TaxTMI 
TaxTMI 
2025 (12) TMI 879
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....t pulp based beverages under TI 2202 9020 of the Central Excise Tariff Act, 1944. The said manufacturing unit is situated at A-28, M.I.D.C. Industrial Area, Saoner, Nagpur and is involved in bottling of aerated waters from the concentrates supplied by M/s. Pepsi Foods Private Limited/PepsiCo India Holdings Private Limited. For the purpose of payment of central excise duty on the final products manufactured by the appellants, they are registered with the jurisdictional Central Excise authorities under Central Excise Registration No. AADCS8973LXM001 as a bottling unit. The appellant is also registered with the department for the taxable service of 'Goods Transport Agency' having Service Tax Registration No. AADCS8973LST001. 2.2 The appellants have also entered into a Bottling Appointment and Trademark License Agreement effective from 01.12.2000, with PEPSICO, INC. New York, USA in relation to the beverages to be bottled, sold and distributed by the appellants with in the allotted territory. These beverages bear the brand name of PEPSI and the range of products include Pepsi, Mirinda, Mountain Dew, 7-up, Slice, Aquafina (mineral water) and fruit juices. 2.3 The department had no....
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....ench of the Tribunal to decide whether the decision of the Tribunal in the matter of the appellants requires reconsideration. 3.2 The Larger Bench of the Tribunal had considered the reference made by the Co-ordinate Bench of the Tribunal and had ordered as follows. "40. The reference is, accordingly, answered in the following terms: The decision of the Bombay High Court in Coca Cola India Pvt. Ltd. vs. Commissioner of C. Ex., Pune-III would have no application in the present case and, therefore, the decision of the Tribunal in the matter of the appellant in SMV Beverages Pvt. Ltd. vs. Commissioner of Central Excise, Nagpur does not require any re-consideration." In arriving at such a conclusion, the Larger Bench of the Tribunal had examined the disputed issue in detail, and held that since the appellant was promoting the trademark/brand name of Pepsi Foods, but section 65(19) of the Finance Act, 1994 does not cover promotion of brand name or trademark of a client, it cannot, be urged that BAS was provided by the appellant to Pepsi Foods. Therefore, in terms of the Final Order dated 17.03.2017 already passed in favour of the self-same appellants holding that ....
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....r repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal." (emphasis supplied) 21. It is seen that clause 2(l) (ii) of the 2004 Credit Rules covers a manufacturer who uses the 'input service' directly or indirectly, in or in relation to the manufacture of final products and includes services used in relation to activities relating to business. It is in this context that the appellant therein had contended that the advertisement of the brand name has a direct relationship with the manufacture of concentrate inasmuch as the demand, and consequently the production, of concentrate depends on the consumption of the soft drink and would, therefore, be covered by clause (ii) of rule 2(l), which permits an indirect ....
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....ervice' and hence credit could be taken. 24. In the present case, the issue is regarding interpretation of clause (ii) of section 65(19) of the Finance Act. It would apply if the appellant promotes or markets the goods produced or provided by or belonging to the client. The client, in the present case, is Pepsi Foods and it produces 'concentrates' and not aerated water. Aerated water is manufactured by the appellant though the main raw material for this is 'concentrate', which is purchased by the appellant from Pepsi Foods. The definition of 'input service' contains the expression 'directly or indirectly', but such an expression does not find place in the definition of BAS, for the definition of BAS does not mention any service in relation to promoting or marketing of sale, directly or indirectly of the goods produced. 25. The view of the department is that advertising of aerated water by the appellant would also result in increase of the sale of 'concentrates' purchased by the appellant from Pepsi Foods. Though, 'concentrate' is the main raw material for the manufacture of aerated water by the appellant, but the definition of BAS in section 65(19)(ii) of the Fina....
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....s finished goods goes up automatically consumption of inputs will go up and accordingly he promotes the sale of input manufacturer/ supplier. In our view such an interpretation is neither logical or rational. Both input suppliers and the finished product manufacturer are independent business entity acting in the interest of their business. The issue before the High Court was vis a vis the admissibility of CENVAT Credit in respect of Advertisement services availed by the Coca Cola India as is evident from para 2 & 3 of order reproduced below: xxxxxxxxx 5.10 While considering the questions as above High Court has recorded what has been state by the Commissioner. In the case before High Court, the advertisement expenses were incurred by Coca Cola India and High Court had held that expenses towards advertisement services are part of the cost incurred for production of the finished product, and hence these services are to be treated as input services for determining eligibility to CENVAT Credit. In our view the decision of High Court does not state what Commissioner has intended to conclude from the same." (emphasis supplied) 30. The Bench, thereafter, also ex....
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....899 (T- Del)]. Similar view has been expressed by the Allahabad Bench in case of Brindavan Bottlers Ltd [2019 (27) GSTL 354 (T-All)] and Mumbai Bench in case of SMV Beverages Pvt Ltd [2018 (17) ELT GSTL 284 (T-Mum)] xxxxxxxxxxx 4.7 The decision of the Hon'ble Bombay High Court relied upon by the Commissioner in the impugned order and by the Authorized Representative has been distinguished by the Mumbai Bench in case of Superior Drinks xxxx." (emphasis supplied) 32. In Kandhari Beverages, the Tribunal again followed the decision of the Tribunal in Superior Drinks and also noticed that the decision of the Bombay High Court in Coca Cola had been distinguished in Superior Drinks. The relevant portion of the order is reproduced below: "4.2 We find that the issue involved in the present appeal is squarely covered by the decisions of the Tribunal in case of Superior Drinks Pvt Ltd [2019 (6) TMI 272 -CESTAT Mumbai]. This decision in turn follows the decisions rendered by the Delhi Bench in case of Narmada Drinks (P) Ltd reported at 2017 (5) GSTL 369 (T-Del)] and also in case of Narmada Drinks (P) Ltd reported at [2018 (6) TMI 899 (Tri.- Del)]. S....
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.... 37. The decision of the Tribunal in the matter of the appellant for the earlier period would, therefore, cover the controversy involved in this appeal. This decision was not followed by the Division Bench in the reference order only because of the decision of the Bombay High Court in Coca Cola. 38. This apart, the appellant was promoting the trademark/brand name of Pepsi Foods, but section 65(19) of the Finance Act does not cover promotion of brand name or trademark of a client. It cannot, therefore, be urged that BAS was provided by the appellant to Pepsi Foods. 39. In this connection, it needs to be noted that brand promotion service was made taxable w.e.f. 01.07.2010 by section 65(105)(zzzzq) of the Finance Act. Introduction of a new entry and inclusion of certain services in that entry pre supposes that there was no earlier entry covering the said service. In this connection reference can be made to the decision of the Bombay High Court in Indian National Shipowners' Association vs. Union of India18, wherein it was held: "38. xxxxxxxx. Introduction of new entry and inclusion of certain services in that entry would presuppose that there was no ear....