Custom, Excise & Service Tax Tribunal
M/S. Conventry Coil-O-Matic (Hr) Ltd vs C.C.E.-Delhi on 25 February, 2013
CUSTOMS, EXCISE AND SERVICES TAX APPELLATE
TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
COURT NO. IV
Date of Hearing/decison:25.02.13
Appeal No E/919/2011- EX-SM[BR]
M/s. Conventry Coil-o-matic (HR) Ltd. Appellant
Vs.
C.C.E.-Delhi Respondent
Present: Ms. Hemant Bajaj, Advocate - for the appellant Sh. S.K.Panda, AR - for the Respondent Coram : Rakesh Kumar Member (Technical) FINAL ORDER NO: 55681/2013 Per Rakesh Kumar:-
The appellant are manufacturer of spring and spring leaves chargeable to Central Excise duty. They availed cenvat credit of Excise Duty paid on inputs and capital goods and services tax paid on inputs services as per the Provision of Cenvat Credit Rules 2004. The input services availed by them are the services of Custom House Agents for clearance of imported raw-material and clearance of goods for export out of India and also the service of rent a cab, which according to them was used by the employees of the company for companys business. The appellant during the period 2007-08 took cenvat credit of Rs.43,979/- in respect of CHA services and credit of Rs. 1,78,233/- in respect of rent a cab services. During the course of audit of Central Excise records, the department detected the availing of this cenvat credit. The Show Cause Notice dtd. 12.11.2008 was issued to the appellant for denying the above mentioned cenvat credit and its recovery along with interest and also for imposition of penalty, on the ground that the services of CHA and rent a cab service are port clearance services and have no nexus with the manufacture of finished goods.
2. The matter was decided by the Deputy Commissioner vide Order-in-Original dtd. 23.03.2010 by which the total cenvat credit demand of Rs. 2,22,212/- was confirmed against the appellant along with interest and penalty of equal amount was imposed on them. Appellant filed appeals to Commissioner (Appeals) against the above order of Deputy Commissioner who dismissed the appeal vide order dtd. 27.12.2010, against which this appeal has been filed.
3. Heard both the sides.
4. Sh. Hemant Bajaj, learned counsel for the appellant, pleaded that so far as the CHA services are concerned, though the Show Cause Notice alleges that these services have been used only for clearance of the export consignments, after removal from the factory, these services have also been used for clearance of imported raw-material in which case, the CHAs Services would be eligible for cenvat credit, that as regards the CHAs services for clearance of export consignments after their removal from the factory, the Tribunal in a series of judgments mentioned in the Tribunals Final Order No. A/1231/2012-EX[DB] dtd. 01.10.2012, in the case of Commissioner of Central Excise, Jaipur Vs. Hindustan Zinc Ltd., has held that in case of goods exported out of India, it is the port from where the goods are exports which is the place of removal and that the services availed up to the port from where the goods are exported, are eligible of cenvat credit, that same view was taken by the Tribunal in the case of Modern Petrofils reported in 2010 (18) S.T.R. 625 and appeal against this judgment was dismissed by the Honble Gujrat High Court vide order dtd. 07.04.2011,that in view of this the CHA services availed for export clearance of goods at the port on export would be eligible for cenvat credit and can not be treated as post clearance services, that as regards service of rent a cab, the same have been used by the appellants employees for the companys work, like meeting with the clients, attending business meeting etc. and in view of this, these services would be covered by the expression activity relating to business in the definition of input service and would be eligible for cenvat credit, that the Tribunal in the case of Commissioner of Central Excise, Vishakhapatnam Vs. Andhra Pradesh Paper Mills Ltd., reported in 2011(22) STR 126 has held that rent a cab service used by officials of the company for their timely completion of job is eligible for cenvat credit and same view has been taken by the Tribunal in the case of Beekay Engineering & Castings Ltd. Vs. Commissioner of Central Excise, reported in 2009 (16) STR 709 and that though at the time of hearing before the Commissioner(Appeals),the appellant had produced the invoices issued by the rent a cab operators which indicate the use of service for companys work, the lower authoritys have been given any findings on this plea. In view of this, the impugned order is not correct.
5. Sh. S.K.Panda, learned Jt. CDR defend the impugned order by reiterating the findings of the Commissioner (Appeals) and emphasised that while CHA services in respect of which the credit had been denied, was used only for clearance of export goods and these services having being availed after clearance of the goods from the factory are not eligible for the cenvat credit. With regard to rent a cab service he emphasised that there is no evidence to show that this services had been used by the employees for the companys work. He, therefore, pleaded that there is no infirmity in the impugned order.
6. I have considered submission from both the sides and perused the records.
7. So far as the CHA services are concerned, to the extent the same have been used for clearance of imported goods used by the appellant for manufacture, the same, without any doubt, would be covered by the definition of input service and would be eligible for cenvat credit. As regards the CHA services availed for clearance of the export consignments after their removal of the factory, I find that this issue stands decided in the favour of appellant by a service of judgments namely - judgment of the Tribunal in case of Modern Petrofiles. Vs. Commissioner of Central Excise Vadodara, reported in 2010 (18) STR 625,judgment of Honble Gujrat High Court in the case of Commissioner of Central Excise Vadodara Vs Modern Petrofiles, (judgment dtd. 07.04.2011 in appeal No. 1918/2010), and Tribunals final order in the case of Commissioner of Central Excise Vs Hindustan Zinc Ltd.(Final Order No. A/1231/2012-EX[DB] ) dtd. 01.10.2012. In view of this I held that CHA services availed by the appellant for clearance of export consignments for export out of India is eligible for cenvat credit and as such the denial of cenvat credit of Rs. 43,979/- in respect of same, is not sustainable.
8. As regards the rent a cab services, the same would be eligible for cenvat credit if rent a cab services had been used by the employees of appellant company for the companys work. The Tribunal in the case of Commissioner of Central Excise, Raipur Vs. Beekay Engg. & Castings Ltd. reported in 2009(16) STR 709, Dr. Reddys Lab Ltd. Vs. Commissioner of Central Excise, Hyderabad, reported in 2010 (19) STR 71 and Commissioner of Central Excise, Vishakhapatnam Vs. Andhra Pradesh Paper Mills Ltd. reported in 2011 (22) STR 126 has held that when rent a cab services is availed by the officials of company for companys work, the same would be eligible for cenvat credit. However the crucial question in this case is as to whether the services, in question, were used for the companys work. Though on this point the appellant from the very beginning, have pleaded that this fact is varifiable from the invoices, the lower authorities have not given any finding on this point. Accordingly on this point, the matter requires to be remanded.
9. In view of the above discussions, while Commissioner (Appeals)s order upholding cenvat credit demand of Rs. 43,379/- along with interest and also imposition of penalty of equal amount is set aside as un-sustainable, the other part of the order upholding confirmation of cenvat credit denying of Rs. 1,78,233/- in respect of rent a cab services and penalty of equal amount is also set asides and the matter is remanded to the Commissioner (Appeals) for fresh decision after considering the evidence produced by the appellant regarding the use of the cabs rented by them. If the cabs have been used for the companys work, the appellant would be eligible for cenvat credit. The de-novo proceedings would be open to any contention in this issue raised by the appellant including limitation. The appeal stands disposed of as above.
(Pronounced in the open court) (Rakesh Kumar) Member (Technical) S.Kaur ??
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