Custom, Excise & Service Tax Tribunal
M/S. Ultratech Cement Ltd vs Cce-Indore on 1 December, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELALTE TRIBUNAL R.K. PURAM, WEST BLOCK NO. 2, NEW DELHI-110066 DIVISION MEMBER BENCH Date of hearing/decision : 1/12/2015 Appeal No. E/1106/2007-EX[DB] [Arising out of Order-in-original no. 02/Comm/ST/IND/07 dated 29.01.2007 read with corrigendum dated 13.4.2007 passed by Commissioner Customs & Central Excise-Indore] For Approval and Signature: Honble Smt. Sulekha Beevi C.S., Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) 1. Whether Press Reporter may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would 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? 4. Whether order is to be circulated to the Department Authorities? M/s. Ultratech Cement Ltd. Appellant Vs. CCE-Indore Respondent
Appearance: Shri Vipul Aggarwal, Advocate for the appellant
Shri Govind Dixit, DR for the respondent.
Coram: Honble Smt. Sulekha Beevi C.S., Member (Judicial)
Honble Shri B. Ravichandran, Member (Technical)
Final Order No. 53715/2015
Per: B. Ravichandran
This appeal is against order dated 29.1.2007 of Commissioner of Central Excise, Indore. Appellants are engaged in the manufacture of Cement and Clinker liable to central excise duty. They were availing cenvat credit on input and input services. Proceedings were initiated against the appellant for denial of cenvat credit of Rs. 3,51,13,135/-. After due process, the impugned order was issued. Ld. Commissioner disallowed an amount of Rs. 85,60,625/- out of the above said amount and imposed a penalty of Rs. 7,50,000/-. Aggrieved by this order the appellant is before us.
2. Ld. Counsel for the appellant, Shri Vipul Aggarwal, submitted that the disallowed credits are attributable to insurance service, R & D services, consultancy services received by them for fly ash storage projects and various input services distributed by input service distributor. He submitted that input service can be divided into two parts. The first part covers services used by a manufacturer in or in relation to the manufacture of final products, and in or in relation to clearance of final products from the place of removal. The second part of the definition is an inclusive part which covers various specified services within the ambit of input service.
3. The ld. Counsel submitted a chart giving details of services, amount of credit, purpose/use of services and reason for denial by original authority. He also listed a number of case laws relied against the reason given in the impugned order.
4. The ld. AR, Shri Govind Dixit, reiterated the findings in the impugned order. He submitted the invoices issued by ISD did not carry details of services, credit for which was distributed to the appellant. In the absence of details of nature of services the denial of credit is justified.
5. We have heard both the sides and perused appeal papers. We have examined the admissibility of credit on various services under dispute. The details of various services are:
(a) Insurance service- For insuring plant and machinery, mining equipments, stores company vehicles.
(b) R & D services- For development of reactive cement.
(c) Consultancy service- For fly ash project
(d) Services distributed by ISD- Testing of cement done at depot, handling and commission charges relating to sale of cement from depot, phone services, maintenance of machines, AC, etc courier service, mobile, van taxi, hotel rent, air ticket, catering and banking charges.
6. We find that the original authority denied these credit mainly on the ground that these services are not used in or in relation to the manufacturing activities or clearance of final products. Here, we have observed that the original authority himself elsewhere in the impugned held that the place of removal in the appellants case would include a depot and services of transportation of goods up to such depot is eligible for credit. As such a contrary view regarding these services being not connected to clearances of goods up to place of removal cannot be taken. We find from the nature of services narrated above that they have either directly or indirectly connected to the manufacturing, clearance or business of the appellant.
7. The emphasis on place of service by the lower authority has no relevance for determining the eligibility for credit.
8. We also examined the decisions in the following case laws relied upon by the appellant:
1. Endurance Technologies Pvt. Ltd. Vs. CCE 2011-TIOL-1045-CESTAT-MUM
2. CCE Vs. Endurance Technology Pvt. Ltd. 2015-TIOL-1371-HC-MUM-ST
3. Parry Engineering & Electronics P. Ltd. & Ors. Vs. CCE 2015 (40) STR 243 (Tri-LB)
4. CCE Vs. Ultratech Cement Ltd. 2011 (21) STR 297 (Tri-Mum.)
5. CCE Vs. Siemens Healthcare Diagnostics Ltd. 2014 (36) STR 192 (Tri.-Ahmd.)
6. Balkrishna Industries Ltd. Vs. CCE 2015 (39) STR 861 (Tri.-Del.)
7. Jodhani Papers Ltd. Vs. CCE 2015 (39) STR 126 (Tri.-Bang.)
8. Hindustan Zinc Ltd. Vs CCE 2015 (37) STR 608 (Tri-Del)
9. Hindalco Industries Ltd. Vs. CCE 2012 (27) STR 401 (Tri.-Dl)
10. Oudh Sugar Mills Ltd. Vs. CCE 2014 (34) STR 309 (Tri.-Del)
11. Dy. General Manager, Tata Motors Ltd. Vs. CCE 2015 (40) STR 269 (Tri.-Mum)
12. Flex Engineering Ltd. Vs. CCE, UP, 2012 (276) ELT 153 (SC)
13. Tata Engg. & Locomotive Ltd. Vs. CCE, Pune, 2010 (256) ELT 56 (Bom.)
14. Vako Seals Pvt. Ltd. Vs. CCE 2015 (40) STR 594 (Tri.-Mum.)
15. Deepak Fertilizers & Petrochemicals Corpn. Ltd.Vs. CCE, 2013 (32) STR 532 (Bom.)
16. Barmalt (India) Pvt. Ltd. Vs. CCE 2015 (38) STR 882 (Tri-Del)
9. In Hindustan Zinc Ltd. (Supra) the Tribunal held that cenvat credit is eligible on insurance services for insuring plant, machinery and goods/cash in transit, vehicles and computers. In Endurance Technologies P. Ltd. (Supra) the Tribunal held that services of repair and maintenance of windmills for generation of electricity are eligible for credit. In Dolphin Automative System P. Ltd 2014 (36) STR 1089 (Tri-Del) the Tribunal held that various services like cleaning services, legal services, management services, celeberation of annual day etc are eligible services for credit. In Ultratech Cement Ltd. (Supra) the Tribunal held that credit on services used outside factory premises cannot be denied.
10. Having examined the scope of input services now in dispute we find denial of credit on them is not legally sustainable. Accordingly, the appeal is allowed.
(Sulekha Beevi C.S.) Member (Judicial) (B. Ravichandran) Member (Technical) Ritu 3