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2018 (8) TMI 1343 - AT - Service TaxBusiness Auxiliary Service - appellants are engaged in distilling and bottling of Indian Made Foreign Liquor (IMFL) which includes their own brand as well as brands owned by United Sprits Ltd., Bangalore - N/N. 39/2009-ST dt. 23.09.2009 - Time Limitation. Time Limitation - Held that:- Just because the two audit objections were conveyed in a single letter dt. 05.12.2013 by the department to the appellants, the fact of first show cause notice having been issued on earlier date for the first objection cannot be put forth as a ground that second SCN issued subsequently is barred by limitation - time limitation not invoked. Taxability of activity of contract bottling pending before the Hon’ble Apex Court - Held that:- The appeal filed by ISWAI has only been admitted by the Hon’ble Apex Court. However, no stay on taxability has been ordered by the Hon’ble Apex Court. Hence this contention of the appellant also does not stand to scrutiny and is therefore rejected. Benefit of N/N. 39/2009-ST dt. 23.09.2009 - Held that:- The intention of disallowing taking of credit to become eligible for any duty / tax exemption is to disallow double enrichment to the assessee in such cases. Discernably therefore, when credit has been taken, the duty / tax exemption cannot be availed. However if such credit taken is reversed with interest even after clearance of final products, there is no reason why the assessee cannot thereafter become ab-initio eligible for the benefit of such exemption notification - though cenvat credit had been taken by the appellant herein, if it is reversed with interest, after clearance of the final products even at the Tribunal stage, the benefit of Notification No.39/2009-ST dt. 23.09.2009, which otherwise mandates non-taking of credit for duty exemption, will now become available to the appellant. The Annexure-I to the SCN gives the value of the raw materials used in the manufacture of the IMFL under contract bottling during the impugned period. As the details have been worked out by the department themselves it appears to reason that condition (b) of the notification namely, “there is documentary proof specifically indicating the value of such inputs “ is also fulfilled. - thus, the appellants should be extended the benefit of Notification No.39/2009-ST dt.23.09.2009 subject to the appellants paying up the disputed quantum of credit taken during the impugned period and also paying up the interest as applicable thereon. The matter is remanded to the adjudicating authority for the limited purpose of confirming the fact of payment of such predeposit, payment of interest on the cenvat credit amount taken by the appellant and re-work the service tax liability accordingly after extending the benefit of N/N. 39/2009-CE. - appeal allowed by way of remand.
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