Custom, Excise & Service Tax Tribunal
M/S Sulphur Mills Ltd vs C.C.E. Bharuch on 14 March, 2018
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad Appeal No.E/10363/2018-SM [Arising out of OIA No. -VAD-EXCUS-002-APP-301-2017-18 dated 10.08.2017 passed by Commissioner (Appeals) Vadodara-I] M/s Sulphur Mills Ltd. Appellant Vs C.C.E. Bharuch Respondent
Represented by:
For Appellant: Sh. Vinay Kansara (Advocate) For Respondent: Sh. S.N.Gohil (A.R.) CORAM:
HONBLE DR. D.M. MISRA, MEMBER (JUDICIAL) Date of Hearing/decision:14.03.2018 Final Order No. A/ 10532 /2018 Per: Dr. D.M. Misra:
Heard both sides.
2. This is an appeal filed against the order-in-appeal No. -VAD-EXCUS-002-APP-301-2017-18 passed by the Commissioner (Appeals) Vadodara-I.
3. Briefly stated the facts of the case are that the appellant had availed CENVAT Credit of service tax paid amounting to Rs. 6,15,403/- on the basis of invoices issued by their Head Office (Input Service Distributor). Alleging that the input service, namely, renting of immovable property that is, go down and head office, having no nexus with the manufacturing activity, therefore, credit cannot be admissible, SCN was issued for recovery of the credit with interest and penalty. On adjudication, the demand was confirmed with interest and penalty. Aggrieved by the said order, they filed appeals before the Ld. Commissioner (Appeals) who, in turn, rejected their appeal. Hence the present appeal.
4. Ld. Advocate Sh. Vinay Kansara for the appellant submits that the appellant are engaged in the manufacture of pesticides and their Head Office situated in Mumbai from where all activities relating to finance, accounting, supply chain etc. are being carried out; also the go downs are taken on rent from where the goods are ultimately sold being the place of the consignment agents. It is his contention that, therefore, the rent paid against the above premises are definitely, having nexus with the manufacturing activity, accordingly, admissible to credit. In support, the Ld. Advocate referred to the judgment of this Tribunal in the case of Carrier Air Conditioning & Refrigeration Ltd. vs CCE 2016 (41) STR 824 (T) and Thiru Arooram Sugar ltd. vs CCE 2017 (51)STR 25 (T), Hind India Pvt. Ltd. vs CCE 2017 (520 STR 385 (T-Bang).
5. Ld. AR for the Revenue reiterated the findings of the Ld. Commissioner (Appeals).
6. I find that the appellant had availed cenvat credit of service tax paid by their Head Office and distributed on proportionate basis to the unit in accordance with Rule 7 of the Cenvat Credit Rules, 2004. The Ld. Advocate vehemently argued that the premises on which rent was paid relates to their Head Office and the premises of the consignment agents, wherefrom the goods are ultimately sold after being cleared from the factory. It is his contention that, therefore, the rent paid against these two premises is having direct nexus with the manufacturing activity, accordingly, admissible. I find force in the contention of the Ld. Advocate in view of the principle of law laid down in the aforesaid cases. In the result, I do not find merit in the impugned order, accordingly, the same is set aside and the appeal is allowed.
(Dictated and pronounced in the open Court) (D. M. Misra) Member (Judicial) Neha