Custom, Excise & Service Tax Tribunal
M/S. East India Petroleum Pvt. Ltd vs Cce, Visakhapatnam on 17 November, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No.ST/1623/2012 (Arising out of Order-in-Original No.VIZ-STX-001-COM-032-12 dt. 29/02/2012 passed by CCE&C, Visakhapatnam-I) For approval and signature: Honble Ms. Sulekha Beevi, C.S., 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 should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s. East India Petroleum Pvt. Ltd. ..Appellant(s) Vs. CCE, Visakhapatnam ..Respondent(s)
Appearance Shri V. Ravindranath, Advocate for the appellant.
Shri P.S. Reddy, Asst. Commissioner(AR) for the respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial) Date of Hearing:17/11/2016 Date of decision:17/11/2016 FINAL ORDER No.31218/2016 [Order per: Sulekha Beevi, C.S.] Brief facts are that:-
The appellants are engaged in providing storage and warehousing and other services and are registered with the Service Tax Department. On verification of accounts of the appellant, it was observed that the appellants had availed irregular credit during the period 2007-08 and 2008-09. A show-cause notice was issued to the appellants and after due process of law, the original authority disallowed the credit of Rs.3,96,934/- and ordered recovery of the same along with interest and imposed equal amount of penalty. Being aggrieved, the appellants have filed the present appeal.
2. On behalf of the appellant, learned counsel Shri V. Ravindranath explained the details of the credit disallowed by the adjudicating authority. They are as follows:-
i. Rs.1,79,856/- was disallowed on the MS items which were used for fabrication of storage tanks.
ii. Rs.1,81,460/- was disallowed as credit availed on input services of interior decoration of their office at Hyderabad.
iii. Rs.78/- was disallowed being repair charges of Benz against document issued by M/s. Adishwar Auto Diagnostics (P) Ltd.
iv. Credit of Rs.4,427/- in regard to laptop of Shri Rakesh Soami for Hyderabad office issued by Dell India Pvt. Ltd.
v. Credit of Rs.865/- taken towards membership fee for Welcome Group Hotel by the Managing Director.
vi. Credit of Rs.9681/- taken for modification of dining hall.
vii. Credit of Rs.2284/- taken on service tax paid on employees group insurance policy.
viii. Credit of Rs10,699/- and Rs.3,028/- availed for services rendered by M/s. Reddy Babji.
ix. Credit of Rs. 4,556/- taken in respect of services availed from civil and mechanical and painting contractor.
3. The learned counsel submitted that the appellant being engaged in providing storage and warehousing facilities, the MS angles, channels etc. were used for fabrication of storage tanks. The issue whether credit is eligible on inputs used for construction of warehouse was analysed in the case of CCE, Visakhapatnam Vs. Sai Sahmita Storages (P) Ltd. [2011(23) STR 341 (AP)] and the issue was held in favour of the assessee. An amount of Rs.1,81,460/- was availed for interior decoration of the corporate office of the appellant at Hyderabad. He submitted that the credit has been disallowed for the reason that it is not for the office of the factory but related to the premises at Hyderabad. Learned counsel submitted that interior decoration done would be eligible under the head modernization and repair services and though availed for the corporate office at Hyderabad, the credit ought to have been allowed. The credit of Rs.9,681/- was availed for modernization of the dining hall and credit of Rs.10,699/- and Rs.3,028/- were also availed for similar civil construction works. The credit of these amounts have been denied on the ground that the invoices are not proper and the appellant has submitted only letters issued by M/s. Reddy Babji. Learned counsel submitted that the period being prior to 01/04/2011, the credit on employees group insurance policy, group personal accident policy ought to have been allowed. Further that though Rs.4,556/- was aviled by the appellant for cleaning services rendered by Shri V. Pradeep Kumar, Civil and Mechanical and Painting contractor; the appellant could not produce the documents to the authorities below and the credit was denied for these reasons. The appellant is ready to furnish the documents and requested that the matter may be remanded for verification of the documents.
4. On behalf of the Department, the learned AR Shri P.S. Reddy submitted that the credit availed on laptop Rs.4,427/- cannot be allowed for the reason that the laptop is meant for personal use of the employee and has no nexus with output service of providing storage facility. He submitted that the credit of Rs.865/- is taken toward membership fee for Welcome Group Hotel which has again no nexus with the output services provided by the appellant. After referring to various documents produced by the learned counsel for the appellant at the time of hearing, in respect of interior decoration services, works contract services, services for modification of dining hall, he pointed out that the documents are not proper, as they are not in the form of invoices / bills and do not contain necessary particulars.
5. I have heard both sides. The issue whether the credit is admissible on input services used for construction of warehouse was considered by the Honble jurisdictional High Court in the case of Sai Samhita Sotrages (P) Ltd. The issue was found in favour of the assessee. Following the same, I hold that the credit of Rs.1,79,856/- is eligible for credit.
6. The learned counsel at the time of hearing produced several documents to contend that the credit availed is proper. On perusal, it is seen that credit of Rs.1,81,460/- is availed for interior furnishings of the premises at Hyderabad. Though in the said document, certain works relating to interior fit out works, painting, dismantling works etc. are shown, it also contains amount spent for furniture. The purchase of furniture cannot be considered as a service. The amounts are shown as composite and service tax paid on the entire amount. For the same reason, I hold that the credit disallowed by the Commissioner on this count is legal and proper. The appellant has paid service tax towards works contract service for modification of dining hall and other repair works to the tune of Rs.23,408/-. The Commissioner has denied the credit stating that the documents are in the form of letters and not in the form of invoices. I do find substance in the observation/finding made by the Commissioner. The photocopy of documents produced before me. At the time of hearing, show that these documents are in the nature of letter issued by on Shri Reddy Babji to the appellant. Certain handwritten bills are attached/enclosed along with the letter. They do not have the pattern of invoice or the necessary details so as to be relied upon for allowing credit. It is for the assessee to maintain proper documents, if availing credit facility. The learned counsel has produced a new document at the time of hearing for the credit availed for Rs.4,556/-. He submitted that this amount was availed for cleaning service at the terminal area. The document produced before me which is a photocopy is not at all clear and does not show that service tax has been discharged. All these documents are so shabby; there are so many handwritten insertions. It is for the appellant who is availing the benefit of credit to upkeep and maintain proper document if he intends to avail credit which the appellant has failed in the present case. Therefore disallowance of credit of Rs.1,81,460/- and Rs.23,408/- and Rs.4,556/-, in my view, does not call for any interference. The credit of Rs.2,284/- availed on insurance policy is held to be eligible. The impugned order is modified to the extent of allowing the credit of Rs.1,79,856/- and Rs.2,284/- as stated above. The appeal is partly allowed in above terms with consequential reliefs, if any.
(Pronounced and dictated in open court) SULEKHA BEEVI C.S. MEMBER(JUDICIAL) Raja.
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