M/S Rallis India Ltd vs Commissioner, Central Excise & Service ...

Appeal No.E/10669/2013-SM [Arising out of OIA No.CCEA-SRT-II/SSP-223/u/s35A(3), dt.07.01.2013, passed by Commissioner (Appeals), Central Excise & Customs, Surat]

M/s Rallis India Ltd Appellant

Vs

Commissioner, Central Excise & Service Tax, Surat-II Respondent

Represented by:

For Appellant: Shri Vinay Kansara, Advocate For Respondent: Shri G. Jha, Authorised Representative

For approval and signature:

Honble Mr. H.K. Thakur, Member (Technical)

1. Whether Press Reporters may be allowed to see the No Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of Seen the order?

4. Whether order is to be circulated to the Departmental Yes authorities?

CORAM:

HONBLE MR. H.K. THAKUR, MEMBER (TECHNICAL)

Date of Hearing/Decision:23.07.2015

Order No. A/11097 / 2015 dt.23.07.2015

Per: H.K. Thakur

This appeal has been filed by the Appellant against OIA No. CCEA-SRT-II/SSP-223/u/s35A(3), dt.07.01.2013, under which OIO No.37/NKS-JC/DIV-II ANK/DEM/2011, dt.21.09.2011 passed by the Adjudicating authority has been upheld. The issue involved is regarding credit taken by the Appellant with respect to ISD invoices issued by the Head Office of the Appellant at Mumbai. First Appellate Authority has rejected the appeal filed by the Appellant on the ground that the services of Professional Fees & Brokerage for sale of Land availed by the Head Office of the Appellant and subsequently distributed to the Appellants factory under Rule 4A of Service Tax Rules, 1994 does not qualify to be input services under Rule 2(l) of CENVAT Credit Rules 2004.

2. Shri Vinay Kansara (Advocate) appearing on behalf of the Appellant argued that CENVAT Credit was taken by the Appellant on the strength of valid ISD invoices issued by Head Office of the Appellant situated at Mumbai and contained all the prescribed details. That credit is admissible on the invoices issued by ISD in terms of Rule 4A of Service Tax Rules, 1994. That the officers of Central Excise situated in Gujarat has no jurisdiction to raise demand with respect to ISD invoice issued by their Head Office at Mumbai. That the only requirement for taking credit is that ISD invoice should be issued by the Head Office and should contain all the details as prescribed by the Rules. He relied upon the case law of CCE Vs Godfrey Philips India Ltd [2009 (14) STR 375 ((Tri-Ahmd). It was his case that the Appellants Headquarter is filing returns under Rule 9(10) of CENVAT Credit Rules 2004 on half yearly basis and that there head office has also been audited periodically by the officers Central Excise.

2.1 That on merits, it is the case of the Appellant that certain services were availed by the Headquarters of the Appellant with respect to certain land situated in Andhra Pradesh and Uttar Pradesh, which were in the names of M/s Rallis India Ltd only. That buying and selling of property in the name of M/s Rallis India Ltd is an activity in relation to business of the Appellant which was covered by the definition of definition of input service given in Rule 2(l) of CENVAT Credit Rules 2004. It was his case that the words activity in relation to business in Rule 2(l) were amended only w.e.f. 01.04.2011. It was strongly argued by the learned Advocate of the Appellant that the period involved in the present appeal is March 2008, which is before the date of amendment of Rule 2(l) of CENVAT Credit Rules 2004. He relied upon the case law of this Bench in the case of Cadmac Machinery Co. (P) Ltd Vs CCE Ahmedabad [2013 (31) STR (Tri-Ahmd)], where an activity in relation to valuation of property was considered to be an activity in relation to business and eligible for CENVAT Credit under Rule 2(l) of CENVAT Credit Rules 2004.

3. Learned Advocate appearing on behalf of the Appellant further argued that entire demand is time barred as all the details have been taken by the Department from the records maintained by the Appellant and that at the relevant time, services availed in relation to business of the Appellant was eligible for CENVAT Credit as per the Larger Bench judgment of CESTAT Bangalore in the case of ABB Ltd [2009-TIOL-830-CESTAT-BANG-LB].

4. Heard both sides and perused the case records. The issue involved in the present case is whether the Appellant is eligible to take CENVAT Credit on the ISD invoices issued by Head office situated in Mumbai. On merit, First Appellate Authority had denied the credit on the ground that the services of Professional Fees & Brokerage for sale of Land is not in relation to manufacturing activity and is not eligible for CENVAT Credit. It is observed from the case records that the period involved in the present proceedings is March 2008 when the words activity relating to business were existing in the definition of input services given under Rule 2(l) of CENVAT Credit Rules 2004. These words were taken away by suitable amendment effective from 01.04.2011. This Bench in the case of Cadmac Machinery Co. (P) Ltd Vs CCE Ahmedabad (supra) has held that the services regarding valuation of property have to be considered as an activity relatable to the business of the Appellant and accordingly eligible for CENVAT Credit under Rule 2(l) of CENVAT Credit Rules 2004. While deciding the issue, this Bench has relied upon the case of Commissioner Vs Ultratech Cement Ltd [2010 (20) STR 577 (Bom.)] and also a case law of Commissioner Vs ABB Ltd [2011 (23) STR 97 (Kar.)] decided by Honble Karnataka High Court. As the period involved in the present proceedings is also prior to 01.04.2011, therefore, it has to be held that the services availed in relation to Professional Fees & Brokerage for sale of Land belonging to Appellant are eligible to CENVAT Credit. This Bench has not gone into the jurisdictional issue and time barred aspect of the appeal as on merit, CENVAT Credit has been held to be admissible to the Appellant.

5. Accordingly, appeal filed by the Appellant is allowed.

(Dictated and pronounced in Court)

(H.K. Thakur) Member (Technical)

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