9911796707
TMI Blog2025 (2) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... 4)11/S.Tax-Adjn/B-I/2011/9082A dated 15.04.2011 Additional Commissioner 34,42,039/- 2009-10 1.2. The above Show Cause Notices were adjudicated vide the impugned Order-in-Original No. COMMR/B-I/ST-34-35/2012 dated 30.01.2013 wherein the Ld. Commissioner has disallowed CENVAT Credit amounting to Rs.3,01,71,279/- and also imposed an amount equal to the credit disallowed as penalty under Section 78 of the Finance Act, 1994 read with Rule 15(3) of the CENVAT Credit Rules, 2004. 2. Aggrieved by the disallowance of credit and imposition of penalty, the Appellant has filed this appeal. 3. The Appellant has summarized the credit disallowed on various items as under: Sl. No. Name of goods/services received Category under which credit availed Amount of CENVAT Credit denied (in Rs.) 1 Electrical Transmission Tower Materials Capital goods 90,44,256/- 2 132 KVD/CTLNT Towers Capital goods 3,78,909/- 3 Mild Steel Section for Templates Capital goods 6,47,769/- 4 Health Insurance of staff and family Input service 1,00,569/- 5 Port Insurance Input service 63,42,990/- 6 Consultancy for construction of railway line Input service 30,47,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of "capital goods" as defined under Rule 2(a) of the CENVAT Credit Rules, 2004. Thus, it is their submission that the denial of credit on these items is not legally sustainable. 3.3. In support of their contention that the items covered under Sl. Nos. 1 to 3 of the Table reproduced above are eligible for credit being "capital goods", the Appellant have cited the judgement in the case of M/s. Bharti Airtel Ltd. v. Commissioner of Central Excise, Pune [2024 (11) TMI 1042 - Supreme Court] wherein the Hon'ble Apex Court has allowed the credit in respect of similar items/goods holding the same as components/accessories of capital goods falling under sub-clause (i) of Rule 2(a)(A) of the CENVAT Credit Rules, 2004. In this regard, they have also relied upon the decision of this Tribunal in the case of M/s. Vodafone Essar South Ltd. v Commissioner of Service Tax, Kolkata [2024 (1) TMI 936 - CESTAT, Kolkata] (Final Order No. 77210 of 2023 dated 27.09.2023 in Service Tax Appeal No. 70576 of 2013 - CESTAT, Kolkata]. Submissions regarding Sl. No. 4: 4. Regarding the disallowance of CENVAT Credit to the tune of Rs.1,00,569/- on "Health Insurance of staff and family", the Appellant contends ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es used in connection with the railway connectivity project. 5.1. With regard to the CENVAT Credit disallowed of Rs. 84,05,618/- on "Supervision charges for construction of Electrical Transmission Towers" (Sl. No. 7 of the above Table), it is their submission that DPCL has entered into long term agreement with M/s. Orissa Power Transmission Corporation Ltd. (OPTCL) vide agreement dated 28.05.2007 for supply of power to the port involving transmission lines of OPTCL; in the process of laying the transmission lines from Bhadrak to Dhamra, OPTCL was to be consulted for re-routing of EHT line crossings at different locations. The Appellant states that this is a part of the construction of 132 KVA line for the purpose of power supply to the port. Hence, it is contended that credit availed in respect of supervision charges for constructing electric lines along the railway siding paid to OPTCL is admissible. 5.2. In respect of the credit denied to the Appellant on "Port Insurance", "House Keeping Service", "Advisory Service", "Renting of Immovable Property Service" and "Other Services" (Sl. No. 5 & Sl. Nos. 8 to 11 of the above Table), it is their plea that all these services were essen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmit that the other defects are curable in terms of Rule 9 of the CENVAT Credit Rules and as such the same cannot be a ground for denying the credit. In this regard, the Appellant contends that the provisions of sub-rule (2) of Rule 9 as it existed prior to 01.03.2007, do not require the mentioning of service tax registration number and jurisdictional Central Excise Range of the service provider. 7. On the other hand, the Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order. 8. Heard both sides and perused the appeal records. 9. We find that the ld. adjudicating authority, in the impugned order, has denied CENVAT Credit on various items/services availed during the period from 2005-06 to 2009-10. 10. Regarding the items listed at Sl. No(s). 1, 2 and 3 of the Table given at paragraph 3 of this Order viz. Electrical Transmission Tower Materials", "132 KVD/CTLNT Towers" and "Mild Steel Section for Templates", we find that these items are covered under the definition of "capital goods" as per Rule 2(a) of the CENVAT Credit Rules, 2004. For the sake of ready reference, relevant portion of the said definition is reproduced below: - "RULE 2. Defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at any such item which adds to the beauty, convenience or effectiveness of some other items can be said to be accessory of that other thing and it may or may not be essential for functioning of main machinery. Seen from the above perspective what is evident is that the tower is a structure fixed to the earth or building on which microwave antenna is fastened to provide the necessary height and stability to the antenna by making it steady and wobble free. The function of antenna as part of the BTS is to receive and transmit radio signal and is used for providing mobile telecom service to the subscribers. The tower itself is not an electrical component of microwave antenna per-se, yet it is necessary and helps in keeping the antenna at proper height and in a stable position so that the antenna can transmit signals for ensuring uninterrupted and seamless services to the subscribers. It is with the aid of the tower that the potential of the antenna is fully realised, making it function optimally. Without tower, antenna cannot effectively function for the purpose it is used. Hence, there can be no doubt that tower is to be considered as an accessory of antenna. 11.11.6 Similarly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplated under Rule 3(1)(i), the Assessees would be entitled to CENVAT credit on the excise duties paid on these goods." 10.3. Thus, by relying on the decision of the Hon'ble Apex Court referred to supra, we hold that the Appellant is eligible for the credit in respect of "Electrical Transmission Tower Materials", "132 KVD/CTLNT Towers" and "Mild Steel Section for Templates". Accordingly, the denial of CENVAT Credit to the appellant on this count is set aside. 11. Regarding the denial of credit in respect of "Health Insurance of staff and family" (Sl. No. 4 of the Table supra), we observe that provision of medical facilities within the Port Area is a pre-requisite for obtaining approval for the port under the Major Port Trust Act, 1963 and the Indian Ports Act, 1908. It has been stated by the Appellant that they have an insurance policy to cover the hospitalization expenses of the employees and their family members as per the company's policy of the 'Corporate Social Responsibility'. Therefore, we find that the same are input services for availing credit of Service Tax. We also find that this issue is squarely covered by the decision in the case of M/s. Indian Bank v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal; (Emphasis supplied) 12.2. We observe that the term 'business' mentioned in the definition of "input service" mentioned above, is a wider concept and must be construed in widest amplitude to cover entire gamut of activities which an entity is engaged into or dealing with in the course or furtherance of its very existence. 12.3. We find that the said services have been rendered by the Appellant in connection with their business activity. The Department has failed to substantiate the claim of lack of nexus of these services with the provision of output services. We also find it relevant to refer to the decision rendered by the Hon'ble Punjab and Haryana High Court in the case of Commissioner of Central Excise, Delhi-III v. M/s. Maruti Suzuki India Ltd. [2023 (11) TMI 724 - P&H], wherein it has been held as under: - "9. Counsel for the respondent-assessee, on the other hand, submitted that the assessee is one of the biggest car manufacturers in India and in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction work is a taxable service under the Finance Act, 1994, it is basically civil in nature relatable to the immovable property not chargeable to central excise duty. Immovable property is neither 'service' nor 'goods'. Input credit is not available to them. Commercial or industrial construction service or works contract service is an input service for immovable property which is neither subjected to central excise duty nor to service tax. In this regard, the Commissioner referred to a CBEC Circular dated 04.01.2008. The Commissioner also held that the service tax paid on lease rentals is not covered under the "input service" as the same is not remotely connected to the manufacturing activity and that the nexus thereof with the manufacture of the final product is far-fetched as the same is not used directly or indirectly in or in relation to the final product i.e. metal-sheet. 7. We are entirely in agreement with Mr. Amrinder Singh's submission on behalf of the respondents, that the Cenvat Credit taken of the tax paid in respect of the said input services can be utilized by the respondents in accordance with the Cenvat Credit Rules. Mr. Amrinder Singh r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax was being paid on the Mandap Keeper services and Rent-a-Cab services and resultantly, it was held that it is part of the business expenditure incurred by the assessee to promote the sales and for efficiently running of the business and the appeals of the Revenue were dismissed. The relevant portion reads thus:- "23. In view of the aforesaid wide and expansive interpretation of the term 'input service' we find the Mandap Keeper Services used to organize meetings and events for promotion of their products such as a new vehicle launch, sales promotion events and also for business dealer meets, conferences, Executive Level Meetings etc. which activities being important for the respondent to promote the sale of vehicles are connected to the business of manufacture of the respondent for which they are entitled to avail CENVAT credit, especially when the expense so mentioned is part of cost on which excise duty is paid. 24. Similarly, the Rent-a-Cab services used by the executives of the respondent for the purpose of travelling required for business meetings, visits to the dealerships, visits to the vendor sites, dealers meet, business promotion activities, vehicle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place of removal would be this Port/ICD/FCS. Needless to say, eligibility to CENVAT Credit shall be determined accordingly." Keeping in view the above, we are of the considered opinion that the Cenvat Credit has been rightly granted to large extent by the Commissioner and the benefit which had been declined has been rightly allowed by the Tribunal by modifying the order of the Commissioner. In such circumstances, we do not find any question of law arising for consideration as projected by counsel for the appellant-revenue and the appeal accordingly stands dismissed." 12.4. In view of the above discussion and by relying on the decision of the Hon'ble High Court cited supra, we hold that the Appellant is eligible for the credit availed in respect of these services, being "input services" in terms of Rule 2(l) of the CENVAT Credit Rules, 2004. The denial of CENVAT Credit to this extent, therefore, is set aside. 13. With regard to the CENVAT Credit denied on the grounds of "Excess credit availed" and "Credit availed on improper documents", we observe that the ld. adjudicating authority has held the same as inadmissible since no evidence was produced before the said authority by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not restricts to services given in the definition but also covers services which are related to business activities. On this issue, DPCL have agreed to reverse Rs.25,544/- on the bills not raised in its name, out of the disputed credit of Rs.9,65,903/-. The other defects are curable in terms of Rule 9 of the CCR,04 and as such the same can not be a ground for denying the credit. The provisions of sub-rule(2) of Rule 9 as it existed prior to 01.03.2007, do not require the mentioning of service tax registration number and jurisdictional Central Excise Range of the service provider. Therefore, the objections raised on this account relating to the period 2005-06 and 2006-07 are not tenable." 13.2.1. In this regard, we agree with the submission of the Appellant that discrepancies pointed out by Revenue in the Show Cause Notice such as Telephone bills in name of employee, non-mentioning of Service Tax Registration number in invoices, invoices in name of previous entity viz. Tata Steels, Jurisdictional details not mentioned, etc., are procedural infractions due to which substantive benefit of credit cannot be denied to the Appellant. Accordingly, we allow the CENVAT Credit availed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
