Custom, Excise & Service Tax Tribunal
M/S Vaidyanath Urban Co-Operative Bank ... vs Commissioner Of Central Excise, ... on 14 July, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Application No. ST/S/94911/14 in Appeal No. ST/86481/14 (Arising out of Order-in-Appeal No. AV(15)299/2014 dated 29.1.2014 passed by the Commissioner of Central Excise & Customs (Appeals), Aurangabad). For approval and signature: Honble Shri Anil Choudhary, 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 : Yes 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? ====================================================== M/s Vaidyanath Urban Co-operative Bank Ltd. Appellant Vs. Commissioner of Central Excise, Aurangabad Respondent Appearance: Shri S.P. Sheth, Advocate for Appellant Dr. B.R. Meena, Addl. Commissioner (AR) for Respondent CORAM: SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) Date of Hearing: 14.07.2014 Date of Decision: 14.07.2014 ORDER NO. Per: Shri Anil Choudhary
The appellant M/s Vaidyanath Urban Co-operative Bank Ltd. is registered with Service Tax department for Banking and other Financial Services. The appellant had availed CENVAT Credit under the Cenvat Credit Rules, 2004 on the duty paid services availed by the appellant. Some of the services are partially exempted vide Notification No. 29/2005-Service Tax dated 22.2.2004 read with Valuation Rules. The show-cause notice dated 9.1.2013 was issued to the appellant for the period October, 2009 to March, 2011 on the allegation that the appellant having availed input tax and the output services being partially exempted were required to either maintain separate account or pay output tax @ 6% under Rule 6(3) on the exemption portion of the service under the head Banking and other Financial Services. Vide Order-in-Original dated 30.9.2013 passed by the Assistant Commissioner of Central Excise, the proposed demand of Rs.3,07,844/- was confirmed along with interest and equal amount of penalty under Rule 15(4) read with Section 78 of the Finance Act, 1994 and penalty of Rs.5000/- under Rule 15A of the Cenvat Credit Rules, 2004. Being aggrieved the appellant had carried the matter before the Commissioner (Appeals). The appellant had raised the ground that it had reversed the total amount of CENVAT Credit availed for the common input service along with interest and the same was repaid by challan, a copy of which is annexed at page 27 of the appeal memorandum. This contention also find reference in para 11.2 of the Order-in-Original. In this view of the matter, the whole input service credit was reversed relating to common input service. Therefore, there was no question of any tax payable under Rule 6(3) of the Cenvat Credit Rules, 2004. The learned Commissioner (Appeals) confirmed the demand alongwith penalty and interest relying on the ruling of the Hon'ble Bombay High Court in the case of Nicholas Piramal (India) Ltd. 2009 (244) ELT 321 (Bom). Being aggrieved the appellant is before this Tribunal.
2. The appellant draws my attention to Rule 2(e) of the Cenvat Credit Rules, 2004 wherein exempt service is defined as follows: -
Exempt Service means taxable service which are exempt from the whole of the Service Tax leviable thereon, or services on which no Service Tax is leviable under Section 66 of the Finance Act, 1994. It is further contended by the appellant that Division Bench of this Tribunal in the case of Nagar Urban Co-operative Bank Ltd. 2014-TIOL-929-CESTAT-MUM, after considering the decision of this Tribunal in the case of Josts Engineering Co. Ltd. Vs. Commissioner of Central Excise, Mumbai III 2013-TIOL-732-CESTAT-MUM and also the ruling of the Hon'ble Bombay High Court in the case of Nichlas Piramal (supra) has granted the stay in similar facts and circumstances taking note that Rule 6(3) has been amended retrospectively by Finance Act, 2010 and the Tribunal in the case of Josts Engineering (supra) relied upon by the appellant held that reversal of credit by the assessee on the entire common input service credit taken along with interest, amounts to non-availment of credit. Therefore, the provisions of Rule 6(3) of Cenvat Credit Rules are not attracted. The appellant also relies upon another ruling of the Division Bench of this Tribunal in the case of Preeti Logistics Ltd. vide Order No. A/238/14/CSTB/C-I dated 3.3.2014 wherein relying on the ruling of the Josts Engineering (supra) in similar circumstances taking into consideration the reversal of whole of the credit of common input service, proper relief was allowed. The appellant also strongly contends that in view of the definition of Exempt Service, they do not fall under this provision of Rule 6(3).
3. The learned AR relies on the impugned order, but does not dispute the rulings relied upon by the Counsel for the appellant.
4. Having considered the rival contention, I take up the appeal itself for final disposal.
5. Considering that the issue is full covered by Josts Engineering (supra) and in the case of Nagar Urban Co-operative Bank Ltd. (supra), I find that the appellants case is squarely covered. Further, the aforementioned ruling was not available before the adjudicating authority at the time of passing of the impugned order and rulings were pronounced subsequently. In this view of matter and after recording the finding that the appellants case are covered by these two rulings, I remand the matter back to the adjudicating authority with a direction to verify the amount of CENVAT Credit reversed. If the same is found to be short then the appellant may be allowed an opportunity to reverse the amount alongwith interest. It is also held that the Banking and other Financial Service, which are the output service of the appellant are not fully exempted and accordingly, do not fall under the category of exempt service as defined under Rule 2(e) of the Cenvat Credit Rules, 2004.
6. The appeal is allowed by way of remand in the above terms.
(Dictated and pronounced in Court) (Anil Choudhary) Member (Judicial) Sinha 1