Mane India Private Limited Versus Commissioner of Central Tax, Central Excise & Service Tax, Medchal – GST
Central Excise
2018 (6) TMI 185 – CESTAT HYDERABAD – TMI
CESTAT HYDERABAD – AT
Dated:- 21-5-2018
Appeal No. E/31329/2017 – Final Order No. A/30602/2018
Central Excise
Hon'ble Mr. M. V. Ravindran, Member ( Judicial )
Shri K. Chandra Sekhar, Consultant for the Appellant
Shri Dass Thavanam, Superintendent (AR) for the Respondent
ORDER
[ Order Per : M. V. Ravindran ]
This appeal is directed against Order-in-Appeal No. HYDEXCUS- MD-AP2-041-17-18 dated 30.08.2017.
2. Relevant facts that arise for consideration are the appellants are the manufacturers of Fragrances and Flavoring Essences. They registered with the Central Excise Department vide CER No. AACCM1243JXM001. They are availing credit of duty paid on inputs and input services under the provisions of CENVAT Credit Rules, 2004 and utilizing the same for payment of duty on final products. Their accounts
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e ineligible CENVAT credit of service tax on the services received at R& D unit and utilized the same for payment of excise duties with intent to evade payment of excise duty in contravention of CENVAT Credit Rules. It was also viewed that the contravention of provisions and evasion of duty is unearthed only on the departmental intervention, meriting recovery of duty for the extended period under Rule 14 of CENVAT Credit Rules, 2004 read with Section 11A of Central Excise Act, 1994. The notice was adjudicated in the impugned order, culminating in the instant appeal, wherein the proposals were confirmed as follows:
a) Confirmed the demand of Rs. 28,75,157/- being the irregular CENVAT credit availed under Rule 14 of CENVAT Credit Rules read with Section 11A(10) of Central Excise Act, 1944.
b) Appropriated Rs. 11,26,813/- already paid by them against above demand.
c) Confirmed the interest applicable under Rule 14 of CENVAT Credit Rules read with Section 11AA of Central Excise Act.
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and also R&D wing activity which are manufacturing activity of the appellant. It is his submission for both the lower authorities recorded that the research conducted in the appellant's premises at Mumbai office has not resulted in any commercial activity and ineligible to avail CENVAT credit. It is his submission, as a specimen case in one item they were research was conducted and commercial production was undertaken. As regards the Central Excise duty paid on works contract service, it is his submission that the work contracts service which is awarded for modernization of the office premises. He is draws my attention, works order nothing but modernization and the CENVAT credit of service tax is correctly availed as the modernization of the office is not excluded eligibility to avail CENVAT credit. He relied upon the judgment of the Tribunal in the case of Ahmednagar Forgings Ltd., [2017 (6) G.S.T.L. 54] and Heidelberg, Cement India Ltd., [2017 (6) G.S.T.L. (473)] for the proposition
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Petrochemicals [2013 (30) STR 475] for the proposition that the Mumbai office having not been registered as input service distributor, appellant factory at Hyderabad unit cannot be availed the CENVAT credit of the service tax paid on renting of immovable property service, security services, cleaning service, internet service and business auxiliary services and relied upon the judgment of Hon'ble Punjab & Haryana High Court in the case of Maruthi Suzuki India Ltd., [2016 (336) ELT 266] for the proposition that nothing used in R&D activity, CENVAT credit cannot be availed as R&D activity it is excluded itself.
5. On careful consideration of the submissions made by both sides and perused the records. On perusal of records, as correctly put forth by both sides, the issue is regarding eligibility to avail CENVAT credit of the service tax paid on renting of immovable property service, security services, cleaning service, internet service and business auxiliary service has also works contra
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he service tax credit of other services availed, I find that these services are rendered by the service providers at the Mumbai premises which was used by the appellant for the sales related activity, marketing and research of the few products. I find that the lower authorities are denying the CENVAT credit to the appellant on the ground that the products which were researched at Mumbai, nevertheless, were not in relation to manufacturing activity, were not commercially produced. In my view these findings are acceptance of fact that seems R & D activity was undertaken at Mumbai as there cannot be any dispute that it is in interest of the business, research and development is a primary requirement. I find that the lower authorities have stated in the orders that if the appellant should have obtained registration under input service distributor, which would indicate that services rendered at Mumbai, were in relation to the activity of manufacturing done at Hyderabad. In my view, the plea
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