Custom, Excise & Service Tax Tribunal
M/S Lifelong Meditech Ltd vs Cce & St, Gurgaon-Ii on 11 May, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH-160 017 COURT NO.1 Appeal No. E/52806/2015-SM [Arising out of the Order-in-Appeal No. 74-CE-APPEAL-II-DELHI-2015 dated 24.03.2015 passed by the Commissioner (Appeals), Central Excise & Service Tax, Gurgaon] Date of Hearing/Decision: 11.05.2016 For Approval & signature: Honble Mr. Ashok Jindal, Member (Judicial) 1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether their Lordships wish to see the fair copy of the order? Seen 4. Whether order is to be circulated to the Department Authorities? Yes M/s Lifelong Meditech Ltd. : Appellant Vs. CCE & ST, Gurgaon-II : Respondent
Appearance Ms. Krati Somani, Advocate for the appellant Shri M.R. Sharma, A.R. for the respondent CORAM: Honble Mr. Ashok Jindal, Member (Judicial) FINAL ORDER NO. 60023/2016 Per: Ashok Jindal The appellant is in appeal against the impugned order wherein inputs service credit has been denied for the following services.
(A) Warehouse Rent Services (B) Project for Modification/ Modernisation Services (C) Horticulture Services (D) Courier Services, and (E) Transportation Services On the premises that these services do not qualify as input services as per Rule 2(l) of the Cenvat Credit Rules, 2004. The period involved is pre 2011 and post 2011.
2.1 The Ld. Counsel appearing on behalf of the appellant submits that warehouse has been used for storing raw materials and finished goods due to space constraints in the factory and warehouse is the place of removal and registered with the Central Excise Department. Therefore, storage of goods is an integral part of manufacturing, therefore appellant is entitled to availe cenvat credit on these services. The appellant also relied on the decision of Barmalt (India) Pvt. Ltd. 2014-TIOL-2668-CESTAT-Del.
2.2 For Project for Modification/ Modernisation Services, it is the submission of Ld. Counsel that for renovation of factory premises is squarely covered by the definition of Rule 2(l) of Cenvat Credit Rules, 2004 as inputs service, therefore Cenvat Credit cannot be denied.
2.3 For Horticulture Services, the Ld. Counsel submits that the appellant is compulsorily required to maintain the garden in their factory. Without the maintenance of garden, the appellant cannot run their factory. Therefore, the Horticulture Services are indirectly related to the manufacturing activity. The appellant is entitled to avail Cenvat Credit on the said service. The appellant also relied on the decision of Millipore India Pvt. Ltd. 2012 (26) S.T.R. 514 (Kar.).
2.4 With regard to the Courier Services, the Ld. Counsel submits that these services have been used for various business correspondences made with suppliers of the goods, without said services; the activity of manufacturing cannot be done. Therefore, courier service is directly/indirectly related to manufacturing activity. Therefore the appellant is entitled to avail cenvat credit on said services.
2.5 For transportation services, the Ld. Counsel submits that these services have been used for marketing and sales promotion by the appellant which is directly related to the manufacturing activity. Therefore, the appellant is entitled to avail cenvat credit on said services.
3. On the other hand, the Ld. AR reiterated the finding in the impugned order.
4. Heard the parties and considered the submissions.
5.1 On careful consideration of the submissions made by the Ld. Counsel, I find that Warehouse has been used by the appellant for storage of raw material and finished goods which is a registered place for removal goods. In the circumstances, storage of goods is an integral part of manufacturing, therefore appellant is entitled to availe cenvat credit on these services.
5.2 With regard to Project for Modification/ Modernisation Services, I find that these services are none other than a renovation of the factory premises which is covered by the Rule 2(l) of Cenvat Credit Rules, 2004. Therefore, I hold that the appellant is entitled to avail cenvat credit for Project for Modification/ Modernisation Services.
5.3 With regard to Horticulture services, I find that the appellant is compulsory required to maintain a garden in their factory to pollution control norms. Therefore, the horticulture services are directly related to the manufacturing activity by the appellant as without maintaining the garden, the appellant cannot run their factory. Therefore, I hold that the appellant is entitled to avail cenvat credit for horticulture services.
5.4 I also observe that Courier service has been used by the appellant for various correspondences made with suppliers of the goods, without these correspondences, the appellant cannot do their business. Therefore, the courier service is an integral part of their activity. Therefore, I hold that the appellant is entitled to avail cenvat credit for Courier service.
5.5 The Transportation service has been used by the appellant for marketing/ sales, which is directly related to the manufacturing activity. Therefore, I hold that the appellant is entitled to avail cenvat credit on Transportation service.
6. In view of the above observations, I hold that the appellant in entitled to avail cenvat credit on the services which are in dispute. Therefore, the impugned order deserves no merit and same is set aside.
7. In result, the appeal is allowed.
(Dictated & Pronounced in the court) Ashok Jindal Member (Judicial) ras 1