At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Mumbai
By, THE HONORABLE JUSTICE: RAJU
For Petitioner: Prasad Paranjape, Advocate And For Respondents: V.K. Agarwal, ADC (AR)
1. The appellants Mindarika P. Ltd. are in appeal against denial of cenvat credit on input service in the shape of mobile phones provided to their employees. Ld. Counsel for the appellants argued that during the period May 2011 to May 2014, the appellants had provided mobile phones to thei
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r employees. The mobile phones were issued in the name of the employees. In respect of each employee, a limit was set and up to that limit the expenditure on the mobile phone was borne by the appellants. The balance, in excess of the prescribed limit, was recovered from the employees. Ld. Counsel argued that all these employees are engaged in the factory and office of the appellants and use of mobile phones is primarily for the purpose of appellants' business of manufacture. Ld. Counsel argued that the Commissioner (Appeals) has denied the benefit of the said credit only on the ground that even without these mobiles phones it was possible to manufacture the goods. On the basis of such assertion, the Commissioner (Appeals) has come to the conclusion that the said input services are not used in or in relation to manufacture. He further produced a list of employees along with ranks and phone numbers. From the list, he showed that limits are set for each employee and the appellants are taking credit only to the extent of such limit. He pointed out that the appellants are not taking credit in respect of the amount paid by the employees themselves.
2. Ld. AR relies on the impugned order.
3. I have gone through rival submissions.
4. I find that the argument of Commissioner (A) that it is possible to manufacture goods without the help of these mobile services, cannot be considered as a valid argument. However, it is seen that the responsibility of establishing that the said services were used in or in relation to the manufacture of goods is on the appellants. A perusal of the list provided by the appellants shows that he has categorized the staff department wise like accounts, assembling, design, human resource management, information technology, maintenance, material manufacturing, marketing etc. There are few abbreviations in the list which could not be explained by the ld. Counsel. From the list, it is seen that some mobiles are supplied to suppliers also and also to drivers. It is not understood as to how the said suppliers, who are not employees of the company, can justify availment of credit. It is seen that the lower authorities have not examined this aspect.
5. In view of the above, the impugned order is set aside and the matter is remanded to the original adjudicating authority to examine the nature of department in which the employee work and how it is related to manufacturing activities. However, it is apparent that that he need not go into the aspect of each call made by the employee, as that would put unnecessary burden on the appellants. The appeal is allowed by way of remand