Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Centum Rakon India Pvt. Ltd on 19 December, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Application(s) Involved: E/CROSS/23151/2014 in E/21169/2014-SM Appeal(s) Involved: E/21169/2014-SM [Arising out of Order-in-Appeal No. 727/2013 dated 31/12/2013 passed by the Commissioner of Central Excise, Bangalore-I (Appeals)] Commissioner of Central Excise, Service Tax And Customs Bangalore-IV Office of the Commissioner of Central Excise & Service Tax Bangalore-IV Commissionerate, 59, HMT Bhavan, Bellary Road Bangalore 560 032 Karnataka Appellant(s) Versus Centum Rakon India Pvt. Ltd. No.44, KHB Industrial Area, Yelahanka New Town Bangalore 560 106 Karnataka Respondent(s)
Appearance:
Shri Pakshi Rajan, AR For the Appellant Shri Rajesh Kumar, CA #1010, 2nd Floor, 26th Main, (Above Corporation Bank), 4th T Block, Jayanagar, Bangalore 560 041 For the Respondent Date of Hearing: 19/12/2016 Date of Decision: 19/12/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 21428 / 2016 Per: S.S GARG The present appeal is directed against the impugned order dated 31.12.2013 passed by the Commissioner (Appeals) vide which he partially allowed the appeal filed by the Department. Briefly the facts of the case are that the respondent is a 100% EOU and engaged in the manufacture and export of Crystal and Oscillators thereof, classified under Tariff Heading 85 of Central Excise Tariff Act, 1985. The assessee had filed a refund claim under Rule 5 of the Cenvat Credit Rules, 2004 claiming refund of accumulated/unutilized cenvat credit for the quarter ending March 2012 for Rs. 38,59,702/- (Rupees Thirty Eight Lakhs Fifty Nine Thousand Seven Hundred and Two only). The Deputy Commissioner sanctioned refund claim of Rs. 34,11,696/- (Rupees Thirty Four Lakhs Eleven Thousand Six Hundred and Ninety Six only) against services viz. Banking & Financial Services, Business Auxiliary Services, Chartered Accountant, Clearing and Forwarding Services, Information and Technology, Management Consultancy Services, Security Services, Renting of Immovable Property Service and rejected the claim of Rs. 4,48,006/- (Rupees Four Lakhs Forty Eight Thousand and Six only). The Department preferred an appeal before the Commissioner against the sanction of refund on Banking & Financial Services and Business Auxiliary Services on the ground that the said services cover a broad spectrum activities which may not be used in or in relation to manufacture of goods and the Deputy Commissioner had not disclosed as to how these services have been used/related to the process of manufacture. The Commissioner (Appeals) allowed the Departmental appeal holding that Business Auxiliary Services pertain to commission and management fee paid to holding company and that they are specifically covered under the definition of input service and the refund allowed by the original authority is in order and also further held that the assessees are not eligible for export of unutilized cenvat credit in respect of Banking and Financial Services. Aggrieved by the said order, the Revenue has filed the present appeal.
2. I have heard the learned AR and also the counsel for the assessee.
3. The learned AR submitted that the Commissioner (Appeals) has wrongly held the sales commission as sales promotion as defined in the definition of input service under Rule 2(l) of Cenvat Credit Rules 2004. He further submitted that the Honble High Court of Gujarat at Ahmedabad in the case of CCE Vs. Cadila Health Care Ltd. [2013 (30) S.T.R. 3 (Guj.)] has held that, nothing on record to indicate that they were actually involved in any sales promotion activity like advertising, covered in inclusive part of the definition of input service and the agents were directly concerned with sales rather than sales promotion. Further the services provided by them was neither Business Auxiliary Service nor covered under the definition of input service as the same was not directly or indirectly in or in relation to manufacture of final product.
4. On the other hand learned CA for the assessee who also filed the cross objection in this case has submitted that there was no objection which was raised by the Department as to the eligibility of cenvat credit availed. He further submitted that denial of refund of any credit availed would defeat the very purpose of Rule 5 of Cenvat Credit Rules 2004. In support of this, he relied upon the decision in the case of CCE Vs. Convergys India Pvt. Ltd. reported in 2009 (16) S.T.R. 198 (Tri.) which was upheld by Punjab and Haryana High Court reported in 2010 (20) S.T.R. 166 (P&H). He further submitted that the respondents have taken service of marketing and sales team of Centum Electronics Limited (holding company of respondent) and the support was taken to increase the sales of the product manufactured by the respondent and further respondents were not had marketing and sales division, due to which they have availed service from Centum Electronics Limited. He further submitted that the decision in the case of Cadila Health Care Ltd. which has been relied upon by the Revenue in the present appeal is not applicable to the present case as the Centum Electronics has provided the sales promotion activity by undertaking the work of sales and marketing team. He further relied upon the decision of Punjab & Haryana High Court in the case of CCE Vs. Ambika Overseas 2012 (025) S.T.R. 348 (P&H) wherein it was held that canvassing and procuring orders were in relation to sales promotion and would fall under sales promotion activities.
5. After considering the submissions of both the parties and perusal of the record, I am of the considered opinion that there is no infirmity in the impugned order with regard to allowing refund of cenvat credit of sales promotion. Further I am of the opinion that Cadila Health Care as relied upon by the Revenue is not applicable in the facts and circumstances of this case. The decision relied upon by the assessee cited supra are applicable in the facts and circumstances of the case and therefore I find no merit in the Revenues appeal and the same is hereby dismissed. Accordingly cross objection also disposed of.
(Operative portion of the Order was pronounced in Open Court on 19/12/2016) (S.S GARG) JUDICIAL MEMBER iss