Custom, Excise & Service Tax Tribunal
Cipla Ltd vs Siliguri Commissionerate on 20 April, 2023
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
KOLKATA
REGIONAL BENCH - COURT NO.2
Excise Appeal No.79204 of 2018
(Arising out of Order-in-Appeal No.110/SLG-CE/2018-19 dated 15.06.2018 passed by
Commissioner (Appeals) of CGST & Excise,Siliguri)
M/s CIPLA Limited
Kumrek, P.O.Rangpo, East Sikkim-737132
Appellant
VERSUS
Commissioner of CGST & Excise, Siliguri
C.R.Building, Haren Mukherjee Road, Hakimpara, Siliguri
Respondent
APPERANCE :
Shri Dipankar Majumdar, Advocate for the Appellant Shri K.Chowdhury, Authorized Representative for the Respondent CORAM:
HON'BLE MR.RAJEEV TANDON, MEMBER (TECHNICAL) FINAL ORDER NO...75251/2023 DATE OF HEARING : 20 .04.2023 DATE OF DECISION : 20 .04.2023 Per Rajeev Tandon :
The appellant being aggrieved by the Order-in-Appeal No.110/SLG-CE/2018-19 dated 15.06.2018 passed by the ld.Commissioner (Appeals) of CGST & Excise, Siliguri, have filed this appeal.
2. They are engaged in the manufacture of pharmaceuticals falling under Chapter 30 of the Central Excise Tariff Act, 1985 and located at Sikkim. The appellant had taken cenvat credit on various inputs and input services during the period 2012-13 and 2013-14. The 2 Excise Appeal No.79204/18 adjudicating authority upheld entire demand raised and also imposed penalty under Section 11AC of the Central Excise Act, 1944 read with Rule 15 (2) of the Cenvat Credit Rules, 2004.
3. The appeal filed by the appellant before the ld.Commissioner (Appeals), however, was allowed, confirming the duty demand & disallowing input service tax credit to the tune of Rs.2,77,703/- on miscellaneous constructions, fabrication and erection of pipes, supply and installation of CGI shed in DG yard. The Department has also filed a memo of cross objections in the matter.
4. The Commissioner (Appeals) has denied the aforesaid cenvat credit on the ground that the same was inadmissible under Rule 2 (1)(ii)(A) of the Cenvat Credit Rules, 2004. He was of the view that the said services are specifically excluded from the definition of input services. The said Rules read as under:
[(l) "input service" means any service, -
(i) used by a provider of [output service] for providing an output service; or
(ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward 3 Excise Appeal No.79204/18 transportation of inputs or capital goods and outward transportation upto the place of removal;
[but excludes], -
[(A) service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for -
(a) construction or execution of works contract of a building or a civil structure or a part thereof; or
(b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or]"
5. Heard both sides and perused the case records.
6. It is noticed that the services received by the appellant from M/s Sunanda Agri Marketing, are in the nature of fabrication and erection of pipes fittings and the services received from M/s Friends Traders, are in the nature of repair and maintenance in the factory premises. The appellants have specifically pleaded that the said services were essentially required for modernization, renovation or repairs of within factory premises. They are not a part of in execution of works contract or construction services as envisaged under Section 66E (b) of the Finance Act, 1944. It's an admitted position that the said services are used for repair/renovation of and within the factory premises and were not a part of construction or execution of a works contract as in the nature for construction of civil structures and buildings. In support of his contention, the ld.Advocate for the appellant has also relied upon Board's Circular No.943/4/2011-CX dated 29th April, 2011. It is also 4 Excise Appeal No.79204/18 observed that on the very aspect for their sister unit, they have been allowed similar credit vide Order-in-Appeal No.PUN-SVTAX-000-APP- 012-16-17 dated 05.04.2016. Admissibility of CENVAT Credit in the aforesaid circumstances on the aforesaid services is now a settled proposition in law. As the appellants have availed the input service tax credit for repair, maintenance and modernization and fabrication & erection of pipe fittings at their factory premises, it is amply clear that the aforesaid credit is admissible to them and are not hit by exclusion clause of Rule 2 (1)(ii)(A) of the Cenvat Credit Rules, 2004.
7. In the result, appeal succeeds with consequential relief to the appellant, if any.
(Operative part of the order was pronounced in the open court) Sd/-
(Rajeev Tandon) Member (Technical) T.K.