant is involved in the manufacture of excisable goods. Therefore, all the services are in relation to the manufacture of final product. As regard the Rent a cab service, the said service is used for transportation or the conveyance of the employees in relation to the Company's business activities. Therefore, service is not used for the personal consumption.
2 E/10692/2018-SM Similarly, the Hotel Accommodation service is also used for lodging of the staff, directors of the company for the purpose of official duty. Therefore, the same is not used for personal use. As regard the courier services, the same is used for sending goods, documents and parcels. He submits that the courier service is essential for the business and, hence, same is eligible. He submits that in various judgments, the tribunal has allowed the CENVAT credit in respect of all the aforesaid services. He placed reliance on the following judgments:
"Rent a Cab Service:
1. Aia Engineering Ltd. Vs. C.C.E. & Ahmedabad-III, Fuinal Order No. A/11320/2018 dated 12.06.2018, CESTAT (A/bad)
2. M/s. Welspun Corp Limited vs. Commissioner of Central Excise and Customs, Service Tax, Vadodara, Final Order No. A/11000- 11001/2018 dated 08.05.2018, CESTAT, (A,bad)
3. M/s DCM Shriram Lt.d Vs. CCE & ST- Vadodara-II, Final Order No. A/10834/2018 dated 25.043.2018, CESTAT (A/bad)
4. Commissioner of Service Tax, Chennai Vs. M/s Chennai Container Terminal Pvt. Ltd. 2018-TIOL-2411-CESTAT-MAD
5. Technocraft Industries India Pvt. Ltd. Vs. Commissioenr of Central Excise Thane-1 2018-TIOL-1738-CESTAT-MUM
6. Commissioner Vs. Transpek Industry Ltd. 2018(12) GSTL 29 (Guj.)
7. Commissioner of Service Tax, Pune Vs. M/s Nihilent Technologies Pvt. Ltd. 2017-TIOL-2696-CESTAT-Mum
8. M/s Marvel Vinlys Ltd. Vs Commissioner of Central Excise, Indore 2016-TIOL-3071-CESTAT-DEL
9. CCE & ST, Mangalore Vs. Mangalore Refinery & Petrochemicals Ltd. 2016 (42) STR 6 (Kar.)
10.Principal Commissioner Vs. M/s Essar Oil Ltd. 2015-TIOL-2768-HC- AHM-CX
11.Honourable High Court of Karnataka-Bangalore in case of CCE Bangalore-I Vs. Interplex Electronics Pvt. Ltd. 2015 (39) STR 572(Kar.)
12.Commissioner of C.Ex., Bangalore-III Vs. Stanzen Toyotetsu India (P) Ltd 2011 (23) STR 444 (Kar.) House Accommodation Service:
1. M/s Sarita handa Exports Pvt. Ltd. Vs. Commissioner Central Excise, Gurgaon-II 2016-TIOL-2559-CESTAT-CHD
13.Courier Services:
14.Shankar Packaging Ltd. Vs. C.C.E. & S.T., Vadodara-I, Final Order No. A/10889/2018 dated 27.04.2018, C ESTAT (A'bad)
15.Avia Global Plast Pvt Ltd. Vs. CCE & ST, Daman, Final Order No. A/10452/2018 dated 07.03.2018
16.M/s Sunbeam Generators Pvt. Ltd. Vs. Commissioner of Central Excise & Service Tax, Pondicherry 2016-TIOL-2230-CESTAT-MAD
3 E/10692/2018-SM
17.M/s Lifelong Meditech Ltd. Vs. Commissioner of Central Excise and Service Tax, Gurgaon-II 2016-TIOL-1685-CESTAT-CHD 2.1 He further submits that the demand was issued invoking the extended period in as much as for the period 01/10/2013 to 31/08/2015, the show cause notice was issued on 15/02/2016. He submits that the issue was not free from doubt as on the services used for removal of goods such as courier, there were various conflicting judgments and the matter was referred to the larger bench. Finally the issue was decided by Hon'ble Supreme Court in the case of Ultratech 2018 (9) GSTL 337-SC. He submits that as per the board's circular dated 23/08/2007, the appellant was entitled for the CENVAT credit which was not withdrawn. In these circumstances, demand for extended period was not sustainable.
3. Shri Amit Kumar Mishra, Ld. Dy. Commr. (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. He submits that as regard the courier services as per the Ultratech Cement Ltd. (supra), the appellant is not entitled for the credit. As the services were used for removal of goods from the places of removal whereas the credit is admissible only in respect of services upto the places of removal. As regard other services, he submits that since with effect from 01.04.2011, services related to business activity was removed from the inclusion portion of the definition, the credit for rent a cab service, hotel accommodation service which is used for business activity is not admissible.
4. I have carefully considered the submission made by both the sides and perused the records. The services of Rent a cab and Hotel Accommodation are services are used for overall business activities of the appellant. The only business carried out by the appellant is manufacturing of excisable goods and sale thereof. Therefore, these services are actually 4 E/10692/2018-SM related to the manufacturing activities of the appellant. This tribunal in the following judgments held that the CENVAT credit on Hotel Accommodation and Rent a Cab service is admissible:
"Rent a Cab Service:
1. Aia Engineering Ltd. Vs. C.C.E. & Ahmedabad-III, Fuinal Order No. A/11320/2018 dated 12.06.2018, CESTAT (A/bad)
2. M/s. Welspun Corp Limited vs. Commissioner of Central Excise and Customs, Service Tax, Vadodara, Final Order No. A/11000- 11001/2018 dated 08.05.2018, CESTAT, (A,bad)
3. M/s DCM Shriram Lt.d Vs. CCE & ST- Vadodara-II, Final Order No. A/10834/2018 dated 25.043.2018, CESTAT (A/bad)
4. Commissioner of Service Tax, Chennai Vs. M/s Chennai Container Terminal Pvt. Ltd. 2018-TIOL-2411-CESTAT-MAD
5. Technocraft Industries India Pvt. Ltd. Vs. Commissioenr of Central Excise Thane-1 2018-TIOL-1738-CESTAT-MUM
6. Commissioner Vs. Transpek Industry Ltd. 2018(12) GSTL 29 (Guj.)
7. Commissioner of Service Tax, Pune Vs. M/s Nihilent Technologies Pvt. Ltd. 2017-TIOL-2696-CESTAT-Mum
8. M/s Marvel Vinlys Ltd. Vs Commissioner of Central Excise, Indore 2016-TIOL-3071-CESTAT-DEL House Accommodation Service:
1. M/s Sarita handa Exports Pvt. Ltd. Vs. Commissioner Central Excise, Gurgaon-II 2016-TIOL-2559-CESTAT-CHD
5. Following the above judgments the appellant is entitled for the CENVAT credit. Accordingly I hold that the demand in respect of CENVAT credit on Rent a Cab service and Hotel Accommodation is set aside. As regard courier service as per Hon'ble Supreme Court judgment in the case of Ultratech Cement Ltd. (supra) credit is admissible only in respect of services used for the removal of goods upto the place of removal. From the perusal of the records, it is not clear that whether all the courier services is used for removal of goods. As per the submission of Ld. Counsel, the courier service is used for sending documents or inward transportations as well as for outward transportation. As regard the inward transportation and sending and receiving the documents, the CENVAT credit is admissible. However, as regard the courier service used for outward transportation of the goods, if it is beyond place of removal then it is not admissible. As 5 E/10692/2018-SM regard the limitation issue raised by Ld. Counsel, I agree that on the issue of service used for removal of goods there was a serious doubt. There were various conflicting judgments on the said issue, the matter was referred to the larger bench in the case of ABV Ltd. 2009 (15) STR 23-Larger Bench and, thus, subsequently Hon'ble Supreme Court in the case of Ultratech Cement Ltd. (supra) decided the issue. It is also a fact that the appellant was availing the credit relying on the Board's Circular dated 23.08.2017 which was not withdrawn by the Revenue. In these circumstances, malafied intention cannot be attributed to the appellant. Therefore, the demand for extended period is hit by limitation. The same is set aside being time barred. For the normal period in respect of courier services the demand will sustain only in respect of courier services which is used for removal of excisable goods beyond the place of removal. Therefore, the demand in respect of courier services for the normal period of one year needs to be requantified by the Adjudicating authority. As a result, the demand in respect of CENVAT credit on Rent a Cab service, Hotel Accommodation and demand of extended period in respect of courier service is set aside and for remaining portion, the matter is remanded for requantification to the Adjudicating Authority. Taking into consideration overall facts and circumstances and since no malafied intention is involved, the penalty imposed by the lower authority is set aside in entirety. Accordingly, the appeal is disposed off in the above terms.
(Dictated and pronounced in the open Court) (Ramesh Nair) Member (Judicial) DS