Custom, Excise & Service Tax Tribunal
Walvoil Fluid Power India Pvt. Ltd vs Commissioner Of Central Excise, ... on 26 December, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/21264/2014-SM, E/21265/2014-SM [Arising out of Order-in-Appeal No. 79/2014 dated 19/02/2014 passed by the Commissioner of Central Excise, Bangalore-I (Appeals)] [Arising out of Order-in-Appeal No. 23/2014 dated 27/01/2014 passed by the Commissioner of Central Excise, Bangalore-I (Appeals)] Walvoil Fluid Power India Pvt. Ltd. No. 23, Doddanakundi Industrial Area Bangalore 562 107 Karnataka Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax Bangalore-I Post Box No. 5400, CR Buildings, Bangalore- 560 001 Karnataka Respondent(s)
Appearance:
Shri Akbar Basha, CA #1010, 1st floor(Above Corp.Bank) 26th Main, 4th T Block, Jayanagar, Bangalore 560 041 Karnataka For the Appellant Shri N. Jagdish, AR For the Respondent Date of Hearing: 26/12/2016 Date of Decision: 26/12/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order Nos. 21518-21519 / 2016 Per: S.S GARG The appellant has filed these two appeals against the impugned orders dated 27.01.2014 and 19.02.2014 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has denied the cenvat credit on input services viz. Staff Insurance, Xerox Services, Bank Charges, Housekeeping etc. Since the issues in both the appeals are identical, therefore both the appeals are being disposed of by the present order. The details of the two appeals are given below: Sl. No. Appeal No. Period of Dispute Duty (Rs.) Penalty (Rs.) 1 E/21264/2014 September 2011 to July 2012 3,29,318/- 2000/-
2 E/21265/2014 April 2011 to August 2011 2,43,512/- 5000/-
2. Briefly the facts of the case are that the appellant is engaged in the manufacture and clearance of excisable goods falling under Chapter 84818090 of Central Excise Tariff Act, 1985 and are availing cenvat credit on various input and input services. During the course of audit, it was found that the appellant had availed cenvat credit of service tax paid on various services viz. Staff Insurance, Xerox Services, Bank Charges, Housekeeping Service. Thereafter a show-cause notice was issued proposing to deny the cenvat credit on these services. The adjudicating authority confirmed the demand by denying the cenvat credit on the services cited supra. Aggrieved by the said order, appellant filed an appeal before the Commissioner who also upheld the Order-in-Original. Aggrieved by the said order, the appellant filed the present appeal.
3. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed by ignoring the plethora of judicial decisions and without appreciating the scheme of Cenvat Credit Rules, 2004. He further submitted that the cenvat credit had been availed on the input services which are used for the manufacture of final product. The appellant has also established the usage of input service and its nexus with the manufacturing of the final product and the same is reflected in the following table:
Nature of input services Nexus with output service exported Amount of credit for the period April 2011 to August 2011 Amount of credit for the period September 2011 to July 2012 Staff Insurance Appellant require the staff for manufacturing of final product, without staff appellant cannot carry out manufacturing activity. Further in terms of Factories Act, appellant is required to obtain insurance for its staff. Therefore credit availed on staff insurance is very essential for manufacture of final product. Appellant relies upon the decision of CCE Vs. Stanzen Toyotetsu India (P) Ltd. 2011 (23) STR 444 (Kar.) 1,69,140 2,249 Xerox Charges These services are used for maintenance of photo copying machine, the appellant would use photo copying machine to photo copy documents, agreements, purchase orders, bills, invoices, JV etc which is very much essential for administration purposes, further the appellant submit that without supporting documentary evidence the appellant would not be in a position to carry our smooth manufacturing process, as photo copying of documents is very essential, in order to provide administrative convenience to the manufacturing activity. Appellant wishes to rely upon the decision of Parason Machinery (I) Pvt. Ltd. Vs. CCE 2012 (277) E.L.T. 215 (Tri.-Mumbai) 5,092 13,137 Bank Charges These services are used for the purpose of transacting with the bank in respect of export collections and import payments, bank charges for DDs and other processing charges, the appellant submits that said services are covered directly under the limb financing activity under the definition of input services. Therefore credits on the same could not be denied. Appellant relies upon the decision of Semco Electric Pvt. Ltd. Vs. CCE 2012 (276). 11,231 60,635 Housekeeping services This service is required to ensure the shop floor and entire premises of factory is kept clean, further the cleanliness is a major aspect to ensure increased efficiency in work, therefore the said services are very much used indirectly in or in relation to manufacture of finished goods. Appellant wishes to rely upon the decision of Balakrishna Industries Ltd. Vs. CCE 2010 (254) E.L.T. 301 (Tri.-Mum.) 56,399 2,35,420
4. On the other hand the learned AR reiterated the findings of the impugned order.
5. Heard both the parties and perused the records.
6. Learned counsel for the appellant submitted that in the case of Staff Insurance, the amount of Rs. 1,69,140/- (Rupees One Lakh Sixty Nine Thousand One Hundred and Forty only) has been claimed as credit during the period April 2011 to August 2011 but the credit pertains to the period prior to 01.04.2011 where the Staff Insurance was covered in the definition of input service and has also been held as an input service in the case of CCE Vs. Stanzen Toyotetsu India (P) Ltd. 2011 (23) STR 444 (Kar.). The learned counsel did not press for the credit on Staff Insurance amounting to Rs. 2,249/- (Rupees Two Thousand Two Hundred and Forty Nine only) which pertains to the period September 2011 to July 2012 and the same does not fall in the definition of input service. Further with regard to Xerox Charges, Bank Charges and Housekeeping Service, all the three services appellant has given justification for these services and these services fall in the definition of input service as has been held in the decisions cited supra. Therefore, following the ratio of the decision cited supra, I am of the considered opinion that the impugned orders are not sustainable in law and the same are set aside by allowing the appeals of the appellant.
(Operative portion of the Order was pronounced in Open Court on 26/12/2016) (S.S GARG) JUDICIAL MEMBER iss