Custom, Excise & Service Tax Tribunal
M/S. Titan Industries Ltd vs Commissioner Of Service Tax, Chennai on 9 March, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
Appeal No. ST/481/2009
(Arising out of Order-in-Original No. 10/2009 dated 29.6.2009 passed by the Commissioner of Central Excise, Chennai III)
M/s. Titan Industries Ltd. Appellant
Vs.
Commissioner of Service Tax, Chennai Respondent
Appearance Smt. Radhika Chandrasekar, Advocate for the Appellant Shri A. Cletus, Addl. Commissioner (AR) for the Respondent CORAM Honble Ms. Sulekha Beevi C.S., Member (Judicial) Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of Hearing / Decision: 09.03.2018 Final Order No. 40600 / 2018 Per Bench The appellants are engaged in providing services of maintenance and repair service and is registered with the Service Tax Department. During verification of records, it was noticed that appellant had availed credit on various input services which are not eligible. It was also noticed that they had taken centralized registration but had no centralized billing system and therefore the credit availed is not admissible. Show cause notice was issued proposing to disallow the credit to the tune of Rs.2,39,34,843/- along with interest and also for imposing penalties. After due process of law, the original authority disallowed the credit and confirmed the demand along with interest and imposed equal penalty. Aggrieved, the appellants are now before the Tribunal.
2. The ld. Counsel Smt. Radhika Chandrasekar appearing on behalf of the appellant submitted that the appellant had availed credit on various services like Mandap Keeper Service, Real Estate Agent Service, Transport of Goods by Air Service, Programme Producer Service, Event Management Service, Rail Travel Agent Service, Air Travel Agent Service, Travel Agent Service, Market Research Agency Service, Clearing and Forwarding Agency service, Tour Operator Service, Rent-a-cab Service and Advertising Agency Service. She submitted that any activity relating to the business of the appellant is eligible for credit. The period involved is prior to 1.4.2011 and the definition of input services included all activities relating to business of the service provider. The said services have been availed for providing output service and therefore are eligible.
3. With regard to the issue that appellant has wrongly taken centralized registration without having centralized billing, accounting system, the ld. Counsel submitted that the said allegation is incorrect. The appellant had centralized billing system. The appellant has 31 service centres located in India and these service centres are registered centrally at Hosur for rendering output service namely Repair and Maintenance for the watches manufactured. The accounting is done in SAP which is automatically updated in centralized server and is accessible to all users across the country. Each service centre will mail the details of output services every month and accordingly liabilities are worked out at Hosur for payment of service tax on or before fifth of subsequent month. So also each of the input services is received in the respective centres and all conditions are complied with. All the input services on which credit was taken have been used for providing output services using centralized service tax registration. The service tax was paid at Hosur. Therefore, the credit is also available at Hosur in respect of input services received at various locations.
4. The ld. Counsel also argued on the ground of limitation. The department had conducted audit and an intimation letter dated 28.12.2005 was received by the appellant. As per this intimation, the appellant had filed all the necessary details for the three years along with ST3 returns. The appellant had submitted details of credit availed also. The department was therefore put to knowledge regarding the credit availed. The show cause notice issued invoking the extended period alleging suppression of facts is without any legal or factual basis.
5. The ld. AR Shri A. Cletus reiterated the findings in the impugned order. He submitted that the input services on which credit has been availed are not necessary services for the appellant for providing the output service. Further, that the appellant has availed credit on the services utilized in other service centres. That therefore the credit availed at Hosur is ineligible.
6. Heard both sides.
7. The first issue that arises for consideration is whether the appellant is eligible for credit on the various input services like Mandap Keeper Service, Real Estate Agent Service, Transport of Goods by Air Service, Programme Producer Service, Event Management Service etc. The period involved is prior to 1.4.2011 when the definition of input services had a wide ambit as it included the words activities relating to business. The Honble High Court of Bombay in the case of Coca Cola India Pvt. Ltd. Vs. Commissioner of Central Excise, Pune 20009 (242) ELT 168 (Bom.) has analysed the implication of the term within the definition of input services and has held that almost all activities relating to the business of the assessee would fall within the ambit of input service. We therefore hold that the denial of credit alleging that these services do not qualify for input service is unjustified.
8. The second reason for disallowing credit is that the appellant though has a centralized registration but does not have centralized billing system. The ld. Counsel for the appellant has asserted that the appellant had a centralized billing system and was availing the credit on services utilized in other service centres at Hosur. During the relevant period, there was no provision for ISD registration. The appellant had obtained centralized registration. This was within the knowledge of the department. The credit was availed at Hosur on the input services which have been availed at the various service centres since the appellant has obtained centralized registration for credit. We are of the considered opinion that the denial of credit on this ground cannot sustain. Further, the department has accepted the decision laid down in the case of Commissioner of Central Excise Vs. Dashion Ltd. 2016 (41) STR 884 (Guj.), wherein it was held that even though services are availed in different units of the appellant, credit is admissible. Taking note of these facts, we hold that the demand cannot sustain.
9. The ld. Counsel has also strongly argued on the ground of limitation. The appellant has furnished necessary details of credit availed along with ST 3 returns. The documents produced before us show acknowledgement by the department. This clearly evidences that the appellant has not suppressed facts regarding the availment of credit on input services. Therefore, the show cause notice issued invoking extended period cannot sustain. The appellant succeeds on the ground of limitation also.
10. In the result, the impugned order is set aside both on merits as well as on limitation. The appeal is allowed with consequential relief, if any.
(Operative portion of the order was
pronounced in open court)
(Madhu Mohan Damodhar) (Sulekha Beevi C.S.)
Member (Technical) Member (Judicial)
Rex
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