Custom, Excise & Service Tax Tribunal
Bharat Heavy Electricals Ltd vs Commissioner Of Gst&Amp;Cce(Chennai ... on 5 December, 2018
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CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH
CHENNAI
Appeal No.E/40788/2018
[Arising out of Order-in-Appeal No.166/2017 (CTA-II) dt.30.11.2017
passed by the Commissioner of Central Tax (Appeals-II), Chennai]
Bharat Heavy Electricals Ltd Appellant
Versus
Commissioner of Central Tax (Appeals-II) Respondent
CGST & Central Excise, Chennai Appearance:
Ms.S.Sridevi, Advocate For the Appellant Shri L.Nandakumar, AC (AR) For the Respondent Per : Hon'ble Ms. Sulekha Beevi C.S., Member (Judicial) Date of hearing / decision : 5.12.2018 FINAL ORDER No. 42996/2018 The issue involved in this appeal is with regard to the disallowance of Cenvat Credit on various services.
2. The Ld.Advocate, Ms.S.Sridevi appearing for the appellant submitted that the department has denied the credit alleging that it is not established that the services on which credit has been availed on the basis of ISD invoices have been used directly or indirectly in or in relation to manufacture and clearance of final products. She 2 submitted that the details of the services availed and the nexus with the manufacturing activity alongwith the decisions which related to the said services are given in the table below :-
S.NO. Services Involved Purpose Covered decisions 1 Air Travel Agent / Rail Booking tickets for Arm Embedded travel Agent Services their employees who Technologies -
undergo visit to 2016 (45) STR
meeting / trainings / 133 (Tri Bang);
factory visits etc.,
Xlinx India Tech -
2016 (44) STR
635 (Tri Hyd);
Mandarika (P)
Ltd., - 2015 (39)
STR 309 (Tri Del)
2 Cable operator services Cable connection in JP Morgan
office/conference to services - 2016
remain updated with (43) STR 196 (Tri
business news and Mum);
developments
essential for efficient Stock holding
output Corp -2015 (39)
STR 664 (Tri
Mum)
3 Convention service For arranging Annual Virchow
general meetings / Laboratories -
meetings of floating 2017 (51) STR
tenders/acceptance 443 (Tri Hyd)
of orders
4 Membership service Towards subscription Xlinx India Tech -
to engineering 2016 (44) STR
institutes, 635 (Tri Hyd);
management
institutes, trade Virchow
associations etc., Laboratories -
2017 (51) STR
443 (Tri Hyd)
5 Erection For installation of GE India
commission/installation servers, generators, technology service ups and other Centre-2014-
equipments TIOL-1931-
CESTAT-BANG
Orient Cement
Ltd., - 2017 (51)
STR 459 (Tri
Hyd)
3
6 Civil works Used for Zydus Nycomed
services/Repairs and repairs/modernization Healthcare 2013 maintenance and maintenance of (3) STR 197 (Tri office building Mum);
7 Designing and printing Printing of tender Ultratech
services docs/in house Cements Ltd., vs
journals etc., CCE., Jaipur -
2015 (40) STR
523 (Tri Del)
8 Cleaning For maintaining the Xlinx India Tech -
services/Housekeeping office 2016 (44) STR
635 (Tri Hyd);
CCE., vs Maruthi
Suzuki - 2015
(38) STR 503 (Tri
Del)
9 Sponsorship services Publication of Xlinx India Tech -
booklet, banner and 2016 (44) STR
conductive events in 635 (Tri Hyd.) relation to business development etc., 10 Finance Lease services Purchase of Xlinx India Tech -
/ computers/printers 2016 (44) STR etc., on finance lease 635 (Tri Hyd.) for execution of day to day routines. It Stock holding relates to banking Corp -2015 (39) and financial STR 664 (Tri services. Mum) 11 Accommodation Regional operation Accenture services division booked hotel Services (P) Ltd., rooms for the 2015 (40) STR employees who are 719 on official duty in attending meeting/customers etc.
3. The Ld.AR, Sh.L.Nanda Kumar supported the findings in the impugned order.
4. Heard both sides.
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5. The issue is with regard to the eligibility of credit on the services shown in the table above. The appellant has explained the need for availing the various services also. After going through the submissions and perusal of records, I am of the view that the credit availed on air travel agent / rail travel agency service, cable operator service, convention service, erection, commission and installation service, designing and printing service, cleaning service / housekeeping, sponsorship service and finance lease service are eligible for credit. These issues were considered by the Tribunal in Xilinx India Tech. Services Pvt. Ltd. Vs CC., CE. & ST., Hyderabad-IV 2016 (44) S.T.R.635 (tri. - Hyd.). Following the said decision, I hold that the credit availed on the above services are legal and proper. The disallowance being unjustified, is set aside.
6. The Ld.Counsel for the appellant has produced the invoices relating to the services availed on membership fees. It is submitted by her that the appellant company had to take membership in Associated Chamber of Commerce and Industry of India. This is to enable the company to have connections with similar persons in the very same field of commerce and industry. This helps to develop the business and also to get updated with the trends in the industry and is therefore related to the activity of manufacture. It is not for personal membership in a Club. Similarly the appellant has taken membership in spending on conference of public enterprises. The Invoice is raised in the name of the company (Bharat Heavy Electricals Ltd). In CCE, Pune III vs Zensar Technologies Ltd 2016 (42) STR 570 (Tri. - Mum.) the said services were held to be eligible. These services 5 therefore cannot be said to be for personal consumption. I hold that the credit availed on membership services is eligible.
7. The Ld.Counsel has submitted that the credit for civil works / repairs and maintenance is actually in respect of charges for Annual maintenance contract for xerox machines. She has also produced the invoices relating to such AMC services. It is her case that the repairs and maintenance also include supply of toner and therefore the category of services in the invoices is mentioned as works contract service. Since these are used for repairs and maintenance of xerox machines which are used by the appellant factory, she contend that the credit ought to be allowed. On perusal of the records in para 8.3, the Commissioner (Appeals) has remanded to the adjudicating authority to reconsider the issue of various services. In para 8.4 of the Order in Original it is mentioned that works contract services as well as civil works services are disallowed. It is not possible to make out from the SCN or the order as to the services which come under works contract service and civil works services. This aspect needs to be reconsidered. Therefore this issue with respect to credit availed on works contract service / civil works service / repair and maintenance of xerox machine is remanded to the adjudicating authority.
8. So also the appellant contends that the accommodation services are availed for hotel accommodation for the employees who are on official duty. The appellant has to establish with necessary documents that the accommodation was availed for official purposes only. The Counsel for appellant submitted that the appellant would be able to 6 furnish documents to establish that this was availed for official purposes only. For this reason, I hold that the accommodation service also requires to be remanded to the adjudicating authority.
9. From the discussions made above, the services for civil works / repair and maintenance as well as accommodation services shown in the table above are remanded for fresh adjudication to the adjudicating authority. The credit availed for other services shown in the table are allowed. The appeal is partly allowed and partly remanded with consequential relief if any in above manner.
(Operative part of the order pronounced in open court) (Sulekha Beevi C.S) Member (Judicial) vsr