Commissioner Of Central Excise vs M/S. Enco Engineering Combine P Ltd

[Arising out of Order-In-Appeal No. 420-SVS-GGN-2013 dated 13/08/2013 passed by Commissioner of Central Excise (Appeals) Delhi III, Gurgaon]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should 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 Departmental authorities?

Commissioner of Central Excise Appellants

New Delhi III

Vs.

M/s. Enco Engineering Combine P Ltd. Respondent

Appearance:

Shri R K Mishra, AR for the Appellants

Shri Rahul Tangri, Advocate for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 28.04.2015

FINAL ORDER NO. A/ 51628/2015-(SM)

Per Ashok Jindal :

Revenue is in appeal against the impugned order.

2. The facts of the case are that the respondent is manufacturer of Auto parts, components and they also undertake the activity of job work on behalf of the principal manufacturer of auto parts. The respondent is availing Cenvat credit on the inputs received by them for their own purpose as well as on job work goods. After manufacturing the goods on their behalf, they cleared them on payment of duty and there is no dispute. The respondent clears the job work done goods to the principal manufacturer without payment of duty and principal manufacturer has discharged duty liability on these job work goods at the time of clearance of final product. This is also undisputed. The contention of the Revenue is that respondent is not entitled to take Cenvat credit on the inputs supplied by the principal manufacturer therefore, Cenvat credit is to be reversed by the respondent and Cenvat credit on manpower supply services and security service are also sought to be denied. The adjudicating authority disallowed the Cenvat credit to the respondent. Consequently, duty demand along with interest was confirmed. Penalty was also imposed. On challenge of this order before Commissioner (Appeals), who set aside the adjudication order. Therefore, Revenue is before me.

3. The contention of the learned AR is that on job work goods, the principal manufacturer is entitled to take Cenvat credit under the category of job worker. Therefore, Cenvat credit is required to be denied. And to take Cenvat credit on security services, he submits that there is no nexus to the security service to the manufacturing activity of the respondent, therefore Cenvat credit on these services is also required to be denied.

4. On the other hand, learned Counsel appearing on behalf of the respondent submits that issue has been settled by Larger Bench of this Tribunal in the case of Sterlite Industries (I) Ltd. vs. CCE Pune, [2005 (183) ELT 353 (Tri-LB)] which has been affirmed by Honble Bombay High Court as reported in [2009 (244) ELT A 89)(Bom)] wherein it has been held that in case the principal manufacturer discharged duty liability on final product, the job worker is entitled to take Cenvat credit on inputs He therefore, submits that respondent is entitled to take Cenvat credit on inputs as well as manpower supply service. For security services, he submits that security services qualifies the definition of Rule 2(l) of Cenvat Credit Rules, 2004, therefore they are entitled to take Cenvat credit.

5. Heard the parties. Considered the submissions.

6. The issue has been settled by Honble High Court of Bombay in the case of Sterlite Industries (supra) wherein it has been held that job worker is entitled to take Cenvat credit on inputs / input services if job work goods has been used by the principal manufacturer in manufacture of final product and on the said goods, the principal manufacturer has discharged duty liability. Therefore, I hold that respondent is entitled to take Cenvat credit on input as well as manpower service. Further, I have gone through the definition of input service as per Rule 2(l) of Cenvat Credit Rules, 2004 and same form inclusive part of the definition and no nexus is required by the respondent for availing Cenvat credit on security service. In these circumstances, I hold that respondent is entitled to take Cenvat credit on security services. Therefore, I do not find any infirmity in the impugned order. Same is upheld and appeal filed by the Revenue is dismissed.

(Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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