Vandana Auto vs Cce & St-Raipur

[Arising out of Order-in-appeal no. 184(ST)/RPR-l/2013 dated 23-10-2013 passed by The Commissioner (Appeal) Central Excise & Customs, Central Excise Building, Tikarapara, Raipur (C.G.) 492 001]

1. Whether Press Reporter may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it would 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 Department Authorities?

Vandana Auto Appellant

Vs.

CCE & ST-Raipur Respondent

Appearance:

Sh. A.K.Mishra, Counsel for the appellant

Sh. G.R. Singh, DR for the respondent

Coram: Honble Sh. Manmohan Singh, Member (Technical)

FINAL ORDER NO. 50010/2015

Per: Manmohan Singh

Appellants have come in appeal against Commissioner (appeal)s order 184(ST)/RPR-I/2013 dated 23/10/2013 wherein Commissioner (appeal) rejected the appeal but waived the penalty under section 76 of the Finance Act. Appellant is engaged in providing taxable service in the category of authorised service station as defined under section 67 of the Chapter 5 of the Finance Act. Adjudicating Authority disallowed the service tax credit of Rs. 1,64,867/- and ordered for recovery under provisions of section 73 of the Finance Act along with interest under section 14 of the CENVAT Credit Rules, 2004. Amount of credit of Rs. 37080/- which was reversed of Real Estate Service was ordered to be appropriated against total credit disallowed. Penalty under provision 76 of Finance Act, 1954 and penalty of Rs. 1,64,867/-, under section 67 of the Finance Act, was also imposed.

2. Ld. Counsel pleaded that they were engaged in the sale of motor vehicles of M/s. Bajaj Auto Limited Pune and were simultaneously engaged in providing service of various service station. He also requested that they should have been granted proportional credit on items which was used in the services for authorized service station. It was fairly agreed that but for audit availment of these are not voluminous of credit by them would not have come to the notice of the department.

3. On the other hand, ld. DR reiterated the facts as contained in the Order-in-Appeal and specifically referred to the para 5.3 where it has been stated that appellant has availed credit on advertising as input service for authorised service station. Advertising has no relation with the authorised service station which could not be considered as input service or output service of repairing, re-conditioning or renovation of vehicle. He also pointed out that appellants have failed to produce copies of advertising invoices to supplement their case. He also referred to para 5.4 of the Commissioner (appeal)s order where it has been pointed out that courier service could not be treated as input service for authorised service station and no document has also come on record in support of their claim. Accordingly, credit on courier service was not available to them. In respect of other items, like credit on mobile phones, CENVAT credit on premium of life insurance corporation, account package, maintenance of computer installed in the appellants sales office of motor vehicle, it has duly been admitted by the appellant that this account package was not used for services of the vehicle as it was substantially used only for the sale of vehicle. They have also availed input service credit on security service. Adjudicating authority has rightly pointed out that it could not be considered as input service or output service for repairing, re-conditioning or renovation of vehicles.

4. I have examined all the aspects as given in Order-in-Appeal as well as raised during submissions before the Bench by both sides. It is an admitted fact that major activity of the appellant was sale of motor vehicles and providing services incidental to that. They have not maintained separate record for sale of vehicles as well as for providing authorized service station. As per discussion above, it has clearly come out that most of the input service credit taken by them related to the activities of the sale of vehicles. There are a few activities out of which some proportion of the service has been used for repairing or maintenance but it has come out that no separate record in this regard have been maintained. This matter has been examined by the Commissioner (appeal) in his order in detail at para 5.3, 5.4, 5.5, 5.6, 5.7, 5.8, 5.9, 5.10 and 5.11. It was also placed before the Bench that wrong availement of input service credit came to the notice of department only when the detailed audit of the Unit was undertaken. But for audit, wrong availement could not have been detected.

5. Considering totality of the facts I do not find any force in the pleading of the appellant to accept their prayer for grant of proportional credit as no documentary evidence has been produced before Commissioner (appeal).

6. In view of the above, appeal is rejected.

(Manmohan Singh)

Member (Technical)

RITU

APPEAL NO. ST/50756/2014-ST[SM]