Anand Automotive Ltd vs C.C.E. & S.Tax, Delhi

Arising out of the order in original No.16/COMMR/PKL/2013 dated 30.4.2013 passed by the Commissioner , Central Excise, Panchkula.

For approval and signature:

Honble Mr. Ashok Jindal, Judicial Member

Honble Mr. R.K.Singh, Technical Member

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 26 of 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 Departmental authorities?

Anand Automotive Ltd. .. Appellant

Vs.

C.C.E. & S.Tax, Delhi . Respondent

Appearance:

Present Shri Manish Gaur, Advpcate for the appellant

Present Mrs. Suchitra Sharma, A.R. for the respondent

Coram: Honble Mr. Ashok Jindal, Judicial Member

Honble. Mr. R.K. Singh, Technical Member

Final Order No.50014/2015

Per Ashok Jindal:

The appellant is in appeal against the impugned order demanding service tax amount of Rs.1,13,17,016/- and denying credit of Rs.1,47,93,107/- along with interest and various penalties imposed under the Finance Act, 1994.

2. As per facts on record, the service tax proposed to be demanded on transit house income earned by the appellant during the period 1.10.10 to 30.4.2011 that for providing transit guest house to employees of sister unit which is covered under Business Support Service (BSS) . Therefore, they are required to pay service tax.

3. The service tax is also demanded on reimbursement of amount received by the appellant from their sister unit, where their employees have been posted under the category Manpower Recruitment or Supply Agency service during the period 1.10.10 to 31.3.2011. Another demand of service tax has been confirmed for the period 1.10.2010 to 30.9.2011 on the premise that the appellant has made provision in their books of account on account of Management Consultancy Service provided by them to their sister unit.

4. A demand of Rs.1,47,93,107/- is also confirmed on account of denial of cenvat credit on the premise that the appellant could not produce invoices on the strength of which they have availed cenvat credit. The matter was taken up for adjudication by the ld. Commissioner and demand of service tax as proposed in the show cause notice has been confirmed along with interest and various penalties have been imposed on them. Aggrieved by the said order, the appellant is before us.

5. After hearing at length from both sides, we are of the opinion that appeal itself can be disposed of at this stage. Therefore, after waiving the requirement of pre-deposit, the appeal is taken up for final consideration.

6. The contention of the ld. Counsel for the appellant is that for providing transit home service to the employees of their sister concern by the appellant does not fall under the category of BSS as they have not provided infrastructure service to their sister unit. He further submits that the guest house is provided for their employees as well as to their sister units employees. Therefore, they are not liable to pay service tax under the BSS. He further submits that the demand under the category of Manpower Recruitment or Supply Agency is not sustainable in the light of the decision of the Honble Gujarat High Court in the case of C.S.T. vs. Arvind Miills Ltd. reported in 2014 (35) STR 496 (Guj.) and in the case of Bain & Co India Pvt. Ltd. vs. C.S.T., Delhi reported in 2014 (35) STR 553 (Tri-Delhi). As they have received reimbursement of the salaries paid to their employees through their sister concern render service to their sister concern, therefore, that activity does not fall under the category Manpower recruitment or supply agency service. He further submits that the appellant is providing management service to their sister unit as the actual amount is payable to them is not known, therefore, the appellant is making provision of the amount receivable towards Management Consultancy Service in their books of account to be received from their sister unit.. Therefore, the demand confirmed under this head is also not sustainable. He also submits that in the impugned order, the ld. Commissioner has accepted their contention and sought verification report from the Assistant Commissioner to find out whether the appellant has paid the service tax on this activity or not. Therefore, the matter needs examination on this account. He further submits that reason for denial of cenvat credit is that the appellant has not produced the invoices. Moreover, the invoices which were found proper, no opportunity to the appellant has been given for producing invoices against which the cenvat credit has been taken. Moreover, the appellant was not even asked to explain the entitlement cenvat credit on the strength of invoice of paying service tax, therefore, the impugned order is required to be set aside.

7. On the other hand, the ld. A.R. submits that in this case, the ld. Commissioner has examined the issues in detail and thereafter he has found that the appellant is liable to pay service tax under the category Business Support Service, Manpower Recruitment of Supply Agency service and Management Consultancy service. She further submits that the appellant has been given ample opportunity to produce the documents. Therefore, the cenvat credit has been rightly denied.

8. We have considered the submissions from both sides. Without giving any findings on the merits of the case, we find in the impugned order that the major demand pertains to Management Consultancy Service and denial of cenvat credit on various services availed by the appellants. In the impugned order, the ld. Commissioner in the case of Management Consultancy Service has sought a verification to be done by the Assistant Commissioner. For denial of cenvat credit, the appellant has not produced any invoice. In these circumstances, the impugned order is not sustainable in the eyes of law and the matter needs examination at the end of the adjudicating authority. Therefore, we set aside the impugned order and remand the matter back to the adjudicating authority to give an opportunity to the appellant to produce all the relevant documents in support of their defence and to obtain verification report from the Assistant Commissioner with regard to the payment of service tax on Management Consultant Service. The adjudicating authority shall hear the appellant on merits to demand service tax for Business Support Service and Manpower Recruitment or Supply Agency Service and thereafter shall pass an appropriate order in accordance with law on merits of the case , as contended by the appellant before us. The appeal is allowed by way of remand. Stay application is also disposed of in the above terms.

(Ashok Jindal)

Judicial Member

(R.K. Singh)

Technical Member

scd/

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