Custom, Excise & Service Tax Tribunal
Kirloskar Oil Engines Ltd vs Commissioner Of Central Excise, ... on 6 April, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. IV APPEAL No. E/386/08 (Arising out of Order-in-Appeal No. RKR(105)01/08 dated 11.3.2008 passed by Commissioner of Central Excise & Customs (Appeals), Aurangabad) For approval and signature: Hon'ble Mr. P.G. Chacko, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Kirloskar Oil Engines Ltd. Appellant Vs. Commissioner of Central Excise, Aurangabad Respondent Appearance: None for appellant Shri K. Lal, Authorised Representative (SDR), for respondent CORAM: Hon'ble Mr. P.G. Chacko, Member (Judicial) Date of Hearing: 6.4.2009 Date of Decision: 6.4.2009 ORDER NO.................................
There is no representation for the appellants despite notice, nor any request of theirs for adjournment. The respondent is represented by learned SDR who reiterates the findings of the lower appellate authority.
2. It appears from the records that, during the period of dispute, the appellants had availed CENVAT credit on two taxable services, viz. (a) repairs and maintenance service and (b) garden maintenance service. In a show-cause notice dated 3.9.2007, the Assistant Commissioner had proposed to disallow the above credit to the assessee as also to impose penalty on them. The party contested the demand both on merits and on the ground of limitation. In adjudication of the dispute, the original authority held against them on both the issues and accordingly, CENVAT credit of Rs.30,145/- came to be denied to the assessee and a penalty of equal amount came to be imposed on them. The appeal filed by the party against the decision of the adjudicating authority was dismissed by the Commissioner (Appeals). Hence the present appeal of the assessee.
3. After a perusal of the grounds of this appeal and consideration of the submissions of SDR, I find that the short question which arises for consideration is whether the above services would qualify to be 'input services' under Rule 2(l) of the CENVAT Credit Rules, 2004. If they were used by the assessee directly or indirectly in relation to the manufacture of their final products or the clearance thereof from their factory, they are 'input services' within the definition of this term given under Rule 2(l). The lower authorities have apparently found no evidence of the repairs and maintenance service having been used in respect of vehicles of the company, run in connection with their business activity. In respect of garden maintenance service, the authorities have categorically held that the meaning of 'input service' is not wide enough to include this service. At this stage, it is pointed out by the SDR that only garden maintenance service had been taken into account in the relevant show-cause notice. However, both the authorities chose to deal with both the services.
4. Any manufacturer can manufacture excisable goods and clear the same from his factory without maintaining any garden. For this simple reason, it has to be held that garden maintenance service has no nexus, even remotely, to manufacture or clearance of excisable goods. In other words, the above service was not used, directly or indirectly, in relation to the manufacture or clearance of excisable goods. I, therefore, concur with the lower authorities on the point. Whether repairs and maintenance of vehicles is part of the issue covered by the show-cause notice is something to be considered by the original authority. In the present round of litigation, both the authorities appear to have assumed that repairs and maintenance service is also part of the dispute between the department and the assessee. Looking at the show-cause notice, I have not found any mention of this service. Whether any separate show-cause notice was issued, covering this service is also not discernible from the records. In this scenario, after holding that garden maintenance service availed by the assessee during the period of dispute is not CENVATable in terms of Rule 2(l) of the CENVAT Credit Rules, 2004, I call upon the original authority to verify the records meticulously to find out whether the dispute between the department and the assessee involved repairs and maintenance of vehicles and, if so, to adjudicate such dispute afresh after giving the assessee a reasonable opportunity to prove that the vehicles repaired/maintained by the company had in fact been used, directly or indirectly, in relation to the manufacture or clearance of excisable goods. Needless to say that the party should be given a reasonable opportunity of being heard.
5. The appeal is allowed by way of remand for the above limited purpose.
(Pronounced in Court) (P.G. Chacko) Member (Judicial) tvu 1 5