CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH
BANGALORE

Appeal(s) Involved:

E/23747/2014-SM 


[Arising out of Order-in-Appeal No. 526/2014 dated 28/08/2014 passed by the Commissioner of Central Excise, Bangalore-II (Appeals)]

MYSORE ELECTRICAL INDUSTRIES LTD.
TUMKUR ROAD, YESHWANTPUR 
BANGALORE  560 022
	APPELLANT(S)
	
	Versus	

COMMISSIONER OF CENTRAL EXCISE, SERVICE TAX AND CUSTOMS, BANGALORE-II 
PB 5400, CR BUILDING, QUEENS ROAD, 
BANGALORE  560 001
KARNATAKA	RESPONDENT(S)

Appearance:

Shri A.S. Monnappa, Advocate No.128, 3rd Stage, Vinayaka Layout, Vijayanagar, Bangalore  560 040 Karnataka For the Appellant Dr. Harish J, Deputy Commissioner (AR) For the Respondent Date of Hearing: 28/06/2017 Date of Decision: 28/06/2017 CORAM:

HON'BLE SHRI S.S GARG, JUDICIAL MEMBER

Final Order No.    20989 / 2017    

 
Per: S.S GARG 	

The present appeal is directed against the impugned order dated 28.08.2014 passed by the Commissioner (Appeals) wherein the Commissioner (Appeals) has rejected the appeal of the appellant and upheld the Order-in-Original. Briefly the facts of the present case are that during the course of audit by the Departmental audit party, it was noticed that the appellant had availed credit on services like Water Treatment Expenses whereby the treated water is used for gardening which do not fall under the purview of input services as defined in Rule 2(l) of Cenvat Credit Rules, 2004. It was also noticed that the appellant had taken cenvat credit on the strength of unsigned documents and photocopy of invoices which were not in conformity with Rule 9 of Cenvat Credit Rules. Further cenvat credit was denied with regard to Company Secretary Service on the ground that the invoice details are not mentioned. On these allegations a show-cause notice was issued demanding and recovering an amount of Rs. 23,608/- (Rupees Twenty Three Thousand Six Hundred and Eight only). After due process of law, the original authority vide the Order-in-Original disallowed cenvat credit of Rs. 21,942/- (Rupees Twenty One Thousand Nine Hundred and Forty Two only) along with applicable interest and also imposed equal penalty under Rule 15(2) of the Cenvat Credit Rules read with Section 11AC. Aggrieved by the said order, appellant filed appeal before the Commissioner who also rejected the appeal of the appellant.

2. Heard both the parties and perused the material on record.

3. Learned counsel for the appellant submitted that the impugned order denying the cenvat credit on the input services viz., Water Treatment Expenses, Maintenance of Photocopy Machine and Company Secretary Service have been wrongly denied on unsustainable grounds. He further submitted that as far as Company Secretary Service is concerned, in the show-cause notice it is mentioned that invoice details are not available whereas while passing the Order-in-Original, the cenvat credit was denied on the ground that the service is not within the ambit of manufacture of final product and hence not eligible for credit of service tax paid towards the service. With regard to water treatment service it has been denied on the ground that it is not related to the manufacture. Further with regard to the xerox copy cenvat credit has been denied on the ground that the original copies of invoices have not been produced for verification. Learned counsel further submitted that it is factually incorrect that original copies of invoices relating to maintenance of Xerox machine were not produced. He further submitted that the original copies were produced before the original authority and this is recorded in the Order-in-Original also but the same was not considered by both the authorities. The counsel has produced the original copy of the invoices relating to the maintenance of photocopy machine before this Tribunal also. As far as Water Treatment is concerned, it is a mandatory requirement as per the Pollution Control Act that the manufacturers cannot discharge the toxic effluents generated during the manufacture into sewers or the drainage system unless the same is treated in an Effluent Treatment Plant and the appellant has produced the order of the Pollution Control Board on record. Therefore, this service falls within the definition of input service as the same is related to the manufacture and usage of discharged water. Similarly, with regard to Company Secretary Service, the appellant has produced the invoice of the Company Secretary wherein Service Tax Registration No. is mentioned and this service also falls within the definition of input service. In support of his contention, the appellant relied upon the following decisions wherein these services have been held to be input services.

a) ARM Embedded Technologies Pvt. Ltd. Vs. CCE, Cus. & S.T., Bangalore  2016 (45) S.T.R. 133 (Tri.-Bang.)

b) CCE, ST, & Cus., Bangalore  II vs. Nash Industries  2016 (45) S.T.R. 233 (Tri.-Bang.)

c) ANAR Chemicals Pvt. Ltd. Vs. CCE, Ahmedabad  2011 (24) S.T.R. 32 (Tri.-Ahmd.)

d) Indian Farmers Fertiliser Coop. Ltd. Vs. CCE, Ahmedabad  1996 (86) E.L.T. 177 (S.C)

4. On the other hand, the learned AR reiterated the findings of the impugned order.

5. After considering the submissions of both the parties and perusal of the material, I am of the view that the impugned order denying the cenvat credit on Company Secretary Service, Water Treatment Service and Xerox Machine Service is not sustainable in law in view of the decisions cited by the appellant. Therefore, by following the ratio of the said decisions, I allow the appeal of the appellant by setting aside the impugned order with consequential relief.

(Operative portion of the Order was pronounced in Open Court on 28/06/2017) (S.S GARG) JUDICIAL MEMBER iss