Radical Instruments vs C.C.E., Delhi Ii

Arising out of the order in appeal No.180/STAX/APPLD-II/12/1631 dated 17.4.2013 passed by the Commissioner (Appeals), Central Excise and Service Tax, New Delhi.

For approval and signature:

Honble Mr. Justice G. Raghuram, President

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 26 of 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?

Radical Instruments .. Appellant

Vs.

C.C.E., Delhi II . Respondent

Appearance:

Present Shri Rohit Bector, C.A. for appellant

Present Shri B.B. Sharma, A.R.. for the respondent

Coram: Honble Mr. Justice G. Raghuram, Presiden

Final Order No. 52611/2015

Per Justice G. Raghuram:

The assessee is in appeal against the Order dated 17.4.2013 passed by the Commissioner (Appeals),Central Excise, Delhi II whereby its appeal against the Primary adjudication order dated 14.6.2011 passed by the Assistant Commissioner, Central Excise Division, Ambala City was rejected.

2. Audit of the record of the assessee revealed that the appellant availed cenvat credit on courier service which was used for excisable goods as well as rendition of output services, of Repair & Maintenance and Erection Commission and Installation. Alleging that courier services were not input services for the appellants final product or for output services, namely Erection, Commissioning or Installation, proceedings were initiated which culminated in the Primary adjudication order dated 14.6.2011, whereby cenvat credit of Rs.1,25,080/-was disallowed and ordered to be in order to be recovered along with interest under Section 75 of the Finance Act, 1994 in addition to imposition of penalty equivalent to the amount of cenvat disallowed, under Rule 15of Cenvat Credit Rules, 2004 read with Section 78 of the Finance Act, 1994.

3. On the admitted factual scenario, the assessee is a manufacturer of microscopes and accessories and was sending finished products to its buyers, domestic as well as overseas through courier services and the assesee availed cenvat credit paid on such courier charges and utilized the same for payment of service tax on its output services like GTA, Repair & Maintenance and Erection, Commissioning or Installation services for which the appellant was also registered under provisions of the Finance Act, 1994. Courier services were utilized for dispatch of excisable goods to its buyers as well as for dispatch of accessories for the purpose of repair which was its output service.

4. The authorities below concurrently concluded that the appellant could not legitimately avail cenvat credit on courier services for remittance of service tax on its output services since these were not used as input services for providing the output services. The authorities below also held that the assessee could not avail cenvat credit for remittance of central excise duty on finished excisable goods namely microscopes since these were post-manufacturing activities and therefore were not eligible for cenvat credit.

5. The High Court of Punjab & Haryana in Ambuja Cements Ltd. Vs. UOI & Ors.  (2009) 223 CTR (P & H) 375 declared the principle that where sale of excisable goods is on FOR destination basis, at the door step of customers and transportation charges were incurred for such transaction, freight charges involved in such transaction is an input service eligible for credit under Rule 2 (l) of the Cenvat Credit Rules, 2004. This decision therefore covers the issue in favour of the assessee in so far as the assessee availed cenvat credit on courier services for its export as well as domestic sales. In so far as availment of service tax credit incurred on courier charges for remittance of service tax on the assessees output services of Maintenance, or Repair and Erection, Commissioning or Installation services, for the reasons alike, since the courier and Goods Transport Agency services are input services for rendition of output services, cenvat credit is equally admissible.

6. For the aforesaid reasons, the appeal succeeds. The impugned order is quashed, but in the circumstances without costs.

(Justice G. Raghuram))

President

scd/

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