M/S. Jaquar & Company Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 206/CE/DLH/2013 dated 13.12.2013 passed by Commissioner of Central Excise (Appeals), New Delhi]

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. Jaquar & Company Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

New Delhi

Appearance:

Shri S K Pahwa & Shri Rahan Phawa, Advocates for the Appellants

Ms. Ranjana Jha, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 23. 6.2015

ORDER NO. FO/ 52041/2015 SM

Per Ashok Jindal :

The appellant is in appeal against the impugned order denying Cenvat Credit on Business Auxiliary services on the premise that debit note is not appropriate proper document as per Rule 9 of Cenvat Credit Rule, 2004 to avail Cenvat Credit of the services which are availed by the appellant which are in the nature of post manufacturing activity.

2. The facts of the case are that appellant is manufacturer of bathroom fittings and also are selling these Bathroom fittings through dealers in open market and in some cases, appellant procured bulk orders through their dealers or some commission agents. For that, appellant is paying certain commission to dealers or to commission agents for procuring purchase orders for appellants. The commission agents / dealers are paying service tax on the commission being paid to them by appellant under the category of Business Auxiliary service and raised debit notes on the appellants. Appellant took Cenvat Credit of service tax paid by dealers / commission agents on the strength of debit notes. Revenue is of the view that debit note is not a proper document to avail Cenvat Credit as per Rule 9 of CCR, 2004 and further Business Auxiliary services availed by the appellant is post manufacturing activity and therefore appellant is not entitled to take Cenvat Credit. In these set of facts, proceedings were initiated against the appellant for the period 2006-07 to 2008-09 by way of show cause notice dated 22.7.11. The matter was adjudicated. Cenvat Credit was denied. Consequently demand of duty was confirmed along with interest. Equivalent amount of penalty was also imposed. Aggrieved from the said order, appellant is before me.

3. Learned Counsel for the appellant submits that the debit note which has been questioned by the Revenue is not proper document, contains all the details which are required for availment of cenvat credit as per Rule 9 of CCR, 2004. Further, he submits that the Business Auxiliary services have been availed by the appellant before clearance of goods from their factory. Therefore, they are entitled to take Cenvat credit. He further submits that the show cause notice dated 10.2.11 was issued to them for the period 2007-08 to deny Cenvat Credit by invoking extended period of limitation. Therefore, impugned show cause notice cannot be invoked by extending period of limitation. He further submits that identical issue in their own case for their unit at Wazirpur and Bhiwadi came up before this Tribunal and decided vide Final Order No. A/54830/2014 dated 30/10/2014 and A/51656-51657/2014 dated 4.4.2014. He also relied on the decision of High Court of Karnataka in the case of CCE, Bangalore vs. Stanzen Toyotetsu India (P) Ltd. [2011 (23) STR 444 (Kar)] to say that any services availed by an assessee in the course of business is entitled to take Cenvat Credit.

4. On the other hand, learned AR opposed the arguments advanced by learned Counsel and submits that she needs time to ascertain how the impugned show cause notice was issued when a show cause notice dated 10.2.2011 for the period 2007-2008 was issued to the appellant. She further submits that as per Rule 9 of CCR, 2004, debit note is not a proper document for availment of cenvat credit. She further submits that the sale commission paid to the commission agent / dealer is an activity made post manufacturing, therefore, Cenvat Credit has been rightly denied to the appellant.

5. She also submits that the appellant has produced only one sample copy of debit note therefore, investigation could not be done completely. Therefore, matter be remanded. She further submits that debit note which was produced by the appellant is vague. On limitation she submits that in the earlier show cause notice, the only issue was that the activity of business auxiliary service is post manufacturing activity but the issue of debit note was not there in the show cause notice. Therefore, show cause notices has rightly been issued to the appellant by invoking extended period of limitation.

6. Heard the parties. Considered their contentions.

7 I find that in the appellants own case for their units in Wazirpur and Bhiwadi, this Tribunal on the identical issue of availment of cenvat credit on the strength of debit note for business auxiliary service has been allowed. In these circumstances, I hold that appellant is entitled to take cenvat credit on the strength of debit notes which contains the details as per Rule 9 of CCR, 2004 for availment of cenvat credit. I also hold that the activity of business auxiliary service has been availed by the appellant in the course of their business of manufacturing of excisable goods. Therefore, appellants are entitled to take cenvat credit. With these terms, appeal succeeds on both the issues. Therefore, I set aside the impugned order and allow the appeal with consequential relief, if any.

( Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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