Custom, Excise & Service Tax Tribunal
Sudarshan Chemical Industries Ltd vs Commissioner Of Central Excise, Raigad on 14 January, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. APPEAL No. E/920/12-Mum (Arising out of Order-in-Appeal No. US/179/RGD/2012 dated 15.3.2012 passed by Commissioner of Central Excise (Appeals), Mumbai-II) For approval and signature: Honble Mr. S.S. Garg, 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?
====================================================== Sudarshan Chemical Industries Ltd. Appellant Vs. Commissioner of Central Excise, Raigad Respondent Appearance: Ms. Aparna H., Advocate, for appellant Shri D.S. Maan, Assistant Commissioner (AR), for respondent CORAM: Honble Mr. S.S. Garg, Member (Judicial) Date of Hearing: 11.1.2016 Date of Decision: 14.1.2016 ORDER NO
This appeal is directed against order-in-appeal No. US/179/RGD/2012 dated 15.3.2012 passed by Commissioner of Central Excise (Appeals), Mumbai-II, upholding the order-in-original by dismissing the appeal of the appellant.
2. Briefly the facts of the case are that the appellant is engaged in the manufacture of organic and inorganic pigments/chemicals, intermediates, pesticides etc. falling under Chapters 29, 32, 34 and 38 of the Central Excise Tariff Act, 1985. The appellant is availing credit of duty paid on inputs, capital goods and input services in accordance with the Cenvat Credit Rules, 2004. During the period from April 2006 to March 2011, the appellant took credit of service tax of Rs.1,85,943/- paid on various input services like courier services, inspection and issuing certificates for safety relief valves, repair of boiler and stress relieving of boiler, rent-a-cab, tour and travel service, architectural consultancy service for conference hall and guest house etc. The availment of cenvat credit of service tax paid on these services i.e. courier service, rent-a-cab service, tour and travel service and architecture consultancy service was objected by the respondent and thereafter a show cause notice dated 29.4.2011 was issued to the appellant proposing to deny cenvat credit of service tax. Thereafter the Deputy Commissioner of Central Excise vide his order-in-original dated 1.11.2011 confirmed the demand of Rs.1,71,317/- out of Rs.1,85,943/-. Thereafter the appellant filed appeal before the Commissioner (Appeals) who upheld the denial of credit along with interest and equal penalty. Hence the present appeal has been filed.
3. The learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without considering and appreciating the submissions made by the appellant. The provisions of law, judgments, CBEC instructions on the issue cited by the appellant. He further submitted that for manufacture of final products, the appellant used services inter alia courier service, rent-a-cab service, tour and travel services for transportation of their employees. He further submitted that as per Rule 2(l) of the Cenvat Credit Rules, 2004, any service used inter alia for clearance of goods from the place of removal is an input service. He also submitted that the credit of service tax paid on courier service is admissible on the strength of the following judgments:-
(i) CCE vs. Apar Industries Ltd. reported in 2010 (20) STR 624 (T) upheld by the Honble Gujarat High Court reported as 2011 (23) STR J-194 (Guj.);
(ii) Meghachem Industries reported in 2011 (23) STR 472 (T);
(iii) CCE vs. HEG Ltd. reported in 2010 (18) STR 446 (T).
The learned counsel further submitted that the credit of service tax paid on rent-a-cab/tour and travel service used for transportation of employees from their residence to factory/office and back is admissible for official visits from factory to head office etc., based on the following judgments:-
(i) Stanzen Toyotetsu reported in 2009 (14) STR 316 (T) upheld by the Honble Karnataka High Court reported as 2011 (23) STR 444 (Kar.);
(ii) Cable Corpn. of India reported in 2008 (12) STR 598 (T);
(iii) Hindustan Zinc Ltd. reported in 2009 (16) STR 704 (T);
(iv) Heartland Bangalore reported in 2011 (21) STR 430 (T);
(v) T.G. Kirloskar reported in 2010 (17) STR 359 (T).
He further submitted that the service tax paid on all the services is admissible and the same has been upheld by the Honble Bombay High Court in the case of Ultratech Cement Ltd. reported in 2010 (20) STR 577 (Bom.). He also submitted that the question of penalty does not arise as all the disputed services are input services based on settled position of law and the availment of credit thereon is proper and legal and further when the issue involved relates to interpretation of law as to availability of cenvat credit on various disputed services, the penalty cannot be imposed as per the settled position of law.
4. On the other hand, the learned AR reiterated the findings of the Commissioner (Appeals) and as submitted that the appellant has failed to establish the nexus between the services and the business activity and, therefore, in the absence of nexus between the two, the appellant is not entitled to take cenvat credit of service tax paid on the services.
5. I have heard the learned counsel for the parties and perused the records and also various judgments cited by the learned counsel for the appellant in support of his contentions on issues like cenvat credit on courier service, rent-a-cab service and also on architecture and other services which are used in or in relation to the business activity carried on by the appellant. Since all the disputed services activities are related to the appellants business activities and all expenses incurred for manufacture and export of goods from part of the value of the goods and hence the credit of service paid thereon is admissible and has been so held in the various judgments cited supra by the appellant. Further, the Honble High Court of Bombay in the case of Ultratech Cement Ltd. (supra) has interpreted that the input services as not only cover services of falling in the substantial part of Rule 2(l) of the Cenvat Credit Rules, 2004 but also cover services which are covered under the inclusive part and they are the services rendered prior to the commencement of manufacturing activity as well as services rendered after manufacture. The inclusive part of the definition includes services rendered in relation to business. Therefore, keeping in view the judgment cited above, which covers all the services on which cenvat credit was denied by the department, I am of the considered view that the appellant is entitled to cenvat credit on all the services and the impugned order is not sustainable in law and the same is set aside by allowing the appeal with consequential relief, if any.
(Pronounced in Court on 14.1.2016) (S.S. Garg) Member (Judicial) tvu 1 6