Custom, Excise & Service Tax Tribunal
M/S Patwardhan Infrastructure Pvt. Ltd vs Commissioner Of Central Excise, Nagpur on 28 October, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. ST/89810/14 (Arising out of Order-in-Appeal No. SR/210/NGP/2011 dated 20.1.2011 passed by the Commissioner of Central Excise & Service Tax (Appeals), Nagpur). For approval and signature: Honble Shri Raju, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No 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 : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== M/s Patwardhan Infrastructure Pvt. Ltd. Appellant Vs. Commissioner of Central Excise, Nagpur Respondent Appearance: None for Appellant Shri B.K. Iyer, Supdt. (AR) for Respondent CORAM: SHRI RAJU, MEMBER (TECHNICAL) Date of Hearing: 28.10.2016 Date of Decision: 19.01.2017 ORDER NO. Per: Raju
This appeal has been filed by the appellant, M/s Patwardhan Infrastructure Pvt. Ltd., for denial of CENVAT Credit. Earlier the matter had reached the Tribunal and was remanded by the Tribunal with directions. In remand proceedings, both the lower authorities have held against the appellant. Aggrieved by the said order, the appellants before Tribunal.
2. No one appeared for the appellants though matter was listed number of times.
3. 3. From the grounds of appeal, it is seen that the appellants were registered with the Central Excise department at Nagpur, effective from 27/02/2007. During the period 30/04/2007 to 29/02/2008 they received certain input services and availed CENVAT credit in respect of these services. However, the invoices indicated the recipient of the service as Patwardhan Infrastructure Pvt. Ltd., Pune. Therefore, the department was of the view that the appellant should not have taken service tax credit at Nagpur for the services received in Pune. Accordingly, notice was issued and the adjudicating authority, after considering the submissions made by the appellant, dropped the demand. On appeal filed by the Revenue before the lower appellate authority, the Commissioner (Appeals), Nagpur considered the matter afresh and he held that CENVAT credit is not admissible and disallowed the credit apart from imposing a penalty of an equivalent amount. The lower appellate authority noted that registration for service tax purpose is based on the premises in Nagpur where business is conducted and if business is conducted from more than one premises, separate registration should have been obtained. In the instant, case only the Nagpur premises have been registered whereas the invoices indicate the service recipient at the Pune address and, therefore, he denied the credit. The matter was remanded for the following grounds: -
The short point to be decided in this case is where did the appellant receive the input service? Whether it was at Nagpur or at Pune and whether these input services were used in rendering output services and whether there is any nexus between the input service received and the output services provided? From the facts available on records it is seen that the input services have been received only after the registration was given at Nagpur and the Pune address did not have any registration at all. If that be so, the question of availing credit by the Pune office does not arise. If it is only mentioning of an incorrect address on the invoices received, it is a curable defect. Therefore, the case needs to go back to the original adjudicating authority to verify whether the input services on which credit has been availed was received at the Nagpur office and whether there is a clear nexus between the input services received and the output services rendered. The adjudicating authority can also verify whether there is any double counting of the amounts and any excess demand has been made on account of double counting of the invoices. Needless to say, the appellant should be given a reasonable opportunity of being heard to make submissions in their defence before passing the adjudication order.
4. The lower authorities have held against the appellant. Input services on which they have claimed credit pertain to supervision of Toll charges at Alibagh Toll Centre. The appellants are involved in procuring various contracts on commission basis and are registered under Business Auxiliary Service. It is seen that both the lower authorities have held that there is no nexus between input service and output service. The output services rendered as described in the Order-in-Original is that the appellants are engaged in service of procurement of contract order for their clients and in some cases, the project are BOT basis and required collection of toll at such project site. Therefore commission includes the activities right from procurement of orders till the end of the project and realization of the proceeds by the clients from the government/public, as the case may be. While it is true that for a company operating toll plaza and paying Service Tax on such toll services, would be entitles to input service credit of operating such toll site. The appellants are however engaged in the operating of toll plaza on commission basis and registered under Business Auxiliary Service. They are not providing the toll services. Their job is merely to obtain the contracts. The Order-in-Original has observed as follows: -
Their commission includes the activities right from procurement of orders till the end of the project and realization of the proceeds by the clients from the government/ public as the case may be. Noticee thereby claimed that Supervision of Toll Collection is all input service for them. First of all the submissions of Noticce are not supported by any documentary evidence. Noticce has failed to bring on record to establish the nature of services rendered by noticee by availing the service under dispute so as to prove that there is clear nexus between the service under dispute received by them and claimed as input service and output service rendered 'by Noticee. Thus, though Noticce was given sufficient opportunity in compliance of CESTAT's order dated 12.10.2012, for submission of their claim supported by due evidence for verification, Noticee failed to furnish any evidence to substantiate their claim. As such Noticee failed to prove that services in question are input service for rendering output service in order to avail Cenvat Credit of such services. Thus, Cenvat Credit of services in question cannot be availed by Noticee in absence of any documentary proof to substantiate that there is clear nexus between such services availed and output service so rendered. In the Order-in-Appeal the following has been observed: -
I find that work done by the appellant is difficult to be assessed on the basis of their arguments only and in the absence of evidences. The only documentary evidence he has produced in this regard before the lower authority (as claimed by him) is proof of payments made/received on this account. They have not even produced the copies of contracts entered into with M/S SMS Infrastructure who are rendering them such services and the contract entered into with the companies who have granted them contracts of toll collection on BOT basis or otherwise. As he is not into construction business, the question of operating the toll collection centre on BOT basis does not arise. If he has only been given contract of operating the toll collection centre, then he is not just a commission agent anymore as claimed by him. But, he is vehemently sticking to the point that he is a commission agent. If he is only getting a share in the toll collection for procuring the contract, then there is no service being rendered by the appellant. So, in either of the situations, it is inconceivable to establish any nexus between the service received (input service) from 5M5 Infrastructure and the service rendered (output service) by the appellant, may it be commission agent's services or toll collection services. Hence, the nexus between the services received by the appellant from M/s 5M5 Infrastructure and their relation with the output service rendered by the appellant is not established.
5. I find that the appellants have failed to establish nexus and clearly communicated the nature of services provided by them and why there is no nexus between the services provided by them and the services received by them. Even in grounds of appeal there is no clarity. In view of the above, I am unable to hold that there is any nexus between the input service and the services provided by the appellant. Accordingly, the credit of input is not available to the appellant. Appeal is therefore dismissed.
(Pronounced in Court on 19.01.2017) (Raju) Member (Technical) Sinha 5 Appeal No. ST/89810/14