Custom, Excise & Service Tax Tribunal
Jeans Knit (P) Ltd vs Commissioner Of Central Excise, ... on 31 August, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/26916/2013-SM [Arising out of Order-in-Appeal No. 229/2013 dated 10/05/2013 passed by the Commissioner of Central Excise, Bangalore-I (Appeals)] For approval and signature: HON'BLE SHRI S.S GARG, JUDICIAL MEMBER 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Jeans Knit (P) Ltd. No. 21-E-2, II Phase Peenya Industrial Estate Bangalore 560 058 Karnataka Appellant(s) Versus Commissioner of Central Excise, Service Tax And Customs Bangalore-II PB 5400, CR Building, Queens Road, Bangalore 560 001 Karnataka Respondent(s)
Appearance:
Shri Ashok Deshpande, Advocate 504, 4th Floor, Oxford Towers, 139, Old Airport Road, Kodihalli, Bangalore 560 008 Karnataka For the Appellant Shri Mohd Yusuf, AR For the Respondent Date of Hearing: 31/08/2016 Date of Decision: 31/08/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 20711 / 2016 Per: S.S GARG The present appeal is directed against the Order-in-Appeal No. 229/2013-CE dated 10.05.2013 passed by the learned Commissioner (Appeals) vide which he rejected the refund claim with regard to the input services viz. Banking Charges, Insurance, CA-secretarial charges, CA-KVAT accounting on the ground that input services are not in or in relation to manufacture of final products. Briefly the facts of the present case are that the appellant is a Private Limited Company and is a 100% EOU and is engaged in the manufacture and export of readymade garments. During December 2009, the appellant had exported their final products and while exporting had availed various input services. Since all the final products were exported and there were no DTA sales, they were not in a position to utilize the cenvat credit of service tax paid on various input services. Consequently they filed a refund claim for Rs. 11,38,339/- (Rupees Eleven Lakhs Thirty Eight Thousand Three Hundred and Thirty Nine only) on 05.04.2010 under Rule 5 of Cenvat Credit Rules, 2004 for refund of the service tax credit availed on the input services used in the manufacture of their final goods which were exported. The adjudicating authority rejected the claim vide Order-in-Original dated 14.07.2010. Aggrieved by the order, appellant filed appeal before the Commissioner (Appeals) who vide Order-in-Appeal dated 10.05.2013 partly sanctioned the refund claim and rejected the balance amount of Rs. 1,04,081/- (Rupees One Lakh Four Thousand and Eighty One only) on the ground that the input services were not in or in relation to the manufacture of final product. The Commissioner (Appeals) also rejected the plea for interest on the refund claim amount on the ground that Notification No. 5/2006-CE (NT) dated 14.03.2006 is a self contained notification and a refund under it is not to be equated with refund under Section 11B of the Central Excise Act, 1944 and there is no provision in the notification for grant of interest on the refund of unutilized credit.
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 and has been passed ignoring the judgments in the appellants own case on the same issue and also ignoring the precedent decisions of the Tribunal and the High Court with regard to the input services on which cenvat credit has been denied. He further submitted that all these services viz. Banking Charges, Insurance, CA-secretarial charges, CA-KVAT accounting on which the cenvat credit has been denied have direct nexus with their manufacturing activity and are directly related to the business of the company. He further submitted that the appellate authority has failed to appreciate the provisions of Section 2A of the Central Excise Act, 1944 which categorically provides that the expression duty includes cenvat. He further submitted that the appellate authoritys finding that refund under Cenvat Rule 5 is not one under Section 11B is contrary to settled judicial decisions in this regard. In support of his submissions, he relied upon the following authorities:
(i) Reliance Industries Ltd. Vs. CCE 2009 (236) E.L.T. 299 (T-Ahmd.)
(ii) CCE Vs. Reliance Industries Ltd. 2010 (259) E.L.T. 356 (Guj.)
(iii) CCE Vs. Reliance Industries Ltd. 2011 (274) E.L.T. A110 (SC)
4. After going through the judgments cited by the learned counsel for the appellant, I am of the considered opinion that the impugned order is not sustainable in law in view of the judgments cited supra and I set aside the impugned order by allowing the appeal of the appellant, with consequential relief.
(Order pronounced in open court) (S.S GARG) JUDICIAL MEMBER iss