Custom, Excise & Service Tax Tribunal
M/S Orient Bell Limited (In Appeal No. ... vs Commissioner Of Central Excise, Noida & on 4 January, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH : ALLAHABAD COURT No. I APPEAL Nos. E/2108 & 2447/2012-EX[DB] (Arising out of Order-in-Appeal No. 82/CE/APPL/NOIDA/12 dated 22/03/2012 passed by Commissioner of Central Excise & Customs (Appeals), Noida) M/s Orient Bell Limited (in Appeal No. E/2108/2012) & Commissioner of Customs, Central Excise & Service Tax, Noida (in Appeal No. E/2447/2012) Appellant(s) Vs. Commissioner of Central Excise, Noida & M/s Orient Ceramics & Industries Ltd. Respondent(s)
Appearance:
Shri Kartikeya Narain (Advocate) for Assessee
Shri Pawan Kumar Singh (Supdt.) AR for Revenue
CORAM:
Honble Mrs. Archana Wadhwa, Member (Judicial)
Honble Mr. Anil G. Shakkarwar, Member (Technical)
Date of Hearing : 04/01/2018
Date of Pronouncement : 09/01/2018
FINAL ORDER NOs. 70156-70157/2018
Per: Archana Wadhwa
Both the appeals one filed by the appellant and the other by the Revenue are being disposed by a common order as they arise out of the same impugned orders passed by the Commissioner (Appeals).
2. After hearing both the sides duly represented by Shri Kartikeya Narain and learned AR Shri Pawan Kumar Singh, we note that the appellant was engaged in the manufacture of Glazed Ceramics Tiles & Vitrified Tiles falling under Chapter 69 of Central Excise Tariff Act, 1985. Apart from selling their own manufactured goods, they were also importing the duty paid tiles from China and were also doing the trading of such goods bought from the other manufacturers in the country.
3. During the period from April, 2006 to December, 2010, appellant availed the Cenvat Credit on various input services like Advertisement Services, IT Software Services, Repair and Maintenance Services, Rent-a-cab, Security and Manpower Supply Services etc., Revenue was of the view that since the said input services are being used by the appellant for the sale of their own manufactured goods as well as under the trading activities, they are not entitled to the Cenvat Credit relatable to the trading activities. Accordingly proceedings were initiated against them by way of issuance of a show cause notice on 04.05.2011, resulting in confirmation of demand of duty to the extent of Rs.27,02,173/-. Inasmuch as the appellant had already deposited the amount of Rs.20,31,713/-, the balance amount was confirmed.
4. During the course of appeal before Commissioner (Appeals), appellant took stand that the quantum of reversal of credit, as arrived at by the Adjudicating Authority was by simply dividing the common credit in ratio of trading sales to total sales as per the audit balance sheet, whereas the same should be apportioned according to the actual credit relatable to the trading activities. Commissioner (Appeals) accepted the appellants stands in respect of two services which were actual services and held that wherever it cannot be quantified the credit would be reversed on pro-rata basis. He otherwise upheld the order of reversal of credit.
Both the sides are in appeal before us.
5. It stands contended by the appellant that the trading activities were introduced as exempted services w.e.f. 01.04.2011. As such prior to the said date trading was not a service activity and hence was not an exempted service so as to deny the Cenvat Credit availed in respect of common input services. Reference stands placed on various decisions of the Tribunal
6. We find that the Tribunal in the following case:-
(i) Tricity Auto vs. CCE, Chandigarh-II reported at 2016 (44) S.T.R. 601 (Tri. - Chan.)
(ii) Kundan Cars Pvt. Ltd. vs. CCE, Pune reported at 2016 (43) S.T.R. 630 (Tri.- Mumbai)
(iii) Marudhan Motors vs. CCE & ST, Jaipur-II reported at 2017 (47) S.T.R. 261 (Tri. Del.)
(iv) Franke Faber India Ltd. vs. CCE, Aurangabad reported at 2017 (52) S.T.R. 155 (Tri.- Mumbai) has held that common input services used in trading as also manufacturing activities are not required to reverse the credit relatable to the trading activities prior to 01.04.2011. Inasmuch as the period involved in the present appeal is prior to 01.04.2011, we, by following ratio of all the above decisions, set aside the impugned orders and allow the assessee appeal. Inasmuch as the appeal of the assessee stand allow, the Revenues appeal is required to be rejected. We order accordingly.
(Pronounced in Court on .) Sd/- Sd/-
Anil G. Shakkarwar) Member (Technical) (Archana Wadhwa) Member (Judicial) Ankit 1 4 APPEAL Nos. E/2108 & 2447/2012-EX[DB]