Godrej Saralee Ltd vs Commissioner Of Central Excise

[Arising out of Order-in-Original No.22/2008 (C) dated 2.2.2009 passed by the Commissioner of Central Excise, Puducherry]

Godrej Saralee Ltd. Appellant

Versus

Commissioner of Central Excise, Puducherry Respondent

Appearance:

Shri M. Karthikeyan, Advocate For the Appellant

Shri M. Rammohan Rao, DC (AR) For the Respondent

CORAM:

Honble Shri R. Periasami, Technical Member

Date of hearing/decision :17.3.2015

FINAL ORDER No.40526/2015

The appellant preferred appeal against order dt. 2.2.2009 passed by Commissioner of Central Excise, Puducherry.

2. The brief facts that appellants are manufacturers of "Good Knight" brand mosquito repellent, falling under Chapter 38081901 of First Schedule to CETA. The issue in this appeal relates to denial of cenvat credit availed by the appellant as a recipient on the Goods Transport Agency Services against the input credit distributed by their registered office as ISD. Four show cause notices were issued proposing to deny a total credit of Rs.10,21,98,632 for the period 2006-08. The adjudicating authority in the impugned order dt. 2.2.2009 out of the total credit of Rs.10,21,98,632/-, disallowed credit of Rs.24,65,925/- and appropriated an amount of Rs.9,55,938/- towards the demand and interest of Rs.11,470/- already paid by the appellants and also demanded interest and imposed penalty of Rs.10,000/- under Rule 15 (3) of Cenvat Credit Rules, 2004.

2. Heard both sides.

3. The learned advocate for the appellant submits that appellant is a manufacturing unit and availed input credit distributed by their office at Mumbai as Input Credit Distributor.

He submits that out of the three issues, they are contesting only one issue as stated in 5.2.5.1 of OIO relating to disallowance of cenvat credit of Rs.15,09,987/- pertaining to GTA outward transport service for the period 1.1.2006 to 1.11.2006 distributed by the ISD. Their registered office obtained centralised registration which was duly registered by the jurisdictional Service Tax Commissionerate at Mumbai on various services including GTA service. They paid service tax on GTA in respect of all the units and distributed the credit relating to appellant unit as ISD. The revenue not disputed on the payment of service tax on GTA or the documents issued by ISD on which credit has been availed by the appellants. There is no contravention of any of the provisions of CCR and they have correctly availed the credit distributed by their ISD. The jurisdictional authority at the recipient cannot raise the issue of payment of service tax by Registered office. He also submits that there is no demand raised against the payment of service tax by their Registered office at Mumbai nor any demand raised against appellant for non-payment of GTA. He relied on the following decisions :-

1) Rohit Surfactants Pvt. Ltd. Vs CCE Jaipur 2013 (29) STR 175 (Tri.-Del.)

2) CST Ahmedabad Vs Godfrey Philips India Ltd.

2009 (14) STR 375 (Tri.-Ahmd.)

3) Sarvesh Refractories (P) Ltd. Vs CCE 2007 (218) ELT 488 (SC)

4) CCE Delhi Vs Neel Metal Products Ltd.

2009 (237) ELT 270 (P&H)

5) APG Food Products Vs CCE 2013 (297) ELT 210 (Tri.-Del.)

4. On the other hand, Ld. A.R for the Revenue reiterated the OIO. He submits that jurisdictional Commissioner has the power to examine the admissibility of credit paid by their Registered office at Mumbai. He relied the case of Eveready Industries India Ltd. Vs CCE Chennai  2011 (220 STR 502 (Tri.-Chennai)

5. I have carefully considered the submissions of both sides. The limited issue in this case relates to denial of cenvat credit availed by the appellant as a recipient of GTA services discharged by their registered office and distributed to the appellant unit. As rightly contended by the appellant, the adjudicating authority has denied the credit solely on the ground that their registered office is not authorized to pay service tax on GTA after taking centralized registration at Mumbai. On perusal of the findings, at para 5.51, 5.52 and 5.53, the adjudicating authority has discussed only on the provisions of centralized registration and held that service tax paid by the corporate office is not eligible as cenvat credit availed by the appellant. There is no dispute on the fact that appellants registered office at Mumbai obtained centralized registration for discharge of service tax on various services including GTA services and discharged service tax. The jurisdictional Service Tax Commissionerate at Mumbai not raised any dispute on the payment of service tax nor any demand issued against them. The registered office is registered as ISD is also not under dispute. The Tribunal in the case of Rohit Surfactants Pvt. Ltd. Vs CCE Jaipur (supra), has discussed the identical issue and set aside the impugned order and allowed the appeal. The relevant paragraphs 5 & 6 of the said order is reproduced below :-

"5.?After hearing both sides, duly represented by Shri A.P. Mathur learned advocate and Shri Bharat Bhushan, learned DR, I find that first issue denying the Cenvat credit of Rs. 8,33,606/- relates to availment of credit on the basis of invoices issued by their registered office which stands registered as ISD. The revenues sole case is that their final application dated 19-7-2005 was disposed of on 25-5-2006 rejecting their request for inclusion of GTA services in the Head Office. The period involved is 18-1-2006 to 25-5-2006, i.e. prior to rejection of the said centralized registration in respect of GTA.

6.?Keeping in view the totality of the facts and circumstances, it is to be held that final rejection of centralized registration vide letter dated 26-5-2006 cannot be held to be a justifiable reason for denial of the credit. Apart from the fact that during the said period, the application was pending in the office of Deputy Commissioner, without their being any decision taken by him on the same, I find that there is otherwise no dispute about the availability of the credit to the appellant. The substantial benefit, if otherwise available, cannot be denied on the technical and procedural grounds. As such, in the absence of any dispute that the appellant was otherwise entitled to the benefit of Cenvat credit of Service Tax paid on GTA services, so received by them, the denial of the same on the ground that the credit was availed on the basis of invoices raised by their head office is neither justifiable nor warranted."

In the above case, the Tribunal held that the availment of cenvat credit by the respondent was allowed where even the centralized registration was rejected by the department. Whereas in the present case there is not even iota of dispute raised by the Mumbai Commissionerate on the centralized registration obtained by the registered office of the appellant. That being the case, the ratio of the above judgement is squarely applicable to the facts of this case. There are number of decisions by the Honble High Court as well as by various Tribunal Benches to the effect that admissibility of the credit cannot questioned by the department at the recipient side. I find that appellants have rightly availed the credit on GTA distributed by their registered office as ISD. Accordingly, the impugned order is set aside in so far as it disallows the cenvat credit of 15,09,987/- pertaining to GTA distributed by the ISD. The appeal is allowed in the above terms.

(Operative part of the order pronounced in open court on 17.3.2015)

(R. PERIASAMI) TECHNICAL MEMBER

gs

6