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2015 (8) TMI 308 - KARNATAKA HIGH COURTAvailability of Cenvat Credit of Service Tax paid on Exempted Services of Job work - process of chrome plating - Business auxiliary service - Notification No. 8/2005-ST, dated 01-03-2005 - Held that:- A bare reading of this notification denotes that this notification is issued under section 93(1) of the Finance Act, 1994 which exempts the taxable services of production of goods on behalf of the principal manufacturer from the whole of service tax leviable under Section 66 of the Finance Act. However, this exemption notification is subject to the condition that the said exemption shall apply only in cases where such goods are produced using raw materials or semi finished goods supplied by the client i.e., the principal manufacturer and goods so produced are returned back to the said client for use in or in relation to the manufacture of other goods on which appropriate duty of excise is payable. - Notification is condition precedent. Section 5A(1A) of the Central Excise Act provides for power to grant exemption from duty of excise. Section 5A(1A) of the Central Excise Act specifically provides that "for the removal of doubts, it is hereby declared that where an exemption under Sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer of such excisable goods shall not pay the duty of excise on such goods". - The contention urged on behalf of the Department that the FMGIL having wrongly paid service tax has consequently passed an inadmissible CENVAT credit amounting to ₹ 2,02,00,275/- to the principal manufacturer i.e., FMTPR much against the exemption Notification No. 8 of 2005 is not worthy of acceptance. Notification No. 8 of 2005 is a conditional notification and Section 5A(1A) of Central Excise Act, 1944, is not-applicable to the present case. - no interference is called for with the well reasoned order of the Tribunal - Decided against Revenue.
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