Custom, Excise & Service Tax Tribunal
M/S Rashtriya Ispat Nigam Ltd vs Cce, C & St, Visakhapatnam-I on 28 September, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No. E/20021/2015 (Arising out of Order-in-Appeal No. 30/2014 (V-I) CE dt. 29.09.2014 passed by CCE, C& ST (Appeals), Visakhapatnam) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member (Judicial) 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? M/s Rashtriya Ispat Nigam Ltd., ..Appellant(s) Vs. CCE, C & ST, Visakhapatnam-I ..Respondent(s)
Appearance Sh. Karan Talwar, Advocate for the Appellant.
Sh. Nagraj Naik, Deputy Commissioner (AR) for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Date of Hearing: 28.09.2016 Date of Decision: 28.09.2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The appellants are engaged in the manufacture of various products and are availing the facility of CENVAT Credit of service tax paid on input services. They were issued a show cause notice proposing to deny CENVAT Credit of Rs. 6,08,415/- availed by them on input services namely authorized service station service, outdoor catering service, mandap keeper service and convention service for the period from April 2007 to December 2011. After due process of law the original authority confirmed the disallowance of credit as per the demand, interest and imposed equal amount of penalty. In appeal, the Commissioner (Appeals) upheld the same. Hence this appeal.
2. On behalf of the appellant the Ld. Counsel Sh. Karan Talwar explained the details of input services for which the credit has been denied. The services availed and the amount involved in each service is as shown below:
Description of service Amount in Rs.
Authorized service station service 24,269/-
Outdoor Catering services 95,750/-
Mandap Keeper service 4,65,223/-
Convention service 23,173/-
Total 6,08,415/-
3. He submitted that major portion of the dispute is prior to 01.04.2011 when the definition of input service had a wide ambit as it included the words activities relating to business. He pointed out that the amount pertaining to authorized service station service falls within the period prior to 01.04.2011. The Ld. Counsel submitted that the various services were essentially availed by the appellant for carrying out their business of manufacturing activity and would qualify as input services. He relied upon the judgments rendered in the following cases:
i) CCE Vs Parth Poly Wooven Pvt. Ltd., [(2012) 25 S.T.R. 4 (Guj)]
ii) CCE, Bangalore-III Vs Stanzen Toyotetsu India (p) Ltd., [2011 (23) S.T.R. 444 (Kar.)]
iii) CCE & ST, Mangalore Vs Refinery & Petrochemicals Ltd., [2016 (42) S.T.R. 6 (Kar.)]
iv) M/S Reliance Industries Ltd., Vs CCE & ST, LTU, Mumbai [2016-TIOL-2392-CESTAT-MUM]
4. On behalf of the department Ld. AR Sh. Nagraj Naik strongly defended the findings in the impugned order. He submitted that outdoor catering services, mandap keeper services and convention services have been availed by the appellant in Five & Seven star hotels and are availed for the purpose of extending courtesy and hospitality activities to unknown persons and therefore are not eligible for credit. He referred to the definition of input services and contented that outdoor catering services availed by appellant would fall within the exclusion portion of the definition, and hence is not eligible for credit.
5. I have heard the rival submissions made before me. At the outset, it is to be stated that during the period prior to 01.04.2011 the definition of input service had a wide ambit and all the subject services have been held to be eligible for credit as held in various judgments which have been relied by the Ld. Counsel for appellant. The issue for consideration therefore narrows down to the period after 01.04.2011. In the reply to show cause notice the appellants have explained the purpose for which they availed the mandap keeper service/convention service/outdoor catering services. The appellant is a Government of India undertaking. The subject services is seen to have availed to increase the efficiency in management, increase the customer base and for better performance of the organization. For better appreciation, the submissions given by the appellant in their reply to show cause notice are reproduced below:
The Noticees are required to interact with various stakeholders like Advocates, Arbitrators, Auditors, Banks, Consultants, Customers, Contractors, Insurance Companies, Port, Suppliers, Trade Unions, local representatives, and various State and Central Governments Departments like Railways, Central Excise, Customs, Service Tax, Income Tax, Provident Fund, Commercial Tax, Municipal Corporation, Labour Welfare, Water Supply, Pollution Control, Factories, Revenue and Police, etc., during the course of their business activities. The Noticees are subjected to various kinds of Audit like Statutory Audit, CAG Audit, ISO Audit, OHSAS Audit, EA-2000 Audit, CERA Audit etc. The Noticees conduct sales promotion activities like Customers Meet, Partnership Summit, etc. The Noticees also conduct various kinds of Business / Knowledge promotion seminars like Rolling Mills Operating Committee meeting, SSI Interaction meetings, etc.. The Noticees have several kinds of litigation with suppliers, customers, Tax authorities, interested groups. The Noticees take the services of Advocates, Solicitors and Arbitrators to represent them before various forms. During the course of such interactions the advocates, arbitrators, auditors, Police officials and other guests / dignitaries are provided with working lunch, business lunch and dinner. Further, Banquets are hosted to several visiting dignitaries. The Noticees submit that all these guests / dignitaries are treated in their official capacities based on the business relationships the noticees had with them. In some cases it is included in the contract with the service providers that necessary arrangement of transport and boarding are to be made by the Noticees. These arrangements are outsourced to various Hotels, Caterers, and Restaurants. The Invoices for these services are raised by the service providers as Out Door Catering Service, Mandap Keeper Service and Convention Service. The Branch Sales Offices, who avail such services, issue Input Service distributor invoices for the services. The Noticees are availing CENVAT Credit of service tax paid on these services since they are Input Services.
6. The above facts presented before me reveal that the subject services were not availed for personal consumption of an employee but for the appellant organization. It is also not disputed that the invoices were raised in the name of appellant and not in the name of any employee. Further, the department has not adduced any evidence to establish that the subject services were availed for the personal consumption of any employee of the appellant organization. The issue whether after 01.04.2011 credit is admissible on outdoor catering service/ mandap keeper service and convention service was analysed by the Tribunal and has been held in favour of the assessee in the case of M/s Reliance Industries Ltd., (supra).
7. On appreciation of facts of the case and following the decision laid in M/s Reliance Industries Ltd., I hold that the appellants are eligible for credit. The impugned order is set aside. The appeal is allowed with consequential reliefs, if any.
(Pronounced & dictated in open court) (SULEKHA BEEVI C.S.) MEMBER (JUDICIAL) Jaya.
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