Custom, Excise & Service Tax Tribunal
M/S Mangalam Cement Ltd vs Cce, Jaipur-I on 30 August, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing: 23.8.2016
Date of Pronouncement: 30.8.2016
Appeal No. E/3215/2007-EX(SM)
(Arising out of Order-in-Appeal No. 294(RKS)CE/JPR-I/2007 dated 26.9.2007 passed by the Commissioner (Appeals), Customs & Central Excise, Jaipur)
For Approval & Signature :
Honble Mr. Ashok K. Arya, Member (Technical)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether their Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
M/s Mangalam Cement Ltd. Appellant
Vs.
CCE, Jaipur-I Respondent
Appearance Ms. Rinky Arora, Advocate - for the appellant Shri R.K. Mishra, AR - for the respondent CORAM: Honble Mr. Ashok K. Arya, Member (Technical) Final Order No. 53279/2016 Per Ashok K. Arya :
The appellant viz. M/s Mangalam Cement Ltd. is in appeal against the impugned order dated 26.9.2007 passed by the Commissioner, Central Excise (Appeals), Jaipur who has sustained the order in original passed by Assistant Commissioner, Central Excise, Jaipur whereunder the Cenvat credit for the following input services have been disallowed:
(i) Outdoor catering,
(ii) Clearing and forwarding services,
(iii) Cargo handling services,
(iv) Business Auxiliary Services (other than sales promotion) relating to C&F services,
(v) Telephone used at residence,
(vi) Outward transportation.
2. The appellant is represented by ld. Advocate Ms. Rinky Arora who has inter alia pleaded as follows:
(i) The Business Auxiliary Services (BAS), C&F agent services and cargo handling services taken at depot in relation to sale of goods from depot are falling under the scope of Input services.
(ii) Credit is admissible on services of GTO taken for outward transportation of cement from factory to consumer, depot to consumer and railway siding to depot.
(iii) Transportation is a part and parcel of clearance activity.
(iv) No penalty is imposable under Rule 15(1) of Cenvat Credit Rules, 2004.
(v) No penalty leviable because no mens rea involved.
2.1 The ld. Advocate has stated that the period involved is July 2005 to December 2005. She stated that outward freight is in respect of input service of outward transportation of goods and they are selling on FOR basis; they are, therefore, entitled to Cenvat credit on the input services of outward freight. She relies on the following decisions to support her contention:
(a) Ultratech Cement Ltd. Vs. CCE & ST, Rohtak- 2015 (37) STR 364 (Tri.-Del.)
(b) CCE & ST, Bangalore Vs. ABB Ltd. 2011 (23) STR 97 (Kar.)
(c) CCE Vs. Parth Poly Wooven Pvt. Ltd. 2012 (25) STR 4 (Guj.).
(d) Ambuja Cements Ltd. Vs. Union of India 2009 (236) ELT 431 (P&H).
2.2 Ld. Advocate further submitted that input services in the form of telephone used at residence are also entitled to Cenvat credit. Ld. Advocate cites the Honble High Court of Andhra Pradesh decision in the case of CC Vs. ITC Ltd. 2012-TIOL-199-HC-AP-ST saying that the services which were crucial for maintaining the staff colony, such as lawn mowing, garbage cleaning, maintenance of swimming pool, collection of household garbage, harvest cutting, weeding etc. were held as input services within Rule 2(l) of the Cenvat Credit Rules, 2004. Therefore, telephone used at residence is also directly or indirectly related to manufacture activity and cannot be excluded from the Cenvat credit.
2.3 In case of outdoor catering services, the appellant cites the following case laws in their support:
(a) CCE, Nagpur Vs. Ultratech Cement Ltd. 2010 (20) STR 577 (Bom.)
(b) CCE, Mumbai-IV Vs. GTC Industries Ltd. 2008 (12) STR 468 (Tri.-LB).
3. Ld. AR, Shri R.K. Mishra has appeared for the Revenue. He reiterated the findings given by the lower authorities. He further pleads that as per Honble Calcutta High Court decision in the case of CCE, Chennai-III Vs. Visteon Powertrain Control Systems (P) Ltd. 2016 (41) STR 168 (Mad.) Cenavt credit cannot be given on outward transportation of goods. He also cited the decision of Honble High Court of Bombay in the case of CCE, Nagpur Vs. M/s Manikgarh Cement 2010 (20) STR 456 (Bom.) saying that the service of telephone at the residence cannot be covered by the Cenvat credit facility.
4. I have carefully considered the facts of the case and the submissions of both sides along with the case laws cited by them.
5. Ld. Advocate for the appellant cited CESTAT decision in the case of Manglam Cement (vide Final Order No. 50183-50185/2015-EX(SM) dated 15.1.2015) saying that it is their own case where the goods transport service along with other services were found to be eligible for Cenvat credit facility to the appellant.
5.1 Considering the facts of the case and the case laws mentioned by the appellant, I am of the considered view that all subject input services except input service of telephone used at residence are eligible for facility of Cenvat credit in case of this appellant. In case of input service of telephone used at residence in the light of the Honble High Court of Bombays decision in the case of Manikgarh Cement (supra), I am of the considered view that this input service viz. telephone used at residence would not be entitled to Cenvat credit facility.
6. In the light of the above discussions, the appellant is entitled to the facility of Cenvat credit for all subject input services except for the service of telephone at residence.
7. The appeal is partly allowed in above terms.
(Pronounced in Court on 30.8.2016) (Ashok K. Arya) Member (Technical) RM 5