Custom, Excise & Service Tax Tribunal
M/S Manaksia Coated Metals & vs C.C.E.-Kutch (Gandhidham) on 3 January, 2018
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Zonal Bench 2nd Floor, Bahumali Building, Nr Girdharnagar Bridge, Asarwa Ahmedabad 380 004 Appeal No. : E/10838/2017 Arising out of OIA-KCH-EXCUS-000-APP-054-16-17 dt 26/12/2016 passed by the Commissioner ( Appeals ) Commissioner of Central Excise, Customs and Service Tax-RAJKOt. M/s Manaksia Coated Metals & Industries Ltd - Appellant(s) Vs C.C.E.-Kutch (Gandhidham) - Respondent(s)
Represented by For Applicant(s) : None For Respondent(s) : Shri S N Gohil, Authorised Representative CORAM :
Shri M V Ravindran, Hon'ble Member (Judicial) Date of Hearing / Decision : 03/01/2018 ORDER No. A/10110 / 2018 Per : Shri M V Ravindran, This appeal is directed against OIA OIA-KCH-EXCUS-000-APP-054-16-17 dt 26/12/2016 passed by the Commissioner ( Appeals ) Commissioner of Central Excise, Customs and Service Tax-RAJKOT.
2. None appeared on behalf of the appellant despite notice. Since the matter lies in a narrow compass, the appeal is taken-up for disposal even in the absence of any representation.
3. Heard Ld DR and perused the records.
4. Ld DR for the Revenue submits that the appellant herein had availed Cenvat Credit of the Service Tax paid by the service providers i.e., Professional Service who had given the appellants for the service and charges for the expansion of production capacity of the existing plant. It is his submission that the said services were rendered during the Sept 2012 to March 2013 that the definition of Input Service under Rule 2(l) of the Cenvat Credit Rules 2004 has undergone changes wherein Service Tax paid for setting up of plant has been deleted from the definition and there is no provision for availing Cenvat Credit for the Service Tax paid on charges/services received for expansion of the plant. There is no definition of any what would mean in respect of the plant. He draws the attention of the Bench to the definition of the Input Service as enshrined 2(l) of the Cenvat Credit Rules of 2004. It is his further submission that services were utilized for the upcoming plant which would mean that it may not be used in the form of which was rendered.
5. On careful consideration of the submissions made by the Ld DR and on perusal of records, I find that the issue is regarding eligibility of Cenvat Credit of the Service Tax paid by the service providers under professional services as regard charges for expansion of production capacity. It is noticed from the OIO that the appellant herein has been taking a stand that these services were in regard to the expansion/renovation work being carried out by the appellants at Kutchh plant. On such categorical assertion made before the Adjudication Authority, I find that the Adjudicating Authority has gone in tangent and recorded that the said services which are rendered are not for the upcoming Galvanized Plant which is of expansion plant. The same views has been expressed First Appellate Authority in the impugned order. In my considered view the definition of the input services as enshrined in Rule 2(l) of the Cenvat Credit Rules, 2004 needs to be read.
(l) input service means any service, -
(i) used by a provider of taxable service for providing an output service; or
(ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal; but excludes services,-
(A) specified in sub-clauses (p), (zn), (zzl), (zzm), (zzq), (zzzh) and (zzzza) of clause (105) of section 65 of the Finance Act (hereinafter referred as specified services), in so far as they are used for-
(a) construction of a building or a civil structure or a part thereof; or
(b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or (B) specified in sub-clauses (d), (o), (zo) and (zzzzj) of clause (105) of section 65 of the Finance Act, in so far as they relate to a motor vehicle except when used for the provision of taxable services for which the credit on motor vehicle is available as capital goods; or (C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee;?;
6. It can be seen from the above definition, the services which are used in modernization, renovation, repairs of the factory Service Tax credit can be availed. It is not clear from the records as to how both the authorities have come to a conclusion that the said expansion/renovation is not covered under the definition of the input service and especially under modernization/ renovation or repair of the factory It can not disputed that the services rendered by the service provider in the factory premises of the appellant and the services hired were used for the reasons mentioned for.
7. In view of the fore going, I find that both the lower authorities were in error in rejecting the claim of the appellant as to eligibility to avail cenvat credit.
8. In view of the foregoing, I hold the impugned order is unsustainable and liable to set aside and I do so.
9. The impugned order is set aside and the appeal is allowed.
(Dictated and pronounced in the open Court) (M V Ravindran) Member (Judicial) swami 4