Custom, Excise & Service Tax Tribunal
M/S Jsw Steel (Salav) Ltd vs Commissioner Of Central Excise, Raigad on 5 August, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. E/1835 to 1841/11 (Arising out of Orders-in-Appeal No. YDB/417/RGD/2011 dated 19.4.2011; YDB/904-905/RGD/2010 dated 22.12.2010, YDB/911/ RGD/2010 dated 28.12.2010; YDB/539/RGD/2011 dated 3.2.2011; YDB/414/RGD/2011 dated 19.4.2011; US/289/RGD/2011 dated 26.9.2011 passed by the Commissioner of Central Excise (Appeals), Mumbai-II). For approval and signature: Honble Shri Raju, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No
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 : Yes CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy : Seen
of the order?
4. Whether order is to be circulated to the Departmental : Yes
authorities?
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M/s JSW Steel (Salav) Ltd.
Appellant
Vs.
Commissioner of Central Excise, Raigad
Respondent
Appearance:
Ms. Aparna Rao, Advocate
for Appellant
Mr. R.K. Maji, Assistant Commissioner (AR)
for Respondent
CORAM:
SHRI RAJU, MEMBER (TECHNICAL)
Date of Hearing: 22.04.2016
Date of Decision: 05.08.2016
ORDER NO.
Per: Raju
The appellants were issued various show-cause notices demanding reversal of credit availed on input services namely, shipping fees, insurance, technical testing and certification and cleaning services for Vessels and Barges and repair and maintenance of guest house. The following appeals have been filed: - Sr. No. Appeal No. Period SCNs DT.
Service on which credit denied 1 E/1835/11 Dec, 08 to July, 09 04.01.2010 Shipping Fees 2 E/1836/11 Oct, 07 to Sept, 08 03.12.2008 11.04.2009 22.05.2009 Insurance 3 E/1837/11 Jan, 08 to June, 08 04.02.2009 Shipping Fees
4. E/1838/11 Jan, 08 to June, 08 03.02.2009 Technical testing & Certification & Cleaning Services for Vessels and Barges
5. E/1839/11 Oct, 08 to March, 10 25.08.2010 Insurance
6. E/1840/11 Nov, 08 to March, 09 07.12.2009 Insurance Service
7. E/1841/11 April, 07 to March, 09 & April, 09 to March, 09 10.01.2011 27.04.2010 Repairs & Maintenance of Guest House, Painting, Water proofing, plastering.
2. Learned Counsel for the appellants argued that credit of maintenances of Barges and Tugs and insurance services has been allowed in their own case by the Tribunal vide Order No. A/634-638/14/SMB/C-IV dated 11.3.2014. She further argued that credit of Service Tax paid on Tugs, Port Services and Shipping fees paid by the appellant has been allowed by the Tribunal in their own case Vide Order No. A/235-240/13/SMB/C-IV dated 8.3.2013. Learned Counsel for the appellant also brought to the notice an adverse decision in their own case reported at 2009 (16) STR 195. The services dealt in said order were subscription given to SIVA Security Services outside factory (Railway), rent a cab service, and mobile telephone service. In the said case, credit of services availed outside the factory was denied on the following grounds: -
Any service to be brought within the ambit of definition of input service should be one which should specify the essential requirement contained in the main part of the definition. This requirement is equally applicable to the various items mentioned in the inclusive part of the definition as well. In this view of the matter, I am constrained to hold that the appellant is not entitled to CENVAT Credit on any of the four items of services in question. In respect of some of the said services, they have not adduced evidence to establish the nexus, if any, between the services and the manufacture/clearance of the final products. She, however, argued that the views that input services have to be received in the factory for availing the credit has been upset by various decisions of Tribunal and superior courts.
2.1 As regards input services, it was highlighted by the Counsel that the insurance was taken in respect of Vehicle insurance policy, Burglary insurance, Standard Fire & Spl. Peril policy, Marine inland specific transit insurance. It was argued by the learned Counsel that all these are essential activities and the credit of the Service Tax paid on the said insurance policies would be admissible. It was argued that the Commissioner (Appeals) has relied on the decision of Hon'ble High Court of Delhi in the case of DSCL Sugar 2014 (34) STR 58 (Tri-Del), wherein Service Tax paid on insurance of transit of finished goods has been allowed as well as Service Tax paid on insurance of vehicle owned by the appellant has also allowed.
2.1.1 I find that insurance at various stages undertaken for safety of their stock of raw material and finished goods as the input service is taken in the ordinary course of business.
2.2 The learned Counsel argued that credit for repair and maintenance of guest house is permissible as has been held by the Tribunal in the case of Reliance Industries Ltd. 2015-TIOL-2343-CESTAT-MUM. She argued that in the said case, credit of such services availed in respect of residential township constructed for their employees has been allowed as input services.
3. Learned AR argued that credit of services availed for guest house is not admissible as has been held by the Tribunal in the case of Mahindra & Mahindra Ltd. 2015 (39) STR 298 (Tri-Mum). He specifically pointed out para 6.2, which reads as under: -
6.2 As regards the guest house services, it cannot be said that there is a nexus between the service and the manufacturing activities. Therefore, there is a merit in the contention of the Revenue that guest house service is not an eligible input service. Accordingly, we set aside the order allowing input Service Tax credit on guest house service. But for the above modification, the impugned order is upheld and the Revenues appeal is rejected. He further relied on the decision of the Tribunal in the case of Navabharat Ventures Ltd. 2015 (39) STR 342 (Tri-Bang), wherein credit of services used for repair and painting of staff quarters outside factory premises has not been allowed. He specifically relied on para 4 of the said decision, which reads as under: -
4.?I find from the available record that Repair and Maintenance Service has been utilised by the appellant for the residential complex provided to its employees, which is situated outside the factory premises. Further, the services in relation to consultancy has been availed by the appellant not for its manufacturing unit, but for its another unit, which is located outside the factory of manufacture of excisable goods. The Cenvat Credit Rules permit the manufacturer to take Cenvat credit of the service tax paid on the input services, which have direct/indirect nexus with the manufacture of the final product. In the present case, it is an admitted fact that the disputed services have not been used by the appellant for the intended purpose, i.e., in or in relation to manufacture of final product and also not related to the business activity of the appellant. Thus, I am of the considered view that the said services will not qualify as input service for the purpose of taking Cenvat credit. Accordingly, I find no substance in the appeal filed by the appellant and dismiss the same. The impugned order is upheld.
He also relied on the decision of the Tribunal in the case of Hindustan Zinc Ltd. 2011 (23) STR 274 (Tri-Del), wherein services received in respect of the appellants guest house like maintenance etc. has been denied.
4. I have gone through the rival submissions. I find that the Service Tax credit in respect of shipping fees and services availed in respect of vessels and barges is covered by the order of Tribunal in the appellants own case vide order dated 11.3.2014 and 08.03.2013. In view of the above, credit of these services is available and is allowed.
5. The appellant has relied on the decision of the Hon'ble High Court of Delhi in the case of DSCL Sugar (supra), wherein credit of insurance services taken in respect of vehicles owned by the appellant was allowed. In this case, the insurance is in respect of vehicles and other assets owned by the appellant. Relying on the decision of Hon'ble High Court of Delhi in the case of DSCL Sugar (supra), the credit of the insurance services is allowed.
6. The credit in respect of repair and maintenance of guest house has been denied. The appellant have relied on the decision of the Tribunal in the case of Reliance Industries Ltd. (supra).
6.1 The learned AR has relied on the decision of the Tribunal in the case of Mahindra & Mahindra (supra), Navbharat Ventures Ltd. (supra) and Hindustan Zinc Ltd. (supra).
6.2 In the instant case, the guest house is located right next to the factory premises. It is not the case of the Revenue that these services are used for personal consumption of the employees. The fact that the guest house is located right next to the factory implies that it is used in relation to the manufacturing activity. In view of the above, credit of repair and maintenance services of the guest house is allowed.
7. The appeals are accordingly allowed.
(Pronounced in Court on 05.08.2016) (Raju) Member (Technical) Sinha 6 Appeal No. E/1835-1841/11