M/S. Hindustan Zinc Ltd vs C.C.E. & S.T., Jaipur-Ii

[Arising out of Order-In-Appeal No. 124-125(OPD)/CE/JPR-II dated: 03.08.2013 passed by CCE (Appeals-II) Jaipur]

For approval and signature:

Hon'ble Mr. S.K. Mohanty, 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. Hindustan Zinc Ltd. ...Appellant

Vs.

C.C.E. & S.T., Jaipur-II Respondent

Appearance:

Mr. Narendra Singhvi (Advocate) for the Respondent

Mr. G R Singh, DR for the Appellants

CORAM:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing. 09.07.2015

Final Order No. 54139-54140 /2015_

Per S K Mohanty:

These appeals are directed against the impugned order dated 03.08.2013 passed by the Commissioner (Appeals), Central Excise, Jaipur, upholding the cenvat demand confirmed in the adjudication order. The cenvat credit has been denied to the appellant on the ground that Group Insurance Policy taken for the family members of the employee will not be considered as input service and service tax pad on those policies will not be eligible for cenvat credit. Further, cenvat credit has also been denied on the ground that the Input Service Distributor has not properly distributed the credit to the appellant.

2. The Ld. Advocate Sh. Narendra Singhvi appearing for the appellant submits that the service tax paid on the Insurance premium for the family members of the employee will be eligible for cenvat credit in view of the decision of this Tribunal in the case of PTC Software India (P) Ltd. vs CCE Pune-III reported in 2014 (35) STR 632 (Tri. Mum). He further submits that the head office of the appellant located in Udaipur has been registered with the Service Tax Department as the Input Service Distributor (ISD) and distributed the service tax credit paid on the input services to the different manufacturing units. That in the case in hand, out of the total amount of Rs. 1,13,055/-, the ISD has distributed Rs. 79,390/- to the appellants unit and the balance of Rs. 33,916/- to the other units. On the basis of the ISD invoice, the appellant took cenvat credit of the service tax indicated therein. Upon verification of the books of accounts maintained by the appellant, the Chartered Accountant vide its certificate dated 11.11.2013 has confirmed taking of cenvat credit by the appellant. In this context, the Ld. Advocate has relied on the judgment of Honble Karnataka High Court in the case of CCE vs ECOF Industries Ltd. Reported in 2011 (23) STR 337 (Kar.), to justify that cenvat credit is available to the appellant.

3. Per contra, the Ld. AR Sh. G R Singh appearing for the respondent reiterated the findings recorded in the impugned order. He relied on the judgment of Honble Bombay High Court in the case of CCE Nagpur vs Manikgarh Cement reported in 2010 (20) STR 456 (Bom.), and also the decision of the Tribunal in the case of CCE Tirupati vs Nutrine Confectionery Co. Ltd. reported in 2012 (26) STR 556 (Tri. Bang), to state that credit is not available on the disputed services.

4. Heard the Ld. Counsel for both the sides and perused the records.

5. With regard to denial of service tax credit in the impugned order on the ground that Insurance Policy taken for the family members will not be considered as input service, I find that said issue has been decided by this Bench of the Tribunal in the case of PTC (Supra). As regard to distribution of input service paid by the ISD, I find that the Chartered Accountant upon verification of the books of accounts of the appellant has certified the actual amount of service tax distributed by the head office to the appellant under the cover of proper and valid invoice. On the basis of such invoice, the credit has been taken by the appellant. Since, the practicing Chartered Accountant form has certified that the credit has been distributed correctly, the same cannot be denied without adducing any other evidence proving these facts as wrong. Therefore, I am of the considered view that the cenvat credit distributed by the ISD and taken by the appellant based on the valid invoice, cannot be denied to the appellant.

6. In view of above, I do not find any merits in the impugned orders. Therefore, I set aside the same and allow the appeals in favour of the appellants.

(Dictated and pronounced in open court)

(S. K. Mohanty) Member(Judicial)

Neha

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