Custom, Excise & Service Tax Tribunal
M/S. Basf India Ltd vs The Commissioner Of Central Excise on 8 August, 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE COURT - I Application Involved: E/Stay/25102/2013 in E/25132/2013-SM Appeal Involved: E/25132/2013-SM [Arising out of Order-in-Appeal No.484/2012 dt 01/10/2012 passed by Commissioner of Central Excise, Mangalore] M/s. BASF India Ltd. Appellant Versus The Commissioner of Central Excise Mangalore Respondent
Appearance:
Mr L.S. Karthikeyan, Advocate For the Appellant Mr R. Gurunathan, Additional Commissioner (AR) For the Respondent Date of Hearing: 08/08/2013 Date of Decision: 08/08/2013 CORAM:
HON'BLE SHRI B.S.V.MURTHY , TECHNICAL MEMBER Final Order No. 25822 / 2013 Order per. B.S.V.MURTHY BASF India Ltd. (BASFI) according to the appellant was an associated enterprise of the applicant. Along with other enterprises, BASFI also got amalgamated with the appellants as per the order of the Honble High Court of Bombay dated 24.01.2011. This fact was intimated to the department in October 2011. However on 04.02.2011 proceedings were initiated against the appellant objecting to the credit of service tax taken on various services such as Outdoor Catering, Security, Weigh Bridge, Truck Parking area etc. etc. The objection was that these services were being used by the appellant as well as BASFI which also used to function from a part of the premises given to them. The original adjudicating authority after observing principles of natural justice denied the entire amount of credit of Rs. 15,26,424/- taken on these common services. On an appeal filed by the appellant, the Commissioner (Appeals) in the impugned order took the view that appellant is eligible for proportionate credit.
2. After hearing both the sides for some time, it was proposed by the Bench that the matter itself can be finally decided since the issue involved is not complicated and can be decided. Both sides agreed and accordingly the requirement of pre-deposit is waived and appeal is taken up for final decision.
3. The learned counsel submitted that even though Commissioner allowed a proportionate credit, he did not specify how such credit should be allowed. The appellants have calculated the credit denied on the turnover basis. Further he submits that the merger had already taken place even before show-cause notice was issued. However before the order-in-original was passed, the appellants had already intimated the department that the merger has taken place. Moreover this was brought to the notice of both the lower authorities but both have not made any observations.
4. In my opinion the merger itself is sufficient for deciding the issue. In this case as on January 2011 when the merger took place, whatever credit was available in the books of BASFI was transferred to the appellant. I find from the records that the department was intimated about the merger and availment of credit in the books of BASFI by the appellant in October 2011 and this has not been objected to. Moreover I also find that Rule 10 of CENVAT Credit Rules 2004 provided that where the entire assets are taken over by another company and transferred, the credit available in the books of accounts also get transferred. Therefore the entire exercise undertaken by the Revenue became infructuous because both the companies merged and by the time proceedings were initiated technically from the date of order of the High Court, the merger also has taken place and therefore whatever credit was available in the books of accounts of BASFI has to be transferred to the appellant in January 2011 itself. Even though in reality the actual transfer of the credit was made only in October 2011. Moreover I also find that it is not the case of the Revenue that the other unit was not eligible for the credit and in fact this aspect has not been examined. The only ground taken is that the services were utilized in both the units and therefore proportionate credit should have been availed. It was also submitted by the learned counsel that BASFI was also paying excise duty and they were making payment from both PLA and CENVAT credit account. In such a situation it cannot be said that there was an intention to avail wrong credit since BASFI would have also utilized the credit. Since before passing the order-in-original the credit had already become part of the credit of appellant and the BASFI ceased to exist, in my opinion it would not fair and it would not be legal also to deny the credit taken by the appellants. In view of the above discussion, the impugned order is set aside and appeal is allowed with consequential relief if any to the appellant.
(Order Pronounced and Dictated in Open Court) B.S.V.MURTHY (TECHNICAL MEMBER) iss