Custom, Excise & Service Tax Tribunal
M/S. Mysore Polymers & Rubber Products ... vs Cce, Mangalore on 9 August, 2011
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing:09/08/2011
Date of decision:09/08/2011
Appeal No.E/710-711/08; ST/777/09
(Arising out of Order-in-Appeal No.34 & 35/2008-CE dt. 21/7/2008 & No.248/2009 dt. 29/6/2009 passed by CCE(Appeals), Mangalore)
For approval and signature:
Honble Mr. P.G. Chacko, Member(Judicial)
Honble Mr. M. Veeraiyan, 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?
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 Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Mysore Polymers & Rubber Products Pvt. Ltd.
..Appellant(s)
Vs.
CCE, Mangalore
..Respondent(s)
Appearance Mr. Rajesh Kumar, Chartered Accountant for the appellant.
Mr. M.M. Ravi Rajendran, JDR for the Revenue.
Coram:
Honble Mr. P.G. Chacko, Member(Judicial) Honble Mr. M. Veeraiyan, Member(Technical) FINAL ORDER No._______________________2011 Per P.G. Chacko The issues and the amounts involved in these appeals are summarized below:-
Appeal No. Issue Amounts involved E/710/2008 Availment of Cenvat credit on outward transportation of goods and C&F Agent service. Period- April, 2004 to March, 2006. Cenvat credit on outward GTA - Rs.97,227/- & Cenvat credit on C&F Agent service Rs.1,28,061/- + interest under 11AB + Penalty under 11AC E/711/2008 Availment of Cenvat credit on outward transportation of goods and C&F Agent service. Period- April, 2006 to December, 2006 Cenvat credit on outward GTA - Rs.72,029/- & Cenvat credit on C&F Agent service Rs.1,30,341/- + Penalty of Rs.10,000/- ST/777/2009 Cenvat Credit on outward GTA.
Period- 1/1/2007 to 30/11/2007 Rs.88,494/- + Interest under Section 75.
2. On examination of the records and hearing both sides, we find that the first issue relates, in some cases, to CENVAT credit of the service tax paid on Goods Transport Agents Service (GTA Service) availed by the appellant for outward transportation of their final products from factory to customers premises and, in other cases, from factory to depot / Clearing & Forwarding Agents premises. The lower authorities relied mainly on the Tribunals decision in Gujarat Ambuja Cements Ltd. Vs. CCE, Ludhiana [2007(6) STR 249 (Tri. Del.)] to hold that the GTA service availed by the appellant for outward transportation of their final products in the aforesaid manner did not qualify to be input service defined under Rule 2(l) of the CENVAT Credit Rules, 2004 (CCR) and hence any credit of the service tax paid on such service was not admissible to them. Ld. Chartered Accountant for the appellant has challenged the decision of the lower authorities, on the strength of the Honble Karnataka High Courts judgment in ABB Ltd. Vs. Commissioner [2011-TIOL-395-HC-KAR-ST] wherein the Tribunals Larger Bench decision in the case of ABB Ltd. [2009-TIOL-830-CESTAT-BANG-LB] to the effect that outward transportation of finished goods from the place of removal was covered by the definition of input service upto 31/3/2008 was upheld by the Honble High Court. After a perusal of the Honble High Courts judgment, we find that the first issue is covered in favour of the appellant by the High Courts ruling. The Honble High Court held that, till the amendment (effective from 1/4/2008) of clause (ii) of Rule 2(l) of the CCR through substitution of the word upto for the word from, transportation charges incurred by a manufacturer for clearance of final products from the place of removal stood included in the definition of input service. Following the Honble High Courts ruling, we hold the first issue in favour of the appellant.
3. The appellant had also availed CENVAT credit of service tax paid by C & F Agents on the service rendered by them in connection with sale of the goods manufactured by the appellant. The original authority, reiterating the view taken in the relevant show-cause notices, held that no CENVAT credit would be available on C&F Agents service as this service was rendered subsequent to the clearance of the goods from the place of removal for the sale of the goods. The appellate authority in Order-in-Appeal No.34 & 35/2008 upheld this view. However, in Order-in-Appeal No.248/2009, the appellate authority held in favour of the assessee by relying on the Tribunals decision in Metro Shoes Pvt. Ltd. Vs. CCE, Mumbai-I [2008(10) STR 382] wherein it had been held that services rendered by various service providers like C&F agents during the course of transportation of the final products from the factory of the manufacturer to their own showrooms located at various places were input services for the manufacturer as these services were used by the manufacturer, directly or indirectly, in or in relation to the clearance of the final product from the place of removal. Ld. Chartered Accountant for the appellant has submitted that, on the present issue, Order-in-Appeal No.248/2009 was accepted by the Department and therefore the contra decision of the lower appellate authority on the same issue in Order-in-Appeal No.34 & 35/2008 is liable to be set aside. We have found no rebuttal of this submission. CENVAT credit on C&F agents service was denied to the appellant by the ld. Commissioner(Appeals) in Order-in-Appeal Nos.34 & 35/2008 dt. 21/7/2008, which decision is under challenge by the assessee in the first two appeals. The appellate authority in its subsequent Order-in-Appeal No.248/2009 dt. 22/6/2009 allowed the benefit of CENVAT credit on the same service availed by the assessee and this decision of the appellate authority has not been challenged by the Revenue. In the result, the first two appeals must succeed on the second issue as well.
4. The impugned orders to the extent adverse to the appellant are set aside and all the appeals are allowed.
(Operative portion of this order pronounced on conclusion of the hearing) (M. VEERAIYAN) MEMBER (TECHNICAL) ( P.G. CHACKO ) MEMBER (JUDICIAL) Nr 5