Page 111 - GSTL_18th June 2020_Vol 37_Part 3

2020 ] ANAND I POWER LTD. v. COMMISSIONER OF CGST, NASIK 325
Commissioner v. Endurance Technology Pvt. Ltd.
— 2017 (52) S.T.R. 361 (Bom.) — Referred .................................................................................... [Para 3]
Commissioner v. Systems and Components Pvt. Ltd.
— 2004 (165) E.L.T. 136 (S.C.) — Referred .................................................................................... [Para 4]
Tally Solutions Pvt. Ltd. v. Commissioner — 2017 (47) S.T.R. 148 (Tribunal) — Referred ............. [Para 3]
REPRESENTED BY : Shri Makrand Joshi, Advocate, for the Appellant.
Shri Saikrishna Hatangadi, Assistant Commissioner
(AR), for the Respondent.
[Order]. - Inadmissibility of Cenvat Credit availed on tax paid for “rent-
ing of immovable property” outside the manufacturing unit and confirmation of
demand against such availment along with interest and penalty by the Commis-
sioner (Appeals), Central GST & C. Excise, Nashik is assailed in this appeal.
2. Facts of the case that have given rise to this appeal is that appellant is
a manufacturer of “piston ring” having its factory at Satpur Industrial Estate,
Nasik. It had availed Cenvat Credit on tax paid for renting of immovable proper-
ty at Delhi and Mumbai Branch offices. During the period March, 2010 to March,
2013 Cenvat Credit amounting to Rs. 33,21,270/- was held, in the EA 2000 audit,
to be inadmissible. Appellant was put to show cause notice, was demanded such
duty along with interest and equivalent penalty and adjudication order confirm
the same with 50% penalty u/s Rule 15(2) of CCR, 2004 read with Section
11AC(1)(b) of the Central Excise Act with reduced penalty option by 25% u/s.
11AC(1)(c) in case payment of penalty was made within 30 days and reversal of
Rs. 14,55,273/- of Cenvat Credit was also adjusted against total demand as well
as appropriated. Appellant’s unsuccessful attempt before the Commissioner
(Appeals) has brought the dispute to this Forum.
3. In the memo of appeal and during the course of hearing the appeal,
Learned Counsel for the appellant Mr. Makrand Joshi submitted that at Delhi
and Bombay, office premises were taken on rent by appellant for marketing of
product such as display, coordination with customers, new development of cus-
tomers and for extending warranty coverage as well as trouble shooting of the
operation of the product that would augment customer satisfaction and increase
demand of appellant’s product so that production and sale would remain unaf-
fected, besides doing other management activities as well as training and coach-
ing of staff and it has become a settled principle of law that those activities are
covered within the definition of “activities relating to business” as mentioned in
the pre-amended Rule 2(l) of Cenvat Credit Rules, 2004. He further pointed out
that the demand covers both pre- and post-period of the amended Cenvat Credit
Rules, 2004 and for both the periods Tribunal has been constantly of the opinion
that such credit on ‘renting of immovable property’ for marketing and after sales
service or research purpose is admissible. He relied upon the decision of the
CESTAT, Chennai reported in 2017-TIOL-(869)-CESTAT-(Madras), 2017 (47)
S.T.R. (148) (Tri. - Bang.) and 2017 (52) S.T.R. 361 (Bom.) to support his stand that
such marketing of product and sales promotion activities are included within
input service definition and renting of premises outside the manufacturing facto-
ry unit is permissible. Therefore, he argued that the credits taken by the appel-
lant were valid credit for which the order passed by the Commissioner (Appeals)
is required to be set aside.

GST LAW TIMES  18th June 2020  111