M/S.Keihin Panalfa Ltd vs Cce, Noida

(Arising out of OIA No.NOI/EXCUS/000/APPL/65/2014 dt.21.03.14 passed by Commissioner of CCE(Appeals), Noida)

Date of Hearing: 18/06/2015

Date of Order:30.6.2015

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No

3. Whether their Lordships wish to see the fair copy of the order? seen 4. Whether order is to be circulated to the Department Authorities? Yes

M/s.Keihin Panalfa Ltd Appellant

Vs.

CCE, Noida Respondent

Appearance:

Present for the Appellant: Shri Madhulika Bose, Advocate

Present for the Respondent: Shri R.K.Grover, DR

Coram: Honble Smt.Sulekha Beevi C.S., Member (Judicial)

Final Order No.52050/2015

Per: Sulekha Beevi C.S.

The issue for consideration is whether Cenvat Credit is available on Rent  a cab service, House Keeping service, Air Freight, Detective Agency services (Manpower recruitment services).

2. The appellants are engaged in the manufacture of parts of Auto mobiles, viz; air-conditioners and parts thereof for motor cars. They are availing Cenvat credit on input, capital goods and input services used in the manufacture of their final products. During the course of audit it was pointed out to the appellants that they had availed Cenvat Credit of service tax paid on Rent  a  Cab service, Detective service, Air Freight and Housekeeping service which do not fall within the ambit of inputs services. The appellants vide letter dated 24/02/2012 intimated that they have taken Cenvat credit of service tax amounting to Rs. 12, 72, 066/ paid on Rent  a  Cab services, Detective service, Air Freight and housekeeping services during the period from April 2006 to November 2008 and thereafter have not availed credit of service tax paid on these services.

3. A show cause notice dated 06/03/2012 was issued to the appellants to show cause why the Cenvat credit of service tax amounting to Rs. 12, 72, 066/ should not be disallowed and recovered from them. The Order  in  Original dated 25/07/2013 confirmed the demand and penalty. Being aggrieved the appellants filed appeal before the Commissioner (Appeals) who upheld the demand and penalty. Hence this appeal.

4. The issue that arises for consideration is whether the services, viz; rent a cab service, housekeeping services, air freight (air travel agents service) , Detective agency services are eligible for availing Cenvat credit on the service tax paid by the appellants. The relevant period is April 2006 to November 2008. The definition of input service as applicable for the period of dispute, in this case, has been analyzed and settled in plentiful judgments. The definition is of very wide connotation. The use of the words, such as following activities relating to business in the definition of input service has been defined in a wide manner and includes within its ambit not only the illustrations given in the definition and does not pose a restrictive nature. Any service used in relation to the activities of the business is included. Therefore the catena of decisions in this field have interpreted to cover any service in relation to the business of manufacture.

5. The transportation/rent-a-cab service availed for transportation of employees/ workers to reach factory premises /work place on time was held to be an input service, qualified to avail Cenvat credit in the following judgments:-

(1) CCE, Bangalore-I vs. Stanzen Toyotetsu India(P) Ltd.- 2011 (23) STR 444 (Kar.)

(2) CCE, Bangalore-I vs. Bell Ceramics Ltd.-2012 (25) 428 (Kar.)

(3) CCE, Bangalore-III vs. Tata Auto Comp Systems Ltd.-2012 (27) STR 338 (Kar.)

(4) CCE, Federal Mougul Goteze (India) Ltd.-2011-TIOL-650-HC-P&H-ST

6. The housekeeping services availed for the purpose of maintenance and cleaning of the manufacturing premises etc. have been held to satisfy the test of input service eligible to avail Cenvat credit in the judgements rendered in CCE vs. Manikgarh Cement- 2009 (16) STR 171 (Tri-Mum), CCE vs. ITC Ltd.- 2012 TIOL 199 HCAP  ST and Balkrishna Industries Ltd. Vs. CCE- 2010(18) STR 600 (Tri-Mum).

7. The air travel charges/air travel agent services availed for business purposes and the service tax paid on the said air travel services is admissible as credit being qualified to be treated as input services coming within the definition applicable at the relevant period. This issue has been held in favour of the appellant in CCE vs. DCW Ltd.-2011 (22) STR 214 (Tri -Chennai) and in Goodluck Steel Tubes Ltd. Vs. CCE, Hyderabad-2013 (32) STR 123(Tri-Del).

8. The detective agency services/manpower recruitment services, according to the appellant was used for safeguarding the premises as well as for checking the background of the people being employed in their factory so as to know the trustworthiness of the people being employed. The appellants relied on the decisions rendered in Delphi Automotive Systems Pvt.Ltd.- 2015 (37) STR 522(Tri-Bang) and C Cubed Solutions Pvt.Ltd. vs. CCE-2013 (29) STR 385(Tri-Bang). In view of the broad and wide amplitude of the definition of input services the activity of providing security service to the premises and employees cannot be said to be having no nexus with the business of manufacture of the appellants.

9. Following the ratio in the decisions cited above, I find no force in the contention of the Revenue that Cenvat credit is not admissible for the above services. Therefore credit has been wrongly denied.

10. In view of the above, the impugned order is set aside and the appeal is allowed with consequential relief to the appellants.

(Pronounced in the open court 30.6.2015)

(Sulekha Beevi C.S.)

Member (Judicial)

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