Custom, Excise & Service Tax Tribunal
Nectar Beverages Pvt.Ltd vs Commissioner Of Central Excise, ... on 28 January, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No . 20107 / 2014 Appeal(s) Involved: E/802/2008-SM [Arising out of Order-in-Appeal No. 48-2008 dated 24/07/2008 passed by the Commissioner of Central Excise (Appeals) Mangalore] NECTAR BEVERAGES PVT.LTD., ADJACENT TO GTC, BELGUM ROAD, DHARWAD Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax - BELGAUM NO. 71...CLUB ROAD, CENTRAL EXCISE BUILDING, BELGAUM, KARNATAKA-590001 Respondent(s)
Appearance:
None For the Appellant Mr. Ganesh Haavanur, A.R. For the Respondent CORAM:
HONBLE SHRI B.S.V.MURHTY TECHNICAL MEMBER Date of Hearing: 28/01/2014 Date of Decision: 28/01/2014 The respondents are manufacturers of aerated waters and availed CENVAT credit of service tax paid on out-door transportation charges and also service tax paid on annual maintenance charges on refrigerators and cooling equipments stored in the premises of dealers/retailers. Proceedings were initiated and the original adjudicating authority dropped the demand against which Revenue went in appeal. The Commissioner (Appeals) allowed the appeal filed by the Revenue and now the assessee is in appeal challenging the decision of the Commissioner (Appeals).
2. Nobody is present on behalf of the appellant and they have requested that a decision may be taken on merits after considering the written submissions filed by them.
3. In the written submissions, the appellant relied upon the decision in the case of Ambuja Cements Vs UOI [2009-TIOL-110 P&H-ST] wherein it was held that credit is admissible to the appellant. I also find that this issue is covered by the decision of the Honble High Court of Karnataka in the case of CCE &ST., LTU Bangalore Vs ABB Ltd. [2011(23)S.T.R. 97 (Kar)] wherein it was held that outdoor transportation expenses from the place of removal would be admissible. In this case, the appellant had borne the expenses towards freight up to the dealers premises and therefore, the decision of the Honble High Court of Karnataka would be applicable to the facts of this case. The period involved is also prior to 1.4.2008. Therefore, the CENVAT credit of Rs. 3,50,823/- availed towards outdoor transportation expenses is admissible and accordingly appeal is allowed in respect of this demand.
4. The second issue involved is the eligibility of CENVAT credit of service tax paid on annual maintenance charges in respect of refrigerators and cooling equipment kept in the dealers premises by the appellant. There is no dispute that the cooling equipment and the refrigerators belong to the appellant. However, the learned A.R. points out that the issue is covered by the decision of the Tribunal in the case of Deepak Fertilizers & Petrochemical Corp. Ltd. Vs CCE Belapur [2013(288)ELT 316(Tri-Mum)]. Even though the appellants have mentioned in their written submissions that the issue is covered in their favour in the above said decision, on going through the decision, I find that it is actually against the appellant. Since the issue is covered in favour of the Revenue by the decision in the case of Deepak Fertilizers & Petrochemicals Corpn. Ltd. (supra) and not in favour of the appellant, following the precedent decision, I hold that the appellant is not eligible for the CENVAT credit of service tax paid on Annual Maintenance charges. Such expenses have been incurred after the goods have been removed from the factory and the manufacturing process is completely over and goods have been sold to the dealers/retailers. These expenses are incurred on behalf of the dealer/retailer and it cannot be said that it has a nexus with the manufacturing process of the appellant. The demand of Rs. 1,39,231/- with interest is upheld. In the impugned order, Commissioner (Appeals) had imposed a penalty of Rs. 25,000/- while confirming the demand of nearly Rs. 5,00,000/-. In view of the fact that the demand has come down to Rs. 1,39,231/-, I consider it appropriate that the penalty also should be reduced suitably. Accordingly, the penalty is reduced to Rs. 10,000/-. The appeal is decided in the above terms, (Order dictated and pronounced in open court) B.S.V MURTHY TECHNICAL MEMBER 2