Custom, Excise & Service Tax Tribunal
M/S Marudhan Motors vs C.C.E. & S.T. Jaipur-Ii on 29 July, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
ST Appeal No. ST/58663/2013-ST[SM]
[Arising out of Order-In-Appeal No. 107/VC/CE/JPR-II/2013 dated 16.04.2013 passed by CCE Jaipur-II]
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?
M/s Marudhan Motors Appellant(s)
Vs.
C.C.E. & S.T. Jaipur-II Respondent(s)
Appearance:
Mr. O.P. Agarwal (Advocate) for the Appellant Mr. Dharam Singh (DR) for the Respondent CORAM:
Honble Mr. S.K. Mohanty, Member (Judicial) Date of Hearing/ Decision. 29.07.2016 Final Order No. 53259 /2016 Per S. K. Mohanty:
The issue involved in this appeal for consideration by the Tribunal, is as to whether, during the period 2005-2006 to 2009-2010, trading should be considered as exempted service under Rule 2(e) of the Cenvat Credit Rules, 2004 for the purpose of requirement of Rule 6(3) ibid.
2. The brief facts of the case are that the appellant is a service tax assessee and provides the taxable service namely, authorized services station, business auxiliary service and tour operator service. Apart from providing the taxable services, the appellant also engaged in the trading activities. Since cenvat credit taken common input services were used for providing both taxable service as well as for the services relating to the trading activity, the Department disallowed the cenvat credit under Rule 14 of the Rules on the ground that trading activity should be considered as exempted service in terms of Rule 2(e) of the Rules, and as such, the appellant is required to maintain separate account or pay the amount towards provision of service on the trading activity (In terms of Rule 6(3)(A) of the Rules). The adjudication order dated 15.03.2012 passed in confirming the demand, culminated in the impugned order dated 16.04.2013. Hence this present appeal is before the Tribunal.
3. The term exempted services has been defined in Rule 2(e) of the Rules to mean taxable services which are exempted from the whole of the service tax leviable thereon, and include services on which no service tax is leviable under Section 66 of the Finance Act. The definition of exempted service was amended vide notification no. 3/2011-CE(N.T.) dated 01.03.2011. The effect of the amendment is that an explanation was added to the said Rule, clarifying that exempted service includes trading. On perusal of both un-amended and amended provisions of exempted service, it reveals that the activity of trading was not included within the ambit of definition prior to 01.04.2011. In this case, since the dispute is up to the period of 2009-2010, the amended definition of exempted service would not be applicable. Thus, the embargo credit in Rule 6(3) of the Rules does not have any application for taking of cenvat credit on the activities concerning provision of taxable service and trading activity. Hence, denial of cenvat credit by the authorities below, in my opinion, is not in conformity with the statutory mandates. Therefore, I do not find any merits in the impugned order and allow the appeal in favour of the appellant.
(Dictated and pronounced in open court) (S. K. Mohanty) Member(Judicial) Neha 3 | Page ST/58663/2013-ST[ST]