M/S. Varica Herbs vs Cce, Puducherry
- CitationAppeal No. 73
Ratio decidendi
The rule this decision rests on
Where the appellant shows, with substantial evidence on the record, that a service is relevant to its manufacturing activity or business, and the revenue authority finds no contrary evidence that the service was used elsewhere rather than for business or manufacture, denial of CENVAT credit on that service is unjustified. Expenditure on training, and on printing and stationery, does not by itself establish relevance to the manufacturing activity, and CENVAT credit on such items is therefore not allowed.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out of Order-in-Appeal No. 73 & 74/2014 (P) dated 9.4.2014 passed by the Commissioner of Central Excise (Appeals), Chennai)
M/s. Varica Herbs Appellant
Vs.
CCE, Puducherry Respondent
Appearance
Shri G. Hari Govind, Chartered Accountant, for the Appellant Shri K.P. Muralidharan, AC (AR) for the Respondent
CORAM
Honble Shri D.N. Panda, Judicial Member
Date of Hearing / Decision: 6.2.2015
Final Order No. 40144-40145 / 2015
Learned Chartered Accountant says that in both the cases, CENVAT credit disallowed relates to testing and certification charges, training, courier services, renting, security services, telephone charges, transportation charges, AMC and printing and stationery. He justifies the incurring of the cost of testing and certification which was used for testing the samples of the goods manufactured which is directly attributable to manufacture. Similarly, training is of that nature.
1.2 So far as the courier service and transportation services are concerned, his submission is that, those are necessary for the purpose of business to carry out sales and also to bring the input to the factory. The renting expenditure was incurred for the purpose of housing the factory for which that is eligible to get the input service tax credit on rental charges. The security services were utilized for protection of the factory and the premises as a whole where business is carried out. Therefore, CENVAT credit on the security services paid is not inadmissible. Further, the telephone charges incurred for the conduct of business is also eligible to get CENVAT credit of service tax paid thereon. So far as AMC is concerned, that being related to DG sets used in the manufacture, that also qualifies to get CENVAT credit. Printing and stationery being used in the business, CENVAT credit thereon is admissible. In view of the above, not only stay applications may be disposed but also appeals may be allowed.
2. Revenue supports the adjudication and says that learned Commissioner (Appeals) has assigned reason of disallowance in para 8 of the appellate order.
3. Heard both sides and perused the records.
4. In the course of hearing, the reason stated by the Chartered Accountant as aforesaid and supported by substantial evidence on record demonstrate relevancy of services to manufacture and business of the appellant. When the authority below did not find any contrary evidence of use of services elsewhere but were utilized for business as well as manufacture, denial of CENVAT credit is unjustified. But the expenditure on training, printing and stationery could not satisfy as to relevancy thereof to the manufacture activity. Therefore, no CENVAT credit on these two items shall be allowed. But credit on the rest of the items clamed shall be allowed.
5. In view of the above, both the stay applications are allowed and appeals are allowed partly to the above extent.
(Dictated and pronounced in open court)
(D.N. Panda) Judicial Member
Rex
3
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