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Service Tax - Case Laws
Showing 41 to 60 of 117 Records
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2019 (9) TMI 1188 - CESTAT HYDERABAD
Works contracts service - exclusion of value of free supplies in assessable value - benefit of composition scheme - HELD THAT:- The issue as to whether free supplies has to be included in the total taxable value for discharge of service tax liability, is decided by Hon’ble Apex Court in the judgment of COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT] where it was held that the value of the goods/materials cannot be added for the purpose of aforesaid notification dated September 10, 2004, as amended by notification dated March 01, 2005 - appeal dismissed.
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2019 (9) TMI 1187 - CESTAT MUMBAI
Whether the Appellant is liable to pay interest under Section 75 of the Finance Act, 1994? - The Appellant prior to the issue of show cause notice, on being pointed by the audit, did not dispute and paid the service tax.
HELD THAT:- No case of mis-conduct is made out against the Appellant and as such the SCN invoking the extended of limitation is not maintainable - the demand of interest under section 75 of Finance Act, 1994 and also the penalty set aside.
Appeal allowed - decided in favor of appellant.
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2019 (9) TMI 1186 - CESTAT MUMBAI
CENVAT Credit - input services - General Insurance Services - Repair & Maintenance of vehicles - service Tax paid on expenses of staff welfare - denial on account of nexus with output services - period 2010-11 to 2013 -14 and 2014-15 - HELD THAT:- As per the impugned order of the learned commissioner, the appellant failed to produce any evidence to substantiate its claim whereas the learned chartered account submitted that all the evidence were submitted but both the authorities below failed to look into the same.
Be that as it may, without going into the merits of the matter, the case is remitted back to the original authority for the period 2014-15 also for de novo adjudication after following the principle of natural justice - appeal allowed by way of remand.
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2019 (9) TMI 1152 - RAJASTHAN HIGH COURT
Maintainability of appeal - monetary amount involved in the appeal - Levy of service tax - imposition of penalty - cleaning of railway wagons, cleaning of railway buildings and premises, cleaning and housekeeping of railway running rooms, water tightening of wagons in monsoon seasons etc. etc. - HELD THAT:- Having regard to the amount which is over all amount of ₹ 72,51,533/-, and the fact that even that amount has been directed to be bifurcated, this Court is of the opinion that the appeal falls within the mandatory limit prescribed by the circular dated 22/08/2019.
Appeal dismissed.
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2019 (9) TMI 1147 - CALCUTTA HIGH COURT
Jurisdiction of SCN - Power of Commissioner Service Tax-II Commissionerate, Kendriya Utpad Shulka Bhawan to hear SCN - whether the show cause notice dated 19th April, 2016 was without jurisdiction?
HELD THAT:- The stipulation in paragraph 4 of the said show cause notice that it could be adjudicated by the Commissioner Service Tax-II Commissionerate was in order - Therefore, the objection of the appellant as to jurisdiction has no substance at all in our opinion. The case needs to be adjudicated on merits.
However, we find from the records that in the absence of an interim order, the Service Tax Audit Commissionerate, Kolkata has on 17th March, 2017 adjudicated upon the show cause by passing an order. The appellants did not participate in it, because of the pendency of the appeal.
To do complete justice between the parties, we direct that the show cause notice is to be adjudicated on merits afresh. The adjudication made on 17th March, 2017 is set aside - Appeal disposed off.
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2019 (9) TMI 1145 - CESTAT CHENNAI
Imposition of penalty u/s 77 and 78 of FA - tax liability not discharged within the due dates specified - failure to file ST-3 returns - suppression of relevant facts - HELD THAT:- Even the statute gives a cushion of thirty days’ time after the Show Cause Notice as sufficient compliance to escape the rigours of Section 78 by pegging the penalty at 15 per cent. It is the case of the appellant that the entire tax (excess, in fact) and interest was paid by 31.03.2011 whereas the Show Cause Notice was issued on 22.02.2011 and the Order-in-Original has appropriated a sum of ₹ 9,00,846/- as against the demand of ₹ 11,36,600/- and clearly, there is no discussion on why the other payments were not considered and nor do we see any justifiable reasons for doing so.
There are no doubts with regard to the conduct of the appellant entertained by the Adjudicating Authority except a bald allegation of “suppressed the facts” which is not sufficient - So also, mere non-filing of ST-3 return is insufficient to bring home the guilt under Section 78 since that default is dealt with separately by a different provision.
Penalties set aside - appeal allowed.
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2019 (9) TMI 1143 - CESTAT CHENNAI
Refund of service tax - service tax paid on composite contracts in respect of the construction activities including construction of residential complex service - Circular No. 108/02/2009 dated 29.1.2009 - time limitation.
Scope of Circular No. 108/02/2009 dated 29.1.2009 - HELD THAT:- Para 3 of Circular No. 108/02/2009 dated 29.1.2009 clarifies that if the purchaser enters into an agreement for construction of residential complex with the builder and the builder provides the services for construction and after such construction, the purchaser received such property for his personal use, then such activity would not be subjected to service tax because the exclusion provided in the definition of residential complex would apply to such a situation. Thus, it is very much clear that the exclusion clarified in the circular applies to the appellants - the service tax paid by them is under mistake of law.
Time Limitation - HELD THAT:- Section 11B prescribes a period of one year for filing the refund claim. However, the Hon'ble jurisdictional High Court in the case of M/S. 3E INFOTECH VERSUS CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, COMMISSIONER OF CENTRAL EXCISE (APPEALS-I) [2018 (7) TMI 276 - MADRAS HIGH COURT] had occasion to analyse the issue of levy when service tax is paid under mistake of law.
The rejection of refund claim is unjustified - Appeal allowed.
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2019 (9) TMI 1141 - CESTAT NEW DELHI
Non/short payment of service tax - Franchisee Service - Management Consultancy Service - Non-payment of service tax on advertisement expenses incurred by the local franchisees - Short payment of service tax due to wrong utilisation of cenvat credit - Non-payment of service tax on ‘management consultancy’ services by wrongly claiming the same as ‘export service’ - Interest on late payment of service tax on franchisee fees to McDonald’s USA.
Non-Payment of Service Tax on Advertisement Expenses Incurred By Franchisees - SCN alleges that since the franchisee has to expend during each calendar year an amount which is not less than 5 per cent of the gross sale for advertising and promotion of the restaurant system owned by Mcdonald’s Corporation through the contractual obligation, the franchisor gets an extra consideration towards the advertisement from the franchisee for promotion of its own brand, instead of the franchisee, which amount will form part of the value of taxable service of the franchisor - Section 67 of the Act read with Rule 5 of the 2006 Rules - HELD THAT:- The franchisee had to expend not less than 5% of the gross sales in a particular year towards the advertisement of its Restaurant. The amount was not required to be deposited in any fund of the franchisor for advertisement or promotion of the franchisor - What further transpires from the agreement is that there is no obligation cast upon the franchisee to incur any expenditure on advertising the brand name, service marks and trademarks of the franchisor. Any indirect result, because of advertisement cannot, therefore, be called an extra consideration in terms of section 67 of the Act. Unless an amount is charged by the service provider to the service recipient, it does not enter into an equation for determining the value on which Service Tax is payable.
The order has grossly erred in interpreting the franchise agreement, thereby, including the cost of advertisement in the franchise fee received by the Appellant. The amount incurred by the franchisees towards advertisement expenses, cannot, therefore, be said to be ‘consideration’ paid by the franchisee to the Appellant, as it is the franchisee themselves who are benefitting out of such expenses and not the Appellant.
The value of material which is supplied free by the service recipient cannot be treated as “gross amount charged” as that is not a “consideration” for rendering the service - Decided against Revenue.
Short payment of Service Tax due to wrong utilisation of cenvat credit - HELD THAT:- The franchisee services received by the Appellant and the ‘Management Consultant’ services rendered by the Appellant, are so inextricably linked, that, one cannot be rendered/received in the absence of the other. Where, on the other hand, the Appellant is receiving franchisee services from McDonald’s USA to set up the franchise business in India, at the same time, the Appellant is also providing consultancy to McDonald’s USA, in order to effectively carry out and supervise the franchise business. Accordingly, to state that, the franchise service could not be termed as an input service, for management consultancy is against the spirit of the CENVAT Credit mechanism - Decided against Revenue.
Non-payment of Service Tax on ‘Management Consultancy’ services by wrongly claiming the same as export service - HELD THAT:- Rule 3(2) of the Export of Service Rules 2005 states that provision of any taxable service to qualify as export has to satisfy the condition that payment for such services is received in convertible foreign exchange - In the first instance, there is no time limit in Rule 3(2) of the Export Service Rules, 2005. Thus, any time limit prescribed by the Reserve Bank of India would not debar exporter from receiving remittances for the services even after one year. What has, therefore, to be examined is whether the Appellant received any remittances thereafter. This has not been examined in the impugned order - The matter, therefore, needs to be remitted to the Principal Commissioner for examining this issue and thereafter recording a finding.
Interest on late payment of Service Tax on franchisee fees to McDonald’s USA - HELD THAT:- In the instant case, the date of entry and payment to overseas entity are on the same day. There is, therefore, no delay and the reasoning given by the Principal Commissioner to the effect that since the payment of franchisee fee from the local entities is on monthly basis, the same should be the basis with respect to the remittances to the overseas associated enterprises is not correct - the forward charge and reverse charge cannot be equated for the charge of interest as these are governed by different set of Rules - Demand of interest do not sustain.
Extended period of limitation - HELD THAT:- The demand made in Issue No. 1, 2 and 4 has been set aside - With regard to Issue no. 3, the matter has been remitted to the Principal Commissioner to decide it afresh - Thus, it is not necessary to examine the issue relating to limitation, at this stage.
Appeal allowed in part in favor of Assessee and part matter on remand.
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2019 (9) TMI 1123 - CESTAT CHANDIGARH
Whether the Offshore Upfront Fee paid by the respondent is an interest or a fee? - HELD THAT:- We find that if it is an interest then service tax is not payable by the appellant in terms of the Circular No. F.No. B2/8/2004-TRU dt. 10.09.2004 wherein interest on loan is not the part of taxable value - We have gone through the facts of the case and the respondent has produced a letter from the Standard Chartered Bank dated 15.12.2014 to show that the Offshore Upfront Fee is nothing but an interest on buyer credit transaction as stipulated by the RBI Guidelines.
On going through the said letter, we hold that the said amount on which the service tax is being demanded and Upfront Fee is nothing but an interest and on interest, no service tax is payable by the respondent, therefore, the respondent is not liable to pay service tax on the said amount.
Decided in favor of assessee.
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2019 (9) TMI 1107 - CESTAT BANGALORE
Works contract service - Site Formation and Clearance, Excavation, Earthmoving and Demolition Service - execution of Works Contract with M/s Power Grid Corporation of India Ltd. for setting up of 400/220 KV Sub-Stations - period May 2006 to September 2007 - extended period of limitation - HELD THAT:- The substantial portion of the payment goes towards Earth work in filling with borrowed Earth. As the contract contemplates various items of works along with the cost of material involved. The appellants placed on record proof of payment of VAT on the subject contract under Kerala VAT which recognises the contract to be Works Contract - Therefore, in view of the Hon’ble Supreme Court’s decision in COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] the contract is to bee seen as a non-viviceptable contract and therefore, it is not chargeable to Service Tax before 01.06.2007.
Thus, the contract being indivisible, no Service Tax can be levied upon the appellants before 01.06.2007.
Time limitation - HELD THAT:- As we find that the appellant has a strong case on merits, we are not going into the issue of limitation.
Appeal allowed - decided in favor of appellant.
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2019 (9) TMI 1105 - CALCUTTA HIGH COURT
Effective date for amendments in respect of service tax on supply of tangible goods - Since the respondent is not appearing by learned Counsel, service and issuance of notice of the appeal to be issued and served by 30th September, 2019. Learned advocate-on-record for the appellant is directed to file an informal paper book by 22nd November, 2019, serving a copy thereof upon the advocate-on record for the respondent not later than seven days before the date of hearing of the appeal.
List this appeal on 4th December, 2019.
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2019 (9) TMI 1099 - SC ORDER
Maintainability of appeal - Business Auxiliary Service - commission received from M/s. Amadeus India Pvt. Ltd. for booking of tickets through Computerized Reservation Booking System (CRBS) - HELD THAT:- Office objection(s) regarding court fee be cured within four weeks from today, failing which the appeal shall stand dismissed for non-prosecution without further reference to the Court.
List the matter after four weeks.
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2019 (9) TMI 1088 - CALCUTTA HIGH COURT
Demand of Service tax - amount not received - respondent assessee, Indian Oil Corporation transported oil by pipeline from Bongaigaon to its Haldia refinery - HELD THAT:- Mr. Chakraborty, learned senior counsel appearing for the respondent submits that the service tax was payable on the amount received and not receivable. Since no amount was received, service tax was not paid - The lower adjudication authorities accepted this argument and did not entertain the demand of the appellant.
Application dismissed.
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2019 (9) TMI 1045 - SC ORDER
Renting of Immovable Property Services or not - assignment of entire business of the hotel to IHCL - scope of definition.
HELD THAT:- Issue Notice.
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2019 (9) TMI 1037 - CESTAT BANGALORE
Classification of services - activities of drilling, blasting, excavation and raising (extraction) of iron ores from mines and crushing, screening, sorting, grading, processing etc. of iron ore in the processing unit - Business Auxiliary Service or not period 10.09.2004 to 30.09.2006 - Site Formation and Clearance, Excavation, Earth Moving & Demolition Service or not for the period 01.06.2007 to 30.09.2007.
HELD THAT:- On perusal of the contract, it is seen that the contract is termed a “raising contract” wherein the principals (first party) desirous of utilizing the knowledge and expertise of the second party i.e. appellants who possess the necessary expertise, labour, machinery and equipment, technical know-how to carry on scientific and systematic mining operations such as excavation, extraction, grading, sorting etc. permits the appellants to act as “rising contractor”. In terms of Article 3 of the Contract, the second party shall during the continuation of this Agreement, systematically extract, excavate, raise, grade, sort, etc. minerals from the mines. In terms of Article 8, the first party shall pay a sum of ₹ 110 per metric tonne of iron ore and ₹ 125 per metric tonne for iron ore fines. Ongoing through bills available on records, it is seen that the appellants are paid for the quantity of iron ore lumps and C‟ Ore extraction, iron ore extraction charges and iron ore fines extraction for various periods.
The main contention of the appellants in this case is that they are manufacturing iron ore and in view of the Hon‟ble Supreme Court‟ decision in the case of EMPIRE INDUSTRIES LTD. VERSUS UNION OF INDIA [1985 (5) TMI 215 - SUPREME COURT] and Others the activity undertaken by them amounts to manufacture and therefore, it is beyond the scope of the levy of Service Tax - HELD THAT:- We find that as the appellants are engaged in mining of iron ore. The activity involved includes transfer of goods and show-cause notice does not specify as to the value of the goods involved and has not excluded the same from the taxable value. Service Tax, if at all, can be levied on them for the mining activity, they are undertaking in terms of the raising contract, and not under Business Auxiliary Services before 1.6.2007. Therefore, the demand of Service Tax on the appellants under the category of “Business Auxiliary Service”, the impugned order does not survive on merits.
Extended period of limitation - HELD THAT:- Understandably, the levy of Service Tax on the activities undertaken by the appellants is a question of interpretation. The issue is certainly debatable. Against the very same appellant, Department has issued various SCNs seeking payment of Service Tax under different Heads. When the Tax administration itself is in doubt as to the nature of the service allegation of suppression of fact on the appellants is not sustainable.
Scope of SCN - The appellants contended that the demand of Service Tax was made under three different categories of services and the same was confirmed under the Head “Mining Service” which is beyond the scope of the SCN - Penalties - HELD THAT:- In the instant case, there is a non-vivisectable contract for Mining. There is no doubt that the activity the appellant comes under Mining which is the essential character of the contract. Therefore, the conclusion drawn by the Original Authority and upheld by the Appellate Authority cannot be faulted - appeal is dismissed as far as the demand of Service Tax is concerned - As the issue relates to interpretation of tax liability, penalties are set aside.
Business Auxiliary Service - Excavation/Extraction and Raising of Iron Ore - demand of duty for the period 01.10.2006 to 31.05.2011 - HELD THAT:- The service rendered by the appellants is clearly a Mining Service. The Department has issued a SCN dated 21.10.2008 to the appellants seeking to demand duty under three categories which includes the category of Mining of Mineral, Oil or Gas. The Adjudicating Authority has confirmed the demand under only one heading of Mining of Mineral, Oil or Gas - there is no reason to interfere with the same - the appeal filed by the Department is rejected.
Classification of services - contract is for raising of iron ore by the appellants for the persons with whom they have contracted with - period from 1st April 2006 to 31st March 2007 - HELD THAT:- In the instant case also, the contract is for raising of iron ore by the appellants for the persons with whom they have contracted with. Apparently, the activity undertaken by the appellants is essentially that of mining. It cannot be vivisected into different elements and cannot be charged to duty under any other service during relevant period - Therefore, prior to 1.6.2007, no service tax can be collected under the heads “Site Formation and Clearance, excavation and earth moving and demolition” service or “Business Auxiliary Services” - Appeal allowed.
Business Auxiliary Service - HELD THAT:- The facts of this appeal are invariance with the facts discussed above in the case of Appeal No.ST/3568/2012. In ST/3568/2012, though the show-cause notice has discussed different types of services, the adjudicating authority and the appellate authority have come to a conclusion that the services fall under one category i.e., Mining of Ores, Minerals or Gas - there was no confusion in the mind of the adjudicating authority as to under which, the service of the appellant‟s falls in.
Appeal disposed off.
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2019 (9) TMI 1024 - CESTAT BANGALORE
Rejection of VCES declaration - power to reject the said claim - It is the primary contention of the Ld. Consultant for the assessee that in terms of Section 106 ibid, the designated authority has no power to reject the declaration since according to him, it is the Commissioner of Central Excise alone who can do so.
HELD THAT:- On a plain reading of the clarification issued by the CBEC Board vide Circular No. 174/9/2013-ST dated 25.11.2013, it is clear that any Show Cause Notice proposing to reject the VCES declaration has to be invariably issued “within 30 days” of filing the application/declaration. In the case on hand, the Show Cause Notice refers to the declaration in form VCES-1 of the appellant filed on 31.12.2013 and the Show Cause Notice is dated 31.01.2014.
When the Board has clarified that such Show Cause Notice should be issued within 30 days, it may perhaps be even that a Show Cause Notice, if issued on the 30th day, could be bad. But anyway, the Notice is clearly after 30 days in the case on hand. This, in my humble opinion, goes to the very root of the issue whereby the whole proceedings will invariably have to be held to be ab initio void. Therefore, the Show Cause Notice cannot be sustained.
The rejection by the designated authority as upheld by the Commissioner (Appeals) cannot be sustained - appeal allowed.
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2019 (9) TMI 1022 - SC ORDER
Permission for withdrawal of petition - HELD THAT:- What gets revealed from the perusal of the office report is that the Ld. Counsel for the petitioner has filed document/application for the withdrawal of this Petition which is an unregistered one.
Since the petition has not been registered as yet, therefore, the same is permitted to be withdrawn.
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2019 (9) TMI 955 - BOMBAY HIGH COURT
Refund claim - alternate remedy of appeal - disputed question of facts involved - HELD THAT:- The Commissioner has stated that in absence of original documents, the claim could not have been processed. The list of documents relied upon by the Petitioner in this Petition shows that there were copies and not the original - Apart from this position, it cannot be said that there is any consensus as regard the fact that the necessary original documents were submitted by the Petitioner and were lost by the Respondent – Department - This aspect, in view of the statements in the impugned order and the affidavit-inreply, is a disputed question of fact.
Alternate remedy - HELD THAT:- Section 35 of the Central Excise Act provides an appeal to the Commissioner - Appeals. There is no dispute that the impugned order passed by the Assistant Commissioner is appealable under Section 35 to the Commissioner - Appeals. Therefore, this disputed question of fact has to be decided in the statutory appeal provided under Section 35 of the Act.
Thus, on both counts, that the Petition involved disputed question of fact and that a statutory remedy of appeal is available to the Petitioner, we are not inclined to exercise our writ jurisdiction - petition rejected.
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2019 (9) TMI 954 - PUNJAB AND HARYANA HIGH COURT
Permission for withdrawal of petition - security services to various Government Departments - HELD THAT:- Petition dismissed as withdrawn.
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2019 (9) TMI 889 - CESTAT BANGALORE
Liability of service tax - amount received from the prospective buyers where such amount includes consideration towards undivided share of land within the period 2010-11 to 2014-15 - services availed from two sub-contractors in undertaking construction activity when these sub-contractors have discharged the service tax liability - construction activity undertaken for educational institutions and on the deposits collected from all the buyers of residential apartment towards resident/owner welfare association to be used for future payments.
Demand of service tax - amount received from the prospective buyers where such amount includes consideration towards undivided share of land within the period 2010-11 to 2014-15 - HELD THAT:- The learned Commissioner held that the appellant has collected sums from the buyers before the receipt of the occupancy certificate/completion certificate and therefore provided taxable service as per Section 65(105) (zzzh) of the Finance Act 1994. He also relied upon the Board Circular 151/2/2012-ST dated 10.02.2012 - reliance placed in the case of GS. PROMOTERS VERSUS UOI [2010 (12) TMI 34 - PUNJAB AND HARYANA HIGH COURT] where it was held that the levy of tax is on service and not on service provider and construction services are certainly provided even when a constructed flat is sold. Taxing of such transaction is not outside the purview of the Union Legislature as the same does not fall in any of the taxing entries of State list - service tax cannot be levied.
Demand of service tax - reverse charge mechanism on the services availed by them from two sub-contractors - HELD THAT:- Karnataka High Court in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX & CUSTOMS, BANGALORE-II VERSUS NITHESH ESTATES LTD., [2018 (7) TMI 1135 - KARNATAKA HIGH COURT] where it was held that the appellants are not liable to pay any service tax as the building constructed by them is not for the use of Commerce or Industry - no service tax is liable to be paid by the appellants in this regard.
CENVAT Credit - the service provider has not furnished Cenvat credit documents to the Department for verification and thus failed to comply with the provisions of Rule 6 of the Cenvat Credit Rules - HELD THAT:- In terms of N/N. 21/2014-CE (NT) of Cenvat Credit Rules, 2004 the service provider shall not take credit after 6 months of date of issue of any documents specified in sub-rule (1) of Rule 9. However, learned counsel for the appellants submits that the credit was due to them prior to 11.07.2014 i.e the date of amendment of Rule and therefore, they are not barred from taking credit. However, it is held that no service tax is payable by the appellants on the issues raised in the impugned order we are not going into the issue of credit.
Appeal allowed - decided in favor of appellant.
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