Custom, Excise & Service Tax Tribunal
M/S Quark City India Pvt. Ltd vs Cce & St, Chandigarh on 17 April, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing : 24.3.2014
Date of Pronouncement:17.4.2014
Appeal No. ST/59871/2013-ST(SM)
[Arising out of the Order-in-Appeal No. CHD-EXCUS-OOO-APP-92-13-14 dated 24.6.2013 passed by the Commissioner of Central Excise, Chandigarh)
For Approval & signature :
Honble Ms. Archana Wadhwa, Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it would 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 of the order?
4.
Whether order is to be circulated to the Department Authorities?
M/s Quark City India Pvt. Ltd. Appellant
Vs.
CCE & ST, Chandigarh Respondent
Appearance Shri Hemant Bajaj, Advocate - for the appellant Shri M.S. Negi, D.R. - for the respondent CORAM: Honble Ms. Archana Wadhwa, Member (Judicial) Final Order No. 51614/2014 Per Archana Wadhwa :
The appellant is registered with the department for transport of goods by road, maintenance and repair of immovable property service and renting of immovable property. During the scrutiny of half yearly returns for the half year ending on 30.9.2008 and 31.3.2009 it was observed that the appellant had taken and availed Cenvat credit of Rs.5,76,264/- on the services namely cleaning service, real estate agent service, manpower recruitment agency service, insurance service used in the maintenance of Plot No. A-45, Industrial Area, Phase VIII-B, Mohali during the period 1.4.2008 to 31.3.2009. Out of this, of Rs.2,11,348/- pertained to the input services namely cleaning service, real estate agent service, manpower recruitment agency service, insurance service used in maintenance of Plot No. A-45, Industrial Area, Phase VIII-B, Mohali. Cenvat credit of Rs.3,64,916/- was taken pertaining to input service tax of common services used in premises A-40 and A-45 during the period 1.4.2008 to 31.3.2009 on the services like professional fee for audit of financial statements, courier services, medical insurance of management staff of quark city, insurance of employees, service charges for repair of printer, repair and maintenance of computer software, services charges of repair of DG set, maintenance of photocopier and professional fee for consultancy on income tax matters. Accordingly, a show cause notice was issued to the appellant for recovery of Rs.5,76,264/- along with interest under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 73(1) of the Finance Act, 1994. The appellant was also show caused for penal action under Rule 15 of the Cenvat Credit Rules, 2004 read with Section 76 of the Finance Act.
2. The original adjudicating authority confirmed the demand of Rs.5,76,264/- by denying the Cenvat credit and also imposed penalty of identical amount under Rule 15 of Cenvat Credit Rules read with Section 76 of the Finance Act, 1994.
3. On appeal against the said order, Commissioner (Appeals) allowed credit to the extent of Rs.2,11,348/- availed in respect of A-45 premises, inasmuch as the output service of renting of immovable property stands provided from the said premises. However in respect of Cenvat credit of Rs.3,64,916/-, he disallowed the same by observing as under :-
As regards the common input Cenvat credit of Rs.3,64,916/- taken by the appellant in respect of both the premises i.e. A-40A and A-45, it is observed that it has been admitted by the appellant and their main office from where they were carrying out the activities were A-40A only and the premises A-45 had been rented out, therefore, in my view the appellant could not have been eligible for taking the Cenvat credit on the common input services in respect of both the premises unless they were registered as Input Service Distributor and the input service credit would have been distributed. It is further observed that the concept of input service distributor have been brought into force for dealing with such situations only. The proper procedure for distributing this Cenvat credit has not been followed by the appellant and as such the Cenvat credit has been rightly denied to them.
4. As is seen from the above para the sole reason for denial of credit is that the premises A-45 were not registered with the department as input service distributor. Otherwise there is no dispute that the appellant is entitled to the credit of service tax paid on common services availed for both the premises.
Tribunal in the case of CCE Vs. Jindal photo Ltd. - 2009 (14) STR 812 (Tri.-Ahmd.) observed that even when the registration is not taken as input service provider but there is no dispute about the availability of the credit, credit should not be denied on the said procedural violation. By following the same, I set aside the impugned order and allow the appeal with consequential relief to the appellant.
(Pronounced in Court on 17.4.2014) (Archana Wadhwa) Member (Judicial) RM 1