1 911 Rig ,Wfin 311 tact, 44 37ITC 711337 - II, 3TPT4Tag - I cfl*it ( sirfPff, 4w414 3- errc ar- sra, 411a2.14.14, mu, iiiciur 31 -813- 4rdrc - 380 015. OFFICE OF THE ASSISTANT COMMISSIONER, CENTRAL EXCISE, DIVISION - II, AHMEDABAD- I . THIRD FLOOR, CENTRAL EXCISE BHAVAN, NEAR POLYTECHNIC, AMBAWADI, AHMEDABAD -380 015. ?rant gra* 3TW VRT / By R.P.A.D. t5T.TE.V/16 - 22/SCN - Cadmac/12 - 13 . 311t3i * 21' artmr / Date of Order: 23.12.2014 chic]) aftR3I / Date of Issue : 23.12.2014 Caw tifitaiPassed by : Ms.Ruchi Bisht / Assistant Commissioner 9t affair TT. / Order-in-Original No :- AC / 15 /Div - IF 2014- 15 D- 4T Fazit) ail 4- 6 wit al t an cfl t, .5i4/504, ftAt cRitTr*Th -Q- ' an I This copy is granted free of charge for private use of the person(s) to whom it is sent. T4T aTtl- TT 3.13TE ch)3 aft FQ:fa• r4T 3iTt'31- 371 1 17, Teti Wft l a• ti 60(46) ROI 3i - CT 3177a- (3PtIW), *7 ,1- 171 irt-i le, !I pe,c6, tT 3rt04 araF, 3itdiaTer, n- 380 015 WW7 Ti. t.V.1 a f aTitM 4 , t Thhci I t I Tfl- 3icita"tR F 2/-(ef bill') Th -T ftWE cid ll 61.1I I vritcr Any person deeming himself aggrieved by this order may appeal against this order in Form E.A.1 to Commissioner (Appeals), Central Excise, Central Excise Bhavan, Ambawadi, Ahmedabad - 380 015 within sixty days from the date of its communication. The appeal should bear a court fee stamp of Rs.2/- only. icl-ci 3141rg, arcir - dm -acr 40ki si RAH # 7`trw SI u -r- "r vre. 6-e- 3- fr 'eft frzi !Ic-ch rartR, Pzid-ucicql, 2001 *Peld-1 3 t cratirdt 313 - 41R- .t-(-0ffl - { fdlv 011a; -ri f6-Q- PitTird-r 1W- J :iffigfara . c,÷coaqi tic.ld , if lTa - TTv :- The Appeal should be filed in Form No. E.A.1 in duplicate. It should be signed by the appellant in accordance with the provisions of Rule 3 of Central Excise (Appeals) Rules, 2001. It should be accompanied with the following :- (i) ictrl 3141Eg dl wit Copy of accompanied Appeal. (ii) PkAti Sr cite arccar D-- fr 3i-rtsr ra-- tarcrIWtrritt, 601 • It T; : r T T71- Cri r Zrr3 r arrtu tir 2/- re! I +4 I ei te. F.W t* -- Ceidll 0011 Vits 6V I Copies of the decision or, one of which at least shall be certified copy, the order appealed against or the other order which must bear a court fee stamp of Rs.2.00/-. TH. 3f1t31- ftY , K 3T9Wa (3141W), * - 01 - u 6c4 le, torch, 3c414 tl rot 3Ta7", 311- 4MTer, 3T- 6W- Cr4g - 3 7.5% 6i torch 3itiaT t11.7 •Cra" 010-1(0-11 Th -T radg 31, -FdT 1/471.0-11.11 ert 80 015 SisOcA 01 a3;s97. .hid-, 31-* 71 An appeal agaisnt this order shall lie before the Commissioner(Appeals), Central Excise, Central Excise Bhavan, Ambawadi, Ahmedabad -380 015 on payment of 7.5% of the duty demanded where duty or duty and penalty are in dispute, or penalty, where penalty alone is in dispute". Sub: Show Cause Notice No. V/16-22/SCN Cadmac/12-13 dated 06.02.2013 issued M/s. Cadmach Machinery Co. Pvt. Ltd., 3604/05, Phase IV, GIDC, Vatva, Ahmedabad 382445 -matter reg.
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1
911 Rig ,Wfin 311 tact, 44 37ITC 711337 - II, 3TPT4Tag - I
Education Cess Rs. 6,612/- + SHE Cess Rs. 3,280/-) should not be
disallowed and recovered in terms of provisions of Rule 14 of the
Cenvat Credit Rules, 2004 readwith Section 11A (1) of the Central
Excise Act, 1944.
4
(ii) Penalty should not be imposed on them in terms of provisions of Rule
15(1) of the Cenvat Credit rules, 2004.
(iii) Interest at the prescribed rate should not be charged and recovered in
terms of provisions of Rule14 of the Cenvat Credit Rules 2004
readwith Section 11 AA of the Central Excise Act, 1944
They were also directed in the said show cause notice to produce at the time of
showing cause all the evidence upon which they intend to rely in support of their defense
and also directed to indicate in their written explanations to whether they desire to be
heard in person before the case is adjudicated.
WRITTEN SUBMISSIONS :-
9. The notice deny all the allegations/observations raised in the Show Cause
Notice and state that the Show Cause Notice is not sustainable on the basis of submissions
made below which are independent and without prejudice to each other.
(i) Whether Cenvat Credit availed for the Air Travel agency service amounting to Rs. 11,941/-, photography service amounting to Rs. 3,177/-, Insurance
service amounting to Rs. 43,514/- and Chartered Accountant Service amounting to Rs. 2,81,706/- were allowable as input or not
(ii)Cenvat Credit of Service tax not mention in ER -1 return is procedural lacuna
or not.
(iii) Whether when there is issue interpretation involved, penalty under Rule
15(1) of the Cenvat Credit Rules, 2004 has to be imposed or not.
9.1 Regarding Cenvat availed for the Air Travel agency service amounting to Rs. 11,941/-
photography service amounting to Rs. 3,177/-, Insurance service amounting to Rs. 43,514/-
and Chartered Accountant Service amounting to Rs. 2,81,706/- were allowable as input or not.
Noticee has working across the India has availed service credit rightly, which were
used in or in relation to the manufacture of the final product and clearance of final product
from the place of removal.
9.1.1 Noticee want to draw your attention towards the basic provision of Cenvat Credit
Rules, 2004 as under H
Input service defined under Cenvat Credit Rules, 2004
(I) "input service" means any service, —
used by a provider of taxable service for providing an output service;
or
onlifela0400* it I
I 5
(ii) used by a manufacturer, whether directly or indirectly, in or in
relation to the manufacture of final products and [clearance of final products
upto the place of remova]l,
and includes services used in relation to setting up, modernization, renovation or repairs of
a factory, premises of provider of output service or an office relating to such factory or
premises, advertisement or sales promotion, market research, storage up to the place of
removal, procurement of inputs, activities relating to business such as accounting, auditing,
financing, 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 up to the place of removal; "
9.1.2 From the abdve it is clear that under the present scheme of Cenvat credit rules,
Cenvat Credit has been allowed for the service tax paid on setting up of office, factory
premises and more particularly service tax paid on commercial or industrial construction
service. This is also clarified by the Board F.No. 137/203/2007-CX.4 dated 01.10.2007 has
clarified that service tax paid on construction of an office of service provider is an input
service and there is no restriction on taking of credit.
9.1.3 Even under Rule 6(5) of the Cenvat Credit Rules, 2004 produce here under :-
"(5) Notwithstanding anything contained in sub-rule 91), (2) and (3), credit of the
whole of service tax paid on taxable service as specified in sub-clause (g), (p), (q), (r), (v),
(w), (za), (zm), (zp), (zy), (zzd), (zzg), (zzh), (zzi), (zzk), (zzq) and (zzr) of clause (105) of
Section 65 of the Finance Act, 1994 shall be allowed unless such service is used for
exclusively in or in relation to the manufacture of exempted goods or providing exempted
services."
So from the above it is clear that notice has utilized input service in or in relation to
the manufacture of final product and clearance of final product from the place of removal 7
has claimed rightly.
9.1.4 Your honour, notice have availed credit of input service, i.e. Chartered Accountant
Service and Air Travel Agency Service. All the above were necessary and related to the
functioning of "business & activities," so all of the service availed by us falls under input
service definition & eligible for credit & refund in support of our contention.
9.1.5 Noticee also rely in support of our claim clarification issued by the Board Circular No.
120/01/2010-ST dated January 19, 2010
"3. The matter has been examined. At the outset it is necessary to understand that the
entire purpose of Notification No. 52/2006-CX (NT) is to refund the accumulated input
credit to exporters and zero-rate the exports. Accumulated credit and delayed sanction of
refund causes cash flow problems for the exporters. Therefore, the sanctioning authorities
6
are directed to dispose of the refund claims expeditiously based on the following
clarifications to the issues raised in paragraph 2 above.
10.1 use of different phrases in rules and notification [para 2(a)]:
10.1.1 The primary objection indicated by the field formations is that the language
of Notification no. 5/2006-CX (NT)
permits refund only for such services that are used in providing output service. In other
words, the view being taken is that to be eligible for refund,
input services should be directly used in the output service exported. As regards the
extent of nexus between the inputs/input services and the export goods/services, it must
be borne in mind that the purpose is to refund the credit that has already been taken. There cannot be different yardsticks for
establishing the nexus for taking of credit and for refund
of credit. Even if different phrases are used under different rules of Cenvat Credit Rules,
they have to be construed in a harmonious manner. To elaborate, the definition of input
services for manufacturer of goods, as given in Rule 2 (I) (ii) of Cenvat Credit Rules, 2004,
includes within its ambit all services used "in or in relation to the manufacture the final
products" and includes service used "directly or indirectly". Similarly Rule 2 (0(i) of Cenvat
Credit Rules also gives wide scope to the input services for provider of output services by
including in its ambit services "used for providing and output service."
10.1.2 Therefore, the phrase, "used in" mentioned in Notification No. 5/2006-CX (NT) to
show the nexus also needs to be interpreted in a harmonious manner. The following test
can be used to see whether sufficient nexus exists. In case the absence of such input/input
service adversely impacts the quality and deficiency of the provision of service exported, it should be considered as eligible input or input service. In the case of BP0s/call centers, the services directly relatable to
their export business are renting of premises; right to use
software; maintenance and repair of equipment; telecommunication facilities; etc. Further,
in the instant example, service like outdoor catering or rent-a-cab for pick-up and dropping of its employees to
office would also be eligible for credit on account of the fact that these offices run
on 24x7 basis and transportation and provision of food to the employees are
necessary pre-requisites which the employer has to provide to its employees to ensure that
output service is provided efficiently. Similarly, since RPOs/call centers require a large
manpower, service tax paid on manpower recruitment agency would also be eligible both
for taking the credit and the refund thereof. On the other hand, activities like event
managements, mandap keepers, hydrant sprinkler systems (that is services which can be
called as recreational or used for beautification of premises), rest houses etc. prima facie
would not appear to impact the efficiency in providing the output service, unless adequate
justification is shown regarding their need.
10.2 One-to-one co-relation between inputs and outputs and scrutiny of voluminous
record [para 2(b) & (c) above] :
7
10.2.1 Similar problem of co-relation and scrutiny of large number of documents was being
faced in another scheme [notification No. 41/2007-ST dated 06.10.2007] which grants
refund of service tax paid on services used by an exporter after the goods have been
removed from the factory. In Budget 2009, the scheme was simplified by making a provision
of self-certification [Notification No. 17/2009-ST] where under an exporter or his Chartered
Accountant is required to certify the invoices about the co-relation and the nexus between
the inputs/input services and the exports. The exporters also advised to provide a duly
certified list of invoices. The departmental officers are only require to make basic scrutiny of
the documents and, if found in order, sanction the refund within one month. The reports
from the field show that this has improved the process of grant of refund considerably. It
has, therefore, been decided that similar scheme should be followed for refund of Cenvat
Credit under notification No. 5/2006-CE(NT). The procedure prescribed herein should be
followed in all cases including the pending claims with immediate effect."
10.2.3 Further, the notice wants to produce definition of the input service amended
w.e.f 01.04.2011 speak as under ;
[(I) "input service" means any service:-
(i) used by a provider of taxable service for providing an output service;
Or
(h) used by a manufacturer, whether directly or indirectly, in or in
relation to the manufacture of final products and clearance of final products
upto the place of removal,
and includes services used in relation to setting up, modernization, renovation or repairs of
a factory, premises of provider of output service or an office relating to such factory or
premises, advertisement or sales promotion, market research storage up to the place of
removal, procurement of inputs, activities relating to business such as accounting,
auditing, financing, 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 up to the place of removal;
[but excluded], -
[(A) service portion in the execution of a works contract and construction services including
service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as
specified services) in so far as they are used for —
(a) Construction or execution of works contract of a building or a civil structure or a part
thereof; or
(b) Laying of foundation or making of structures for support of capital goods,
Except for the provision of one or more of the specified services; or]
8
[(B) [servies provided by way od renting of a motor vehicle], in so far as they relate to a
motor vehicle which is not a capital goods; or]
[(BA) service of general insurance business, servicing, repair and maintenance, in so far as
they relate to a motor vehicle which is not a capital goods, except when used by —
(a) A manufacturer of a motor vehicle in respect of a motor vehicle manufactured by
such person; or
(b) An insurance company in respect of a motor vehicle manufactured by such person,
or]
[(C) such as those provided in relation to outdoor catering, beauty treatment, health
services, cosmetic and plastic surgery, membership of a club, health and fitness centre,
life insurance, health insurance and travel benefits extended to employees on vacation
such as leave or Home Travel Concession, when such services are used primarily for
personal use or consumption of any employee;]
10.2.4 Regarding Cenvat of air travel service, the noticee further wants to submit
that the value of travel stand paid by the notice indicating that the air travel was
undertaken by the employees in connection with the business of noticee. In terms of
provisions of Income Tax law an assessee cannot incur any expenses of any personal nature
on any of its employees/Director. Inasmuch as it is the notice who had paid for said air
travel, it has to be held that the air travel was under taken in connection with the business
of the notice. Further, the notice want s to draw attention towards the fact that in his own
case earlier, the CESTAT has allowed credit taken on Air Travel Agent Service had been
allowed vide Order No. A/1669/2011-WZB/AHD dated 24.08.2011 in Appeal No.
E/1517/2010.
10.2.5 The assesse vide Letter dated nil has further submitted an undertaking "For
the purpose of air travel service, we further would like to submit that in terms of provisions
of Income Tax law an assessee cannot incur any expenses of any personal nature on any of
its employees/Director and as per our organization's policy, we as an organization is not
incurring any air travel/land travel expenses of any employee of the organization, other
than for business/official purpose. Whatever travel expenses are booked in books of
accounts are related to business/official purpose only. It means that the officer of the
organization has traveled by any mode, across the country is only for business/official
purpose of the organization.
10.2.6 Regarding Cenvat of chartered accountant service, the notice wants to
submit that such service has been availed for the various activities like stock verification
lying in the premises of the notice, keeping books of accounts and other finance and costing
related activities which is covered under the supra definition given under Rule 2(I) of Cenvat
Credit Rules, 2004.
9
10.2.7 Regarding Cenvat of insurance service, the notice wants to submit that such
insurance service is not for the personal health employees, rather such insurance is of
workman compensation policy. Workman compensation insurance policy has been taken
for the workers working in the factory premises from where goods are removed. Thus, the
notice has rightly availed the Cenvat credit of insurance service which has been directly or
indirectly, in or in relation to the manufacture of final products and clearance of final
products used for the removal of goods.
10.2.8 Regarding photography service, the notice wants to submit that at the time
of the festival various programmes have been arranged, which involve the sales promotion
and advertising activities for the business of the noticee. For the arranging such
programmes, noticee has been incurring the expenses, on which notice has avail Cenvat
credit, which has direct nexus with the output service i.e. for manufacture and clearance of
final products. Further, the noticee wants to submit that Cenvat of photography service was
taken for various programmes arranged by the notice at the premises of the notice only and
such programmes help the notice in building brand image of the notice. Further, such
programmes are part of marketing and promotional activities for goods manufactured by
the notice. As per input service definition, the services used for building brand image,
marketing and promotion are considered as input service.
10.2.9 So, the notice has rightly availed the Cenvat credit of air travel, insurance
service, photography service and chartered accountant service and the department's
contention that such services were used after the removal of goods was not sustainable.
11 The Noticee also rely on the following case laws :
(i) 2013 (32) STR 123 (Tri-Del) in the CESTAT, Principal bench, New Delhi [Court No. 3]
Ms. Archana Wadhwa, Member (I) Goodluck Steel Tubes Ltd. Vs. Commissioner of C.Ex.,
Noida Final Order No. 750/2012-SM(BR)(PB), dated 01.06.2012 in Appeal No. E/727/2010-
SM(BR)
Cenvat credit of service tax — input service — Air Travel Agent Service — Air travel
performed for company business — Service tax paid is admissible as credit — Rule 2 of
Cenvat Credit of Service tax — Input Service — Outdoor catering service — Larger Bench in
GTC Inds. Ltd. [2008 (12) STR 468 (Tribunal —LB)] holding in favour of assessee — Revenue's
case that larger bench order not attained finality as challenged before Bombay High Court —
Larger bench order not stayed by High Court, same required to be followed - Rule 2(I) of Cenvat Credit Rules, 2004 [para 2]
Appeal allowed.
(vi) 2012 (277) ELT 194 (Tri.-Del) in the Cestat, principal bench, New Delhi [Court No.
IV] Shri Rakesh Kumar, Member (T)
Commissioner of C.Ex., jaipur - H Vs. J.K.Cement Works Fin& Order Nos. 81-83 /2009-M(BR)(PB) dated 16.01.2009 in Appeal No. E/1270-1272/2007-5M
Cenvat Credit of Service tax — Input service- repair of car and motor vehicles and
photography service — management, maintenance of repair service availed for fleet of cars
and motor vehicles owned by company — Vehicles meant for officer's use for company work
— Claim that Photography service used in relation to manufacturing activity not
controverted by Revenue — Impugned services used in or in relation to manufacture or in
relation to business activities and covered as input services — Credit admissible - Rule 2(I)
and 14 of Cenvat Credit Rules, 2004 [para 3.3, 4]
Cenvat Credit of Service tax — Input service — Rent-a-cab service — Use of hired taxis
explained as in relation to manufacture of cement — No evidence produced by Revenue to show taxis used for activities not related to manufacture — Credit on rent-a-cab service
admissible - Rule 2(I) and 14 of Cenvat Credit Rules, 2004 [para 3.2, 4]
Cenvat credit of service tax — Input service — Telephone service — Mobile phone — tribunal
decisions holding credit of service tax on mobile phones admissible — Plea that mobile
phones given to staff for company work, not disputed by Revenue — Credit admissible - Rule 2(I) and 14 of Cenvat Credit Rules, 2004 [para 3.1, 4]
Appeal dismissed.
(vii) 2011 924) STR 645 (kar.) In the High Court of Karnataka at Banglore N. Kumar and
Ravi malimath, J1 Toyoto kirloskar Motor Pvt. Ltd. Vs. Commissioner of C.Ex, Banglore, C.E.A No. 47 of 2007 c/w C.E.A No. 100 of 2008, decided on 28.03.2011
Cenvat Credit of Service Tax — Input service — Celebration of Karnataka Rajyosthava day —
Common experience indicating that if it was not celebrated, there would be trouble both
inside and outside factory, with government acting only after damage was done — In that
view best way was to extend financial help to employees celebrating the function —
Expenses on shamiana, food/snacks, taking of photographs and entertainment, found to be
7
15
in relation to security of establishment and welfare of employees — It could not be
separated from business of manufacture of final product — It was input service on which
Cenvat credit could be taken - Rule 2(1) of Cenvat Credit Rules, 2004 [paras 8, 9, 11]
Cenvat Credit of Service tax — Input service — definition in Rule 2(1) of Cenvat Credit Rules,
2004 — Its clauses (i) and (ii) are exhaustive, as it uses word 'means' — thereafter, it is
extensive as it uses word 'includes', and enlarges scope by stating all activities relating to
business constitutes input service — real test in nexus/integral connection with manufacture
of final product and business. [Paras 8, 11]
Cenvat Credit of Service tax — Input service — Security of establishment — It includes
(ii) 2009 (016) STR 0707 (Tri-Del) in the matter of Jaypee Rewa Plant Vs.
Commissioner of C.Ex., Bhopal
" Cenvat credit of service tax — input service — Air Travel Agent Service — Air travel
performed for company business — Service tax paid is admissible as credit — Rule 2 of
Cenvat Credit Rules, 2004 - Appeal allowed"
Further, the assessee vide their letter dated nil has submitted an under taking to
the effect that as per our organization's policy, we as an organization is not incurring any
air travel/land travel expenses of any employee of the organization, other than for
business/official purpose. Whatever travel expenses are booked in books of accounts are
related to business/official purpose only. It means that the officer of the organization has
traveled by any mode, across the country is only for business/official purpose of the
organization.
From the above, discussion I find that air travel services used by the assessee have a
nexus with the manufacture of the final product and clearance of the final product from the
place of removal. Therefore, the assessee is eligible for Cenvat Credit of Rs. 11,941/- availed
20
on Air Travel Agency Services during the period from January, 2012 to September, 2012.
Hence, I allow the said Credit.
18.2 I find that the assessee had paid the Service tax and availed Cenvat Credit on
Chartered Accountant Services amounting to Rs. 2,81,706/- during the period from January,
2012 to September, 2012. In this regard I find that services of Chartered Accountant for
providing transfer pricing advisory services for certifying and verifying details and
information for EPCG authorization, for carrying out of statutory audit under the provisions
of Companies Act, under Income Tax Act, for auditing of financial records, excise records,
marketing records, service tax records, VAT audit fees etc. is an actively related to business.
Further, I find that Chartered accountant services used by the assessee have a nexus with
the manufacture of the final product and clearance of the final product from the place of
removal. Therefore, the assessee is eligible for Cenvat Credit of Rs. 2,81,706/- availed on
chartered accountant services during the period from January, 2012 to September, 2012.
Therefore, Cenvat Credit amounting to Rs. 2,81,706/. availed on these invoices issued by
Chartered Accountant is admissible to them. Hence, I allow the said Credit.
18.3 I find that the assessee had paid the Service tax and availed Cenvat Credit on
Insurance Services amounting to Rs. 43,514/- during the period from January, 2012 to
September, 2012. Further, I find the assessee in their defence reply stated that such
insurance service is not for the personal health employees; rather such insurance is of
workman compensation policy. Workman compensation insurance policy has been taken
for the workers working in the factory premises from where goods are removed.
Further, I would like to see the provisions of the Cenvat Credit Rules, 2004 which is reproduced here in below :-
"Rule 2 (I) "Input service" means any service, -
used by a provider of taxable service for providing an output service, or (ii) used by the manufacturer,
whether directly or indirectly, in or in relation to the manufacture of final products
and clearance of final products from the place or removal
and includes services used in relation to setting up, modernization, renovation or repairs of a
factory, premises of provider 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, activities relating to business such as accounting, auditing,
financing, 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 up to the place of removal;
[but excludeq-
21
[(A) .....
(B)
(BA) ......
(C) such as those provided in relation to outdoor catering, beauty treatment health
services cosmetic and plastic surgery, membership of a club, health and fitness centre, life
insurance, health insurance and travel benefits extended to employee on vacation such as
leave or Home Travel concession, when such services are used primarily for personal use or
consumption of any employee;]
Moreover, I find that the assessee is silent on the credit taken on insurance services
as they have not placed reliance on any decision in their written submission. Moreover, at
the time of personal hearing, they have not produced any evidence to substantiate the
details of workman compensation policy, its terms or its relevance and nexus with the
manufacture of the final product and clearance of the final product from the place of
removal.
In view of the above discussion, I find that the credit availed on insurance services by
the assessee has no nexus with the manufacture and clearance of the final product from the place of removal. Also, the said service has been excluded from the definition of 'input
service'. Therefore, the assessee is not eligible for Cenvat Credit of Rs. 43,514/- availed on
insurance services (workman compensation policy) during the period from January, 2012 to
September, 2012. Therefore, Cenvat Credit amounting to Rs. 43,514/- availed on these
invoices issued by the service provider is not admissible to them. Hence, I disallow the said
Credit.
18.4 I find that the assessee had paid the Service tax and availed Cenvat Credit on
Photography Services amounting to Rs. 3,177/- during the period from January, 2012 to
September, 2012. Moreover, I find that the assessee has placed reliance on the decision
reported at 2011(24) STR 645 (Kar.) in the High Court of Karnataka at Bangalore regarding
celebration of Karnataka Rajyotsava Day which is not relevant in this case. Also, they have not produced any evidence with the written submissions or before me at the time of
personal hearing awarded to them which shows that there is nexus with the manufacture of
the final product and clearance of the final product from the place of removal.
In view of the above discussion, I find that the credit availed on the photography
service by the assessee has no nexus with the manufacture of the final product and clearance of the final product from the place of removal. Thus, I find that the credit availed
on photography services does not fall in the category of input service as defined under the
Cenvat Credit Rules, 2004. Therefore, Cenvat Credit amounting to Rs. 3,177/- availed on
these invoices issued by the service provider is not admissible to them. Hence, I disallow the
said Credit.
22
19. Accordingly, I pass the following order:-
ORDER
Out of total demand of Rs. 3,40,338/-
( ) I drop the demand to the tune of Rs. 2,93,647- (Rupees Two Lakhs Ninety Three
Thousand Six Hundred and Forty Seven only) in respect of Cenvat Credit availed by
them on Air travel Agency Service and Chartered Accountant Services as discussed in
Para 18.1 to 18.2 under the proviso to Section 11A(1) of the Central Excise Act, 1944
read with Rule 14 of the Cenvat Credit Rules, 2004.
(ii) I disallow the Cenvat Credit amounting to Rs. 46,691/- (Rupees Forty Six Thousand
Six Hundred and Ninety One only) ) in respect of Cenvat Credit availed by them on
Insurance services and photography services as discussed in Para 18.3 to 18.4 for the
period from January-2012 to September-2012 and order to be recovered from M/s.
Cadmac Machinery Co. Pvt. Ltd, Ahmedabad in terms of the provisions of Rule 14 of
Cenvat Credit Rules, 2004 read with Section 11A (1) of the Central Excise Act, 1944. (iii)
I order to recover interest at the prescribed rates from M/s. Cadmac Machinery Co.
Pvt. Ltd, Ahmedabad on the said wrongly availed Cenvat Credit in terms of the
provisions of Rule 14 of Cenvat Credit Rules, 2004 read with Section 11AA of the
Central Excise Act, 1944.
(iv)I impose penalty of Rs.12,000/ (Rupees twelve thousand Only) upon M/s. Cadmac
Machinery Co. Pvt. Ltd, Ahmedabad under the provision of Rule 15(1) of the
Cenvat Credit Rules, 2004.
20. The Show Cause Notice issued M/s. Cadmac Machinery Co. Pvt. Ltd., Ahmedabad -
382 445 vide F. No. V./16-22/SCN-Cadmach/12-13 dated 06,02.2013 by the Deputy
Commissioner, Central Excise, Division — it, Ahmedabad — I stands disposed of in the above manner.