Custom, Excise & Service Tax Tribunal
Balaji Multiflex Pvt Ltd vs Rajkot on 27 August, 2018
In The Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
Appeal No. E/10915/2018-SM
[Arising out of OIA-RAJ-EXCUS-000-APP-235-2017-18 dated 13/02/2018 passed by the Commissioner (Appeals)
Commissioner of Central Excise, Customs and Service Tax- AHMEDABAD]
M/s Balaji Multiflex Pvt. Ltd Appellant
Vs
C.C.E. & S.T. - Rajkot Respondent
Represented by:
For Appellant: Shri S. Bissa (Advocate) For Respondent: Shri Amit Kumar Mishra (A.R.) CORAM:
HON'BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) Date of Hearing/Decision: 27.08.2018 Final Order No. A/ 11920 /2018 Per: Ramesh Nair The brief facts of the case are that the appellant is engaged in manufacture of excisable goods and paying excise duty, they have got the job work done Job worker paid the service tax on the entire value of the service including the value of material. The appellant has availed the CENVAT credit on the service tax paid by the job worker. The case of the department is that the job worker is not supposed to pay service tax on the cost of the material used in the job work, accordingly, the credit in respect of service tax attributed to the material cost was denied, referring to exemption Notification No. 12/2003-ST.
2. Shri. S. Bissa Ld. Counsel appearing on behalf of the appellant submits that the appellant have taken the CENVAT credit of the service tax paid by the job worker, whether the service tax was rightly paid or not by the
2|Page E/10915/2018-SM service provider, no question can be raised at the recipient end as the assessment of the service provider attained finality. He placed reliance on the following judgments:
CCE & Cus. Vs. MDS Switchgear Ltd. 2008 (229) ELT 485 (SC) India Vision Satellite Communications Ltd. Vs. CCE & ST, Cochin 2015 (39) STR 684 (Tri. Bang.) Nav Bharat Tubes Ltd. Vs. CCE, Jaipur-l 2010 (18) STR 470 (Tri.-Del.) Raymond Uco Denim Pvt. Ltd Vs. CCE, Nagpur 2017 (7) GSTL 346 (Tri.
Mum.) GMR Airport Developers Ltd. Vs. CCE & ST, Hyderabad- lV 2017 (4) GSTL 427 (Tri. Hyd.) Manikgarh Cement Vs. CCE, Nagpur 2011 (22) STR 471 (Tri. Mum.) Mahaveer Surfactants (P) Ltd. Vs. CCE, Pondicherry 2009 (233) ELT 109 (Tri. Chennai) CCE, Chennai Vs. Carborandum Universal Ltd, 2009 (16) STR 181 (Tri. Chennai) Unitech Machines Lts, Vs. CCE, Meerut-l 2015 (39) STR 30 (Tri. Del.) Balkrishna Industries Ltd. Vs. CCE, Jaipur-l 2015 (39) STR 30 (Tri.Del.)
3. Sh. Amit Mishra Ld. Deputy Commissioner (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order.
4. On careful consideration of the submission made by both the sides and the perusal of the records, I find that the appellant have availed the CENVAT credit of service tax paid by the job worker, firstly, the appellant is entitled for the CENVAT credit of the amount of service tax paid by the service provider irrespective whether it was payable or not. Secondly, the service provider has to pay service tax on gross value of the service including the
3|Page E/10915/2018-SM material cost as per Section 67 of the Finance Act, 1994, which provides that service provider is required to pay service tax on gross value of the service. No exclusion in respect of the value of the goods is provided, it is only by the Notification the abatement to the extent of the value of the goods is provided. It is the option the assessee or the service provider whether he wants to avail the exemption Notification or otherwise. Therefore, if the service provider has opted not to avail the exemption Notification No. 12/2003-ST and paid the service tax on the entire value including material cost, no objection can be raised either on the payment of service Tax and consequently, on the part of the service recipient for availing the CENVAT credit. Unlike Section 5A of Central Excise Act, 1944, no such provision is made in service tax law regarding compulsion on availing exemption notification, therefore, service provider is at liberty either to pay service tax on the entire gross value or on the concessional rate. Therefore, the service tax paid by the service provider on the gross value which includes the material cost cannot be disputed consequently eligibility to CENVAT credit on the said service tax can also not be objected on the part of the appellant.
5. As per the above discussion, I am of the view that the appellant is entitled for the CENVAT credit, accordingly, the impugned order is set aside and appeal is allowed.
(Dictated and pronounced in the open court) (Ramesh Nair) Member (Judicial) Prachi