Custom, Excise & Service Tax Tribunal
The Commissioner Of Customs vs M/S. Apotex Pharmachem India Pvt. Ltd on 9 September, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH AT BANGALORE COURT - I Appeal No: C/19/2010, C/1554/2011 & C/1655/2011 (Arising out of Order-in-Appeal No: 133/2009 Cus. (B) dated 22.10.2009 passed by the Commissioner of Customs (Customs), Bangalore.) Date of Hearing: 09.09.2011 Date of decision: 09.09.2011 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? The Commissioner of Customs Bangalore. Appellant Vs. M/s. Apotex Pharmachem India Pvt. Ltd. Respondent
Appearance For the appellants : Shri M. M. Ravi Rajendran, JDR For the respondents : Shri S. Shiva Kumar, CA CORAM SHRI M. VEERAIYAN, HONBLE MEMBER (TECHNICAL) FINAL ORDER No._______________________2011 Per M. Veeraiyan (Oral) These three appeals by the department are against the common impugned Order-in-Appeal No.133/2009 dated 22.10.2009 of Commissioner (Appeals).
2. Heard both sides extensively.
3. The relevant facts in brief are that the respondents are 100% EOU and are manufacturers and exporters of pharmaceutical products. They availed credit of Service Tax paid on various input services. As they are predominantly exporting the products, they had accumulated credit and claimed refund of the same under Rule 5 of the Cenvat Credit Rules. Original authority by three different Orders-in-Original sanctioned refunds partly and rejected the claims in respect of credit attributable to services of consultancy / professional services, telephone services, courier services, travel services and recruitment services, holding the said services as not input services for the purpose of manufacture of products exported by the respondents. Against the orders of the original authority in so far as they were against the respondent, they filed appeals before the Commissioner (Appeals). Commissioner (Appeals) allowed the appeals of the party and hence, the department has preferred these appeals.
4. Learned SDR reiterates the grounds of appeal.
5. Learned Chartered Accountant for the respondent strongly supports the order of the Commissioner (Appeals). He also submits that the department has not questioned the validity of credit taken by the respondents. It is also not disputed that the refund has been sought for on the ground that the credit could not be utilized due to export undertaken by the respondents. He also submits that the stand of the department in the grounds of appeal that they have preferred an appeal against the order of the Tribunal in the case of CST, Delhi Vs. M/s. Convergys India Pvt. Ltd., Gurgaon is no more valid inasmuch as the departments appeal in the said case stands rejected by the Honble High Court of Punjab and Haryana reported in 2010 (20) STR 166 (P & H).
6.1 I have carefully considered the submissions from both sides and perused the records. At the outset, it is to be observed that the input and input services are relative terms and the same have to be understood in the context of the final products / the output services and not in isolation.
6.2 For example, cotton yarn, a final product in a spinning mill, is an input in the hands of a manufacturer of grey fabrics and the grey fabrics, a final product in the hands of a manufacturer of grey fabrics, is an input in the hands of a processor and so on. Similarly the term input services requires to be understood.
6.3 In the present case, Commissioner (A) taking into account the facts of the present case, the definition of input services and after relying on ratios of decisions of the Tribunal held that the impugned services are to be treated as input services insofar as the final products manufactured by the respondents are concerned. A reading of the grounds of appeal do not indicate any reason as to why the various decisions relied upon by the learned Commissioner (Appeals) are not applicable to the facts of the present case. The only submission is that the department has not accepted the decision of the Tribunal in the case of Convergys India Pvt. Ltd. and they were planning to file an appeal. It is fairly conceded that the Tribunals decision in the case of Convergys India Pvt. Ltd. stands upheld by the Honble High Court of Punjab and Haryana as reported in 2010 (20) STR 166. Since no other grounds have been taken in the grounds of appeal, I hold that there is no valid reason to interfere with the orders of the Commissioner (Appeals).
6.4 Appeals by the department are, therefore, rejected.
(Pronounced and dictated in Open Court) (M. VEERAIYAN) Member (Technical) rv ??
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