Custom, Excise & Service Tax Tribunal
Finolex Cables Ltd vs Commissioner Of Central Excise, Pune-I on 30 June, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. E/653/10-MUM [Arising out of Order-in-Appeal No. PI/VSK/23/2010 dtd. 8/2/2010 passed by the Commissioner (Appeals), Central Excise, Pune-I] For approval and signature: Honble Mr Ramesh Nair, Member (Judicial) =======================================================
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 :
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?
=======================================================
Finolex Cables Ltd
:
Appellants
VS
Commissioner of Central Excise, Pune-I
:
Respondent
Appearance
None for the Appellants
Shri M.K. Shastri, Asst. Commissioner (A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 30/6/2015
Date of decision: /2015
ORDER NO.
Per : Ramesh Nair
This appeal is directed against Order-in- Appeal No. PI/VSK/23/2010 dtd. 8/2/2010 passed by the Commissioner (Appeals), Central Excise, Pune-I, wherein the Commissioner (Appeals) upholding the order-in-original dated 28/10/2009 rejected the appeal of the appellant.
2. The fact of the case is that the appellant is engaged in the manufacture of excisable goods i.e. Insulated Electrical Wires & Cables falling under chapter 85441990 of the first schedule to the Central Excise Tariff Act, 1985. The appellant is availing Cenvat credit of Central excise duty as well as Service tax as per the Cenvat Credit Rules, 2004. During the scrutiny of the records it was found that the appellant is availing Cenvat Credit of service tax paid on the services of Membership of various business associates such as CII, Young President Pune Chapter, IEEMA, Economic Research India Ltd., MCCIA etc. Show cause notice was issued wherein Cenvat credit on above input services amounting Rs. 1,21,742/- and Rs. 1,89,976/- respectively was proposed to be denied and interest and penalties proposed to be imposed. The show cause notice was adjudicated and the demand as raised in the show cause notice was confirmed for total amount of Rs. 3,11,718/-, demanded interest under Section 11AB and penalties of Rs. 2,000/- was imposed. Aggrieved by the said order in original, appellant filed appeal before the Commissioner (Appeals), who upheld the order-in-original. Being aggrieved by the said impugned order appellant is before me.
3. When the matter was called for hearing none appeared on behalf of the appellant, nor any adjournment request was found, therefore I proceed with the matter to decide on merit.
4. Shri M.K. Shastri, Ld. Asst. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.
5. I have carefully considered the submission made by Ld. A.R. and considered the grounds of appeal submitted by the appellant.
6. The issue involved in the present case is admissibility of Cenvat Credit in respect of out door catering services and member ship and subscriptions of various business association and business periodicals. As regard out door catering services in various judgments it was held that credit is admissible however credit in respect of service charges recovered from the employee is not admissible. In the present case the credit in respect of out door catering services was denied on the ground that the service charges to the extent Cenvat credit was proposed to be denied were recovered by the company from the employee. In this regard appellant made submission in the appeal that they have submitted revised quantification sheet according to which the amount of Cenvat credit attributed to the amount of service charges of out door catering service recovered from the employee comes to Rs. 60,871/- instead of Rs. 1,21,742/- as confirmed by lower authority. Therefore I find the amount demanded of Rs. 1,21,742/- does not appear to be correct and only credit of Rs. 60,871/- should be denied. However since lower authority have not looked into this re-quantification, I direct the adjudicating authority to verify this re-quantification and if it is found correct then demand amount of Rs. 1,21,742/- shall be reduced to Rs. 60, 871/- . As regard the issue of Cenvat credit of membership and periodical of various business associations and law journals such as CII, Young President Pune Chapter, IEEMA, Economic Research India Ltd, MCCIA etc. I am of the view that all these member ship and subscriptions are directly related to the business activity of the appellant. Therfore I am of the view that Cenvat credit clearly admissible on these membership and subscription particularly when the amount is paid by the appellant, booked into their books of account as expenditure. On this identical issue this tribunal has passed various judgments allowing credit on membership and subscription, the relevant judgments are cited below:
BAL PHARMA LTD.VersusCOMMR. OF C. EX., CUS. & S.T., BANGALORE-I 2014 (34) S.T.R. 752 (Tri. - Bang.)
2.?The appellant is engaged in the manufacture of medicaments and availed Cenvat credit of duty paid on Export Agent Commission, Hazardous waste material incineration charges, Pest control service, Xerox machine service, Membership fees, Professional charges and Employees transport charges. It is found that in respect of exports, the place of removal is port and therefore the services cannot be said to have been obtained after the removal of the goods. Moreover it is also not correct to say that credit of duty paid on all services received after removal of the goods are not eligible. The definition itself clearly provides that certain services are included in the definition of input services and the inclusive definition has been provided to take care of such situation. Having regard to the nature of services received, amount involved and the definition of input services, I consider that appellant is eligible for the credit of duty paid by them. Accordingly both the appeals are allowed with consequential relief, if any, to the appellant.
BCH ELECTRIC LTD. Versus COMMISSIONER OF CENTRAL EXCISE, DELHI-IV2013 (31) S.T.R. 68 (Tri. - Del.)
6.?So far as the service of club membership is concerned, the appellant were availing this service from India International Centre and IEEMA. In respect of membership of IEEMA, the appellants plea is that this is an association of engineering products manufacturers and the association provides the market related information, information about new technology, etc., to its members which is essential to carry out business and such information is the basic need of an industry to stand in competition in the market. I am of the view that there is merit in the appellants plea. As such membership of this club would be covered by the definition of input services. However, appellant has not shown as to how the membership of India International Centre, New Delhi has the nexus with the manufacturing business and as such the services tax paid on the membership fee of this club is not cenvatable.
7.?As regards services on renting of car parking space, I am of the view that the car parking space had obviously been used for parking of the vehicles of the appellant-company and its officers and as such this service has nexus with the business of the appellant and has to be treated activity related to business. Moreover, the appellant has also pleaded that the cost of this service has also been included in the value of the final products and therefore, in view of the judgment of the Honble High Court in the case of Ultratech Cement this service would have to be treated as an input service.
In view of the above judgments and my observations as discussed above, I am of the view that the membership and business associations and subscriptions of business periodicals are admissible input services and credit is allowed.
7. The appeal is disposed of in above terms.
(Order pronounced in court on_________________) Ramesh Nair Member (Judicial) sk 6