Custom, Excise & Service Tax Tribunal
M/S. Barmalt (India) Pvt. Ltd vs Cce, Delhi-Iii on 16 September, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-DB
Date of Hearing/Decision : 16.09.2014
E/Stay/60396/2013
E/59698/2013Cu[DB]
[Arising out of Order-in-Original No. 96-98/SA/CCE/2013 `dated 27.06.2013 passed by the Commissioner (Appeals), Central Excise, Delhi]
For Approval & Signature :
Honble Mr. Justice G. Raghuram, President
Honble Mr. R.K. Singh, 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?
2.
Whether it would be released under Rule 27 of the 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?
4.
Whether order is to be circulated to the Department Authorities?
M/s. Barmalt (India) Pvt. Ltd. Appellant
Vs.
CCE, Delhi-III Respondent
Present for the Appellant : Shri Bipin Garg, Advocate
Present for the Respondent : Shri Yashpal Sharma, DR
FINAL ORDER NO. 54222/2014
PER: R.K. Singh
Appellants filed stay petition alongwith appeal against Order-in-Original No. 96-98/SA/CCE/2013 dated 27.06.2013 in terms of which Cenvat credit of Rs. 80,13,096/- has been held to be inadmissible and ordered to be recovered alongwith interest and mandatory penalty.
2. Briefly stated the facts are as under:
The appellants had taken Cenvat credit of service tax paid on commercial or industrial construction service during the year 2009-10. They also took credit of service tax paid on the rents for hired warehouses outside the factory for storage or raw material as well as finished goods. The finished goods stored outside the factory were non-paid goods for which the permission of the department was taken and as such goods were cleared from there.
3. As the issue is now covered by various judicial pronouncements, we proceed to dispose of the appeal itself with the consent of both sides after waiving the requirement of pre-deposit.
4. The appellants contend that (i) out of the impugned demand, Rs. 57,32,077/- pertains to credit taken in respect of service tax paid on commercial or industrial construction service which was used for setting up their factory and that prior 01.04.2011 such service for setting up the factory was clearly eligible to be called input service.
(ii) Of the remaining amount, Rs. 13,68,611/- pertains to service tax paid on rent prior to 01.04.2011 and Rs. 9,12,408/- pertains to such service tax paid after 01.04.2011 and the definition of input service clearly allows services used in relation to storage up to the place of removal to be called input service.
5. We have considered the matter. As regards the credit taken in respect of Commercial or industrial construction service, it is not disputed that the said service was utilized for setting up the factory and therefore it was covered under the definition input services prior 01.04.2011 as is evident from the definition of input service contained in Rule 2(l) of Cenvat credit Rules 2004 reproduced below:
(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 or final products and clearance of final products from the place of removal.
And includes service 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 upto the place or removal, procurement of inputs, activities relating to business, such as accounting, audition, 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 upto the place of removal.
Thus the entire credit relating to commercial or industrial construction service is clearly admissible.
6. As regards Cenvat credit of service tax paid for rental service the appellants have stated that they owned, and were responsible for, the goods upto the warehouse from where the finished goods were cleared/sold and therefore in terms of Section 4(3)(c)(iii) of Central Excise Act, 1944 such a warehouse was the place of removal. As per the above definition, input services used for storage up to the place of removal continued to be covered under the definition of input service. Therefore, the service tax paid on rent is also available as credit.
7. In view of the foregoing discussion, we waive the pre-deposit and allow the appeal.
(Justice G. Raghuram) President (R.K. Singh) Technical Member Neha 3