Custom, Excise & Service Tax Tribunal
M/S. Rotork Controls (India) vs Commissioner Of Central Excise, ... on 22 December, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/21470/2015-SM [Arising out of Order-in-Appeal No. 102/2015-CE dated 27/02/2015 passed by Commissioner of Central Excise , BANGALORE-I (Appeal) ] M/s. Rotork Controls (India) Pvt. Ltd Plot No 165-166, KIADB Industrial Area, Bommasandra BANGALORE - 560099 KARNATAKA Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax Bangalore-I POST BOX NO 5400, CR BUILDINGS, BANGALORE - 560001 KARNATAKA Respondent(s)
Appearance:
Shri Krishnamurthy, Consultant For the appellant Shri N. Jagadish, AR For the respondent Date of Hearing: 22/12/2016 Date of Decision: 22/12/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 21536 / 2016 Per : S.S GARG The present appeal is directed against the impugned order dated 27.2.2015 whereby the Commissioner (A) has rejected the appeal of the appellant and upheld the Order-in-Original.
2. Briefly the facts of the case are that appellants are manufacturers of excisable goods i.e. valve actuators and gear boxes falling under Chapter 85 and are availing CENVAT credit on inputs, capital goods as well as on service tax paid on services. During the audit of the records of the appellant, the Department observed that the appellants have wrongly availed CENVAT credit of service tax of Rs.8,12,661/- being service tax paid towards construction, architecture and infrastructure services and has utilized the same for payment of duty. Thereafter a show-cause notice was issued for availing ineligible credit, which were not having any nexus directly or indirectly in or in relation to the manufacture of their finished goods. Appellant filed reply to the show-cause notice refuting the allegations in the show-cause notice and thereafter the Additional Commissioner after due process of law confirmed the demand, interest and penalty vide Order-in-Original dated 25.11.2013. Aggrieved by the said order, the appellant filed appeal before the Commissioner (A) who upheld the same. Hence, the present appeal.
3. Heard both the parties and perused the records.
4. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly considering the definition of input service as well as by ignoring the decisions of the Tribunal on this aspect. He further submitted that the appellant had paid service tax on construction, architecture and infrastructure facilities which are utilized in their factory for manufacturing excisable goods and this service falls in the definition of input service. He further submitted that the period of dispute is March 2011 and at that time, as per the definition of input service, this service was very much part of the input service though in the amended definition from 1.4.2011 certain services were excluded but that is not applicable in the present case, as appellant have received the input services prior to the amendment to the definition of input service.
4.1 In support of his submission, he relied upon the following decisions:
i. Adani Port & Special Economic Zone Ltd. vs. CST, Ahmedabad: 2016 (42) STR 1010 (Tri.-Ahmd.) ii. Steril Gener Life Sciences Pvt. Ltd. vs. CCE, Puducherry: 2016 (42) STR 355 (Tri.-Chennai) iii. J.P. Morgan Services (I) Pvt. Ltd. vs. CST, Mumbai: 2016 (42) STR 196 (Tri.-Mumbai) iv. CCE, Mumbai-II vs. J.P. Morgan Services India Pvt. Ltd.: 2015 (38) STR 410 (Tri.-Mumbai) 4.2 CCE vs. Ultratech Cement Ltd.: 2010-TIOL-745 wherein the Honble High Court after considering the definition of input service under Rule 2(l) has held that the definition is very wide and covers not only services which are directly or indirectly used in or in relation to the manufacturing of final products but also after manufacturing of the final product. The learned counsel further submitted that with regard to construction, the same is undertaken for construction of premises for the manufacturing activity and it is directly connected with the business of manufacture.
5. On the other hand, the learned AR reiterated the findings of the learned Commissioner (A).
6. After considering the judgments cited supra, I am of the view that the impugned order, denying the CENVAT credit on service tax paid towards construction, infrastructure and architecture services, is not sustainable in law. These activities fall in the definition of input service and the appellant is entitled to CENVAT credit of the same as the same are directly connected with the manufacture of the product. Consequently, I allow the appeal of the appellant and set aside the impugned order with consequential relief, if any.
(Operative portion of the Order was pronounced in Open Court on 22/12/2016.) S.S GARG JUDICIAL MEMBER rv 5