M/S. St. Microelectronics Pvt. Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 185-ST/APPL/NOIDA/2012 dated 29/06/2012 passed by Commissioner of Customs, Central Excise (Appeals), NOIDA ]

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. St. Microelectronics Pvt. Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

& ST, NOIDA

Appearance:

Shri Nagesher Rao & Ms Shayree Basu Mullick, Advocate for the Appellants

Shri D Singh, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 12.2.2015

FINAL ORDER NO. A/ 50461/2015-ST(SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned order denying the refund claim of the appellant of Rs.15,72,298/- by way of impugned order which they have filed for the period April, 2010 to June, 2010 under Notification No. 5/2006 to claim the refund on input service credit lying unutilized in their Cenvat credit account of export of service.

2. Learned Commissioner (Appeals) denied the refund claim on account that the services on which the appellant is claiming refund are not input service as per Rule 2(l) of Cenvat Credit Rules, 2004, namely outdoor catering, maintenance and repair service manpower recruitment services, ambulance service, non-mentioning of a address of service received by M/s. Reliance Communication Ltd.

3. Learned Counsel for the appellants submits that in the case of outdoor catering services, total amount denied is Rs.1,54,257/- out of which the appellant has already reversed a sum of Rs. 83,512/- as they have recovered the said amount from the employees providing subsidized food to the employees and for the balance Rs. 70,745/- they are entitled as input service credit as held by GTC Industries Ltd. [2008 (12) STR 468 (Tri-LB)]. For the service of maintenance and repair services, sewage treatment plant, garden, canteen, assets water purifier, repair of car used for business travel purpose, business premises including workstations, office equipment furniture etc. he submits that all these services have been availed by them for maintaining their office by providing output services, therefore they are entitled to input credit services as held by Honble High Court in the case of Ultratech Cement. He also relied upon the decision of Semco Electricals Pvt. Ltd. [2010 (18) STR 177 (Tri-Del)] for denial of input service credit for non-mentioning of input service description on man power recruitment service. He submits that they were having an agreement with M/s. Fujiotsu Consulting India Pvt. Ltd. for supply of technical engineering to provide assistance in providing output service. In the invoice, name of the employee and number of days is mentioned clearly and thereafter supply of service in the invoice dates. They have also produced the agreement between supplier of the service before the lower authorities and after perusing the agreement it comes out that appellant has received manpower recruitment service. He further, submits that for the subsequent period on the basis of invoices, the appellant has been allowed input service credit under the category of man power recruitment service. Therefore he prays that on these services, input service credit be allowed.

4. Learned Counsel fairly conceded that input service credit on ambulance service and non-mentioning of input service, invoices were raised by Reliance Communications Ltd.

5. On the other hand, learned AR opposed the contention of the learned Counsel and submits that in the case of manpower recruitment service invoices does not give description of the service recipient and as per Rule 2(4A) of the Service Tax rules, 1994 when there is no proper description of the service recipient, Cenvat credit is not admissible.

6. He drew my attention to the agreement produced . The Agreement is for consulting engineering services and they are claiming the services of man power recruitment service. Therefore, they are not entitled to take Cenvat credit for manpower and outdoor catering services.

7. Learned AR submits that these services have no nexus with the services provided by the appellant. Therefore without any nexus of service recipient and service provided by the appellant is not entitled to take Cenvat credit as per Rule 2(l) of the Cenvat Credit Rules, 2004. He further submits that in the case of non-mention of repair services are in the nature of civil works. For outdoor catering services, he further submits that said service is more in the nature of welfare service as they are required to provide statutory requirement of providing canteen in the premises.

8. Heard the parties. Considered the submissions.

9. For outdoor catering services, the contention of the learned AR has submitted that as there is statutory requirement for the canteen, therefore they are entitled to Cenvat credit in the light of decision of this Tribunal in the case of Semco Electricals (supra) wherein this Tribunal has held that if the employees of an organization comes under the statutory requirement to maintain the canteen, then also Cenvat credit is available. Therefore I hold that appellant are entitled to claim Cenvat credit of Rs. 70,745/- on this count. Consequently entitled for refund claim under notification No. 5/2006.

10. For maintenance and repair services, I find that both services, i.e. sewage treatment plant, garden, canteen assets, water purifier, repair of car used for business travel purpose, business premises and assets including workstations, office furniture, used for business purposes, are in the nature of services availed by the appellant in the course of their manufacture. Therefore, I hold that the appellant is entitled to avail input credit services as held by the Honble High Court in the case of Ultratech Cement (supra). Therefore I allow the input credit services of Rs.4,78,842/-. Consequently, the appellant are entitled for refund of the same.

11. For manpower recruitment services, I find that all the invoices produced were in the name of employees and number of working days. Therefore it works out that how much time they take and the service provider has paid service tax. Further I find that for the subsequent period lower authorities have already allowed these services as man power recruitment services and allowed the Cenvat credit. Therefore, appellant is entitled to take Cenvat credit of Rs. 9,36,669/- under the category of man power recruitment service and consequently, they are entitled for refund claim under notification No. 5/2006.

12. For ambulance services and non-mentioning of service recipient on the invoices raised by Reliance Communication, as learned Counsel conceded, therefore, I disallow the input service credit on this service.

13. With these terms, the appeal is disposed of.

(dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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