Custom, Excise & Service Tax Tribunal
Vako Seals Pvt. Ltd vs Commissioner Of Central Excise, ... on 15 May, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. E/263/11-MUM [Arising out of Order-in- Appeal No. SB(139) 139/MV/2010 dtd. 10/12/2010 passed by the Commissioner (Appeals) of Central Excise, Mumbai] 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?
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Vako Seals Pvt. Ltd.
:
Appellants
VS
Commissioner of Central Excise, Mumbai-V
:
Respondent
Appearance
Shri. J. N. Tiwari, Advocate for the Appellant
Shri. Sanjay Hasija, Superintendent (A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 15/5/2015
Date of decision: 15/5/2015
ORDER NO.
Per : Ramesh Nair
This appeal is directed against Order-in- Appeal No. SB(139) 139/MV/2010 dtd. 10/12/2010 passed by the Commissioner (Appeals) of Central Excise, Mumbai, wherein Ld. Commissioner(Appeals) upheld the order-in-original No. 46/05/AC/KDN/2010 dated 25/2/2010 rejecting the appeal filed by the appellant. The fact of the case is that appellant have availed Cenvat Credit in respect of service tax paid on rent of Gala No. A-07, Pravasi Industries Estate, Goregaon(E), which was not part of their manufacturing premises and had been included in their Central Excise Registration only on 31/3/2009 therefore it is contended in the show cause notice that said premises could not be considered as part of their factory premises to be used in the manufacture of their goods and therefore service cannot be considered as input service. Show cause notice culminated into adjudication order wherein adjudicating authority has confirmed demand of Cenvat Credit on renting service amounting to Rs. 57,407/-, demanded interest under Section 11AB, imposed penalty of Rs. 57407/- under Section 11AC, in addition, penalty of Rs. 2,000/- under Rule 15(4) of Central Excise Rule, 2004 was also imposed. Aggrieved by the said order appellant approached the Commissioner(Appeals), who upheld the order-in-original and rejected the appeal. Dissatisfied with the impugned order, the appellant is before me.
2. Shri. J.N. Tiwari, Ld Counsel for the appellant submits that principally there is no dispute that the credit in respect of service tax paid on rent on the said premises taken on rent is admissible for the reason that after inclusion of the said premises on 31/3/2009 the Revenue allowed the Cenvat Credit however Cenvat credit for the prior period i.e. before 31/3/2009 was denied only on the ground that the said premises was not included as the part of the factory premises. He submits that for taking Cenvat credit in respect of the rental premises it is not necessary or it has not been provided in the Cenvat Credit Rules that the said premises should be included in the registered premises of the factory. It is his submission that so long the premises used in relation to the manufacture of final product for business activity related to the factory the credit should be allowed.
3. On the other hand, Shri. Sanjay Hasija, Ld. Superintendent (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that prior to inclusion of said rental premises in the registration, it can not be considered as use of the premises in relation to the manufacture of final product, therefore Cenvat Credit was rightly denied by the lower authorities.
4. I have carefully considered the submissions made by both sides and perused record.
5. I find that as far as use of the premises is concerned it is not in dispute that same is used in connection with activity of the factory such as storage of goods. For the same use Revenue has allowed credit, subsequent to the date of inclusion of such premises in the registered premises of the factory therefore as far as use prior to the inclusion in the registered premises or thereafter it is same therefore it cannot be said that merely premises is not included in the registration premises the same is not used for activity related to manufacture. The whole emphasize for disallowing credit was given by the lower authorities on the ground that since the said rental premises was not included in the registered premises therefore credit is not admissible. As I discussed, use before or after, when it is meant for factory activity, credit is admissible whether the premises was included in the registered premises or otherwise. It is kept in mind that service is not tangible unlike inputs or capital goods. Scope of service is not limited within the four corner of factory, even if same services are received by the appellant at any place directly or indirectly related to manufacture of activity or related to business activity of the assessee irrespective whether it is provided within the factory or out side the factory, credit is admissible. Therefore in my considered view so long as rental premises in the present case is used for manufacturing activity of factory unit, credit is admissible, therefore the impugned order is set aside. Appeal is allowed.
(Operative part pronounced in court) Ramesh Nair Member (Judicial) sk 2