M/S. Unitech Machines Ltd vs C.C.E. & S.T. Meerut-I

[Arising out of Order-in-Original No. MRT-EXCUS-000-APP-117-13-14 dated 30.08.2013 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Meerut-I].

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. Unitech Machines Ltd. .Appellants

Vs.

C.C.E. & S.T. Meerut-I .Respondent

Appearance:

Shri Alok Arora, Advocate for the Appellants

Shri A.K. Mishra, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing: 27.04.2015

FINAL ORDER NO. 51479/2015-EX(SM)

Per Ashok Jindal:

The appellant is in appeal against the impugned order wherein refund claim of the appellant has been rejected by both the lower authorities.

2. The facts of the case are that the appellant is manufacturer of motor vehicle parts and sending their semi finished goods for electroplating to the job worker following Rule 4(5)(a) of the Cenvat Credit Rules 2004. The job worker is paying service tax for their activity under the category of business auxiliary services. Service tax paid by the job worker has claimed Cenvat Credit by the appellant. During the course of the audit an objection was raised. The appellant reversed Cenvat Credit on job charges. Later on filed the refund claim which was rejected by both the authorities. Therefore, appellant is before me in appeal.

3. The Ld. Counsel for the appellant submits that in this case there is no dispute that service provider i.e. job worker has paid service tax and on the said invoices appellant has taken the credit. Moreover, the service tax paid by the job worker has been accepted by the department and it was not disputed that job worker is not required to pay service tax. Whatever service tax paid by the appellant to the job worker is entitled for Cenvat Credit. Therefore, their refund claim is admissible. To support his contention he submits that when the payment of service tax has not been disputed by the department at the end of the service provider and same cannot be disputed at the end of service receiver. Therefore, impugned order is to be set aside.

4. On the other hand, Ld. AR submits that the job worker was not required to pay service tax as in one of the job worker it was held by the Adjudicating Authority that job worker is not required to pay service tax on job work goods. When the job worker is not required to pay service tax, therefore appellant is not entitled to take Cenvat Credit.

5. Heard the parties. Considered the submissions.

6. In this case it is not disputed by the Revenue at the end of job worker that they are not required to pay service tax. It is also not in dispute that the job worker has not paid the service tax. In these circumstances, whatever service tax has been paid by the appellant to the job worker, appellant is entitled to take Cenvat Credit. Consequently, the appellant was not required to reverse the same. On objection by the audit party, the appellant has reversed the Cenvat credit, they are entitled to take refund on the same.

7. With these terms, I hold that appellant is entitled to claim refund of service tax reversed by them paid on job work charges.

8. Consequently, impugned order is set aside. Appeal is allowed with consequential relief if any.

(Dictated and pronounced in the open court.)

(Ashok Jindal) Member (Judicial)

Bhanu

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E/52210/2014-EX(SM)