Shri A.D. Almeida, Vice President vs C.C.E. & S.T. Gurgaon-Ii

[Arising out of Order-in-Appeal No. 03/MV/CCE/GGN-II/2015-16 dated 30.04.2015 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Gurgaon].

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. Oriental Carbon & Chemical Ltd.,

Shri A.D. Almeida, Vice President .Appellants

Vs.

C.C.E. & S.T. Gurgaon-II .Respondent

Appearance:

Shri Rupinder Singh, Advocate for the Appellant

Shri R.K. Grover, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing: 27.08.2015

FINAL ORDER NO. 52699-52700/2015-ST(SM)

Per Ashok Jindal:

The appellants are in appeals against the impugned order wherein input service credit has been denied to them. Consequently, demand on duty was confirmed against the appellant company along with interest and penalty imposed on both the appellants.

2. The facts of the case are that the appellant company is having two units. One 100% EOU and one DTA Unit. The appellant procured capital goods and on Bill of Entry the appellant wrongly mentioned as 100% EOU the sister unit. Therefore, Cenvat Credit availed on the capital was sought to be denied on the premises that Bill of Entry is not in the name of the appellant. The input service credit on the following services were also sought to be denied on the premises that these services do not qualify as input service as per Rule 2 (l) of the Cenvat Credit Rules:

a) Business Chamber Association Services

b) Horticulture Services

c) After Sale Services (commission paid to the services)

d) Outward Goods Transportation Agency Services.

3. Aggrieved from the said order, appellants are before me.

4. The Ld. Counsel for the appellant submits that in the Bill of Entry it is wrongly mentioned as 100% EOU. In fact, the goods have been imported by the DTA unit (appellant) who made the payment for the said goods of these capital goods were physically available in the premises of the DTA unit only. Merely wrong mentioning of the name of the 100% EOU, Cenvat Credit cannot be denied. He further submits that all the services mentioned in Para 2 above, on which Cenvat Credit sought to be denied as these are not input services, in fact, all these services have been used by the appellant in the course of the business of their manufacturing activity. With regard to the GTA services he submits that he sold the goods to buyer on FOR basis and audit team has inspected the same. Moreover, in reply to the show cause notice they have clearly mentioned that they are selling goods on FOR basis but Adjudicating Authority has not given any finding thereon. Therefore, in the light of the decision of the Honble High Court of Bombay in the case of CCE Nagpur Vs. Ultratech Cement Ltd.-2010 (260) ELT 369 (Bom) the appellant is entitled to avail Cenvat Credit.

5. On the other hand, Ld. AR oppose the contention of the Ld. Counsel and submits that the services on which appellant has availed input service credit have no relation to the business of the appellant. Particularly for GTA services he submits that appellant has not produced any evidence to show that goods have been sold by them on FOR basis. Therefore, he supported the impugned order.

6. Heard the parties. Considered the submission.

7. In this case Cenvat Credit of Rs.2,71,573/- was sought to be denied on the premise that the Bill of Entry is in the name of the EOI and not in the name of the appellant. In fact, the name of 100% EOU is wrongly mentioned by the appellant which has been explained. The payment towards the said capital goods have been paid by the appellant only and the capital goods is physically available in the premises of the appellant. Therefore, merely wrong mention of the name in the Bill of Entry Cenvat Credit cannot be denied to the appellant. Accordingly, I hold that appellant has taken Cenvat Credit of Rs.2,71,573/- on the strength of Bill of entry on capital goods is correct.

8. With regard to the Cenvat Credit of Rs.3,79,415/- I find that services namely Business Chamber Association Services, Horticulture Services, After Sale Services (commission paid to the services), Outward Goods Transportation Agency Services are the services in the nature of the services availed by the appellant in the course of business of manufacturing. Therefore, appellant is entitled to avail Cenvat Credit on these services as held by the Honble High Court of Bombay in the case of Ultratech Cement Ltd.

9. With regard to the availment of Cenvat Credit on outward goods transportation agency services, the claim of the appellant is that they have sold the goods on FOR basis. Audit team has also conducted audit in the premises of the appellant and examined the documents shown by the appellant. Appellants have also in their reply to the show cause notice claimed that the goods are being sold on FOR Basis, but adjudicating authority chose not to give any finding thereon. Therefore, as claimed by the appellant that they have sold goods on FOR basis, the appellant is entitled to avail Cenvat Credit on outward transportation services. If Revenue feels that it is to be verified then department officers are free to go and inspect the record of the appellant to verify the facts.

10. As observed that the claim of the appellant that the goods have been sold on FOR basis is correct. Therefore, Cenvat Credit on outward transportation services is entitled to the appellant.

11. With these observations, I hold that appellant has taken Cenvat Credit correctly. Therefore, impugned demands i.e. duty and interest are not sustainable. Consequently, penalties are also not imposable.

12. With these terms impugned order is set aside qua denial of Cenvat Credit and imposition of penalty. Consequently, appeals are allowed with consequential relief if any.

(Dictated and pronounced in the open court)

(Ashok Jindal) Member (Judicial)

Bhanu

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ST/52284, 52551/2015-ST(SM)