Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs K. Mohan & Company (Exports) Pvt. Ltd on 17 November, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/2567/2010-SM, C/2077/2011-SM, C/2078/2011-SM, C/2079/2011-SM, C/2080/2011-SM, C/2081/2011-SM, C/2082/2011-SM, C/2083/2011-SM, C/2084/2011-SM, C/2085/2011-SM, C/2086/2011-SM [Arising out of Order-in-Appeal No. 178/2010 dated 23/09/2010 passed by the Commissioner of Customs, Bangalore] Commissioner of Central Excise, Customs and Service Tax Bangalore-I Post Box No. 5400, C.R Buildings, Bangalore 560 001 Appellant(s) Versus K. Mohan & Company (Exports) Pvt. Ltd. Unit No. II, No.62/6 & 62/5, Shed A/A1/A2, Bommanahalli Beur Road, Bangalore Respondent(s)
Appearance:
Shri Mohammed Yusuf, AR For the Appellant Shri T.V. Ajayan, Advocate For the Respondent Date of Hearing: 17/11/2016 Date of Decision: 17/11/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order Nos. 21230-21240 / 2016 Per: S.S GARG Revenue has filed 10 appeals directed against the impugned order dated 23.09.2010 vide which the Commissioner (Appeals) by a common order dismissed all the 10 appeals filed by the Revenue against the Order-in-Original passed by the original authority sanctioning refund of unutilized cenvat credit. Since the issue is identical in all the appeals, therefore I dispose of all the 10 appeals by the common order.
2. Briefly the facts of the case are that the respondent is a manufacturer and exporter of Readymade Garments falling under Central Excise Tariff Heading 620199.90 and are availing cenvat credit on various input services. As they had limited DTA clearance they could utilize the entire credit so taken and filed 10 refund claims relating to the period from 03/2009 to 12/2009 claiming refund totaling to Rs. 15,76,193/- (Rupees Fifteen Lakhs Seventy Six Thousand One Hundred and Ninety Three only). These claims were verified by the Deputy/Assistant Commissioner of Customs who held that the refund amounting to Rs. 81,156/- (Rupees Eighty One Thousand One Hundred and Fifty Six only) is inadmissible on the ground that the said services are not used in the manufacture of final products and sanctioned a refund of Rs. 14,95,037/- (Rupees Fourteen Lakhs Ninety Five Thousand and Thirty Seven only) vide his Order-in-Original. Aggrieved by the said order, the Revenue filed appeals before the Commissioner (Appeals) on the ground that the Assistant Commissioner has sanctioned refund of unutilized cenvat credit on Car Rentals, CHA Service, Chartered Accountant, Courier, Travel Agency, Professional fees, Goods Transport Service, Machine Maintenance, Bank Charge Service, Security Service, Goods Testing without placing on records that all these services are exclusively used in the manufacture of goods. The Commissioner (Appeals) vide the impugned order has rejected the appeals of the Department and upheld the impugned Order-in-Original by holding that the said services are very much covered under the definition of input service as defined under Rule 2(l) of Cenvat Credit Rules 2004. Aggrieved by the said order of the Commissioner (Appeals), the Revenue has filed these 10 appeals.
3. I have heard the learned AR as well as the learned counsel for the respondent.
4. Learned AR submitted that the impugned order passed by the Commissioner confirming the Order-in-Original is wrong and is not sustainable in law. He further submitted that the input services on which refund has been granted does not fall in the definition of input service as contained in Rule 2(l) of the Cenvat Credit Rules. He also submitted that only said services which are directly or indirectly used in the manufacture of export goods qualify for refund but not all the services merely by nomenclature. He also submitted that the lower authority allowed the refund without verifying the usage of the services as input service and that the expenses incurred on business activity is distinct from the manufacturing activity.
5. On the other hand the learned counsel for the respondent defended the impugned order and submitted that there is a specific finding of the Honble Appellate Authority in para 4 of the Order-in-Appeal, wherein the Commissioner (Appeals) has observed as under:
4. I find that the scheme of refund of cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004 is for allowing refund of the cenvat credit in respect of input or output service which cannot be utilized by the manufacturer or provider of output service towards payment of duty on any final product cleared for home consumption or for exports or for payment of service tax on output service. In the event where for any reason such adjustment is not possible, the manufacturer or provider of output service shall be allowed refund of such amount as specified by the notification issued in this regard. The respondents have been permitted the refund on services viz. CHA service, Goods Transport Service (imports), Machine maintenance, Goods testing, chartered accountants, courier services, security services, etc. on which the appellants have objected that the lower authority has allowed refund of services which are not used directly or indirectly in the manufacture but has merely allowed on nomenclature. At the first, I find that the appellants have not disclosed as to how these services have not been used in the process of manufacturing. No such verification is conducted which can conclusively exhibit that the said input services have not been used. On the contrary, the lower authority has in his impugned order verified the eligibility of the services utilized by the respondent before granting refund. Only after due verification, the lower authority has concluded in his order that the services on which the claim is made are used by the respondents in relation to the manufacture of their finished goods and day to day business activities. The lower authority has proceeded to examine the admissibility of the credit in terms of the Cenvat Credit Rules, 2004 before allowing refund. Further, the judgment of Honble CESTAT in the case of CST Vs. Convergeys India Pvt. Ltd. cited in 2009-TIOL-888-CESTAT-DEL and the CBECs circular No. 120/01/2010-ST dated 19.01.2010 also does not support the case of the appellants. 5.1. He relied upon the following case-laws in support of his submission that all services used in relation to business of manufacturing the final product are covered under the definition of input service.
a) CCE, Nagpur Vs. Ultratech Cement Ltd. [2010 (20) S.T.R. 577 (Bom.)]
b) Coca Cola India Pvt. Ltd. Vs. CCE, Pune-III [2009 (15) S.T.R. 657 (Bom.)]
c) CCE, Bangalore-III Vs. Stanzen Toyotetsu India (P) Ltd. [2011 (23) S.T.R. 444 (Kar.)]
d) CST, Delhi Vs. Convergys India Pvt. Ltd. [2009 (16) S.T.R. 198 (Tri.-Del.)]
e) Circular No. 120/01/2010-ST dated 19.01.2010
f) Utopia India Pvt. Ltd. Vs. CST, Bangalore [2011 (23) S.T.R. 25 (Tri.-Bang.)]
g) CCE, Madurai Vs. Stangl Picles & Preserves [2011 (22) STR 396 (Tri.-Chennai)]
6. After considering the submissions of both the parties and perusal of the records and the case-laws cited, I am of the considered opinion that there is nothing wrong in the impugned order allowing refund of unutilized accumulated cenvat credit of input services. The original authority has allowed cenvat credit after proper verification of the records of the respondents and all these services on which credit has been availed have been held to be input services in view of the judgments cited supra. Therefore keeping in view all the facts and circumstances, I do not find any infirmity in the impugned order which is upheld and the Revenues appeals are dismissed.
(Operative portion of the Order was pronounced in Open Court on 17/11/2016) (S.S GARG) JUDICIAL MEMBER iss