NAVBHARAT TUBES LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE appellants manufacture stainless steel tubes and pipes and avail Cenvat credit of input services during the period May, 2005. The appellants took Cenvat credit of Rs. 1,59,249/ - on the basis of 4 invoices of various persons who had provided the service of collection of payment from various consignees. The department issued a show cause notice dated 10 -3 -2006 to the appellants seeking denial of Cenvat credit and recovery of the same along with interest on the ground that services of collection of payment are not covered by the definition of input services. Invoices of the service provider on the basis of which Cenvat credit had been taken, mentioned the service provider's registration number from which it is clear that Service tax had been paid under Business Auxiliary Services head. The Department's view is that this service is not covered by the definition of input services. The Asst. Commissioner vide Order -in -Original No. 22/06/Demand dated 31 -7 -2006 disallowed the credit and confirmed the demand along with interest and besides this, imposed penalty of Rs. 25,000/ - on the appellants under Rule 15 of Cenvat Credit Rules, 2004. On appeal to the Commissioner (Appeals) against order of the Asst. Commissioner, the Commissioner (Appeals) vide impugned Order -in -Appeal No. 35(GRM)ST/JPR -I/2007 dated 15 -2 -2007 upheld the order of the Asst. Commissioner but reduced the penalty to Rs. 10,000/ - . It is this order of the Commissioner (Appeals) against which the appellants filed appeal before this Tribunal.

(2.) LEARNED Advocate for the appellants pleaded that the service was being provided by M/s. A. Kumar & Co., M/s. Rajasthan Engg. Enterprises, M/s. Aniket Associates and M/s. Electromech Engineers for procuring sale orders and collecting payment from the customers; that on the basis of invoices of these service providers, Cenvat credit of Rs. 1,59,249/ - had been taken; that for collection of bills and procurement of orders they were being paid commission by the appellants on which services Service tax was being paid under Business Auxiliary services head; that service bill of collection and procurement of sale orders is very much covered by the definition of 'input service' as given under Rule 2(1) of the Cenvat Credit Rules, 2004 and that in this regard he relies upon the following decisions:

(3.) IN rejoinder, Shri Hemant Bajaj, learned Advocate, pleaded that since the ground raised by learned Jt. CDR has not been taken in the show cause notice, the same cannot be raised at this stage and in this regard he relied upon the following judgments of Hon'ble Supreme Court: