Custom, Excise & Service Tax Tribunal
M/S. Robert Bosch Engineering & ... vs Commissioner Of Central Excise, ... on 13 December, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/28123/2013-SM [Arising out of Order-in-Appeal No. 192/2013 dated 12/08/2013 passed by Commissioner of Central Excise and Service Tax (Appeals), BANGALORE.] M/s. Robert Bosch Engineering & Business Solutions Ltd. No.123, Industrial Layout, Hosur Road, Koramangala BANGALORE 560 095. KARNATAKA Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax Bangalore-LTU 100 FT RING ROAD JSS TOWERS, BANASHANKARI-III STAGE, BANGALORE 560 085. KARNATAKA Respondent(s)
Appearance:
Mr. Deepak Jain, CA DJHS & ASSOCIATES CHARTERED ACCOUNTANT 'GREEN APPLE', NO.16, 1ST FLOOR, MURPHY ROAD, ULSOOR BANGALORE - 560008 KARNATAKA For the Appellant Dr. J. Harish, AR For the Respondent Date of Hearing: 13/12/2016 Date of Decision: 13/12/2016 CORAM:
HONBLE SHRI S.S. GARG, JUDICIAL MEMBER Final Order No. 21397 / 2016 Per : S.S. Garg, The present appeal is directed against the impugned order dated 12.8.2013 passed by the Commissioner (A) vide which the Commissioner (A) has partly allowed the appeal of the appellant and allowed CENVAT Credit on few services and for other services CENVAT credit was denied on account of nexus and lack of documents.
2. Briefly the facts of the case are that the appellant is engaged in providing software services and is a 100% Software Export Oriented Unit with the Software Technology Park of India for export of software services. Appellant claimed CENVAT credit on certain input services which was objected to by the Department and thereafter a show-cause notice was issued proposing to recover the CENVAT credit irregularly availed by them. Thereafter the learned Additional Commissioner vide his order dated 28.2.2013 rejected the CENVAT credit. Aggrieved by the said order, the appellant filed appeal before the Commissioner (A) who partly allowed the credit on various services and partly disallowed on other services. Aggrieved by the said order, appellant filed the present appeal.
3. Heard the learned counsel for both parties and perused the records.
4. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without considering the definition of input service as well as without considering the various judgments rendered by the higher judicial fora specifically holding that these services fall in the definition of input service as contained in Rule 2(l) of CENVAT Credit Rules (CCR), 2004. The learned counsel has given in a tabular form of those services on which the CENVAT credit has been denied describing the nature of service, classification, the amount and reference of case laws which is herein reproduced below:
Nature of Service Classification Amount Reference Movement of personnel baggage Clearing & Forwarding Agents Service/ Business Support Service Rs.4,34,203/-
OIO No.151/2012-LTU dated 16.7.2012 (Jan. 11 to Mar. 11) OIA No.98/2013 dated 12.4.2012 (Jul. 10 to Sep. 10) OIA No.81/2013 dated 19.3.2013 (Oct. 10 to Dec. 10) Relocation Expenses Audit report No.08 (ST) / 2016-17 dated 4.7.2016 Association / Membership Fees Club or Association Service Rs.1,75,201/-
Event Management Event Management Service Rs.84,678/-
Castrol India Ltd v. CCE, Vapi: 2013 (291) ELT 469 (Tri.-Ahmd.) J.P. Morgan Service (I) Pvt. Ltd. vs. CST, Mumbai: 2016 (42) STR 196 (Tri.-Mum.) HCL Technologies Ltd. vs. CCE, Noida: 2015 (40) STR 369 (Tri.-Del.) Toyota Kirloskar Motor Pvt. Ltd. vs. CCE, LTU, Bangalore: 2011 (24) STR 645 (Kar.) Endurance Technologies Pvt. Ltd. vs. CCE, Aurangabad: 2013 (32) STR 95 (Tri.-Mum.) Credential Verification of Employee Manpower Recruitment or Supply Agency Service / Management Consultancy Service Rs.66,822/-
Garden Maintenance Management, Maintenance or Repair Service Rs.59,670/-
ISMT Ltd. vs. CCE & C: 2010-TIOL-27-CESTAT-MUM. Kirloskar Oil Engines Ltd. vs. CCE: 2010-TIOL-983-CESTAT-MUM. HCL Technologies Ltd. vs. CCE, Noida: 2015 (40) STR 369 (Tri.-Del.) Air Transport Services Air Travel Agents Service Rs.57,474/-
OIA No.122-124/2016/LTU dated 24.11.2016 (July 12 to march 13) Audit Report No.98 (ST)/2016-17 dted 4.7.2016 Megma Deisgn Automation (I) Pvt. Ltd. vs. CST, Bangalore: 2015 (40) STR 800 (Tri.-Bang.) CCE vs. Fine Care Biosystems: 2009 (16) STR 701 (Tri.-Ahmd.) CCE, Chennai vs. Greaves Cotton Ltd.: 2010 (20) STR 703 (Tri.-Chennai) Ineligible Services Rs.45,965/-
AMC of Dishwasher Management, Maintenance or Repair Service Rs.17,046/-
Traffic Control Management, Maintenance or Repair Service Rs.11,124/-
Procedural Non-compliance Documentation B Rs.37,494/-
Difference of credit as per statement submitted and ST-3 filed ST-3 Difference - C Rs.21,636/-
5. Now I will take up one by one each input service on which CENVAT credit has been denied.
5.1 Firstly the CENVAT credit has been denied on the Movement of personal baggage. Learned counsel for the appellant submitted that the company has a large employee base without whom, the rendition of output service would not be possible. During the employment, employees move from one location of the company to another or to customer site, where movement of their baggage become necessary to render services and therefore all the services are an activity relating to business and is covered under the definition of input service. He further submitted that in appellants own case for the subsequent period, the Department has allowed the CENVAT Credit on these services holding the same as input service and he has annexed the copies of the order which is mentioned in the table above. Therefore, in my view, the appellant is entitled to avail CENVAT credit on movement of personal baggage.
5.2 The second service on which the CENVAT credit has been denied is Association and Membership Fee. The learned counsel for the appellant submitted that this Membership of the Association relates to Trade Association and Chamber of Commerce and therefore it is an input service. On the other hand, the learned AR submitted that in reply to the show-cause notice, the appellant has stated that the expenses incurred by the company towards Association and Membership charges do not have any nexus with the output service rendered by the assessee as the said service is made available to the Members mainly for the purpose of entertainment, amusement and relaxation. In view of this, I do not allow the CENVAT credit on Association and Membership fees as the same has been rightly been rejected by the Department.
5.3 Further coming to the input service on Event Management, the learned counsel for the appellant submitted that the company has to incur expenses for events such as Technical Day Functions, Value Events, Bosch Annual Day which are organized for the development of employee and which results in betterment of individual performance. In reply to this, the learned AR submitted that impugned order has observed that the company has spent on organizing seminars, social functions, birthday parties, anniversaries and other functions which have no nexus with the output service. In view of the contradictory stand taken by both the parties, I hold that the original authority will verify each service under the category of Event Management before allowing the CENVAT Credit.
5.4 Further the input service on which the CENAT credit has been denied is Credential Verification of employees. The learned consultant submitted that the Commissioner (A) has wrongly observed that credential verification of employees do not have nexus with the output service rendered by the company. He submitted that company has large employees base and also hires quality human resource and ensures quality of the service rendered by the company is highest. Therefore, in order to ensure that the credentials of the employees background are adequately verified, background check becomes critical and part of the employee recruitment process. In view of this, I hold that this activity is relating to business and is covered under the definition of input service.
5.5 Next service is Garden Maintenance, the learned counsel submitted that this has been held to be input service by various decisions cited supra. In view of this, I allow the CENVAT credit on Garden Maintenance being input service.
5.6 The next input service is Air Transport Service and the learned consultant submitted that the employees of the company have to travel to various places in order to perform the job of the company and it has a direct nexus with regard to output service rendered by the assessee. In support of his submission, he relied upon the judgments cited supra in the table. In view of this, I hold that Air Transport is an input service and appellant is entitled to CENVAT credit on the same.
5.7 Next service is ineligible services for which an amount of Rs.45,965/- has been disallowed. The learned consultant did not press for this amount as he was unable to justify the same. Similarly the learned consultant did not press for input CENVAT credit on AMC for dish washer and traffic control procedure on account of lack of documents.
5.8 Further the Revenue has denied the CENVAT credit of Rs.21,636/- on account of difference of credit as per statements submitted and the ST-3 returns filed by the assessee. The learned consultant submitted that the ST-3 returns filed contained the correct facts and the initial statements provided by the company to the Department has omitted certain entries and that is why there is discrepancies between the two. To this, I hold that this will be verified by the original authority regarding its correctness and accordingly the original authority will decide as to how much the appellant is entitled to avail CENVAT credit. Therefore, keeping in view above discussion, the appeal is partly allowed and the matter is remanded back to the original authority for verification of certain services as observed above. The appeal is accordingly allowed subject to verification of documents.
(Operative portion of the Order was pronounced in Open Court on 13/12/2016.) S. S. GARG MEMBER (JUDICIAL) rv 9