Commissioner Of Central Excise vs M/S. Sunbeam Hi Tech Medicare

[Arising out of Order-In-Appeal No. DLI-EXCUS-003-APP-471-13-14 dated 27.8.2013 passed by Commissioner of Central Excise (Appeals) Delhi III]

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

Delhi III

Vs.

M/s. Sunbeam Hi Tech Medicare Respondent

Appearance:

Shri V P Batra, AR for the Appellants

None for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 24.02.2015

ORDER NO. FO/ A 50600 /2015-Ex(SM)

Per Ashok Jindal :

Revenue is in appeal against the impugned order wherein learned Commissioner (Appeals) has allowed the input service credit on the service tax paid by the respondent on rent paid for the factory premises. The facts of the case are that the respondent is manufacturer of excisable goods and have taken the factory on rent for manufacturing these goods. On rent he has paid the service tax. For that Service tax they have taken the Cenvat credit. A show cause notice was issued to the respondent to deny Cenvat credit on these service tax paid for the rent of factory on the premise that same do not have nexus with the manufacturing activity of the respondent. Consequently proceedings were initiated. The matter was adjudicated. Proposal to deny Cenvat credit was upheld by the adjudicating authority. Consequently demand of duty along with interest has been confirmed. Penalty equivalent to duty was also imposed. Aggrieved from the said order, the respondent filed appeal before the learned Commissioner (Appeals) who examined the issue and held that respondents are entitled to Cenvat credit on the service tax paid on the rent of factory premises. Against the said order Revenue is in appeal before me by relying on the decision of this Tribunal in the case of Ellora Times Ltd. vs. CCE, Rajlot [2009 (235) ELT 661 (Tri-Ahmd)], CCE Nagpur vs. Manikgarh Cement [2010 (20) STR 456 (Bom)]; Vikram Ispat vs. CCE, Raigad [2009 (16) STR 195 (Tri-Mum)] and Chemplast Sanmar Ltd. CCE, Salem [2010 (17) STR 253 (Tri- Chennai)].

2. Learned AR supported the grounds of appeal. None appeared on behalf of the respondent. But appeal is taken up for final disposal.

3. I have gone through the case law cited by the learned AR. All the case laws, except Manikgarh Cement are prior to the decision of High Court of Bombay in the case of Ultratech Cement wherein the Honble High Court has specifically held that any service availed by manufacturer of excisable goods in the course of their business of manufacturing is entitled to that input service credit. Therefore, these decisions are not relevant to the facts of this case. Further, I find that in the case of Manikgarh Cement (supra), the Honble High Court of Bombay denied the Cenvat credit in the case of service of repair and maintenance and civil construction used in the residential colony of the employees and for the welfare of employees. Therefore, the said decision is also not relevant to the facts of this case.

4. In this case, the issue before me is that whether the rent paid by the respondent for factory premises have no nexus to the manufacturing activity of the appellant, no person shall answer in affirmative as the factory is directly related to the manufacturing activity of the assessee. This fact has been ignored by the Revenue while proposing to file this appeal before this Tribunal. On going through the Review order, I also find that they have not given any credence to the decision of Honble High Court of Bombay in the case of Ultratech Cement (supra).

5. In these circumstances, I hold that impugned order does not have any infirmity. Same is upheld. Appeal filed by the Revenue is dismissed.

(dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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