ORDER
Archana Wadhwa, Member (J)
1. The short point involved in the present appeal filed by the Revenue, is as to whether the window clearing equipment imported by the respondents for the upkeep and maintainance of the Hotel, would be eligible for the concession as available under Notification No. 28/97-CUS dated 01.01.1997 which provides concessional rate of duty to the capital goods required for rendering services.
2. The adjudicating authority has denied benefit to the respondents, by observing that the window clearing equipment is meant for maintainance of the Hotel and does not render any service to the customer. Therefore the same do not qualify to be ‘capital goods’ for the purpose of Notification No. 28/97. However, that order was set aside by the Commissioner by observing as under:-
“I have carefully gone through the records of the case and submissions of the appellant. From the definition of capital goods given in the notification number 28/97, I find that any plant, machinery, equipments or accessories required for rendering services can be called capital goods. In the present case the “goods”, window clearing equipment, is an equipment for cleaning widows in high rise buildings of hotels. The lower authority in his order has observed that the goods are required for upkeep and maintainance of the hotel, but does not in any way render any services to the customer. Here, I find that the words “services to the customers” are not included in the definition of the capital goods, which simply states “required for rendering services”. The lower authority has tried to read something which is not provided in the notification. Lin fact, the observation is not even factually correct. A hotel renders services to its customers both directly and indirectly. Even the upkeep and maintainance of the hotel is essential for attracting the customers and rendering services. Without cleanliness of high standard it is not possible for any five star hotel to attract international customers and to render services to them. A hotel is not only involved in catering of food to the customer which is a direct service but also in providing them accommodation and up keep of rooms. Now I would like to refer to the definitions of capital goods as given in the Export Import Policy at para 3.10.”
The Appellate Authority has also referred to the definition of the ‘capital goods’ as given in the Export Import Policy and para 3.10 and has observed that inclusion of words directly or indirectly in the above definition should not leave any scope for doubt and the capital goods would include the equipments for use in service sector. As such, he has allowed the benefit to the respondents.
3. Revenue has challenged the above order on the ground that as much as the imported goods do not render any service to the customer, they would not be covered by the notification. They contend, when the notification provides for rendering services, it is clearly implied that the goods are required for rendering services to its customers only. Revenue has also contended that the Commissioner (Appeals) adoption of definition of ‘capital goods’ as given in the Import Export Policy was not correct in as much as the expression of capital goods stand defined in the notification inself.
4. We have heard Shri U.B. Khalwadekar, learned J.D.R. for Revenue and Shri N.S. Thacker, learned advocate appearing for the respondents along with Shri H.P. Modh, learned advocate. Our attention has been drawn to the decisions in the case of Enjay Hotel Pvt. Ltd. V. CC, Nhava Sheva reported in 2000 (92) ECR 354 (Tri.) which laid down that the marble used directly in the Hotel, to clad walls and floors, is a component of a ‘Plant’, entitled to exemption under Notification No. 110/95-CUS. It has been further laid down that scope of the term ‘plant’ must be construed, taking both, the notification and meanings in policy into consideration to provide relief to units contributing towards earning foreign exchange. Accordingly, it was held that the meaning of ‘plant’ in the notification includes goods for providing services, in a Hotel, which is an entity or organization providing services.
5. Examining the issue in the light of the ratio laid down in the above decision, we find that the window cleaning equipment are essential, for maintainance and upkeep of Hotel, it would be a part of the service being rendered by the hotel as rightly observed by the Commissioner (Appeals). Services provided by a Hotel would not only included catering food and the like, but would also take into its ambit the neat and clean ambience provided to customer. As such, we are of the view that the Commissioner (Appeals) conclusion that window clearing equipments would be covered by the definition of ‘capital goods’ provided in the notification which refers to the equipments required for rendering services, and such rendering of services need not be direct, providing services to the customers, but would also include the equipments required for upkeep of the hotel clean so as to attract the customers could not be found fault with.
6. In view of the foregoing, we do not find any merit in the Revenue’s appeal and reject the same.
(Pronounced in Court)