Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S. Rangsons Electronics Pvt. Ltd on 5 October, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/26501/2013-SM [Arising out of Order-in-Appeal No. 67/2013 dated 07/03/2013 passed by Commissioner of Central Excise (Appeals), Mangalore.] Commissioner of Central Excise, Customs and Service Tax-MYSORE S1-S2, VINAYA MARGA, SIDDHARTHA NAGAR, MYSORE - 570011 KARNATAKA Appellant(s) Versus M/s. Rangsons Electronics Pvt. Ltd 347, D1 & D2, KIADB Hebbal Industrial Area, MYSORE - 571016 KARNATAKA Respondent(s)
Appearance:
Mr. N. Jagadish, AR For the Appellant Mr. Vageesh Hegde, CA For the Respondent Date of Hearing: 05/10/2017 Date of Decision: 05/10/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 22389 / 2017 Per : S.S GARG The present appeal has been filed by the Revenue against the impugned order dated 7.3.2013 passed by the Commissioner (A), whereby the Commissioner (A) has allowed the appeal of the assessee and set aside the Order-in-Original.
2. Briefly the facts of the present case are that the respondent are manufacturers of parts of medical equipment, parts of exhaust systems, printed circuit board falling under Chapter Heading 85 and 90 of the Central Excise Tariff Act, 1985. They also avail the benefit of CENVAT credit in respect of inputs and capital goods. It was noticed that the respondent had wrongly availed CENVAT credit on rent, manpower recruitment/supply services and security services. On pointing out by the department, the respondent-assessee had reversed the same under protest. However, they had not paid the interest. On these allegations, a show-cause notice was issued to the respondent-assessee and vide the Order-in-Original, the lower authority ordered recovery of CENVAT credit wrongly taken to the tune of Rs.11,71,124/-, Rs.6,56,576/- and Rs.55,311/- respectively on service tax paid on rent, manpower recruitment/supply services and security services as ineligible as these services were received by the other units of the same company and ordered appropriation of the same already reversed under protest and the protest was vacated. The lower authority also demanded the interest and also imposed the penalty of Rs.2,000/- under Rule 15(3) of CENVAT Credit Rules, for the period up to 27.2.2012 and Rs.30,000/- under Rule 15(1) for the period from 1.3.2010 and penalty of Rs.2,82,155/- under Rule 15(2) of CENVAT Credit Rules, 2004 for the period from 1.3.2010. Aggrieved by the Order-in-Original, the respondent-assessee filed the appeal before the Commissioner (A), who after considering the submissions of the respondent-assessee and by relying upon the decisions of the Tribunal, allowed the appeal of the assessee, hence the present appeal by Revenue.
3. Heard both the parties and perused the records.
4. The learned AR for the Revenue submitted that the impugned order passed by the learned Commissioner (A) is not sustainable in law as the same has been passed without appreciating the legal position. He further submitted that the service tax paid on input services availed at the job work unit is not eligible for CENVAT credit. He also submitted that the learned Commissioner (A) has wrongly extended the definition of input services.
5. On the other hand, the learned consultant for the assessee defended the impugned order and submitted that the respondent-assessee have four units, two of them are located in the same premises and the third unit is located in Mandya, wherein only job work activities assigned by the main unit is carried out and the fourth unit is located in different area. Due to paucity of accommodation for housing the other units in the same premises of the main unit, the respondent had been compelled to engage Unit-III and Unit-IV away from the main unit. He further submitted that the third and fourth units are nothing but the extended unit of the main unit at Hebbal. He also submitted that Unit-III and Unit-IV are assigned with specific job of activity on need basis as planned in the main unit. He also submitted that the main unit was paying rent for all the other units located away under centralized accounting system. The main unit place order for receipt of input services and the payments made for procuring any services from the main unit. He also submitted that the department has been conducting audit from 2001-2009 and were having knowledge of the credit availed and have also accepted the said method without raising any objection. In support of his submission, he relied upon the following decisions:
* CCE vs. Biocon Ltd.: 2014 (309) ELT 66 (Kar.-HC) * Apotex Research Pvt. Ltd. vs. CCE: 2016 (46) STR 874 (Tri.-Bang.) * Raymond Ltd. vs. CCE: 2017 (47) STR 142 (Tri.-Del.) * Greaves Cotton Ltd. vs. CCE: 2015 (37) STR 395 (Tri.-Chen.) * Doshion Ltd. vs. CCE: 2015 (288) ELT 291 (Tri.-Ahmd.) * Sri Krishna Pharmaceuticals Ltd. vs. CCE: 2015 (40) STR 1039 (Tri.-Bang.) * Tata Motos LTd. vs. CCE: 2017 (50) STR 28 (Kol.)
6. After considering the submissions of both the parties and perusal of the material on record, I find that the assessee has a centralized accounting system and the other units, where the job work is being carried out, is nothing but an extended unit of the main unit. I also find that the movements of the materials from the main unit to the job work unit were on the strength of Delivery Challan-cum-Material Gate Passes and job worked items were returned by the job work units under their own Material Gate Pass. The CENVAT credit in respect of input and input services used by the main unit as well as job work unit are availed by the main unit and are reflected in the ER1 monthly returns filed by the main unit. Further, I also find that there is a common and single Profit and Loss account and Balance Sheet for all the units and single consolidated income tax returns. It is also seen that the respondent vide letter dated 21.4.2009 intimated the department regarding setting up of job work Unit-III at Belgagola Hobli, Mandya District and intimated that Unit-III would not be registered under the Central Excise and further, vide letter dated 4.2.2002 intimated the department regarding the setting up of job work plant at Manandavadi Road, Mysore. I also find that the case laws relied upon by the respondent cited supra, are squarely in favour of the assessee and by following the ratio of the said decisions, I find that there is no infirmity in the impugned order which is upheld by dismissing the appeal of the Revenue.
(Operative portion of the Order was pronounced in Open Court on 05/10/2017) S.S GARG JUDICIAL MEMBER rv 6