Custom, Excise & Service Tax Tribunal
Neutral Glass And Allied Industries P. ... vs C.C.E.& S.Tax, Surat Ii on 30 January, 2017
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, O-20, NMH Compound Ahmedabad Service Tax Appeal No.10096 of 2013 Arising out of the order-in-appeal No.SSP/68/SURAT II/2012 dated 28.9.2012 passed by the Commissioner (Appeals), Central Excise, Customs and Service Tax, Surat II. Neutral Glass and Allied Industries P. Ltd. .. Appellants Vs. C.C.E.& S.Tax, Surat II .. Respondent
Appearance:
Present Shri H. Veyapari, C.A.with Shri Sunil C.Veyapari, C.A. for the appellants Present Shri G.P. Thomas, A.R. for the Respondent-Revenue Coram: Honble Dr. D.M. Misra, Member (Judicial) Date of hearing/decision: 30.1.2017 Final Order No.A/10365/2017 Per Dr. D.M. Misra:
This is an appeal filed against the order-in-appeal No.SSP/68/SURAT II/2012 dated 28.9.2012 passed by the Commissioner (Appeals).
2. Briefly stated the facts of the case are that the appellant had availed CENVAT credit of Rs.28,14,685/-, for the period from April 2007 to July 2010, at their factory, on various services received at their Head Office, in relation to running of business activity at their Head Office. Alleging that the services received at their Head office are not admissible at their factory premises, a demand notice was issued for recovery of the said credit along with interest and proposal for penalty. On adjudication, the demand was confirmed with interest and equal amount of penalty imposed. On appeal, the ld. Commissioner (Appeals) in turn, upheld the Order and rejected their appeal. Hence, the present Appeal.
3. Ld. C.A. Shri H. Veyapari assisted by Shri Sunil C. Veyapari, C.A. submits that the major portion of the demand relates to CENVAT credit availed on the service tax paid on renting of immovable property for occupation of their Head office in the rental premises. He submits that unless the head office functions, wherefrom the entire manufacturing business activity of the appellant is organized, it would be difficult to carry out their business activity. Therefore, the services received at their head office namely, renting of immovable property service, printing charges, courier charges etc. are admissible to credit at their factory. He further submits that the appellants do not have more than one manufacturing unit and the entire credit on the input services received at their head office are availed and utilized at their manufacturing unit, even though the Head office was not registered as input service distributor. Further, he also submits that the issue is covered by the decision of the Honble High Court of Gujarat in the case of Commissioner of Central Excise vs. Dashion Limited reported - 2016 (41) STR 884 (Guj.).
4. Ld. A.R. for Revenue reiterates the findings of the ld. Commissioner (Appeals).
5. I find that the only issue needs to be addressed is: whether the appellants are eligible to avail credit at their factory, when the entire input services have been received and utilized for their business activity at their head office. I do not find any reason for not accepting the argument of ld. C.A. for the appellants that these services are necessary and having nexus with the manufacturing activity, therefore, credit availed is definitely admissible to them at their factory. Also, in view of the judgment of Honble High Court at Gujarat in the case of Dashion Limited(supra), non-registration of the head office as an input service distributor cannot be a factor for denying the credit. The Honble High Court at Para 7 of the judgment observed as under:
7.?The second objection of the Revenue as noted was with respect of non-registration of the unit as input service distributor. It is true that the Government had framed Rules of 2005 for registration of input service distributors, who would have to make application to the jurisdictional Superintendent of Central Excise in terms of Rule 3 thereof. Sub-rule (2) of Rule 3 further required any provider of taxable service whose aggregate value of taxable service exceeds certain limit to make an application for registration within the time prescribed. However, there is nothing in the said Rules of 2005 or in the Rules of 2004 which would automatically and without any additional reasons disentitle an input service distributor from availing Cenvat credit unless and until such registration was applied and granted. It was in this background that the Tribunal viewed the requirement as curable. Particularly when it was found that full records were maintained and the irregularity, if at all, was procedural and when it was further found that the records were available for the Revenue to verify the correctness, the Tribunal, in our opinion, rightly did not disentitle the assessee from the entire Cenvat credit availed for payment of duty. Question No. 1 therefore shall have to be answered in favour of the respondent and against the assessee.
6. In the result, the impugned order is set aside and the appeal is allowed with consequential relief, if any to the appellant as per law.
(Dr. D.M. Misra) Member (Judicial scd/ ST/10096/2013-SM 1