M/S. Globe Ground India Pvt Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 32/ST/Appeal/DLH-IV/2013 dated 29/05/2013 passed by Commissioner of Central Excise (Appeals), Allahabad ]

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?

M/s. Globe Ground India Pvt Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

& ST, Delhi IV

Appearance:

Shri J M Sharma, Consultant for the Appellants

Shri V P Batra, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 03.2.2015

FINAL ORDER NO. A/50404/2015-ST(SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned order denying the Cenvat credit on inputs / input services availed by the appellant.

2. The facts of the case are that the appellant is providing air port services and receiving certain input services and also procured input/ capital goods for providing output services. During the course of investigation, it was found that during the period March,2006 to March, 2007, the appellant provided services to German Air Force Aircrafts/ flights at IGI Airport and did not pay the service tax thereon. Therefore these services were presumed by the Revenue as exempted services. In that set of facts, the Cenvat credit availed by the appellant was sough to be restricted to 20% of Cenvat credit as per Rule 6 (3) (c) of the Cenvat credit Rules, 2004. It was also found that during the period 2005 to 2009, security and maintenance services were provided at the residence of Managing Director of the appellant which were sought to be denied on the premise that same does not qualify as input services as per Rule 2(l) of Cenvat Credit Rules, 2004. The Cenvat credit of Rs.4,70,490/- was also sought to be denied on the ground that motor vehicles are not capital goods or inputs and water carts and toilet carts which were converted on vehicles chassis are not entitled for Cenvat credit. The show cause notice was issued to the appellant to deny Cenvat credit along with interest and penalties under various provisions of the Finance Act, 1994 were also proposed. The show cause notice was adjudicated, demands proposed in the show cause notice were confirmed along with interest and penalty under section 78 of the Finance Act read with Rule 15 of Cenvat Credit Rules, 2004 were also imposed. Penalty under section 77 of Finance Act was also imposed. Aggrieved from the said order, appellant is before me.

3. Learned Counsel for the appellant submits that the appellant has not provided any exempted service at all. Infact in two invoices issued to German Embassy, they did not charge the service tax. Therefore, the contention of the Revenue is not correct that they are providing exempted services. Consequently the provision of Rule 6(3)(c) of Cenvat Credit Rules, 2004 are also not applicable to them. He further submitted that Director of the appellant company is an employee and it is the duty of the appellant to provide security and maintenance of his premise and amount so paid by the appellant for the services provided at the residence of Managing Director is availed by the appellant in the course of their business of providing output service. Therefore, they are entitled to take Cenvat credit. Further, he submits that Cenvat credit have been denied on the ground that motor vehicle chassis has been converted to provide water carts and toilet carts, as motor vehicle is not a capital goods, therefore they are not entitled to take Cenvat credit. Infact these carts are not registered under Motor Vehicle Act and vehicle chassis were used by them for providing output services. Therefore, same are capital goods / inputs for providing input services, as per Cenvat Credit Rules, 2004. Therefore, they are entitled to take Cenvat credit.

4. On the other hand, learned AR opposed the contention of the learned consultant and submits that services provided to German Embassy are exempted and have been very well discussed by both the lower authorities in the impugned order. Therefore, as per Rule 6(3)(c) of Cenvat Credit Rules, 2004 they are not entitled to take Cenvat credit. He further submits that the security services availed at the premises of residence of Managing Director has no nexus with the business of appellant and therefore, they are not entitled to take Cenvat credit. On motor vehicle chassis which were used by the appellant for water carts / toilet carts as these are chassis of motor vehicles and for that also he relied upon the final order of on this issue.

5. Heard the parties. Considered the submissions.

6. I find that in this case Cenvat credit sought to be denied on three issues:

A) the denial of Cenvat credit as appellant is providing taxable as well as exempted services;

B) services availed at the residence of Managing Director do not qualify as per Rule 2(l) of the Cenvat Credit Rules, 2004.

C) the vehicle chassis used by the appellant were converted into water carts / toilet carts are not entitled to Cenvat credit being motor vehicle.

Issue No. 1. The revenues contention is that appellant is providing taxable as well exempted services but nowhere Revenue has proved that appellant has provided exempted services. Infact in two of the invoices issued by the appellant to German Embassy, the appellant did not charge the service tax, does not mean that appellant has provided exempted services. Therefore, I hold that in the absence of any contrary evidence produced by the Revenue, the provisions of Rule 6(3)(c) of Cenvat Credit Rules, 2004 are not applicable to the facts of this case. At the most the case could have been booked against the appellant for non payment of service tax which Revenue failed to do so, therefore, I hold that appellant has correctly taken the Cenvat credit of Rs.33,55,544/-.

Issue No. 2 The second issue is that appellant availed security and maintenance services at the residence of Managing Director. Admittedly the services availed at the residence of Managing Director have no nexus with the output services provided by the appellant as held by this Tribunal in the case of Manikgarh Cement [2012 (281) ELT 607 (Tri-Del)]. Therefore, I hold that appellant is not entitled to take Cenvat credit of Rs. 1,04,884/-.

Issue No. 3. The third issue that appellant has taken Cenvat credit on the chassis of motor vehicle which were converted into water carts and toilet carts. Admittedly, these carts were not registered under Motor Vehicle Act, therefore the contention of revenue that these motor vehicle are not capital goods is not acceptable. In these circumstances, I hold that appellant has correctly taken the Cenvat credit of Rs.4,70,490/-.

7. Considering the fact that except for the issue of denial of Cenvat credit on input services credit on security service, appellant as succeeded. No penalty is leviable on the appellant. The input service credit on security service of the residence of the Managing Director was in disputed at the relevant time whether the same was entitled to the appellant or not. Therefore, the penalty on the appellant is not imposable. With these terms, the appeal is disposed of. The appellant is required to pay the amount of Cenvat credit denied on input service credit along with interest.

(dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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