Custom, Excise & Service Tax Tribunal
M/S. J.P. Kenny Ltd vs C.C.E. & C.S.T. - Delhi on 15 January, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. II
Appeal No. ST/57086/2013-ST(SM)
[Arising out of Order-in-Original No.200/ST/PKJ/CCE/ADJ/2012 dated 24.12.2012 by the Commissioner of Central Excise (Appeals), Delhi].
For approval and signature:
Honble Mr Ashok Jindal, Member (Judicial)
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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 Lordships wish to see the fair copy of the Order?
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Whether Order is to be circulated to the Departmental authorities?
M/s. J.P. Kenny Ltd. .Appellants
Vs.
C.C.E. & C.S.T. - Delhi .Respondent
Appearance:
Shri Kishore Kunal, DR for the Appellants Shri G.R. Singh, Advocate for the Respondent CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial) Date of Hearing: 15.01.2015 FINAL ORDER NO.50114/2015-ST(SM) Per Ashok Jindal:
The appellant is in appeal against the impugned order denying input service credit of Rs.6,95,390/-.
2. The brief facts of the case are that the appellant availed Cenvat Credit of Rs.6,48,208/- towards Cenvat Credit received on the invoices received prior to their Service Tax registration and a Cenvat Credit of Rs.47,182/- availed on housekeeping and hotel services charges paid by them. Revenue is of the view that the appellant is not entitled to take Cenvat Credit on service received prior to service Tax registration and the Housekeeping and hotel services charges are not related to their business of manufacturing as this services have been availed outside the factory premises and in residential colony. The show cause notice was issued to the appellant by invoking extended period of limitation. The matter was adjudicated. The demands against the Cenvat Credit of Rs.6,95,390/- was denied along with interest and various penalties of the Finance Act was also imposed.
3. The Ld. Counsel for the appellant submits that the Cenvat Credit cannot be denied for the invoices received prior to service tax registration as held by the Honble High Court of Karnataka in the case of MPortal India Wireless Solutions Pvt. Ltd Vs. CST reported in 2012 (27) STR 134 (Kar.) which has been followed by this Tribunal in the case of Reliance Ports & Terminals Ltd. Vs. C.C.E. reported in 2013-TIOL-388-CESTAT-Mum. For the denial of input services credit on the housekeeping charges, he submits that the same is governed by the decision of this Tribunal in the case of LOreal India Pvt Ltd Vs. C.C.E. Pune 2011 (22) STR 89. For hotel charges, he fairly conceded that they are not entitled to take Cenvat Credit for the same. He further submits that as show cause notice has been issued by invoking extended period of limitation, therefore demands are not sustainable as the facts of availment of Cenvat Credit came in the knowledge of the Revenue at the time of audit conducted in the year July 2008. In these circumstances, it is prayed that impugned order be set aside.
4. On the other hand Ld. AR took the reliance on the decision of this Tribunal in the case of Showa India (P) Ltd. Vs. C.C.E. Faridabad-2012 (25) S.T.R. 152 (Tri-Del) to say that prior to registration of service tax, they are not entitled to take Cenvat Credit. For services of Housekeeping and hotel charges he submits that these services are availed by individual in residential colony. Therefore, appellant is not entitled to take Cenvat Credit. On limitation he submits that as the fact of availment of Cenvat Credit came to the knowledge of the department during the course of the audit and appellant has not taken any positive steps to pay inadmissible Cenvat credit within time. Therefore, extended period of limitation is rightly invoked.
5. Heard the parties. Considered the submission.
6. For availment of the Cenvat Credit on the invoices received prior to service tax registration, I find that issue is squarely covered by the decision of the Honble High court of Karnataka in the case of MPortal India Wireless Solutions Pvt. Ltd (Supra) wherein the Honble High Court of Karnataka has observed as under:
Insofar as requirement of registration wit the department as a condition precedent for claiming Cenvat Credit is concerned, Ld. Counsel appearing for both parties were unable to point out any provision in the Cenvat Credit Rules which impose such restrictions. In the absence of a statutory provision which prescribed that registration is mandatory and that if such a registration is not made the assessee is not entitled to the benefit of refund, the three authorities committed a serious error in rejecting the claim for refund on the ground which is not existence in law. Therefore, said finding recorded by the Tribunal as well as by the lower authorities cannot be sustained. Accordingly, it is set aside.
7. The decision of this Tribunal has been passed on 14.07.2014 whereas decision in the case of MPortal India Wireless Solutions Pvt. Ltd (Supra) was passed by the High Court of Karnataka on 23.09.2011. Therefore, decision of the High Court of Karnataka will prevail over decision of this Tribunal. Therefore, I hold that appellant is entitled to take Cenvat Credit on the invoices received prior to Service tax registration.
8. For availment of Cenvat Credit for housekeeping services and hotel service charges which has been availed by the appellant in residential colony or for individuals. Therefore, I hold that Cenvat Credit on these services is not available to the appellant. Further, I find that during the course of the audit it was pointed out that appellant has taken inadmissible Cenvat credit and appellant has not paid inadmissible Cenvat credit. In these circumstances, revenue has rightly invoked the extended period of limitation. In these circumstances, I confirm the demand of Rs.47,182/- to be paid by the appellant along with interest. With regard the penalty as the services is new and appellant has taken the Cenvat Credit on House keeping services which may be utilized for the business purposes of the appellant. Therefore, on that part of the input services credit the penalty is not imposable. But for the hotel services availed by the appellant, the penalty is confirmed. Appeal is disposed off on the above terms.
(Dictated and pronounced in the open court)
(Ashok Jindal) Member (Judicial)
Bhanu
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E/57086/2013-ST(SM)