Dismissed

Commissioner of Central Excise and Customs Aurangabad v. M/S Varroc Polymers Pvt. Ltd. Aurangabad

Bombay HC19 Oct 2012FA/390/2011

Case brief

AI extract

What is this about?

In First Appeal No. 390 of 2011, the division bench dismissed the revenue's appeal against the Custom, Excise & Service Tax Appellate Tribunal's order allowing Cenvat credit for bus services. The court held the tribunal justified in permitting credit despite partial employee contribution and rejected the appeal as not fit for interference.

What did the court decide?

Appeal rejected; order of the Appellate Tribunal allowing Cenvat credit confirmed.

Commissioner of Central Excise and Customs… — Writ and Judicial Review | Bombay HC (2012)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY, BENCH AT AURANGABAD

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FIRST APPEAL NO. 390 OF 2011

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Commissioner of Central Excise and Customs

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.. APPELLANT

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VERSUS

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M/s Varroc Polymers Pvt. Ltd. .. RESPONDENT

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Mrs. Kalpalata Bharaswadkar, advocate for appellant. Mr. R.G. Rodge, advocate for respondent.

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=====

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CORAM : R.M. BORDE & S. S. SHINDE, JJ. DATE : 19^th OCTOBER, 2012.

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PER COURT :

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Appeal raises exception to the order dated 8-8-2010 passed by the Custom, Excise & Service Tax Appellate Tribunal, Mumbai, dismissing the appeal presented by the revenue and, confirming the order passed by the Commissioner of Central Excise, Aurangabad. Notice dated 9-9-2008 came to be issued in favour of respondent herein for recovery of Rs. 3,08,288/- for availing as Cenvat credit. The notice was duly replied and the matter was adjudicated by the Assistant Commissioner of Central Excise & Customs, Aurangabad on 27-2-2009. The Assistant Commissioner disallowed the cenvat credit of service tax of Rs. 1,26,802/- availed against bus services under the proviso to Rule 14 of Cenvat Credit Rules, 2004 read with proviso to Section 11A(1) of the Central Excise Act, 1944 and, allowed cenvat credit of Service

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Tax of Rs. 1,81,486/- availed against ‘Rent-a-cab’ and ‘Insurance’ services. The assessee preferred appeal challenging the part of order disallowing cenvat credit of service tax of Rs. 1,26,802/0- availed against bus hire services. Appellate authority, on consideration of contentions raised by the parties, found that 11% expenses of bus services were borne by the employees whereas balance amount is borne by employer. Considering this aspect and relying upon the judgment in the matter of Vadodara v/s Haldyn Glass Gujarat Limited reported in 2009(14) S.T.R. 819, appellate authority allowed the appeal and set aside the order partly.

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Appeal presented by the revenue challenging the order passed by the Commissioner (Appeals) has been turned down by the appellate tribunal. It is urged by learned counsel for revenue that since part of the bus charges are borne by the employees, the employer is not entitled to claim cenvat credit for an amount of Rs. 1,26,802/- availed against bus hire services. It is to be noted that paltry contribution out of Rs. 1,26,802/- ( to the extent of 11% ) has been born by employees. Considering this aspect of the matter, we are of the opinion that appellate authority was justified in allowing the appeal. Even if contention of appellant is to be considered, merely part of the charges less than Rs. 15,000/- appears to have been born by employees. Considering this fact, we are not inclined to cause interference in the matter. Another reason for refusing to

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cause interference is that the Ministry of Finance, Department of Revenue, Central Board of Excise & Customs has issued instructions on 17-8-2011 directing that appeals below monetary limits prescribed under the circular shall not be filed before the tribunal, High Court and the Supreme Court. It is instructed by the finance department that appeals against the orders wherein monetary claim is less than Rs. 5,00,000/- may not be presented to Custom, Excise & Service Tax Appellate Tribunal so also appeals wherein monetary claim is less than Rs. 10,00,000/- may not be presented to High Court and appeals involving monetary claim of less than Rs. 25,00,000/- may not be filed before the Supreme Court. The directive issued by circular dated 17-8-2011 are departed from and appeal is presented in the instant matter involving monetary claim of Rs. 1,26,802/-. Contention is raised that the issue arising in the matter is prior to issuance of instructions. However, we are not convinced as regards explanation tendered by revenue. Even on consideration of merits of controversy we are of opinion that this is not a fit case to cause interference. Appeal is devoid of substance hence stands rejected.

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Pending civil application, if any, does not survive and stands disposed of.

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( S. S. SHINDE ) ( R. M. BORDE ) JUDGE JUDGE

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Commissioner of Central Excise and Customs Aurangabad v. M/S Varroc Polymers Pvt. Ltd. Aurangabad

Case brief

What is this about?

What did the court decide?

Commissioner of Central Excise and Customs Aurangabad v. M/S Varroc Polymers Pvt. Ltd. Aurangabad

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

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