Custom, Excise & Service Tax Tribunal
Cochin Port Trust vs Commissioner Of Central Excise, ... on 2 September, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/79/2008-DB, ST/717/2009-DB, ST/306/2010-DB [Arising out of: (i) Order-in-Original No. 12/2007-ST dated 27/12/2007; (ii) Order-in-Original No. 14/2009/ST dated 26/05/2009; and (iii) Order-in-Appeal No. 38/2009/ST dated 13/11/2009 All orders passed by Commissioner of Central Excise, Customs & Service Tax, Cochin.] For approval and signature: HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK KUMAR ARYA, TECHNICAL MEMBER 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should 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 Departmental authorities? Yes COCHIN PORT TRUST, WELLINGDON, ISLAND, COCHIN Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax COCHIN-CCE C R BUILDING, I S PRESS ROAD, ERNAKULAM, COCHIN, - 682018 KERALA Respondent(s)
Appearance:
Mr. Sekhar, CA JRS & CO CHARTERED ACCOUNTANTS 2ND FLOOR, THE MONARCH, P.T. USHA ROAD COCHIN - 682011 KERALA For the Appellant Dr. A. K. Nigam, Addl. Commissioner (AR) For the Respondent Date of Hearing: 02/09/2015 Date of Decision: 02/09/2015 CORAM:
HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK KUMAR ARYA, TECHNICAL MEMBER Final Order No. 21872-21874 / 2015 Per : ARCHANA WADHWA All the appeals are being disposed of by a common order as the issue involved in all the appeals is identical.
2. After hearing both sides duly represented by Mr. Sekhar, CA for the appellants and Dr. A. K. Nigam, Addl. Commissioner (AR) for the Revenue, we find that the appellant is engaged in providing port services on which he is paying service tax. Apart from the said services, the appellant is also engaged in providing services falling under the category of renting of immovable property and leasing of vacant land, etc. During the period in question, the said two services were not taxable inasmuch as they were introduced w.e.f. 1.6.2007 and 1.7.2010. The appellant was availing CENVAT credit of service tax paid on various common input services which were being utilized by them for payment of service tax on the output services of port services.
3. Revenue by entertaining a view that the appellant is availing service tax credit in respect of various common input services, raised the demands against the appellants in terms of provisions of Rule 6 and Rule 6(3)(c) of the CENVAT Credit Rules by proposing to restrict the credit to the extent of 20%. The said proceedings stand culminated into impugned order by the lower authorities.
4. The provisions of Rule 6(2) of the CENVAT Credit Rules requires an output service provider to maintain separate accounts for receipt, consumption and inventory of inputs and input services meant for use in the manufacture of dutiable final product as also for exempted goods or services. If such separate accounts are not maintained by an assessee, the provisions of Rule 6(3)(c) are to the effect that credit to the extent of an amount not exceeding 20% of the amount of service tax payable on taxable output services would be available.
5. Learned advocate has contended that they were admittedly maintaining separate accounts for the inputs/input services required for providing exempted final services or dutiable final services. However, apart from this, he contends that there may be some common input services which might have been utilized for providing the two kinds of final services. He submits that the service of renting of immovable property was not even taxable prior to 1.6.2007 and similarly services falling under the category of leasing of vacant land was not taxable prior to 1.7.2010. As such, the same cannot be considered as exempted services in terms of provisions of Rule 6. In any case, he submits that wherever some unavoidable common services have been used, the appellant is ready to reverse the proportionate credit, in which case it will amount as if no credit has been availed by them, thus making the provisions of Rule 6(2) and 6(3) as inapplicable.
6. Countering the arguments, the learned DR submits that even if the two services in questions were not listed services, the same would still be considered as exempted services in terms of section 2(e) of the CENVAT Credit Rules. He submits that inasmuch as the appellant has not maintained separate cenvatable account, the credit has to be restricted to 20% as envisaged by Rule 6 (2) and Rule 6(3) of CENVAT Credit Rules, 2004.
7. We find that the entire case of the Revenue proceeds on the assumption that a common cenvatable account has been maintained whereas the appellants have contended that they have maintained separate account for the exempted and taxable final services. This fact requires verification. In some of the cases, common input services have been utilized like telephone services, we agree with the learned advocate that in terms of various decisions of the Tribunal segregation of the credit relatable to the exempted final services and reversal of the same to that extent would meet the requirement of law. In this connection, reliance can be placed on Tribunals decision in the case of Orion Appliances Ltd. vs. CST, Ahmedabad: 2010 (19) S.T.R. 25 (Tri.-Ahmd.) and BHEL-GE Turbine Service Pvt. Ltd. vs. CCE, Hyderabad: 2010 (19) S.T.R. 909 (Tri.-Bang.) 7.1 With the above observations, we set aside the impugned order and remand the matter to the original adjudicating authority for verification of the appellants claim that they have not availed the CENVAT credit in respect of exempted services and have maintained separate accounts. The issue of segregation of the CENVAT credit in respect of some services and the reversal to that extent would be re-decided by the Asst. Commissioner in the light of the law declared by the above referred decisions of the Tribunal.
8. All the appeals are disposed of in above manner.
(Order pronounced in open court) ASHOK KUMAR ARYA TECHNICAL MEMBER ARCHANA WADHWA JUDICIAL MEMBER rv 4