Custom, Excise & Service Tax Tribunal
M/S. Ismt Limited vs Commissioner Of Customs And Central ... on 11 May, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. E/1315/10-MUM [Arising out of Order-in- Appeal No. AGS/(61)27/2010 dated 20/4/2010 passed by the Commissioner(Appeals) of Central Excise & Customs, Aurangabad] For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) =======================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should 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 : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
=======================================================
M/s. ISMT Limited.
:
Appellants
VS
Commissioner of Customs and Central Excise, Aurangabad
:
Respondent
Appearance
Ms. Sparsh Prasad, Advocate for the Appellant
Shri. Ashutosh Nath, Asstt. Commissioner(A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 11/5/2015
Date of decision: 11/5/2015
ORDER NO.
Per : Ramesh Nair
This appeal is directed against Order-in- Appeal No. AGS/(61)27/2010 dated 20/4/2010 passed by the Commissioner(Appeals) of Central Excise & Customs, Aurangabad, wherein Ld. Commissioner(Appeals) upheld the order-in-original dated 6/1/2010 and rejected the appeal filed by the appellant. The fact of the case is that the appellant has availed Cenvat Credit of Rs. 31,581/- in respect of security service provided to guest house of appellant company located near by their factory. The show cause notice dated 12/11/2009 was issued wherein proposed denial of Cenvat Credit on the ground that said services appears to have not used/consumed exclusively for the manufacture of excisable goods or during the course conducting of business and as seen from the nature of the service the nexus or use criteria appears to have not fulfilled. In the adjudication order dated 6/1/2010 the demand of Cenvat Credit proposed in the show cause notice was confirmed and penalty of Rs. 2,000/- under Rule 15 of the Cenvat Credit Rules, 2004 and also interest under Section 11AB of the Central Excise Act, 1944 read with Rule 14 of Cenvat Credit Rules, 2004 was demanded. Aggrieved by the said order, appellant filed appeal before the Commissioner(Appeals), who rejected the appeal of the appellant hence the appellant is before me.
2. Ms. Sparsh Prasad, Ld. Counsel for the appellant submits that guest house is used for the stay of company employee and auditors who conduct audit of the factory records therefore it is related to factory activity. She submits that the security service which is subject matter is used for security of guest house and therefore it is admissible input service in terms of definition of input service provided under Cenvat Credit Rules, 2004. She placed reliance on following judgments:
(a) LOreal India Pvt. Ltd. Vs. Commissioner of C. Ex. Pune-I[2011(22) S.T.R. 89(Tr- Mumbai)].
(b) Commissioner of C. Ex. Visakhapatnam Vs. Hindustan Zinc Ltd. [2009(16) S.T.R. 704(Tri- Bang.)]
(c) Commissioner of C. Ex. Nagpur Vs. Ultratech Cement Ltd. [2010(20) S.T.R. 577(Bom.)] She submits that in view of the above cited judgments Cenvat credit in relation to guest house of the manufacturing unit has been allowed.
3. On the other hand, Shri. Ashutosh Nath, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that the security provided to the guest house has no nexus with production of the goods therefore the same does not qualify as input service in terms of definition of input service provided under Cenvat Credit Rules, 2004. In support of his argument he placed reliance on following judgments:
(a) Commissioner of C. Ex. & Customs Vs. Gujarat Heavy Chemicals Ltd. [2011(22) S.T.R. 610(Guj.)].
(b) Commissioner of C. Ex. Nagpur Vs. Manikgarh Cement[2010(20) S.T.R. 456(Bom.)].
(c) MRF Ltd. Vs. Commissioner of C. Ex. & S.T. (LTU), Chennai[2013(31) S.T.R. 689(Tri- Chennai)]
4. I have carefully considered the submissions made by both sides and perused the record.
5. I find that service in question is security services provided to the guest house of the appellant. The guest house is used for lodging of the employees, outside auditors which performing their service to the appellants factory. Nothing is available on record to show that guest house is used for any other purpose. In view of this fact, since guest house used for the stay of employee, auditors which has directed nexus with factory which produces excisable goods therefore Cenvat credit is admissible to the appellant. On going through judgments relied upon by the rivals, I find that in the case of LOreal India Pvt. Ltd.(supra) house keeping service of guest house has been held admissible and in the case of Hindustan Zinc Ltd.(supra) maintenance service of guest house was allowed as input service. Since the similar service involved in the present case, the ratio of both the judgments are squarely applicable in the appellants case also. As regard reliance placed by the Ld. A.R. on various judgments, I find that the judgment of Gujarat Heavy Chemicals Ltd and Manikgarh Cement(supra) facts were different as in these judgments services were provided to the residential quarters of the employee whereas in the present case service was provided to the guest house which is used by appellant for the purpose of smooth function of the factory. As regard the MRF Ltd.(supra) case the credit of security service availed at guest house was denied on the ground that it is use not only for the business purpose for personal engaged in the manufacturing process but also for satisfaction of their personal needs. In the present case no such material was available that guest house was available for the personal needs of the employee therefore judgment of MRF Ltd. is distinguished. In view of my above discussion and careful consideration of the judgments relied upon by the both sides, I am of the view that in facts and circumstances of the case, security service provided to the guest house in the factory is admissible input service, therefore I set aside the impugned order and allow the appeal .
(Operative part pronounced in court) Ramesh Nair Member (Judicial) sk 5