Custom, Excise & Service Tax Tribunal
Badrika Motors (P) Ltd vs C.C.C.Ex. & S. Tax, Bhopal on 27 November, 2013
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-I Date of hearing/decision: 27.11.2013 Service Tax Appeal No.1753 of 2012-SM Arising out of the Order in appeal No.64/BPL/2012, dated 28.3.2012 passed by the Commissioner (Appeals), Central Excise & Service Tax, Bhopal. For Approval and Signature: Honble Mr. Justice G. Raghuram, President 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? Badrika Motors (P) Ltd. .. Appellant Vs. C.C.C.Ex. & S. Tax, Bhopal .. Respondent
Appearance:
Present Ms. Asmita A. Nayak with Shri Ranjeet K. Ranjan, Advocates for the appellants Present Shri Sanjay Jain, A.R. for the respondent Coram: Honble Mr. Justice G.Raghuram, President Final Order No. 58380/2013 Per Justice G. Raghuram:
Heard Ms. Asmita A. Nayak, ld. Counsel for the appellant and Shri Sanjay Jain, ld. A.R. for the responden/Revenue.
2. The Assistant Commissioner, Customs & Central Excise, Satna passed the Order-in-Original dated 23.8.2011 disallowing cenvat credit of Rs.2,77,188/- and Rs.54,062/- and directed recovery along with interest and penalty of Rs.3,31,250/- under Section 78 of the Act. The disallowance of cenvat credit as specified was pursuant to two show cause notices 22.1.2010 and 18.10.2010. The period in issue is 2006-07 to August, 2009. The appellant is a dealer which entered into a dealership agreement with Hero Honda Motors Limited for marketing and distribution; sales; service and vending spare parts of two wheelers manufactured by Hero Honda Motors Limited. The dealership agreement, inter-alia obligates the appellant to promote, develop and maintain sales of products and parts and service of Hero Honda Motors Limited. The two wheelers and spare parts were transported by the company to the appellants business premises by goods transport vehicle. On the remittances made to the goods transport agencies towards transport charges, the appellant remitted the service tax under the taxable Goods Transport Agency service, under the reverse charge mechanism enjoined in Section 66A of the Act. The appellant availed cenvat credit on the service tax remitted for GTA, in respect of the tax remittable for having provided the Business Auxiliary Service to M/s Hero Honda Motors Limited, by way of sales and service of the latters products. The adjudicating authority disallowed the cenvat credit availed on the ground that the taxable Authorised Service Station and Business Auxiliary Service provided by the appellant have no nexus with the remittances made for the goods transport agency service provided to the appellant for transport of new two wheelers from Hero Honda Motors Limited factory to the show room; that there was no possibility of verifying whether all the new vehicles sold by the appellant would invariably come to the appellants authorized service station for servicing; and that some of the vehicles services by the appellant would also comprise those sold by some other dealers. The appellate authority rejected the appellants claim substantially for the same reason as recorded by the primary authority.
3. Rule 2(l) of the Cenvat Credit Rules, 2004 defines input service as meaning any service used by a provider of taxable service for providing an output service. In terms of the agreement between the appellant and Hero Honda Motors Limited, the appellant is required not only to engage itself in the sales of products and spares but to service the two wheelers as well. It is axiomatic that no precise or mathematical correlation is required between the input and output services. It cannot be disputed that the appellant does service two wheelers manufactured by the Company and that the tax on GTA service was remitted for the transport of two wheelers and spares from the manufacturer to the appellants show room.
4. In my considered view this is a sufficient and a proximate nexus for availment of cenvat credit earned on remittances of tax on GTA services, for utilization in its output service as authorized service station and provider of BAS. An identical view was taken by this Tribunal in Sri Venkanna Motors Pvt. Ltd. vs. Asstt.Commr. of C. Ex. & S.T., Hyderabad 2009 (16) STR 34 (Tri-Bang.) and C.C.E., Tirupathi vs. Shariff Motors 2010 (18) STR 64 (Tri-Bang.).
5 On the aforesaid analyses, the adjudication order dated 23.8.2011 as confirmed by the Commissioner (Appeals), Bhopal dated 28.3.2012 cannot be sustained and is accordingly quashed. The appeal is allowed but in the circumstances without costs.
(Justice G. Raghuram) President scd/ 1