Custom, Excise & Service Tax Tribunal
M/S. Rajasthan Textile Mills vs Cce, Jaipur I on 21 July, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO. 2, R.K. PURAM, NEW DELHI COURT III SERVICE TAX APPEAL NO. 114 OF 2007 & EXCISE APEPAL NO. 2411 OF 2007-SM [Arising out of Order-in-Appeal No. 299(GRM)CE/JPRI/2006 dated 13.12.2006 and 138(GRM)CE/JPR-I/2007 dated 15.5.2007 both passed by the Commissioner (Appeals), Customs & Central Excise, Jaipur] For approval and signature: Honble Mr. P.K. Das, Member (Judicial) 1. Whether Press Reporters 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 Departmental authorities? M/s. Rajasthan Textile Mills Appellants Vs. CCE, Jaipur I Respondent
Appearance:
Shri Hemant Bajaj, Advocate for the appellants; Shri I.K. Baig, S.D.R. for the Revenue Coram:
Honble Mr. P.K. Das, Member (Judicial), Date of hearing/decision: 21st July, 2009 FINAL ORDER NO._________________ dated __________ Per P.K. Das:
Common issue is involved in these appeals and, therefore, both are being taken up together for disposal.
2. A show cause notice dated 8.3.2006 was issued alleging that the appellants had wrongly taken/availed credit of service tax including Education Cess amounting to Rs. 1,25,518/- on the service of Customs House Agent engaged for clearances of export consignments during the period from 01.11.2004 to 30.11.2005. The original authority confirmed the demand of tax and refrained from imposition of penalty. The appellants filed appeal before the Commissioner (Appeals) for setting aside adjudication order, which was rejected. Revenue also filed appeal before the Commissioner (Appeals) for imposition of penalty under Section 11AC of Central Excise Act, 1944, which was allowed.. Hence, the appellants filed the two appeal against orders of the Commissioner (Appeals).
3. After hearing both sides and on perusal of the records, I find that the issue has been covered in favour of the appellants by the decision of the Tribunal as under:-
(a) CCE, Rajkot vs. Rolex Rings P. Ltd. 2008 (86) RLT 201 (CESTAT-Ahbad.);
(b) Kuntal Granites Ltd. vs. CCE, Bangalore 2007 (81) RLT 707 (CESTAT-Ban.);
(c) CCE, Rajkot vs. Adani Pharma Chem P. Ltd. 2008 (88) RLT 651 (CESTAT-Ahmd.)
3. It is also relied upon the decision of the Larger Bench of the Tribunal in the case of ABB Ltd. vs. CCE & ST, reported in (2009) 21 STT 77 (Bomay CESTAT-LB).
4. Relevant portion of the order of the Tribunal in the case of Rolex Rings P. Ltd. (supra) is reproduced as under:-
4. After considering the submissions made by both the sides and the reasonings adopted by Commissioner (Appeals), I find that the CHA and Surveyors services are utilized at the time of export of the goods. The respondents continue to remain the owner of the goods in question till the same are exported. As such, it can be reasonable concluded that the place of removal in case of exported goods is the port area. The above interpretation is also supported by Para 8.2 of the Boards Circular No. 97/8/2007-ST dt. 23/8/2007 [reported in 2007 (82) RLT M9] laying down that where sale takes place at the destination point and the ownership of the goods remain with the seller till the delivery of the goods, the place of removal would get extended to the destination point and the credit of the service tax paid on the transportation up to such place of sale would be admissible. Inasmuch as in the present case also, the ownership of the goods remain with the seller till the port area, it can be safely held that all the services availed by the exporter till the port area are required to be considered as input service inasmuch as the same are clearly related to the business activities. Activities relating to business are covered by the definition of input service and admittedly CHA and Surveyors services are relating to the export business. As such, I agree with the reasonings adopted by Commissioner (Appeals) that the credit of duty paid on such services is admissible to the respondents.
5. Revenues reliance on the Tribunals judgment in the case of M/. Excel Crop Care Ltd. [2007 (81) RLT 566 (CESTAT-Ahbad.) = 2007 (7) STR 451 (Tri.-Ahmd.)] laying down that CHA services availed in respect of export does not have any nexus with the manufacture and clearance of the product from the factory and as such are not available as input services for the availment of the credit is not being relied upon by me inasmuch as neither definition of input service was considered nor the Boards circular referred in the preceding paragraph was taken into consideration.
5. In view of the above decisions of the Tribunal, I find that denial of credit of service tax on the services of Custom House Agents and imposition of penalty under Section 11AC of the Act are not sustainable. Accordingly, impugned orders are set aside. Both the appeals filed by the appellants are allowed with consequential relief.
(Dictated & pronounced in the Open Court.) (P.K. DAS) MEMBER (JUDICIAL) RK