Relan Motors Pvt. Ltd vs Cce & St, Jaipur-Ii

[Arising out of Order-in-Appeal No.321(OPD)ST/JPR-II/2013 dated 31.10.2013/22.11.2013 passed by the Commissioner (Appeals), Central Excise & Service Tax Commissioenrate-II, Jaipur]

For approval and signature:

HONBLE MR. S.K. MOHANTY, 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?

__________________________________________________

Relan Motors Pvt. Ltd. Appellant

Vs.

CCE & ST, Jaipur-II  Respondent

Present for the Appellant :Shri Madhur Relan (Director)

Present for the Respondent: Shri Devender Singh, DR

Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 12.06.2015

FINAL ORDER NO. 54107/2015

PER: S.K. MOHANTY

The brief facts of the case, are that the appellant is an authorized dealer of Hero Honda Motor Cycle. The appellant also provides the taxable service i.e. servicing of motor vehicle as defined under section 65 (a) of the Finance Act, 1994 read with Clause (zo) of Section 65 (105) of the said Act. The appellant avails cenvat credit in respect of the service tax paid on the input services used for providing the output service. During the period April 2010 to September, 2010, the appellant availed cenvat credit on transport of goods by road service and utilized the same for payment of service tax attributable to the output service. Taking and utilization of such credit was objected to by the Department on the ground that the appellant was availing credit of service tax paid on freight incurred for inward transportation of vehicles to be sold from the show room, which was not a taxable service. In other words, according to the Department, since there is no nexus between the input services and output service provided by it cenvat credit is not admissible to the appellant. The adjudication order confirming the service tax demand culminated in the impugned order, wherein the appeal filed by the appellant was dismissed by the Commissioner (Appeals). Hence, the present appeal is before this Tribunal.

2. The Director of the appellant company Shri Madhur Relan has relied on the judgment of Honble Andhra Pradesh High Court in the case of Commissioner vs. Shariff Motors reported in 2015 (38) STR J53 (AP) and also decision of this Bench of the Tribunal in the case of Badrika Motors Pvt. Ltd. vs. Commissioner of Central Excise and Service Tax, Bhopal reported in 2014 (34) STR 349 (Tri.-Del.) to justify his stand that taking of cenvat credit on the disputed service is in conformity with the statutory provisions and the utilization of the said credit cannot be denied.

3. Per-contra, the ld. DR, Shri Devender Singh appearing for the respondent submits that since there is no nexus between the input and the output service provided by the appellant, cenvat credit is not admissible, in view of the definition of input service contained in Rule 2(l) of the Cenvat Credit Rules, 2004. Further, he relied on the CBEC Circular No.699/15/2003-CX. dated 05.03.2003 and also the decision of the Tribunal in the case of Assistant Commissioner of Central Excise and Service Tax, Vishakhapatnam vs. Shree Siva Sankar Automobiles reported in 2012 (284) ELT 109 (Tri.-Bang.) to substantiate the stand of Revenue that the denial of cenvat credit benefit is legal and proper.

4. Heard the ld. Counsels for both the sides and perused the records.

5. With regard to the nexus between the input service on which cenvat credit has been taken and the output service provided by the appellant, the Tribunal in the case of Badrika Motors Pvt. Ltd. (supra) held that since tax on GTA service was remitted for transport of two-wheelers, no precise or arithmetical co-relation required between input service and output services. It has further been held that this is sufficient and proximate nexus for availing cenvat credit on GTA service for utilizing in output service. Further, the reason assigned for disallowance of cenvat credit in the impugned order is that sale of motor vehicle is not a taxable service, and thus, taking of cenvat credit on the freight amount incurred for inward transportation of vehicle is not proper, since there is no scope for utilisation of such credit. We find that the issue in hand has been dealt with by the Tribunal in the case of Commissioner vs. Shariff Motors, reported in 2010 (18) STR 64 (Tri. - Bang.), wherein it has been held that definition of input service is broad enough to cover input service availed and output service rendered by the respondent; hence cenvat credit cannot be denied. Appeal filed against the said decision of the Tribunal by the Central Excise Department was dismissed by the Honble Andhra Pradesh High Court as referred above.

6. When the issue is covered by the decision of the Honble High Court, the Boards Circular and the Tribunal decision in the case of Shree Siva Sankar Automobiles (supra) as cited by the ld. DR are not necessary for any further discussion.

7. In view of the judgment of the Honble Andhra Pradesh High Court in the case of Shariff Motors (supra), we do not find any merits in the impugned order. Accordingly, the same is set aside and the appeal is allowed in favour of the appellant.

(Dictated and pronounced in the open Court)

(S.K. MOHANTY)

MEMBER (JUDICIAL)

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