Custom, Excise & Service Tax Tribunal
M/S Shree Cement Limited vs Cce & St, Jaipur-Ii on 17 June, 2014
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No.2, R. K. Puram, New Delhi, Court No. 1 Date of hearing/decision: 17.06.2014 For Approval and Signature: Honble Mr. Justice G. Raghuram, President 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of 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? Excise Appeal No. 52265 of 2014 and Excise Stay Application No.52800 of 2013 (Arising out of order in appeal No. 190(OPD) CE/JPR-II/2013 dated 29.11.2013 passed by the Commissioner (Appeals), Customs & Central Excise, Jaipur-II). M/s Shree Cement Limited Appellant Vs. CCE & ST, Jaipur-II Respondent
Appearance:
Ms. Sukriti Das, Advocate for the appellant Shri R. K. Mishra, DR for the Respondent Coram: Honble Mr. Justice G. Raghuram, President Final Order No. 52494/2014 Per: Justice G. Raghuram:
At the stage of hearing of stay application, with the consent of learned Counsel for the appellant and the learned DR, and as requested, I dispose of the substantive appeal itself, as the issue involved falls within a narrow compass. I dispose of the appeal after waiving pre-deposit.
2. The assessee preferred this appeal against the order of the Appellate Commissioner, Jaipur-II dated 29.11.2013 rejecting the appeal preferred against the primary adjudication order dated 29.09.2011, passed by the Deputy Commissioner, Central Excise, Ajmer.
3. The Primary Authority disallowed availed cenvat credit of Rs.1,50,144/- and directed its recovery, under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944 alongwith appropriate interest on the amount of Cenvat credit under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11AB of the Act and of penalty equal to the disallowed Cenvat Credit, under Rule 15(1) of Cenvat Credit Rules, 2004.
4. The appellant is a manufacturer of clinker and cement and a registrant under the provisions of Central Excise Act, 1944 (the Act).During March 2010 to April 2010, appellant availed input service credit of the specified amount, of service tax remitted for event management organised at temple located within the factory premises.
5. During personal hearing, in the adjudication proceedings, appellant claimed that the event management service was availed in connection with advertisement/sales and promotion of its products and that the event was organised at the temple premises; that service tax was remitted on the taxable event management service and credit of such tax was taken and utilised for clearing its excise duty liabilities, in terms of the provisions of Rule 2(l) of the Cenvat Credit Rules, 2004 as this activity related to the appellants business and was towards advertisement and sales promotion, and this was an input service used in relation to its manufacture.
6. The Primary Authority agreed that the scope of the definition of input service is wide and includes service connected with business and that input service credit of service tax paid for event management if used for organising an event for sales and promotion, is admissible. Curiously however, the Primary Authority proceeded to observe that since the appellant had organised the event for a temple function and though appellant claimed that such service was used for a dealers meet organised for marketing and advertisement of its product, the appellant failed to adduce any evidence in support of its claim and to rebut the allegations in the show cause notice. The Primary Authority went on to observe that it is quite possible that dealers / retailers might have been invited for a temple function for the sake of a business association and higher official of the appellant might have interconnected with them but since a function organised for temple cannot be termed as a business meeting, no credit could be availed, particularly since the event is purely religious in nature.
7. Aggrieved, the appellant preferred an appeal which stood rejected by the Appellate Commissioner. The Appellate Commissioner conceded the position that the definition of input service under the Cenvat Credit Rules, 2004 being wide, would cover advertisement and sales promotion activities undertaken in relation to the manufacturing activity of the appellant. In a further illogical inference the Appellate Commissioner proceeded to record a distinctly creative reason. He held:
But organising a function in temple cannot be considered to be related to sale promotion activity. It is basically a religious function for the staff and local residents and mere presence of some dealers or retailers cannot make it a sale promotion or advertisement activity.
8. The wholly irrational reasons recorded by the Primary and Appellate Authorities proceed on a manipulative and not a good faith analysis of the transaction. Admittedly, the appellant remitted service tax on event management service availed. Section 65(40) of the Finance Act, 1994 defines event management as any service provided in relation to planning, promotion, organising or presentation of any arts, entertainment, business, sports, marriage or any other event and includes any consultation provided in this regard. Section 65(105) (zu) of this Act enacts that any service provided or to be provided to any person, by event Manager in relation to event management is a taxable service. Section 64(41) defines event manager as any person who is engaged in providing any service in relation to event management in any manner.
9. The appellant claimed to have remitted service tax on event management service provided by a third party to facilitate organisation of a dealer/ retailer meet for promotion, marketing, advertisement and promotion of its products, though in a temple premises. If this fact is to be rebutted, the Authorities below should have cogent and clear evidence to come to a contrary conclusion. At any rate speculation and vacuous hypothesis cannot be a substitute for evidence, to support a finding. The premise of the Authorities below, that temple premises is used only for religious functions and for no other social activity is misconceived. It is well established by contemporaneous social evidence as well that temple premises are employed for a variety of social functions including marriages.
10. On the aforesaid analyses, I conclude that the adjudication order passed by the primary authority as confirmed by the order of the Appellate Commissioner impugned is unsustainable and is accordingly quashed. The appeal is allowed but in the circumstances without any costs.
(Justice G. Raghuram) President Pant 1