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2020 (4) TMI 200 - AT - Service TaxCENVAT Credit - input services - supply of tangible goods services - Man Power Recruitment and Supply Agency Service - reverse charge mechanism - motor spirit and high speed diesel oil - demand of interest on reversal of cenvat credit - penalty. Supply of tangible goods service - deemed sale - HELD THAT:- Though the owner of the equipment had insured the goods, the effective control was with the appellant and therefore the issue is covered by definition of “deemed sale” and therefore service tax under the category of “supply of tangible goods service‟ is not leviable on the transaction of use of dredgers and other equipments by the appellant - demand set aside. Man Power Recruitment and Supply Agency Service - reverse charge mechanism - HELD THAT:- In the present case, the appellants have issued Form-16 series to the said employees as their employer and deducted TDS from their salaries and therefore the appellants were employer and there was employer-employee relationship and therefore, we hold that the said demand of around ₹ 1.65 crores cannot sustain - Demand set aside. CENVAT Credit - input - fuels - penalty - HELD THAT:- The appellant could not establish that the goods used by the appellants were eligible to be inputs and therefore, the impugned order is upheld in so far as the same is concerned, with disallowance of cenvat credit of around ₹ 34 lakhs with penalty of ₹ 2 lakhs. Demand of interest on reversal of cenvat credit - HELD THAT:- Once the inputs are issued for use, there is no need to reverse the cenvat credit. However, the appellants have voluntarily reversed the cenvat credit and we do not interfere with such voluntary reversal. We hold that on such reversal interest is not payable - the demand of interest is set aside. Appeal allowed in part.
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