Bajaj Motors Ltd vs Cce, Delhi-Iii

[Arising out of the Order-in-Appeal No.409/SVS/GGN/2013 dt.22.8.13 passed by the CCE (Appeals), Delhi-III)

Date of Hearing/Decision: 11.2.2015

For Approval &signature:

HonbleMr.Ashok Jindal, Member (Judicial)

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether their Lordships wish to see the fair copy of the order? seen 4. Whether order is to be circulated to the Department Authorities? Yes

Bajaj Motors Ltd. Appellant

Vs.

CCE, Delhi-III Respondent

Appearance

Shri Rakesh Bhola, Advocate for the appellant

Shri A.K.Dhawan, AR for the respondent

CORAM: HonbleMr.Ashok Jindal, Member (Judicial)

FINAL ORDER NO.50457/2015

Per Ashok Jindal :

The appellant is in appeal against the impugned order wherein the input service credit on manpower recruitment service and outdoor catering service has been denied to the appellant.

2. The facts of the case are that during the period 2011-12, the appellant availed input service credit on manpower recruitment service and outdoor catering service being manufacturer of excisable goods. The input service credit was sought to be denied on manpower recruitment service on the premises that in the invoices the name of the service was not mentioned. For outdoor catering service, the service does not directly relate to the manufacturing. Therefore, the show cause notice was issued to the appellant. By the impugned order, the input service credit on these services has been denied to the appellant. Aggrieved with this order, the appellant is before me.

3. Learned Counsel for the appellant submits that mere non- mentioning the name of the service in the invoice does not take away the entitlement of input service credit. He submits that if the invoice is perused, it is coming out from the invoice that the service is none other than the service of a manpower recruitment service. He further submits that the allegation in the show cause notice against the appellant is outdoor catering service is not directly or indirectly related to the business of the manufacturer and therefore they are not entitled to input service credit. He submits that as the input service credit for the earlier period has been allowed, therefore, input service credit on outdoor catering service be allowed to the appellant following the decision of Honble Bombay High Court in the case of UltratechCement-2010 (20) STR 577 (Bom.).

4. On the other hand, ld.AR opposes the contention of the appellant on the issue of outdoor catering service. He submits that as per the provisions of Rule 2(l) of Cenvat Credit Rules, 2004 with effect from 1.4.2011 on outdoor catering service, the appellant is not entitled to input service credit.

5. Heard the parties and considered the submissions.

6. On perusal of the invoice, I find that manpower recruitment agency mentioned in the invoice instead of man power recruitment service,I hold that the input service cannot be denied on this ground. Accordingly, the impugned order is set aside. On the second issue, for availability of input service credit on outdoor service, I find that with effect from 1.4.2011 relevant para (C) under 2(l) has been inserted which is reproduced below:-

(C)?such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee.

7. As per amended statute with effect from 1.4.2011, outdoor catering service has been excluded from the definition of input service. I hold that the appellant is not entitled to take input service credit on outdoor catering service of Rs.78,312/-. Further, I find that in this case accumulated show cause notice was issued to the appellant in 2012 by invoking the provision of Rule 2(l) of CCR,2004 . prior to 2011. In these circumstances, I find that the provision denying input service credit on outdoor catering service came into existence with effect from 1.4.2011. Therefore, I hold that the penalty is not imposable on the appellant.

8. With these terms, input service credit on outdoor catering service alongwith interest is denied to the appellant. The appeal is disposed of in the above terms.

(dictated&pronounced in the open court)

(Ashok Jindal)

Member (Judicial)

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