Decided on May 15,2015

Vako Seals Pvt. Ltd. Appellant


RAMESH NAIR, J. - (1.)THIS appeal is directed against Order -in -Appeal No. SB(139)139/MV/2010 dtd. 10/12/2010 passed by the Commissioner (Appeals) of Central Excise, Mumbai, wherein Ld. Commissioner (Appeals) upheld the order -in -original No. 46/05/AC/KDN/2010 dated 25/2/2010 rejecting the appeal filed by the appellant. The fact of the case is that appellant have availed Cenvat Credit in respect of service paid on rent of Gala No. A -07, Pravasi Industries Estate, Goregaon (E), which was not part of their manufacturing premises and had been included in their Central Excise Registration only on 31/3/2009 therefore it is contended in the show cause notice that said premises could not be considered as part of their factory premises to be used in the manufacture of their goods and therefore service cannot be considered as input service. Show cause notice culminated into adjudication order wherein adjudicating authority has confirmed demand of Cenvat Credit on renting service amounting to Rs. 57,407/ -, demanded interest under Section 11AB, imposed penalty of Rs. 57407/ - under Section 11AC, in addition, penalty of Rs. 2,000/ - under Rule 15(4) of Central Excise Rules, 2004 was also imposed. Aggrieved by the said order appellant approached the Commissioner (Appeals), who upheld the order -in -original and rejected the appeal. Dissatisfied with the impugned order, the appellant is before me.
(2.)Shri. J.N. Tiwari, Ld. Counsel for the appellant submits that principally there is no dispute that the credit in respect of service tax paid on rent on the said premises taken on rent is admissible for the reason that after inclusion of the said premises on 31/3/2009 the Revenue allowed the Cenvat Credit however Cenvat credit for the prior period i.e. before 31/3/2009 was denied only on the ground that the said premises was not included as the part of the factory premises. He submits that for taking Cenvat credit in respect of the rental premises it is not necessary or it has not been provided in the Cenvat Credit Rules that the said premises should be included in the registered premises of the factory. It is his submission that so long the premises used in relation to the manufacture of final product for business activity related to the factory the credit should be allowed.
(3.)ON the other hand, Shri. Sanjay Hasija, Ld. Superintendent (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that prior to inclusion of said rental premises in the registration, it cannot be considered as use of the premises in relation to the manufacture of final product, therefore Cenvat Credit was rightly denied by the lower authorities.

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