Custom, Excise & Service Tax Tribunal
Rane Brake Lining Limited vs Commissioner Of Gst&Amp;Cce(Chennai ... on 12 November, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
Appeal No. E/42007/2018
(Arising out of Order-in-Appeal No.250/2018 (CTA-I) dated
22.5.2018 passed by the Commissioner of GST & Central Excise
(Appeals - I), Chennai)
M/s. Rane Brake Lining Ltd. Appellant
Vs.
Commissioner of GST & Central Excise
Chennai North Respondent
Appearance Ms. S. Sridevi and Shri Nitin, Advocates for the Appellant Shri B. Balamurugan, AC (AR) for the Respondent CORAM Hon'ble Ms. Sulekha Beevi C.S., Member (Judicial) Date of Hearing / Decision: 12.11.2018 Final Order No. 42790 / 2018 The appeal is filed by the appellant aggrieved by the disallowance of input tax credit on security services.
2. Brief facts are that the appellants are engaged in the manufacture of asbestos brake linings and are availing the facility of CENVAT credit on inputs, input services etc. It was noticed that they had availed credit of Rs.32,864/- on security services. Show cause notice was issued proposing to disallow the credit and recover the same along with interest and also for 2 imposing penalties. After due processing of law, the original authority confirmed the demand, interest and imposed penalty of Rs.5,000/-. In appeal, Commissioner (Appeals) upheld the same. Hence this appeal.
3. On behalf of the appellant, ld. counsel Ms. S. Sridevi and Shri Nitin submitted that the security services were availed for providing security to the area in which the appellant had dumped the hazardous waste generated in the factory from the manufacturing activity. The credit has been disallowed stating that the said services have no nexus with the manufacturing activity. She submitted that the appellants have to remove as well as store the hazardous waste as per the Hazardous Waste Rules and also the guidelines issued by the Tamil Nadu Pollution Control Board. Therefore, it is required by them to engage the security at the area where the hazardous waste is stored and the disallowance of credit is unjustified and prayed that the same may be allowed.
4. The ld. AR Shri B. Balamurugan supported the findings in the impugned order. He submitted that the security services is in a place which is not within the premises of the factory and has no nexus with the manufacturing activity. That the disallowance of credit is legal and proper.
5. Heard both sides.
6. The ld. counsel has argued that as per the legal requirement and the guidelines issued by Tamil Nadu Pollution 3 Control Board, they have to remove, treat and dispose the hazardous waste/effluents only in a place as approved by the authorities and the same cannot be done within the factory premises. That the non-compliance of such conditions would entail cancellation of factory license. Therefore, I hold that the appellants were compelled to remove and store the hazardous waste outside the factory and to engage security for providing protection for the hazardous waste. I find that the security services are related to manufacturing activity and therefore the denial of input tax credit is unjustified. The impugned order to the extent of disallowing credit on security services is set aside. The appeal is allowed with consequential relief, if any.
(Dictated and pronounced in open court) (Sulekha Beevi C.S.) Member (Judicial) Rex