COMMISSIONER OF CENTRAL EXCISE, PUDUCHERRY Vs. CESTAT

JUDGEMENT

(1.) Challenge in this appeal is to the Final Order No. 40197 of 2016, dated 5-2-2016, passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), South Zonal Bench, Chennai 600 006.

(2.) Short facts leading to the appeal are that M/s. Bright Brothers Ltd., the 2nd respondent herein, are the manufacturers of parts of washing machine, falling under Chapter sub-heading 8450 90 10 of the First Schedule to the Central Excise Tariff Act, 1985. On 24-1-2008, the 2nd respondent availed Cenvat credit of Service Tax of Rs. 25,75,000.00 distributed by their Head Office, at Mumbai, as Input Service Distributor, vide Bill No. 15/2007-08, dated 13-12-2007. The said credit arose on account of service received from M/s. Ambit Corporate Finance Ltd., Mumbai, for assisting sale of 5 units of M/s. Bright Brothers Ltd., at various places. M/s. Ambit Corporate Finance Ltd., is registered at Mumbai, for providing Management Consultancy Services/Business Support Service.

(3.) Contending inter alia that as the above service received by the head office of the 2nd respondent herein, had no nexus with the manufacturing activity of the 2nd respondent, a Show Cause Notice No. 91/2010, dated 4-10-2010 has been issued, proposing denial of the above credit, as per Rule 2(1)(ii) of the Cenvat Credit Rules, 2004 and recovery under Rule 14 of the Rules ibid, read with proviso to Sec. 11A(1) of the Central Excise Act. Both interest and penal provisions have been invoked, in the show cause notice. After due process, the adjudicating authority, vide Order-in-Original No. 49/2011, dated 3-10-201, has confirmed the demand of Rs. 25,75,000.00, with interest, and imposed penalty, equal to the amount of credit taken.