Custom, Excise & Service Tax Tribunal
C.C.E., Delhi-Iii vs Fiamm Minda Automotive Ltd on 22 February, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-SM
COURT IV
Excise Appeal No.E/1112/2009-EX [SM]
[Arising out of Order-in-Appeal No.32/ANS/GGN/2009 dated 30.01.2009 passed by the Commissioner (Appeals), Central Excise, Delhi-III]
For approval and signature:
HONBLE MR. S.K. MOHANTY, 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 Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
C.C.E., Delhi-III Appellant
Vs.
Fiamm Minda Automotive Ltd. Respondent
Present for the Appellant : Shri. R.K. Mishra, D.R.
Present for the Respondent:Shri.Kulbhushan Sharma, Advocate.
Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
Date of Hearing : 09/09/2015
Date of pronouncement : 22/02/2016
FINAL ORDER NO. 50847/2016
PER: S.K. MOHANTY
Revenue is in appeal against the impugned order dated 30.01.2009 passed by the Commissioner (Appeals), Central Excise, Delhi-III, setting aside the adjudication order wherein, Cenvat credit taken by the respondent on the disputed services has been disallowed.
2. The grievances of the Revenue in this appeal are as follows:-
Banking and other financial services received by the respondent are towards payment of export clearance of the final product and the service tax paid thereon is not admissible for Cenvat credit since, the provision of service is beyond the place of removal. That courier services have no direct or indirect nexus with the manufacture of the excisable goods in the factory of the respondent. That though maintenance of canteen facility is a statutory obligation under the Factories Act, but the said service is not confirming to the definition of input service being not related to the manufacture of finished goods. That job work activities are exempt from payment of service tax and since the service provider has inadvertently paid the tax, the same is not available to the recipient of service as Cenvat credit. That input service received by DTA Unit cannot be transferred to the EOU unit.
3. I have heard the ld. Counsel for both sides and perused the records.
4. Banking and other financial services are covered in the inclusive part of definition of input service under the head financing. Further, the said services have been used/utilised for accomplishing the purpose of business. Thus, cenvat credit of service tax paid on such service is available to the manufacturer/service provider, in terms of Rule 2(l) of the Cenvat Credit Rules, 2004.
5. The outdoor catering service has been received by the respondent for providing canteen facilities to its employees, which is statutorily required to be complied with under Section 46 of the Factories Act. The issue as to whether the cenvat credit is available on the said service, is squarely covered by the judgment of Honble Karnataka High Court in the case of Commissioner of Central Excise, Bangalore III vs. Stanzen Toyotetsu Indai (P) Ltd. reported in 2011 (23) S.T.R. 444 (Kar.). The relevant portion in the said judgment is extracted herein below:-
Canteen Service :
12.?It is in this context that when the assessee provides outdoor canteen facilities because of a statutory obligation imposed on him under Section 46 of the Factories Act, it becomes a condition of service as far as the employees are concerned. He has paid the service tax on outdoor canteen services. The said expenses incurred by the assessee will also be taken into consideration before fixing the price of the final product. It may be a welfare measure but certainly it is not a charity provided by the employer to the employees. It is an onerous legal obligation imposed on him. The cost incurred in rendering such service will be included in the cost of production.
6. With regard to courier service, I find that the Commissioner (Appeals) has allowed cenvat credit on such service, placing reliance on the decision of this Tribunal in the case of CCE, Hyderabad IV vs. Deloitte Tax Service India Pvt. Ltd. reported in 2008 (11) S.T.R. 266 (Tri. Bang.). I also find that this Tribunal in the case of Commissioner of Central Excise, Delhi-III vs. Mindarika Pvt. Ltd. 2015 (39) S.T.R. 309 (Tri. Delhi) has allowed Cenvat credit on courier service holding that the said service is integrally connected to the business of the manufacturer/service provider.
7. The respondent had availed Cenvat credit of service tax paid by various job workers on business auxiliary services, which according to the Revenue is not leviable to service tax. Since service providers are registered with the Service Tax Department and service tax paid by them were accepted and retained as statutory dues by the jurisdictional Service Tax authorities, the same cannot be denied at the recipient's end on the ground that the said service is not liable to payment of service tax. Since the respondent herein has taken cenvat credit of service tax on such service, on the strength of valid and proper invoice, evidencing payment of service tax, taking of such credit is in conformity with the Cenvat statute.
8. With regard to transfer of cenvat credit by the respondent from its DTA Unit to EOU Unit, the Commissioner (Appeals) has allowed the cenvat credit by placing reliance on the decision of the Tribunal in the case of WOCO Motherson Elastomers Ltd. vs. CCE, Noida reported in 2008 (228) E.L.T. 107 (Tri. Delhi), wherein it has been held that transfer of cenvat credit availed on capital goods only, has been barred by the CBEC from being transferred to an EOU from a DTA Unit and not the credit availed in respect of the inputs.
9. In view of the foregoing discussions, I do not find any infirmity in the impugned order passed by the ld. Commissioner (Appeals), and thus, the appeal filed by the Revenue is dismissed.
[Pronounced in the Open Court on 22.02.2016] (S.K. MOHANTY) MEMBER (JUDICIAL) Anita ??
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