Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise & S.T., ... vs M/S. Miranda Tools on 18 December, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad Appeal No. : ST/13973/2014 [ST/Cross/10101/2015) (Arising out of OIA-SUR-EXCUS-002-APP-105-14-15 dated 25.09.2014, passed by Commissioner (Appeals) Central Excise, & S.T., Surat) Commissioner of Central Excise & S.T., Surat : Appellant (s) VERSUS M/s. Miranda Tools : Respondent (s)
Represented by :
For Appellant (s) : Shri Lalatendu Patra, Authorised Representative For Respondent (s) : Shri Vinay Kansara, advocate For approval and signature :
Mr. P.M. Saleem, Honble Member (Technical) 1 Whether Press Reporter 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 CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?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 CORAM :
Mr. P.M. Saleem, Honble Member (Technical) Date of Hearing / Decision : 18.12.2015 ORDER No. A/11869/2015 Dated 18.12.2015 Per : Mr. P.M. Saleem The issue involved in the present appeal is whether the Courier Service and Mobile service availed by the manufacturer for the period from April 2008 to June 2011 would be available as input service in terms of Rule 2(l) of Cenvat Credit Rules, 2004, enabling the manufacturer to take credit of service tax paid on such Courier Services and Mobile services.
2. Heard both sides. We find that the Commissioner (Appeals) in the impugned Order-in-Appeal has gone into the issue in detail. The same is reproduced below for better appreciation:-
COURIER SERVICES :
5.3 I find that the appellant contended that they receive the courier services regularly from the different courier agencies. The receive courier services for dispatch of routine business correspondence to the supplier/ customer/ branch office/ agents office/ marketing office, commercial bills to the customers, original copy of Central Excise invoices, purchase order, quotation. They also send various bills and other related documents to the head office for accounting and internal audit purpose. The courier services are also received for procurement of raw materials, export of the finished goods and for domestic sale. The courier services are also received for sending samples of the finished goods to the customers. In different ways, the courier services are used in or in relation to manufacture of the final products. The credit has been availed by the appellant considering such services used in or in relation to manufacture of the finished goods. It is submitted that if the correspondence with the supplier of raw materials is done then the same can certainly be considered as used in or in relation to manufacture of finished goods. Further, correspondence with customer before removal of finished goods can also be considered used in or in relation to manufacture. Further, courier services utilised in relation to Auditing/ Accounting/ Financing/ Marketing etc. are eligible for CENVAT credit in terms of the definition of Input Service. All the above referred activities are in relation to business of manufacture of final products and hence credit is certainly admissible on courier services.
5.4 I have considered the process and stage of evolution of law on the issue. I have come across recent judgment delivered on 18.10.2012/ 07.11.2012 by Hon'ble High Court of Gujarat, Ahmedabad while deciding the Department Tax Appeals in case of the CCE, Ahmedabad-II vs. M/s. Cadila Healthcare Limited, in Tax Appeals No. 353/2010 & 204/2011 (2013-TIOL-12-HC-AHM-ST) involving eligibility of the CENVAT credit on rage of various services including Courier Services observed that the outward transport service used by the manufacturers for transportation of finished goods from the place of removal up to the premises of the purchaser is recovered within the definition of Input Service provided in Rule 2(l) of the Cenvat Credit Rules, 2004. MOBILE SERVICE 5.5 In the context of the availment of CENVAT credit on Mobile services, the appellant contended that they took cenvat credit correctly in terms of the definition of Input Service in as much as the mobile phones were provided by the company to its senior executives of different sections such as production, marketing, finance, store etc. for business activities purpose only. The Mobile services were received by the company to facilitate their senior executives/ employees so that they can carry out business activities/ job performance easily. The mobile services were utilised/ consumed by the senior executives/employees of the company in or in relation to perform their duties such as purchasing/ procurement of inputs or capital goods or consumables, accounting of materials, manufacture of the finished goods, clearance of finished goods, export of finished goods, marketing of goods manufactured, sales promotion etc. Further, the mobile connections were also in the name of the company and hence the bills were raised by the service providers in the name of the company. And accordingly, the appellant company was paying the amount of bills to the service providers.
5.6 I find and relied upon the case of M/s. J.K. Sugar Limited vs. CCE 2011 (270) ELT 225 (Tri. Delhi), while allowing cenvat credit on mobile phone services in Para 8 of the said order the Honble Tribunal observed: As regards mobile phone services, it is not disputed that the mobile phones are used by the company officials for the company work. Hence mobile phone service has to be treated as input service. I find that the same view has been taken in the case of M/s. ITC Limited reported in 2009 (14) STR 847, in the case of M/s. J.K. Cement Works reported in 2009 (14) STR 358 and in the case of M/s. Indian Rayon & Industries Limited reported in 2006 (4) STR 79. Hence the cenvat credit of the service tax paid on the mobile phone service would be available to the appellant. Interpretation of statutes Input service definition of phrase activity relating to business widens scope of definition, Use of words activities signifies wide import of phrase activities relating to business not employed in the Rule. All and any activity to business covered under input service subject to relation between manufacture of final product and the activity Rule 2(l) of Cenvat Credit Rules, 2004.
This view has been further endorsed by the Ahmedabad Bench of Honble Tribunal in the case law of M/s. Ultratech Cement Limited 2010 (258) ELT 266 wherein it has been reiterated that the definition of input services is quite wide and an activity used for business purposes is required to be held as input service and the assessee entitled to the benefit of credit of service tax paid thereon.
3. We agree with the view of the Commissioner (Appeals). This Bench of the Tribunal in the case of CCE & Cus. Vapi vs. Apar Industries Limited 2010 (20) STR 624 (Tri. Ahmd.) has held that service tax paid on the input services namely Courier Services would be eligible for cenvat credit. The said decision was upheld by the Honble Gujarat High Court [2011 (23) STR J194 (Guj)]. Further, the Honble Gujarat High Court has also held that service tax paid on mobile phones would be eligible for taking cenvat credit vide vs. Excel Crop Care Limited 2008 (12) STR 436 (Guj.).
4. In view of the above, we find no reason to interfere with the impugned Order-in-Appeal. Therefore, the same is upheld.
5. Revenues appeal is dismissed. Cross objection filed by the Respondent also disposed of.
(Order dictated and pronounced in the open Court) (P.M. Saleem) Member (Technical) .KL 4