Custom, Excise & Service Tax Tribunal
Spraying Systems India Pvt Ltd vs Commissioner Of Central Excise, ... on 8 July, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE [Arising out of Order-in-Appeal No. 226/2012 dated 14/08/2012 passed by the Commissioner of Central Excise, Bangalore.] For approval and signature: HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER 1 Whether Press Reporters 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 the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 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 SPRAYING SYSTEMS INDIA PVT LTD PLOT NO.303 & 304 2ND CROSS, 5TH MAIN, 4TH PHASE, PEENYA INDUSTRIAL AREA BANGALORE 560 058 Appellant(s) Versus Commissioner of Central Excise, Service Tax And Customs BANGALORE-II PB 5400 CR BUIDING, QUEENS ROAD, BANGALORE, - 560001 KARNATAKA Respondent(s)
Appearance:
Mr. N. Anand & Mr. Anirudh R.J. Nayak, Advocates K.S. RAVI SHANKAR # 152, RACE COURSE ROAD,BANGALORE BANGALORE - 560001 KARNATAKA For the Appellant Mr. S. Teli, Dy. Commissioner (AR) For the Respondent Date of Hearing: 23/06/2015 Date of Decision: 08/07/2015 CORAM:
HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER Final Order No. 21499 / 2015 Per : ARCHANA WADHWA The appellants have been denied the CENVAT credit of duty paid on the inputs to the extent of Rs.8,50,195/- on the ground that bills of entries and invoices were in the old factory address of the appellant whereas the said inputs have been received and used in the new factory address. Further, CENVAT credit to the tune of Rs.4,39,317/- stand denied on the various input services.
2. After hearing both the sides duly represented by Mr. N. Anand & Mr. Anirudh R.J. Nayak, advocates for the appellants and Mr. S. Teli, Dy. Commissioner (AR) for the Revenue, I find that appellant is engaged in the manufacture of spray nozzles and accessories falling under Chapter 84 of the Central Excise Tariff Act. They were having their factory at Yeshwanthpur Industrial suburb and were duly registered with the Central Excise department. However, with effect from 1.2.2009 they shifted their factory to Peenya Industrial area and surrendered their previous registration and got new registration at the new address.
2.1 Prior to moving of the factory from the old address to new address, they had placed orders for supply of various inputs. The said inputs were supplied by the manufacturers under the cover of excise invoices, but the address given by the said suppliers was old address. The Revenues only objection is that whereas invoices were in the old factory address of the appellant, the goods were received in the new factory and as such CENVAT credit cannot be allowed.
3. I find that there is no dispute about the fact that the inputs were actually received by them at Peenya Industrial area and were used by them in the manufacture of their final product. As the purchase orders were placed from the old address, the invoice carried the old address.
3.1 I find that denial of credit on the above technical ground is neither warranted nor justified. Tribunal in the case of Shree Guru Containers vs. CCE, Delhi: 2013 (298) E.L.T. 639 (Tri.-Del.) has considered an identical situation and has held in favour of the assessee. To the similar effect there are other decisions of the Tribunal. Reference can be made to following decisions:
* Bharat Heavy Electricals Ltd. vs. CCE: 2011 (274) E.L.T. 359 (Tri.-Del.).
* Sipani Automobiles vs. CCE: 2002 (150) E.L.T. 845 (Tri.-Bang.) * Racold Appliances Ltd. vs. CCE: 2003 (159) E.L.T. 321 (Tri.-Mum) * Cadila Pharmaceuticals Ltd. vs. CCE: 2005 (192) E.L.T. 1194 (Tri.-Mum.) As such, I find no justification for denial of the credit on the inputs, which admittedly stand received by the appellant in the new factory and used in the manufacture of their final product cleared on payment of duty of excise.
3.2 As regards the input services, I find that a part of the credit stand denied on the ground that catering services cannot be held as input service since number of employees employed by the appellant was less than 250. I find that the Honble Karnataka High Court in the case of Resil Chemicals Pvt. Ltd. vs. CCE: 2014 (36) S.T.R. 1260 (Kar.) has held that for treating the outdoor catering service as input services, neither the obligation to run the canteen under the Factories Act nor the number of employees required to be more than 250 is the criteria. As such by following the said decisions, I hold that the appellant is entitled to the CENVAT credit of Rs.3,165/- denied on the said ground.
3.3 Further credit to the extent of Rs.2,19,625/- stand denied on the same ground that the address in the input service provider invoice was that of old factory. I have already held that in such a scenario benefit cannot be denied. Accordingly, I allow the CENVAT credit.
3.4 Further, CENVAT credit to the extent of Rs.1,45,291/- stands denied on the ground that the invoices of input service provider were in the name of project site address of the appellant and such services cannot be held to be input services used in the factory for manufacture of the final product. Many cases have held that the activities carried at site are relatable to the appellants business and have to be held as cenvatable input services. Reference can also be made to Honble Mumbai High Courts decision in the case of Commissioner of Central Excise vs. Ultra Tech Cement: 2010 (260) E.L.T. 369 (Bom.). Accordingly, I allow the credit.
3.5 Service tax credit to the extent of Rs.23,236/- availed in respect of commission paid for procuring orders from Rourkela Plant and SAIL stand denied on the ground that they have no nexus with the appellants business activities. I find that the Tribunal in the case of Lanco Industries Ltd. vs. CCE: 2010 (17) S.T.R. 350 (Tri.-Bang.) has held that service tax on sales commission paid to the agents are available as credit to the assessee. By following the same, I hold that the said credit is available to the appellant.
3.6 Further an amount of Rs.48,000/- stand denied to the appellant on the ground that inspection of spray nozzles was done on behalf of the appellants parent company Spraying Systems at USA and as such, the appellant cannot be held to be entitled to the benefit of the said credit. Learned advocate explains that the said services were availed by the appellant only for the inspection of the products manufactured by them and it was by mistake that the appellants parent companys name at USA was written in the address. The appellants are required to establish the said fact, for which purpose, I deem it fit to set aside the impugned order relatable to the said demand and remand the matter to the original adjudicating authority.
4. In view of the foregoing, I allow the credit to the full extent in respect of inputs and input services except an amount of Rs.48,000/- in respect of input services. The credit of Rs.48,000/- would be re-adjudicated by the original adjudicating authority after verifying the documents and the other records to adjudge the appellants claim of receipt of services by them only.
Appeal is thus partially allowed and partially remanded in above terms.
(Order pronounced in open court on 08.07.2015.) ARCHANA WADHWA JUDICIAL MEMBER rv 5