Custom, Excise & Service Tax Tribunal
M/S Cubex Tubings Limited vs Cce, Hyderabad on 18 July, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No. E/20389/2015 (Arising out of Order-in-Appeal No. 65/2014-15 (H-I) CE dt. 04.12.2014 passed by CCE (APPEALS), Hyderabad) For approval and signature: Honble Madhu Mohan Damodhar, Member (Technical) 1. Whether Press Reporters may be allowed to see 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 Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s Cubex Tubings Limited ..Appellant(s) Vs. CCE, Hyderabad ..Respondent(s)
Appearance Sh. P.V.B. Chary, Advocate for the Appellant. Sh. Nagraj Naik, Deputy Commissioner (AR) for the Respondent.
Coram:
Honble Madhu Mohan Damodhar, Member (Technical) Date of Hearing: 18.07.2016 Date of Decision: 18.07.2016 FINAL ORDER No._______________________ [Order per: Madhu Mohan Damodhar] The dispute in the present appeal is in regard to disallowance of input service tax credit amounting to Rs. 47,620/- taken on telephone charges (landline and mobile etc.,) which were given to staff, imposition of mandatory penalty under Rule 15 (2) of CENVAT Credit rules read with Section 11AC of Central Excise Act, 1944 and interest under Section 11AA of Central Excise Act, 1944.
1.1 A show cause notice dated 07-11-2-12 was issued proposing disallowance input service tax credit amounting to Rs. 19,60,838/- on the alleged ground that the documents on which input service tax credit taken were in the name of registered office/top management personnel and appellant failed to discharge burden cast on them under Rule 9(6) of CENVAT Credit Rules, 2004 and did not inform the department about details of documents on the strength on which they have availed input service credit and therefore proviso to Section 11A (1) was invoked.
1.2 Adjudicating authority confirmed the proposals made in SCN vide OIO dated 29-11-2013. Upon filing appeal, the Commissioner (Appeals) allowed CENVAT Credit to an extent of Rs. 19,13,218/- out of the total demand confirmed in OIO amounting to Rs. 19,60,838/- and disallowed an amount of Rs. 47,620/- and imposed equal amount of penalty u/R 15(2) read with Section 11AC vide OIA dated 04-12-2014.
1.3 Hence this appeal.
2. Sh. P.V.P. Chari, learned advocate appearing on behalf of the appellant submitted that out of the total demand of Rs. 19,60,838/- proposed in the Show Cause Notice on appeal to Commissioner (Appeals) all the disputed demands have dropped except Rs. 47,620/- relating to landline and mobile charges. He contended that the landline phones and mobile phones were actually used by the employees for business operations. He further submitted that the landlines are in the name of the appellant only and even the other mobile bills bear the name of the appellant in addition to name of employee. Learned advocate pointed out that the matter is already covered in the judgment of Honble High Court of Gujarat in the case of CCE Vs Excel Crop Care Ltd., [2008 (12) STR 436 (Guj)]. He also pointed out that in the impugned order, even the appellate authority has allowed amount of Rs. 21,949/- availed based on invoices bearing name of directors relating to landline at their residence and mobiles bills paid by the company on the ground that they are used in or relation to manufacture of final products. He further submitted that they were regularly filing returns and as such demand is also barred limitation. In this regard, he placed reliance on the ratio of judgment in CCE, Kolkata VI Vs ITC Ltd., [2013 (291) E.L.T. 377 (Tri-Kol)].
3. Sh. Nagraj Naik, learned AR for department argued that it is not clear whether the amount of Rs. 47,620/- relate only to telephone/mobile charges or whether there are some other services/charges involved. In response learned advocate averred that the said amount pertains predominantly only to landline/mobiles charges.
4. In the circumstances, and taking note that the issue is adequately covered by the case laws supra, I am of the considered opinion that the, impugned amount of credit pertaining to charges on landline and mobile phones used by the employees of the appellant, being an eligible input service, requires to be considered as eligible input credit. Appeal allowed, with consequential benefits, if any.
(Operative part of this order was pronounced in court on conclusion of the hearing) (MADHU MOHAN DAMODHAR) MEMBER (TECHNICAL) Jaya.
4