Custom, Excise & Service Tax Tribunal
M/S. Sanmar Foundries Ltd vs Cce, Trichy on 9 November, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
Appeal No. E/42646/2014
(Arising out of Order-in-Appeal No. 90/2014 dated 3.9.2014 passed by the Commissioner of Central Excise (Appeals), Trichy)
M/s. Sanmar Foundries Ltd. Appellant
Vs.
CCE, Trichy Respondent
Appearance Shri V.S. Manoj, Advocate for the Appellant Shri S. Nagalingam, AC (AR) for the Respondent CORAM Honble Shri D.N. Panda, Judicial Member Date of Hearing / Decision: 09.11.2016 Final Order No. 42150 / 2016 Appellant says that the CENVAT credit in controversy relates to the tax paid by the intermediary namely Tyco Sanmar Ltd. and Chemplast Sanmar Ltd. The tax so paid to the appellants intermediary has gone into treasury. Due to certain difficulties appellant being not able to procure the direct services of the service provider it preferred the services through the intermediary who used a portion of such service and rest of the part was used by the appellant. There is nothing on record to suggest that the appellant was not beneficiary of the service provided by the third party service provider.
2. There is inextricable link to the provision of services as well as receipt of the services involving the intermediary above who availed such services and rest of the services passed on to the appellant. This arrangement was made for availment of service. Such material aspect not being enquired by Revenue, the appellant was denied of the CENVAT credit.
3. Revenue on the other hand says that the arrangement was made by the appellant as an afterthought and there is no direct link between the provision of service and recipient of service.
4. Heard both sides and perused the records.
5. When para 2 of show cause notice dated 18.9.2012 is read, it throws light on the proposition of the appellant as above. When the appellant pleaded that it was beneficiary of the service provided by the third party and intermediary being part of beneficiary of service so provided as well as the recipient thereof and transferred to the appellant partly and that part was billed by the intermediary, charging service tax thereon and the tax so paid by the appellant has gone into the treasury, that was not enquired into by Revenue.
6. In order to establish that the services provided by the third party was routed through the intermediary, Revenue has to conduct enquiry from the end of the service provider to ascertain whether the service so provided was routed to the appellant as a beneficiary thereof. Once such vital link is established,, appellant shall not be deprived of the CENVAT credit claimed in absence of any dispute that the tax paid by the appellant has not gone into the treasury.
7. For the aforesaid reason, the matter is remanded to adjudicating authority to grant reasonable opportunity of hearing to the appellant at every stage of the result of enquiry and on the basis of the pleadings of the appellant, authority shall pass appropriate order recording his reason.
8. In the result, appeal is remanded to adjudicating authority for carrying out the direction as stated above.
(Dictated and pronounced in open court) (D.N. Panda) Judicial Member Rex 2