M/S. Shiva Taxfabs Ltd. Unit-I vs C.C.E. & S.T.-Chandigarh-Ii
- CitationAppeal No. E/52391/2014-EX(SM)
Ratio decidendi
The rule this decision rests on
The decision turns on the following principles, in the order the Tribunal takes them: Where the dispute is that the services in question do not qualify as input services under Rule 2(l) of the Cenvat Credit Rules, 2004, the question of whether the assets were capitalised in the appellant's books of accounts is not raised in the show cause notice and need not be considered at that stage. Any service availed by a manufacturer of excisable goods in the course of its business is entitled to input service credit, as held by the Bombay High Court in C.C.E. Nagpur v. Ultratech Cement Ltd. Cenvat credit on construction services for raw material godowns and power houses, on repair and maintenance of printers and photocopiers, and on service tax paid for insurance of a car used for official purposes is admissible. Where the High Courts have taken divergent views on whether credit on construction of labour quarters is admissible, credit on such construction is denied, following the Tribunal's earlier decision in Shree Alloys Industries Pvt. Ltd., and no penalty is imposable where the law on the point is divergent.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in-Original No. JAL-EXCUS-000-APP-300-13-14 dated 30.01.2014 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Chandigarh-II].
For approval and signature:
Honble Shri 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. Shiva Taxfabs Ltd. Unit-I .Appellants
Vs.
C.C.E. & S.T.-Chandigarh-II .Respondent
Appearance:
Shri P. Malhotra, Advocate for the Appellants
Shri D. Singh, DR for the Respondent
CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial)
Date of Hearing: 27.04.2015
FINAL ORDER NO. 51582/2015-EX(SM)
Per Ashok Jindal:
The appellant is in appeal against the impugned order for denial of input service credit on construction services availed by them for construction of raw material godown and power house in their factory, Cenvat Credit on construction services received for labour quarters, Cenvat Credit on repairs and maintenance of printers and photocopier services of car and service tax paid on insurance services of car. The contention of the appellant is that they are entitled to take Cenvat Credit on these services as these services qualify as input services as per Rule 2(L) of the Cenvat Credit Rules, 2004. The Cenvat Credit on construction services has been received for raw material godown and power house which are essentially required for them and same has been covered by definition of Rule 2(L) of the Cenvat Credit Rules 2004. He also submits that construction of labour quarter is an integral part of their factory as their factory is located in a remote area. Therefore, they are entitled to take Cenvat Credit. He further submits that the printer, photocopier and car were used by them for official use in their manufacturer business. Therefore, they are entitled to take Cenvat Credit.
2. On the other hand, Ld. AR submits that the appellant has not produced any evidence for availment of Cenvat Credit on these items. Moreover, has failed to produce any document of capitalization of the said asset in their books of accounts. Therefore, the lower authorities has rightly denied Cenvat Credit. For denial of Cenvat Credit on construction of labour quarters he relied on the decision in the case of Shree Alloys Industries Pvt. Ltd. E/52223/2014 decided on 27.04.2015.
3. Heard the parties. Considered the submissions.
4. The objection has been raised by the audit after investigating the records of the appellant and it is allegation against the appellant that these services do not qualify as input services as per Rule 2 (L) of the Cenvat Credit Rules, 2004. Therefore, issue of capitalization is not raised in the show cause notice and same is not required to be considered at this stage. Further, as held by both the Honble High Court of Bombay in the case of C.C.E. Nagpur Vs. Ultratech Cement Ltd. -2010 (20) S.T.R. 577 (Bom) that any services availed by manufacturer of excisable goods in the course of their business is entitled for Input service Credit. Therefore, I hold that to avail Cenvat Credit on construction services for raw material godown and power houses, repair and maintenance of printer and photocopier, service tax paid on services of car and services of insurance of car. Further I hold that for availment of Cenvat Credit on construction of labour quarters there were divergent views of the High Courts and in the case of Shree Alloys Industries Pvt. Ltd. matter has been observed by me and it was held that on Cenvat Credit on construction of labour quarter the assessee is not entitled to take Cenvat Credit. Therefore, Cenvat Credit of Rs.19,239/- is denied to the appellant.
5. For imposition of penalty on the appellant, I found that there are divergent views of the Honble High Court on construction of labour quarter. Therefore, no penalty is imposable on the appellant. With these terms appeal is disposed of.
(Dictated and pronounced in the open court.)
(Ashok Jindal) Member (Judicial)
Bhanu
2
E/52391/2014-EX(SM)
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free