Custom, Excise & Service Tax Tribunal
M/S Shree Cement Limited vs Cce, Jaipur on 6 September, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. IV Excise Appeal No. 1434-1435 of 2011 (SM) [Arising out of the Order-in-Appeal No. 60 (CB) CE/JPR-II/2011 dated 16/03/2011 passed by The Commissioner (Appeals-II), Central Excise, Jaipur.] For Approval and signature : Honble Shri Rakesh Kumar, Member (Technical) 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 would 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 : Department Authorities? M/s Shree Cement Limited Appellant Versus CCE, Jaipur Respondent
Appearance Shri Hemant Bajaj, Advocate for the appellant.
Shri P.K. Sharma, Authorized Representative (DR) for the respondent.
CORAM : Honble Shri Rakesh Kumar, Member (Technical) DATE OF HEARING : 06/09/2013.
Final Order No. 57587-57588/2013 Dated : 06/09/2013 Per. Rakesh Kumar :-
The only issue involved in these two appeals is as to whether the service of rent a cab availed by the appellant for bringing workers to the factory and dropping them back to their residence can be treated as input service under Rule 2 (l) of the Cenvat Credit Rules, 2004. In both the cases the Department being of the view that the rent a cab service availed by the appellant is not input service, issued a show cause notices for denying the Cenvat credit, its recovery alongwith interest and also for imposition of penalty. However, the original Adjudicating Authority in both the cases dropped the proceedings holding that the rent a cab service availed by the appellant for bringing workers to the factory and dropping them back to their residence is covered by the definition of input service. These orders of the original Adjudicating Authority were reviewed by the department by filing review appeal before the Commissioner (Appeals) and the Commissioner (Appeals) by a common order-in-appeal dated 25/2/11 set aside the orders of the Assistant Commissioner and allowed the Departments appeal. Against this order of the Commissioner (Appeals), these two appeals have been filed.
2. Heard both the sides.
3. Shri Hemant Bajaj, Advocate, the learned Counsel for the appellant, pleaded that on the issue involved in this case, Honble Karnataka High Court in the case of CCE, Bangalore III vs. Stanzen Toyotetsu India (P) Ltd. Reported in [2011] 32 STT 244/12 and also in the case of CCE, Bangalore III vs. T.G. Kirloskar Automotive (P) Ltd. reported in [2011] 32 STT 251/12 has held that rent a cab service provided to workers to reach the factory in time is activity related to the manufacturing business of the Assessee, that same view has been taken by the Tribunal in the case of CCE, Chandigarh vs. Federal Mogul Goetze (India) Ltd. [Final order No. 1437/2010 SM (BR) dated 20/10/2010], that appeal filed by the Government against this order of the Tribunal was dismissed by Honble Punjab & Haryana High Court (judgment dated 28/9/11 in Service Tax appeal No. 8/2011), that same view has been taken by the Tribunal in the case of CCE, Visakhapatnam vs. Andhra Pradesh Paper Mills Ltd. Reported in 2011 (22) S.T.R. 126 (Tri. Bang.) and CCE, Chennai vs. Hyderabad Industries Ltd. Reported in 2010 (20) S.T.R. 704 (Tri. Chennai), that since this issue stands decided in favour of the appellant by the Tribunal as well as by the High Courts in a series of judgments, the appellant have a strong prima facie case in their favour.
4. Shri P.K. Sharma, the learned DR, reiterating the findings of Commissioner (Appeals) in the impugned order and citing the judgment of the Apex Court in the case of Maruti Suzuki Ltd. Vs. CCE, Delhi III reported in 2009 (240) E.L.T. 641 (S.C.), pleaded that the rent a cab service has no nexus with the manufacture of final product by the appellant and, hence, in view of this, judgment of Apex Court, the Cenvat credit would not be available. He also cited the judgments of the Tribunal in the cases of Mercantile & Indus. Development Co. Ltd. Vs. CCE, Mumbai III reported in 2011 (21) S.T.R. 564 (Tri. Mumbai), CCE, Chennai vs. Sundaram Brake Linings reported in 2010 (19) S.T.R. 172 (Tri. Chennai) and CCE, Nagpur vs. Manikgarh Cement Works reported in 2010 (18) S.T.R. 275 (Tri. Mumbai), wherein it was held that the services which have no nexus with the manufacture of final product by the appellant cannot be treated as input services for the purpose of capital goods.
5. I have carefully considered the submissions from both the sides and perused the records.
6. I find that issue involved in this cases whether rent a cab service provided to the workers and employees of a factory to enable them to reach the factory in time, can be treated as input service for the purpose of Cenvat credit, has been decided in favour of the appellant by two Honble High Courts Honble Karnataka High Court in the case of CCE, Bangalore III vs. Stanzen Toyotetsu India (P) Ltd. (supra) and Honble Punjab & Haryana High Court in the case of CCE, Chandigarh II vs. Federal Mogul Goetze (India) Ltd. (supra). Beside this, there are a series of the judgments by the Tribunal as mentioned above, wherein same view has been taken. As against these the judgments cited by the appellant, the learned DR emphasises on a general principle that an input or input service, which has no nexus with the manufacture of a particular final product would not be eligible for Cenvat credit. While, this general principle guides the availability of Cenvat credit in respect of inputs and input services used in connection of manufacture of a particular final product, the existence of nexus is a matter of fact, which has to be determined in each case. In the judgments of the Tribunal and High Courts cited by the appellant, the issue of nexus in respect of the service, in question, has been examined and the High Courts and the Tribunal have expressed the view that there is nexus between availing of rent a cab service to enable the workers to reach the factory in time and manufacture of final product. In view of this, the impugned order is not sustainable. The same is set aside. The appeals are allowed.
(Dictated and pronounced in open court.) (Rakesh Kumar) Member (Technical) PK ??
??
??
??
2