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Commissioner of Central Excise, Goa Versus Hindustan Coca Cola Beverages (P.) Ltd.

2015 (5) TMI 918 - BOMBAY HIGH COURT

Denial of CENVAT Credit - Whether, the service tax paid on mobile phones used by employees/staff of a manufacturing company would be eligible for cenvat credit under the Cenvat Credit Rules, 2004 - Held that:- Rules of 2002 and any other circular as in force before coming into force of Rules 2004 and the commencement of the said Rules would be construed as reference to the Cenvat Credit Rules of 2004 and any corresponding provisions thereof. The said Rules also provide that such Rules or any cir .....

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not be applicable to defeat the credit availed of by the respondent. - expenses of mobile phones are in connection with manufacturing process of the respondent. In such circumstances, we find that both the substantial questions of law framed by this Court are to be answered against the appellant. - Decided against Revenue. - EXCISE APPEAL NO. 31 OF 2008 - Dated:- 10-3-2015 - F.M. REIS AND K.L. WADANE, JJ. For The Appellant : Ms. Susan Linhares, Adv. For The Respondent : V. Menezes, Adv. JUDGMENT .....

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Appellate Tribunal was correct in holding their the Board's Circular No.59/8/2003-ST dated 20.6.2003 specifically clarifying that service tax paid on mobile phone is not eligible for cenvat credit is in applicable under the Cenvat Credit Rules, 2004?" 3. Ms. Linhares, learned counsel appearing for the appellant has pointed out that as per the circular dated 20.6.2004 at clause 2.8, mobile phones are not covered. The learned counsel has further pointed out that as the mobile phones were .....

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s" at Rule 2(p) of 2004 to point out that the mobile phones have not been included therein. The learned Counsel further submits that the reason for not including mobile phones for such credit, according to her, is because mobile phones are not installed in the premises of the respondent. The learned counsel has thereafter taken us through the order passed by the Commissioner (Appeals) as well as Customs, Excise & Service Tax Appellate Tribunal (CESTA) to point out that both the authorit .....

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oming into force of Rules, 2004 would be applicable provided they are consistent with Rules of 2004 and there is corresponding provision in Rules of 2004. The learned Counsel further points out that the input services were not defined under 2002 Rules and as such, the question of claiming that there are any corresponding Rules in 2004 is totally misplaced. The learned Counsel further submits that even upon reading of the definition of word "Input Services" in the Rules, 2004, it appear .....

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arned counsel and we have also gone through the record. 6. In order to appreciate the contentions raised by the learned counsel appearing for the appellant it would be appropriate to quote the provisions of Rules 16 of 2004 Rules. Said Rule 16 reads thus:- "(1) Any notification, circular, instruction, standing order, trade notice or other order issued under the CENVAT Credit Rules, 2002 or the Service Tax Credit Rules, 2002, by the Central Government, the Central Board of Excise and Customs .....

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ules, 2002 and any provision thereof shall, on the commencement of these rules, be construed as references to the CENVAT Credit Rules, 2004 and any corresponding provision thereof." 7. On going through the said Rules what emerges is that Rules of 2002 and any other circular as in force before coming into force of Rules 2004 and the commencement of the said Rules would be construed as reference to the Cenvat Credit Rules of 2004 and any corresponding provisions thereof. The said Rules also p .....

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has rightly come to the conclusion that Rules 2002 would not be applicable to the facts of the present case. Such finding has been confirmed by the Appellate Tribunal by holding that circular of 2003 would not be applicable to defeat the credit availed of by the respondent. 9. We find no reason to interfere with the orders passed by both the Courts below. 10. For the sake of convenience we reproduce the definition of "Input Services" defined under Section 2(l) of Rules, 2004 and " .....

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r of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal; [but exclude],- [(A) service .....

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