Custom, Excise & Service Tax Tribunal
M/S Schneider Electric Conzerve India ... vs Commissioner Of Central Excise on 30 August, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH
BANGALORE
Appeal(s) Involved
E/25213 -25215/2013-SM
[Arising out of Order-in-Appeal No. 321 to 323/2012 dated 17/10/2012 passed by Commissioner of Central Excise (Appeals) Bangalore]
For approval and signature
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s Schneider Electric Conzerve India Pvt Ltd
No. 44,Phase II, Electronic City,
Bangalore 560 100
Appellant(s)
Versus
Commissioner of Central Excise
C.R. Building,
Queens Road,
P.B. No. 5400,
Bangalore-560001
Respondent(s)
Appearance:
Mr J.S. Bhanu Murthy, C.A.
For the Appellant
Mr N. Jagadish, A.R.
For the Respondent
Date of Hearing: 25/08/2016
Date of Decision: 30/08/2016
CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER
Final Order No. 20691-20693/2016
Per : S.S GARG
The appellant has filed three appeals and in all the three appeals the issue involved is denial of CENVAT Credit of service tax on various input services. All the three appeals are being disposed of by this common order.
2. Briefly the facts of the present case are that the appellants are the manufacturers of digital panel meters, energy meters etc. falling under Chapter Heading 902830, 903039 and 903289 of the CETA 1985. A show-cause notice dated 01.01.2009 was issued to the appellant demanding CENVAT credit irregularly availed by the appellant on various services. The appellant controverted the allegation in the show-cause notice mainly on the ground that the services on which credit has been availed are input services and are used by the appellant either directly or indirectly for their manufacturing activities. Thereafter the Addl commissioner vide order-in-original dated 31.03.2010 confirmed a majority of demand and also demanded interest under Rule 14 of CENVT Credit Rules 2004 and imposed a penalty of Rs. 2000/- under Rule 15(3). Aggrieved by the said order appellant preferred appeal before the Commissioner (Appeals) and the Commissioner (Appeals) by the impugned order has modified the order-in-original with regard to certain services and declined to give relief with regard to certain other services. Aggrieved by the said order, the appellant had filed the present appeals.
3. Heard both the sides and perused the records. Learned counsel for the appellant submitted that all the services on which CENVAT credit has been denied fall in the definition of input services as prescribed under Rule 2(l) of the CENVAT Credit Rules. He also submitted that various High Courts have held that the definition of input service should be given broader interpretation and has allowed credit on every service which is connected to the business activity of the manufacturer or service provider. There are 24 input services on which the CENVAT credit has been denied by the impugned order and learned counsel for the appellant has relied upon the decisions of the Honble High Courts and the Tribunal wherein CENVAT credit has been allowed with regard to most of the services. The following table clearly mentions the nature and description of the service and the case law. Sl No Description of service Case law
1. Service tax paid to an agency who collects Form C from assessees customers Megma Design Automation (I) Pvt Ltd Vs CST Bangalore [2015(40)STR 800 (Tri-Bang)
2. Air ticket booking-Air travel agent service Force Motors Ltd Vs CCE Pune [2009(13)STR 692(Tri-Mum)] CCE Vs Greaves Cotton Ltd [2010(20)STR 703(Tri-Che) Vidyut Metallics Pvt Ltd Vs CCE [2016(42)STR 321 (Tri-Mum)] Commr Vs Fine Care Biosystems [2009(16)STR 701(Tri)] Resil Chemicals Pvt Ltd Vs CCE [2016-TIOL-2019-CESTAT-Bang.]
3. House keeping pest control CCE Vs Millipore India Pvt Ltd [2012(26)STR 514(Kar) Balakrishna Industries Ltd Vs CCE [2010-TIOL-535-CESTAT-Mum] CCE Vs Deloitte Tax Services India Pvt Ltd 2008(11)STR 266(Tri-Bang)]
4. Cleaning office furniture and equipment ADC India communications Ltd Vs CCE [2012 (283)ELT 415(Tri-Bang)] Loreal India Pvt Ltd Vs CCE [2011(22)STR 89 (Tri-Mum)]
5. Rent of office space Carrier Air conditioning & Refrigeration Ltd Vs CCE Delhi [2016(41)STR 824(Tri-Che)] Bharat Fritz Werner Ltd Vs CCE [2011(22)STR 429(Tri-Bang)]
6. Service tax credit on brokerage who provided the service of renting a flat Group M Media India Pvt ltd Vs CST [2013-TIOL-175-CESTAT-MUM] Bharat Fritz Werner Ltd Vs CCE [2011(22)STR 429(Tri-Bang)]
7. Insurance services-laptops/input/products transit insurance & insurance services-employees DSCL Sugar Vs CCE Lucknow [2012(28) STR 559 (Tri-Del)] CCE Vs Millipore India Pvt Ltd [2012(26)STR 517(Kar.)] CCE Vs Stanzen Toyotetsu India (P) Ltd [2001(23)STR 444 (Kar)
8. Services relating to additional construction of additional floor Navaratna S.G. Highway Prop. Pvt Ltd Vs CCE [2012(28)STR 166(Tri-Ahmd)] Commr Vs Sai Sahmita Storages Pvt Ltd [2011(23)STR 341(A.P.)]
9. Local travel facility to foreign delegates Fiamm Minda Automotive Ltd Vs CCE [2011(22) STR 210(Tri-Del)]
10. Service tax paid for evolving a report to be submitted to the Karnataka State Pollution Control Board ADC India Communications Ltd Vs CCE [2012(283) ELT 415(Tri-Bang)]
11. Service tax credit availed on GTA outward CCE Vs ABB Ltd [2011 (23)STR 97(Kar.)]
12. Consultancy charges Ultratech Cement Vs CCE [2011(22)STR 289 (Tri-Mum)] CCE Vs Tavant Technologies India Pvt Ltd [2016(43)STR 57(Kar)]
13. Installation services Comr Vs Alidhara Textool Engineers Pvt Ltd [2009(14)STR 305(Tri) Autoprint Machinery Manufacturers Pvt Ltd Vs CCE [2010(19)STR 428(Tri-Che)]
14. Annual subscription Pam Pharma & Allied Machinery Co. Pvt Ltd Vs CCE Mumbai [2016(42)STR 757(Tri-Mum)] CCE Vs Zensar Technologies Ltd [2016(42) STR 570(Tri-Mum)]
15. Service tax credit on freight charges non-commercial Piramal Glass Ltd Vs CCE [2012(286)ELT 414 (Tri-Ahmd)] CCE Vs Parle International Pvt Ltd [2012(28) STR 111 (Tri-Ahmd)]
16. Email server maintenance, computer maintenance Jeans Knit Pvt Ltd Vs CCE [2011(21)STR 460(Tri-Bang)] The learned counsel further submitted that the various input services on which CENVAT credit has been denied has been allowed by various decisions of the Tribunal and the High Courts cited in the table.
4. On the other hand learned A.R. submitted that the service at Sl No. 10 i.e. service tax credit on the service charges bill wherein service tax not collected by the service provider should not be allowed because service tax has not been collected by the service provider. In reply to this the counsel for the appellant submitted that the service tax in this case was paid to the service provider subsequently which is evident from the documents furnished along with reply which indicates that service tax amount of Rs 4080/- was paid vide challan No. 179343 dated 11.01.2006 to the service provider. Similarly service mentioned in column No. 12 where the service tax not charged on the bill but assessee availed credit. In reply to this the learned counsel for the appellant submitted that the bill clearly states that the same is inclusive of service tax. Hence the same is in order. The learned A.R. further submitted that the CENVAT credit on the service tax paid to association fee to Traffic is not directly related to the manufacture as well as business of the appellant and this should not be allowed and similarly service tax on gift voucher order form and annual day expenses should not be allowed as the same is not related with the business activities of the appellant. With regard to these three services namely association fee to traffic as well as gift vouchers and annual day function etc., I am of the view that the appellant is not entitled to CENVAT credit of service tax paid on these services. With regard to rest of the services as stated supra the case of appellant is covered by various decisions cited (supra) and therefore following the ratios of the said decisions, I partly allow the appeals of the appellant by setting aside the impugned order. (Order pronounced in open court on 30/08/2016) S.S GARG JUDICIAL MEMBER pnr 5