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2018 (9) TMI 1668 - 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 - Department also took the view that the amount charged by appellants towards provision of the said service would be the value of taxable service; that they would not be eligible to avail exemption under Notification No.39/2009-ST dt. 23.09.2009 - Time Limitation. Time Limitation - the issue in the present appeal is covered in by DAR No.4. This is a separate objection conveying that appellants had not complied with conditions of non-availment of cenvat credit and evidence showing value of inputs specifically in the invoices raised etc. hence they were requested to offer explanation in that regard along with contract / agreements, accounts relating to job work etc. - 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 - contention of applicant is rejected. Taxability of activity of contract bottling - appellant has also contended that issue of taxability of activity of contract bottling is still pending before the Hon’ble Apex Court since appeal of International Spirits & Wines Association of India (ISWAI) [2016 (12) TMI 1739 - SUPREME COURT] - Held that:- N/N. 39/2009-ST concerns the manner of taxability of BAS provided by an assessee by way of manufacture or processing of alcoholic beverages for or on behalf of the service recipient. As per the notification for calculating taxable value, the value of inputs excluding capital goods, used for providing said service is to be excluded, provided the assessee satisfies the conditions (a), (b), (c) thereof; in particular, not taking any cenvat credit and there is documentary proof indicating the value of such inputs. Evidently then, the notification seeks to exclude predominant portion of the materials’ cost - In any case, it is found that the taxability of activity of contract bottling has already been confirmed by the High Court of Delhi in the Carlsberg India case [2016 (8) TMI 250 - DELHI HIGH COUR]. 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 - Reversal of CENVAT Credit alongwith Interest - Held that:- The Hon’ble Supreme Court in Chandrapur Magnet Wires [1995 (12) TMI 72 - SUPREME COURT OF INDIA] has held that reversal of modvat credit is permissible to avail exemption - thus, 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. However, appellant shall pay up the interest liability on the quantum of credit availed under the Cenvat Credit Rules, 2004 during the period of dispute within a period of four weeks, only after which the matter shall be taken up for de novo adjudication as ordered by the adjudicating authority. Appeal disposed off.
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