Custom, Excise & Service Tax Tribunal
M/S. Delphi Automotive System Pvt. Ltd vs Cc, Ce & St, Noida on 22 August, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-DB
Date of Hearing: 22.08.2014
For Approval & Signature :
Honble Mr. Justice G. Raghuram, President
Honble Mr. R.K. Singh, Member (Technical)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it would be released under Rule 27 of the 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 Department Authorities?
Central Excise Appeal No. E/3378/2012 EX[SM]
[Arising out of Order-in-Appeal No. 230/CE/Appl/Noida/2012 dated 30.07.2012 passed by the Commissioner (Appeals), Central Excise, Noida]
M/s. Delphi Automotive System Pvt. Ltd. Appellant
Vs.
CC, CE & ST, Noida Respondent
Central Excise Appeal No. E/3389/2012 EX[SM] [Arising out of Order-in-Appeal No. 299/CE/Appl/Noida/2012 dated 30.07.2012 passed by the Commissioner (Appeals), Central Excise, Noida] M/s. Delphi Automotive System Pvt. Ltd. Appellant Vs. CC, CE & ST, Noida Respondent Present for the Appellant : Shri Hemant Bajaj, Advocate Present for the Respondent : Shri Sanjay Jain, DR FINAL ORDER NO. 53348-53349 DATED: 22.08.2014 PER: R.K. Singh The appellants have filed these appeals against Orders-in-Appeal No. 229/CE/Appl/Noida/2012 dated 30.07.2012 and 230/CE/Appl/NOIDA/2012 dated 30.07.2012 which up held the Order-in-Original Nos.17/AC/N-V/2011-12 dated 29.02.2012 and Order-in-Original No. 18/AC/N-V/2011-2012 dated 12.03.2012. As the issues involved are similar in both cases they are being deposed of by this order.
2. The facts, briefly stated, are as under:
The appellants are manufacturers of motor vehicle parts and A.C. parts. They took Cenvat Credit in respect of house keeping & dry cleaning service, event management service and legal service. The adjudication authority held that these services are not eligible for Cenvat credit as their products can be manufactured without these services. The adjudicating authority also held them guilty of suppression of facts. Resultantly, Cenvat credit of Rs. 329193/- alongwith interest and equal penalty and Cenvat credit of Rs. 374908/- with interest and penalty of Rs. 75000/- were demanded vide the aforesaid orders in original.
3. The ld. Advocate had contended that in respect of cleaning services, Cestat vide order No. 50992/2014 dated 12.03.2014 in their own case has allowed credit. The following judgments have also allowed credit in respect of house keeping/cleaning services:
(i) Balkrishna Industries Ltd. v. CCE, 2010 (254) ELT 301 (Tri.)
(ii) Rotork Control (India) P. Ltd v. CCE (2010) 20 STR 684 (Tri.)
(iii) CCE, Salem v. ITC Ltd., 2011-TIOL-780-CESTAT-MAD
(iv) NTF (India) Ltd. v. CCE, 2013 (30) STR 575 (Tri.- Del.)
(v) Paper Products Ltd. v. CCE, 2013 (30) STR 310(Tri.-Mumb.) In view these judgments, I find, the issue is settled in favour of the appellants.
4. Regarding the legal service the ld. AR clearly conceded the point in favour of the appellants. Further, the issue is no longer res integra in view of the judgment in the following case:
(i) Golden Tabacco Ltd. v. CCE, Mumbai-I, 2013 (30) STR 594 (Tri.) Thus, the denial of credit in respect of legal service is not sustainable.
5. Regarding event management service, appellants contended that in their own case vide the Final Order No. E/50198/2014-SM[BR] the credit in respect of taxies used for carrying their employees for the function in respect of which the event manager was engaged has been allowed. When credit of service tax paid on taxi service utilised for carrying their employees for the function has been allowed, the credit of service tax in respect of event management service engaged for the same function has to be allowed mutatis mutandis. It has been stated that the function was in relation to business as the outstanding employees working in the factory were honored by way of rewarding and entertaining them to encourage the employees in general for better performance; it was an annual day function which is organized every year. Thus the function does have relation to business of manufacture. The appellants cited the judgment of Karnataka High Court in case of Toyota Kirloskar Motor Ltd. v. CCE, LTU, Bangalore, 201 (24) STR 645 (Kar.). In the said judgment Honble High Court of Karnataka has in effect held that organising such a function can not be separated from business of manufacture of final product. That such credit is allowable is also evident from the Cestat judgment in case of Endurance Technologies Vs. CCE Aurangabad 2013 (32) STR 95 (Tri. Mumb.) which allowed credit in respect of mandap keeper for the annual day function. Thus denial of credit in respect of event management service in this case cannot be sustained.
6. As regards mandatory penalty, the adjudicating authority has stated that it is settled principle of law that in taxation matters mens rea is not an essential factor for imposition of penalty and therefore penalty is imposable under Rule 15 of Cenvat Credit Rules read with Section 11AC of Central Excise Act. This observation is obviously untenable because for Section 11AC ibid wilfull mis-statement/suppression has to be brought out and this necessarily involves mens rea. Indeed, the concerned Order-in-Original does not bring out as to how the appellants are guilty of wilfull mis-statement or suppression of facts. Thus the extended period is also not sustainably invokable in the case as a consequence the demand is also hit by time-bar and mandatory penalty also can not be imposed.
7. In the light of the foregoing, I allow the appeals and set aside the impugned Orders-in-appeals.
[Dictated & Pronounced in the open court] (R.K. Singh) Technical Member Neha 1