9911796707
TMI Blog2017 (9) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... shed products of the assessee. Hence, the assessee is not eligible to avail credit on the input service. Extended period of limitation - Penalty - Held that: - the demand of Cenvat Credit for the extended period of limitation cannot be sustained - As the issue involved in this case is interpretation of the provisions of the Rules, imposition of penalty is not justified. Appeal allowed - decided partly in favor of Revenue. - Appeal No. E/76316/14 - Order No. FO/A/77443/2017 - Dated:- 21-9-2017 - Shri P. K. Choudhary, Member ( Judicial ) Shri K. Choudhary, Supdt.(AR) for the Revenue Miss S. Chatterjee, Advocate for the Respondent ORDER Per Shri P. K. Choudhary Briefly stated the facts of the case are that the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty; it goes to the premises of M/s. Tata Motors which get it mounted on their own chassis using the services of M/s.HIPL (who later on hired M/s.Mahalaxmi Enterprises for the job), afterwards the resultant products is fully built vehicle falling under chapter heading 8704 which is totally in itself a different manufacturing activity and result in emergence of a new product and hence the Manufacturer of resultant product is M/s.TML. M/s.HIPL and M/s.Maha-Laxmi Enterprises are Service Providers and hence the observation of Commissoiner(Appeals) that the clearance in the instant case was effected at TML s (Tata Motors Limited) premises after mounting, is not correct. c. The Commissioner(Appeals) has failed to appreciate the fact that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturing activity of mounting of the body part on chassis by itself or through supplier of the body or through any other party. As such, the final products so emerged were classifiable under chapter 8701 to 8705; the input services so claimed under chapter 8707 by M/s.HIPL had nothing to do with manufacture of body part. 3. The Commissioner(Appeals) observed as under:- 6. I find that it is not in dispute that there are contract to the fact of sale of FCB including its mounting on the chassis supplied by TML. It is also undisputed that the cost of FCB includes cost of mounting on which Central Excise Duty has been paid. This Central Excise Duty payment has not been disputed by the Department. Another undisputed fact is that M/s.M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r whether directly or indirectly in relation to the manufacture of the final product and clearance of final product upto the place of removal. The ld.A.R. stated that the assessee manufactured body for motor vehicles classifiable under chapter 87 and cleared it from their factory on payment of duty. There is a post manufacturing operation at the customer s premises namely M/s.Tata Motors Ltd., of the mounting activities. As per Section 2(f) of Central Excise Act, 1944, manufacture includes any process incidental or ancillary to the completion of a manufactured product. The main contention of the ld.Counsel for the respondent is that the mounting activity has nexus with the finished goods manufactured by the assessee. The ld.Advocate referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he invoices the classification of body has been made under central excise tariff heading 87079000. Hyva contracted with M/s.Maha-Laxmi Enterprises for mounting work in TML premises on behalf of Hyva. M/s.Maha-Laxmi Enterprises paid service tax on the charges recovered and Hyva availed credit of service tax so paid claiming to be an input service for manufacture of Body of motor vehicles . The SCN alleges that the services of mounting are not an input service in the manufacture of Body for Motor Vehicles. I first refer to the statutory provisions. I find from the Central Excise Tariff that headings 8701 to 8705 are for Fully Built Vehicles , heading 8706 is for chassis fitted with engines for the motor vehicles of headings 8701 to 8705 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy on chassis in Tata Motors premises to complete the sale process. Hyva is well aware that the agreement between two parties can not alter the legal positon. Just because Hyva is required to render services in the manufacture of vehicles falling under heading 8701 to 8705, the services can not become an input service in the manufacture and supply of body falling under heading 8707 by Hyva. I do not agree with their contention that mounting is an essential and integral part of manufacture of body part. The activity of manufacture of body part is full and complete in all respect at Hyva premises and they have rightly classified the body part under heading 8707. Whether Tata Motors undertakes the activity of mounting the body part on chassis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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