Custom, Excise & Service Tax Tribunal
Agila Specialties Pvt. Ltd. (Formerly ... vs Commissioner Of Central Excise, ... on 2 January, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/28397/2013-SM [Arising out of Order-in-Appeal No. 453/2013 dated 30/08/2013 passed by the Commissioner of Central Excise, Bangalore-I (Appeals)] Agila Specialties Pvt. Ltd. (Formerly Part of Strides Arcolab Ltd.) (SPD) Plot No. 284-b, Bommasandra, Jigani Link Road, Jigani Road, Jigani Hobli, Anekal Taluk, Bangalore 560 076 Karnataka Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax Bangalore-I Post Box No. 5400, CR Buildings, Bangalore - 560 001 Karnataka Respondent(s)
Appearance:
Shri Rajesh Kumar, CA #1010, 1st Floor (Above Corp. Bank) 26th Main, 4th T Block, Jayanagar, Bangalore 560 041 Karnataka For the Appellant Shri Pakshi Rajan, AR For the Respondent Date of Hearing: 02/01/2017 Date of Decision: 02/01/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 20013 / 2017 Per : S.S GARG The present appeal is directed against the impugned order dated 30.08.2013 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has partly allowed the appeal of the appellant by holding that the appellants are eligible for refund of unutilized cenvat credit under Rule 5 of Cenvat Credit Rules in respect of service tax paid on Clearing and Forwarding and are not eligible in respect of service tax paid on freight outward, input service distribution, input credits, rent charges. Briefly the facts of the case are that the appellant is a 100% EOU engaged in the manufacture of pharmaceutical products and formulations. Appellant filed a refund application for the period July 2010 to September 2010 seeking refund of unutilized cenvat credit on input services and inputs amounting to Rs. 15,40,933/- (Rupees Fifteen Lakhs Forty Thousand Nine Hundred and Thirty Three only). Appellant was partially sanctioned the refund claim to the extent of Rs. 2,82,592/- (Rupees Two Lakhs Eighty Two Thousand Five Hundred and Ninety Two only) and further Rs. 1,91,023/- (Rupees One Lakh Ninety One Thousand and Twenty Three only) claimed on input was rejected on account of non-submission of the documents/invoices. Input service credit availed of Rs. 5,078/- (Rupees Five Thousand and Seventy Eight only) was rejected as ineligible services on the ground that no nexus between input services and manufactured goods was provided. Further refund of Rs. 9,90,202/- (Rupees Nine Lakhs Ninety Thousand Two Hundred and Two only) pertaining to ISD credits was denied on the ground that various services indented from office and distributed, no documentary evidence was provided. Aggrieved by the said order, the appellant filed appeal before the Commissioner and the Commissioner vide the impugned order allowed the appeal partly. Hence the present appeal.
2. Heard both the parties and perused the records.
3. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without appreciating the facts of the case and the law decided in this regard. He further submitted that the refund has wrongly been denied on the ground that the said service does not fall in the definition of input service as contained in Rule 2(l) of Cenvat Credit Rules. He further submitted that the definition of input service is very wide and covers any service which is rendered in or in relation to the business. The learned counsel further submitted that there is a nexus between the input service and the output service rendered by the appellant. Now coming to each input service, firstly I take up freight outward. These services are used for export of goods and in the case of export, place of removal is the port and therefore the appellant is eligible for cenvat credit. In this regard he relied upon the judgment in the case of CC & CE Vs. Pokarna Ltd. 2013 (292) E.L.T. 316 (Tri.-Bang.). Further with regard to input service distributor, the appellant submitted that the intention of seeking ISD registration is to pass on the credits from Corporate Office to the various manufacturing units who in turn use such services in order to manufacture the final product. The appellant submitted that the ISD credit is denied only on the sole ground that the documents based on which such credits were availed were not provided. Further with regard to input credit these credits are in the nature of procurement of packing materials, consumables, components, etc. towards manufacturing of final products. Further with regard to rental charges, the appellant has taken on lease factory premise which is used for and in relation to manufacture of goods for export and in the absence of the premises, the appellant is not in a position to manufacture finished goods.
4. On the other hand the learned AR reiterated the findings of the impugned order.
5. After considering the submissions of the parties and perusal of the material on record, I find that mainly the refund has been denied on account of non-production of documents in support of the invoices and the appellant has submitted that he has all the documents which can prove that these services were used in or in relation to the business. In view of this submission of the learned counsel for the appellant, I am of the view that this case needs to be remanded back to the original authority to consider the documents in proof of various input service and thereafter pass a reasoned order keeping in view the decisions rendered by the Tribunal with regard to these input services. Therefore, I set aside the impugned order and remand the case back to the original authority for passing fresh order after complying with the principles of natural justice.
(Operative portion of the Order was pronounced in Open Court on 02/01/2017) (S.S GARG) JUDICIAL MEMBER iss