Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Gmr Industries Ltd on 23 January, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/946/2008-SM [Arising out of Order-In-Appeal No. 22/2008 dated 22/08/2008 passed by the Commissioner of Central Excise, Customs & Service Tax, Visakhapatnam-I ] For approval and signature: HON'BLE Mr. B.S.V. MURTHY, TECHNICAL MEMBER 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Commissioner of Central Excise, Customs and Service Tax Visakhapatnam-I Central Excise Building Port Area Visakhapatnam 530 035 Andhra Pradesh Appellant(s) Versus GMR Industries Ltd. (Sugar Division) Sankili (V), Regidi Amadalavalasa (M), Srikakulam Dist. Andhra Pradesh Respondent(s)
Appearance:
Mr. A.K. Nigam, AR For the Appellant None For the Respondent Date of Hearing: 23/01/2015 Date of Decision: 23/01/2015 CORAM:
HON'BLE Mr. B.S.V. MURTHY, TECHNICAL MEMBER Final Order No. 20143 / 2015 Per: B.S.V. MURTHY Revenue is in appeal against the impugned order wherein the Commissioner has allowed the cenvat credit of service tax paid on Banking and Financial Services which were utilized for sale of shares by the assessee. I find myself in agreement with the findings of the learned Commissioner which reads as under:
I have gone through the case and the findings of the Adjudicating Authority confirming the demand made in the show cause notice. A penalty of Rs. 10,000/- has been imposed on the appellants under Rule 15(3) of the Cenvat Credit Rules 2004. The definition of input service under Rule 2(l) states-
(l) input service means any service,-
(i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal, and includes services used in relation to setting up, modernization, 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 up to the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation up to the place of removal;
The issue is whether the financial advisory service rendered would fall within the ambit of the definition of input service and the credit of service tax taken on the same is eligible or not. Input services includes activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security and the definition must imply that the services received in respect of the activities mentioned above must be eligible for credit. The services received by the appellants are in respect of the disposal of their share holding in ING Vysya Life Insurance Co. Pvt. Ltd. The contention of the appellants is that they have availed of these services in relation to their business only as financing is necessary for carrying out any manufacturing operations. There is no doubt that the service rendered is covered under the definition of Banking and Financial Services and is a taxable service. The activity of disposal of the share holding would only ensure that the finances are restructured and are available for deployment by the company such as working capital requirement, purchase of new machinery, raw materials, etc. Therefore, the contention of the appellants that services used are in relation to their business gains credence and thus the same would merit inclusion in the scope of the definition of input services. Therefore it would follow that the service tax paid would be eligible for credit. The appeal thus merits being allowed.
2. The learned AR submitted that there is no nexus and this has been seen from the findings recorded hereinabove. Learned AR also relied upon the decision in the case of Maruti Suzuki Ltd. Vs. CCE, Delhi-III reported in [2009 (240) E.L.T. 441 (S.C)]. However the decision in the case of Maruti Suzuki Ltd. related to inputs only and has nothing to do with input services. In this case what we concern with is input service. Since accounting and share registry activity are squarely covered, I find nothing wrong in the impugned order. Accordingly the appeal is rejected.
(Order pronounced and dictated in open court) (B.S.V. MURTHY) TECHNICAL MEMBER iss