Larsen & Toubro Limited vs Commissioner Of Central Excise, ...

[Arising out of Order-in-Appeal No. SK/278/M-II/2013-14 dtd. 23/10/2013 passed by the Commissioner of Central Excise (Appeals-II), Mumbai]

For approval and signature:

Honble Mr Ramesh Nair, Member (Judicial)

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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 : 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? =======================================================

Larsen & Toubro Limited : Appellants

VS

Commissioner of Central Excise, Mumbai-II : Respondent

Appearance

Shri Prasad Paranjape, Advocate for the Appellants Shri Sanjay Hasija, Superintendent (A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 29/6/2015 Date of decision: 29/6/2015

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in-Appeal No. SK/278/M-II/2013-14 dtd. 23/10/2013 passed by the Commissioner of Central Excise (Appeals-II), Mumbai, wherein Ld. Commissioner (Appeals) rejected the appeal filed by the appellant.

2. The facts of the case is that the appellant availed Cenvat Credit amounting to Rs. 13,69,842/- on the invoices for the input service which were invoiced not in the name of the appellant but to the Divisions of L&T other than Heavy Engineering Division (HED), therefore appellant wrongly taken Cenvat Credit. The show cause notice was issued proposing demand of Cenvat credit of Rs. 13,69,842/-, interest under Section 11AB and also penalty under Section 11AC. The adjudicating authority vide order-in-original dated 31/5/2013 confirmed demand and imposed penalty of equal amount and demanded interest as proposed in the show cause notice. Aggrieved by the said original order, the appellant filed appeal before the Commissioner (Appeals), who rejected appeal of the appellant vide impugned order. Aggrieved by the impugned order, the appellant is before me.

3. Shri Prasad Paranjape, Ld. Counsel for the appellant submits that Cenvat credit was denied only on the ground that the invoices for services which was received and used at the job worker place were bearing name of job worker, therefore authorities have presumed that the services are not received by the appellant. It is his submission that the fact which is not under dispute that service provider have provided the service to their job worker on behalf of the appellant, the recipient of the services is the appellant. Since the services were provided in the premises of the job worker but for job work of the appellant and in relation to the manufacturing process carried out by the job worker on behalf of the appellant, services were received by the appellant. Even though the name of the job worker is appearing on the invoices which are because services were provided in the premises of the job worker, however the name of the appellant is clearly appearing on the service tax invoices. He submits that before the original authority as well as Commissioner (Appeals), appellant have categorically made statement and submitted that the services were received by the appellant, payment of such service, bills were made by the appellant to the service provider directly, so recipient of the services are the appellant and merely because the job worker name appears on the invoices of the service provider that should not be the reason for denial of Cenvat Credit.

He submits that in terms of Cenvat Credit rules, Cenvat credit in respect of input service is available on the condition, the service so provided is received by the recipient, and the same is used in or in relation to the manufacture of final product. In the present, case though the services were provided in the premises of job worker but indeed in the relation to the manufacturing process of the appellant carried out by their job worker. Since the payment of service chargers and Service Tax was made by the appellant to the service provider, these facts constitute that services were received by the appellant and used in or in relation to the manufacturing of final product. In view of this fact merely because name of the job worker is appearing on the invoices, Cenvat Credit could not be denied to the appellant, particularly whin the name of Appellant is also appearing in same invoices. In support of his submissions, he placed reliance on the following judgments:

(a) Larsen & Toubro Ltd. Vs. Collector of C. Ex. Bhubaneshwar [1994(72) ELT 948(Tri.)]

(b) Gujarat Heavy Chemicals Ltd. Vs. CCE, Rajkot [2005(192) ELT 658]

(c) Stamed Pvt Ltd. Vs. CCE, Allahabad [1998(102) ELT 466(Tri)]

(d) CCE, Surat Vs. kalpana Industries [2004(175) ELT 309(Tri. Mum)]

(e) Endurance Technologies Pvt Ltd. Vs. CCE, Aurangabad [2012(27) STR 320(Tri. Mum)].

4. On the other hand, Shri Sanjay Hasija, Ld. Superintendent (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that though the name of the appellant is bearing on the service invoices, services were provided in the premises of job worker. He submits that the company L&T Ltd. is having various units in all over India. Therefore by mention of name of the appellant it cannot be ascertained that service recipient is L&T Ltd. (Heavy Engineering division) i.e appellant themselves, therefore adjudicating authority and Commissioner (Appeals) has rightly denied Cenvat credit because there no nexus is established between invoices and the appellant.

5. I have carefully considered the submissions made by both sides and perused the record.

6. I find that in the present case, the whole case is revolving only on the aspect that invoices of services are not bearing the address of the appellant. However the name of the appellant is indeed mentioned in the invoices. I think on that basis alone it was wrongly concluded by the lower authority that in absence of address it cannot be ascertained that the services provided and covered under the input services invoices were meant for the appellant. I observed that name of the appellant is clearly mentioned on the invoices alongwith name and the address of the job worker i.e. M/s. R&C, SBS Marg, Mulund has also mentioned. As per the submission of the appellant which they have been making before both lower authorities that R&C Ltd. is job worker of the appellant and in relation to the job work carried out by the job worker the said service were provided by the service provider in the premises of the job worker on behalf of the appellant. Since, undisputedly the job worker is carrying out job work of the appellant goods, therefore it cannot be presumed that service is provided by the service provider is not for and on behalf of the appellant.

I appreciate the submission of the Ld. Counsel that appellant before both the lower authorities made categorical submission that invoices, on which Cenvat credit was disputed, were accounted for by the appellant in their books of account and payment thereof was also made by the appellant. In view of this, even though if there is doubt about service recipient due to reason that address of the appellant is not appearing on the invoices, by corroboration of the books of account and payment particulars made against the said invoices, it can be ascertained that service recipient is the appellant and nobody else. However these facts of accounting of bills in the books of account of the appellant and accounting of payment made by the appellant to the service recipient were not verified by the lower authority. In my considered view the matter deserves to be remand to the original authority for this limited purpose. I am of the considered view if it is found that against the disputed invoices, the payment is made by the appellant and they have accounted for such demand in their books of account.

This is a sufficient proof that the appellant is recipient of the service irrespective of the fact that invoices also bearing name and address of the job worker. I, therefore, allow the appeal by way of remand. The adjudicating authority after verification of the payment particulars against invoices and accounting in the books of account of the appellant and if the same is found in order, shall allow the cenvat credit by passing a denovo adjudication order after following the principles of natural justice.

(Operative part pronouned in court)

Ramesh Nair Member (Judicial)

sk

7 E/85337/14