Ketan Motors Ltd vs Commissioner Of Central Excise

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI

COURT No. I

APPEAL No.ST/85395/14

(Arising out of Order-in-Appeal No.NGP/EXCUS/000/ APPL/917/13-14 dated 11/11/2013 passed by Commissioner of Central Excise, Customs & Service Tax (Appeals), Nagpur)

For approval and signature:

Honble Mr. P.S. Pruthi, Member (Technical)

1. Whether Press Reporters may be allowed to see :No 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 :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy :Seen of the Order?

4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================

Ketan Motors Ltd., Appellant Vs. Commissioner of Central Excise, Respondent Nagpur

Appearance: Shri.Shailendra Jain, CA for appellant Shri.Ashok B Kulgod, Asst. Comm. (AR), for respondent

CORAM: Honble Mr. P.S. Pruthi, Member (Technical)

Date of Hearing : 22/04/2015 Date of Decision : 22/04/2015

ORDER NO

Per: P.S. Pruthi

1. The appellant is in appeal against Order-in-Appeal No.NGP/EXCUS/000/ APPL/917/13-14 dated 11/11/2013 passed by Commissioner of Central Excise, Customs & Service Tax (Appeals), Nagpur, disallowing the credit of Rs.1,24,886/- and Rs.3,072/- and imposing a penalty of Rs.1,32,453/- under Rule 15 (3) of Cenvat Credit Rules,2004.

2. There are three issues to be dealt with in this case. The first issue is availment of Cenvat credit of Rs.1,27,958/- on documents pertaining to unregistered premises of the appellant at Chandrapur and Amravati. Whereas the service tax credit is taken in their centralized office at Nagpur. Secondly, the credit of Rs.3,072/- pertaining to Nagpur office but the bills are not in the name of the appellant. Thirdly, the penalty of Rs.1,32,453/- imposed on the appellant under Rule 15 (3).

3. Heard both the sides and considered the submissions.

4. The learned Counsel submits that they have a centralized accounting office in Nagpur with branch offices at Chandrapur and Amravati. The services received and the input service tax credit availed thereon are reflected in Nagpur centralized accounting system. Similarly, the service tax on output service provided from Chandrapur and Amravati is paid from the Nagpur centralized office. He submits that they had applied for centralized registration in 2004, a copy of which is placed on record at page 49 of the appeal papers. The centralized registration was granted to them after follow up with the Service tax department, on 26/03/2013. According to him the department has not raised any dispute regarding receipt of services at the branch office, the admissibility of credit on these services or the payment of service tax on output services provided from the branch office. The complete accounting is done in their Nagpur office. The only objection of Revenue is that they did not have a centralized registration and therefore, the input credit is not admissible.

4. As regards penalty he stated that the penalty has been wrongly imposed under Rule 15 (3) of the Cenvat Credit Rules which relates to input services only.

5. The learned AR appearing on behalf of the Revenue reiterates the findings of the Commissioner and states that the appellant should have reconciled the figures of input service credit out put service value and output service tax paid as reflected in their accounts with the ST-3 returns.

6. I have carefully considered the submissions made by both the sides.

7. As regards the first issue, I find that an application dated 16/12/2004 made by the appellant requesting for grant of centralized registration from 01/07/2001, is on record and the letter bears the stamp of the receipt by the department. In any case, the fact of this application having been made is mentioned in the order-in-original and is not disputed. However, the order-in-original states that the centralized registration was not applied for in the proper format and that the appellant had not produced any documents to the effect that they had applied for centralized registration. I find from the letter dated 16/12/2004 that the appellant has stated that they may be given permission to have only one registered place in terms of Rule 3 (a) of the Service Tax Rules. This request can be considered as an application for centralized registration. Not applying in the proper format is not a reason to deny substantial benefit which should follow from the centralized registration. In any case, the centralized registration was granted subsequently on 26/03/2013. The department has not disputed that the input services were received at the branch office and further that they were utilised for providing output services. In fact perusal of the accounting records maintained at the Nagpur office shows the receipt of the services at branch office. Therefore, I see no reason to disallow the Cenvat Credit of Rs.1,24,886/- on the documents pertaining to the branch offices.

8. As regards the credit of Rs.3,072/-, the learned Counsel stated that these pertain to services of telephone. The bills were addressed in the Directors name but the office mentioned is the office premises of the appellant. Therefore, there is no ground to deny the service tax credit in this case and the same is allowed.

9. Having allowed the service tax credit, the question of imposing penalty does not arise.

10. The appeal is allowed.

(Dictated in Court)

(P.S. Pruthi) Member (Technical)

pj

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