Custom, Excise & Service Tax Tribunal
M/S. Delta Infralogistics (World Wide) ... vs Commissioner Of Central Excise And ... on 24 October, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/27850/2013-SM (Arising out of Order-in-Appeal No.MLR-EXCUS-000-COM-MVS-002-13-14 dated 10.7.2013 passed by the Commissioner of Central Excise and Service Tax, Mangalore.) M/s. Delta Infralogistics (world Wide) Ltd No. 201, Veekay Towers, Kulu Bangra Road, Kulur MANGALORE - 575013 KARNATAKA Appellant(s) Versus Commissioner of Central Excise and Service Tax MANGALORE 7TH FLOOR, TRADE CENTRE, BUNTS HOSTEL RD., MANGALORE, - 575003 KARNATAKA Respondent(s)
Appearance:
Mr. N. Anand, Advocate For the Appellant Mr. Parasivamurthy, AR For the Respondent Date of Hearing: 24/10/2017 Date of Decision: 24/10/2017 CORAM:
HON'BLE SHRI ASHOK JINDAL, JUDICIAL MEMBER Final Order No: 22534 / 2017 Per : ASHOK JINDAL The appellant is in appeal against the impugned order wherein CENVAT credit on capital goods as well as on input services has been denied to the appellant on the ground that as per Rule 2(c) of CENVAT Credit Rules, 2004, the appellant is not entitled to avail CENVAT credit on capital goods and as appellant is providing exempted output service, therefore, they are not entitled to avail CENVAT credit on input services availed for providing those services.
2. Heard the parties and perused the records.
3. I find that the period of dispute in this case is April 2009 to March 2010 and during the said period, the capital goods definition was as under:
(a) "capital goods" means:-
(A) the following goods, namely:-
(i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.05 grinding wheels and the like, and parts thereof falling under heading 6804 of the First Schedule to the Excise Tariff Act;
(ii) pollution control equipment;
(iii) components, spares and accessories of the goods specified at (i) and (ii);
(iv) moulds and dies, jigs and fixtures;
(v) refractories and refractory materials;
(vi) tubes and pipes and fittings thereof; and
(vii) storage tank, used-
(1) in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office; or (2) for providing output service;
(B) motor vehicle registered in the name of provider of output service for providing taxable service as specified in sub-clauses (f), (n), (o), (zr), (zzp), (zzt) and (zzw) of clause (105) of section 65 of the Finance Act;
3.1 The said definition was amended w.e.f. 22.6.2010 and as per the amended definition, the capital goods means as under:
Rule 2.?Definitions. - In these rules, unless the context otherwise requires, -
(a)?capital goods means :-
(A)?the following goods, namely :-
(i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.02 and sub-heading No. 6801.10 of the First Schedule to the Excise Tariff Act;
(ii) pollution control equipment;
(iii) components, spares and accessories of the goods specified at (i) and (ii);
(iv) moulds and dies, jigs and fixtures;
(v) refractories and refractory materials;
(vi) tubes and pipes and fittings thereof;
(vii) storage tank [and] [(viii) motor vehicles other than those falling under tariff headings 8702, 8703, 8704, 8711 and their chasis,] Used -
(1) in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office; or (1A) outside the factory of the manufacturer of the final products for generation of electricity for captive use within the factory; or] (2) for providing output service;
(B)?motor vehicle registered in the name of provider of output service for providing taxable service as specified in sub-clauses (f), (n), (o), (zr), (zzp), (zzt) and (zzw) of clause (105) of section 65 of the Finance Act;
[(C) dumpers or tippers, falling under Chatper 87 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), registered in the name of provider of output service for providing taxable service as specified in sub-clauses (zzza) and (zzzy) of Clause (105) of Section 65 of the said Finance Act;] 3.2 I find that as appellant is provider of cargo handling services and they use tippers as capital goods for providing that service and same is covered under Rule 2(B) of CENVAT Credit Rules, 2004 as capital goods. The period under dispute is prior to 22.6.2010. In that circumstance, the show-cause notice issued by invoking Rule 2(C) as amended by CENVAT Credit Rules, 2004 is not applicable to the facts of this case. In that circumstance, CENVAT credit on capital goods cannot be denied to the appellant.
3.3 Further, I find that on the basis of audit, the CENVAT credit taken by the appellant on input service has been objected on the ground that appellant is providing exempted output cargo handling service, therefore, they are not entitled to avail CENVAT credit on these input services. In the impugned order, the learned Commissioner (A) himself has observed that in respect of maize, tipper, timber and iron ore, the appellant has provided output taxable service. The learned counsel for the appellant submitted that with regard to cargo handling service of urea is concerned, the appellant is issuing composite invoice which includes service tax component and on that service, they have discharged service tax and to that effect, they have produced invoices before me. On the basis of the evidence produced before me, it is a fact that on cargo handling service of urea, the appellant is paying service tax. Therefore, I hold that appellant is providing taxable output service. Therefore, CENVAT credit on input service cannot be denied as per Rule 3 of CENVAT Credit Rules, 2004. In that circumstance, I do not find any merit in the impugned order, the same is set aside and the appeal filed by the appellant is allowed.
(Order was dictated in Open Court on 24/10/2017.) ASHOK JINDAL JUDICIAL MEMBER rv 5