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Service Tax - Case Laws
Showing 81 to 100 of 133 Records
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2015 (6) TMI 543
Business Auxiliary Service - appellants were providing Short Message Peer to Peer (SMPP) service to various clients but were not paying service tax thereon - Held that:- Telecommunication service defined under Section 65(109a) requires that the services, inter alia, is rendered by a person, who has been granted a licence under the first proviso to sub-section (1) of Section 4 of Indian Telegraph Act, 1985 and the appellants not having been granted such a licence are not covered thereunder. Consequently, the appellants' contention that as they are covered under Telecommunication Service, they cannot be covered under BAS is totally invalid [even if the contention that being covered under Telecommunication Service would necessarily mean they were not covered under any other taxable service earlier is presumed (without admitting) to be valid].
There is hardly any doubt that the appellants were providing service to their client's subscribers on behalf of their clients for which they were paid by their clients. If the services provided by them to their clients' subscribers were not on behalf of their clients, they (i.e., the appellants) had no reason to provide service to their clients' subscribers and there would be no reason for their clients to pay the appellants for the said service. Indeed, to whom the data/SMSs should be sent, at what time they should be sent, the priority to be attached to them etc. are all decided by the clients and the appellants are merely acting on behalf of the clients. There is an agreement between the appellants and their clients, like an agreement dated 28.08.2006. Under the agreement, the appellants have to give their client a direct SMPP connection through their network. The appellants then have to deliver the SMSs received from the clients to the latter's subscribers for which they get a fee from the clients. The clients also promise not to send any data which consider as objectionable. The terms of the agreement make it clear that the SMS which is being sent to the client's subscriber is only on behalf of the client and the appellants cannot send any material on their own. Thus it is amply clear that the service has been rendered by the appellants on behalf of the clients and is therefore clearly covered under the scope of BAS as the appellants have rendered service in relation to provision of service on behalf of the clients.
Section 67(2) of Finance Act, 1994 allows cum-tax benefit only if the gross amount charged for the service is inclusive of service tax payable. In the light of the admitted fact that the price charged by the appellants did not include any service tax, the cum tax benefit cannot be extended to them. - however, penalty u/s 78 is set aside - Decided partly in favour of assessee.
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2015 (6) TMI 511
Penalty u/s 76 & 77 - taxes has been paid even before the issuance of show cause notice - Held that:- The benefit of Section 80 of the Finance Act, 1994 should be extended. In the absence of such a substantial plea and there being no bonafide justification for exemption, penalty was imposed. We find no reason why the Authorities should depart from imposing such penalty as mandated by the provisions of the Act. - issue is covered by the decision[2015 (1) TMI 812 - MADRAS HIGH COURT] in the case of Dhandayuthapani Canteen - Vs - Customs, Excise and Service Tax Appellate Tribunal, wherein this Court, while considering the issue whether the penalty is imposable where the tax is paid before issuance of show cause notice held that penalty is imposable even in cases where tax is paid before issuance of show cause notice. - Decided against assessee.
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2015 (6) TMI 510
Recovery of erroneous refund claim allowed earlier - Assessee provides telecom services sold recharge vouchers (RCV) to distributors at a discount to the printed MRP - since the value realised on sale of RCVs was less than the MRP, they claimed refund of excess service tax paid - Held that:- Revision proceedings initiated by the Commissioner must be completed by passing an order within two years from the date on which the order sought to be revised has been passed. In this case the order sought to be revised was passed on 9.07.2008 and therefore order of Commissioner is required to be passed before 8.7.2010 which was done. However the requirement of clause (1) that the Order is subject to the provisions of Section 73 has to be met simultaneously. That is, the requirement of Section 73 has to be fulfilled. Section 73 (1) of the Finance Act is the provision in service tax law with regard to, inter alia, recovery of amounts erroneously refunded. The Section specifically lays down the procedure and time period within which Show Cause Notice must be issued for recovery of erroneous refunds.
Show cause notice as contemplated under section 11A of the Central Excise Act is required to be issued for recovery of erroneously refunded amounts within the time limit as provided in that Section from the relevant date and not through proceedings under section 35E. Although these decisions were rendered in the context of the Central Excise Act, the ratio will apply in the context of Service Tax law because the provisions of recovery and review under sections 11A and 35E of the Central Excise Act are identical to the provisions under Section 73(1) and erstwhile Section 84 of the Service Tax law. - Decision in the case of Best and Crompton Engg. Ltd. vs Commissioner C.EX. Chennai [2000 (9) TMI 91 - CEGAT, NEW DELHI] - Decided against Revenue.
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2015 (6) TMI 509
Extension of stay order - Extension of the further period of 365 days - Held that:- Perusal of Section 35C (2A) clearly reveals that the said sub-section did not grant any power to grant stay; it only sought to put fetters on the power of the Tribunal to grant stay beyond a certain period. Consequently its abolition can only have an effect that fetters which the said sub-section sought to place on the Tribunal with regard to the duration beyond which CESTAT could not grant stay no longer exist. In other words, with the abolition of Section 35C(2A) ibid with effect from 06.08.2014, the power of the Tribunal with regard to grant of stay in no way got attenuated. Even during the existence of sub-section 35C(2A) of the Act (i.e. prior to 06.08.2014), the Tribunal in the case of Halidram India Pvt. Ltd. Vs. CCE, Delhi [2014 (10) TMI 724 - CESTAT NEW DELHI (LB)] held that the Tribunal had power to extend the stay beyond the period of 365 days in cases where appellant was ready and willing to pursue the appeal, but the Tribunal owing to the older pendency was unable to take up the appeal. - Stay extended.
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2015 (6) TMI 508
Clearing and forwarding agent - Valuation - inclusion of actual expenses received by the appellant as per the contract, chargeable of service tax or otherwise - Held that:- As per Rule 6(8) of Service Tax Rules, 1994, the service tax liability which has to be discharged by service provider was the value received for the taxable service in relation to the services rendered by clearing and forwarding agent. From the perusal of the records, we find that there is no dispute as to the service tax discharged by the appellant on an amount received as compensation for the service rendered as clearing and forwarding agent; the additional amount which are received by the appellant are for computer stationery charges, godown rent and establishment charges is not disputed that the said amounts are paid to the appellant as per the agreement in contract which talks about the reimbursement of expenses to the appellant. In the order-in-Review the learned Commissioner has not controverted the said facts by adducing evidences against the same. - Commissioner in the Review Order relies upon the provisions of Rule 5 of Service Tax (Determination of Value) Rules, 2006 which were not in statute during the material period involved in this case. Suffice to say that the provisions which were not in statute cannot be applied for the demand of tax, the impugned order is on this point non-est. - Decided in favour of assessee.
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2015 (6) TMI 474
Vagueness of show cause - non-specification of classification/category of services in the show cause notice - nature of receipt - Held that:- A careful perusal of the orders of the adjudicating authority, the Commissioner (Appeals) as also the Tribunal would reveal that the Commissioner (Appeals) has decided the issues on two aspects, viz., one on the vagueness of the show cause notices stating that it is bereft of details and being without clarity and the other on the plea of limitation. The Tribunal, however, in its order, while extracting the portion of the order of the Commissioner (Appeals) was of the view that the Revenue had discharged its burden by producing the statements given by NLC and that the assessees did not dispute it at any point of time and that the entire demand was raised on the basis of the statements provided by NLC. However, this finding of the Tribunal runs conter to the plea raised by the appellants/assessees before the Commissioner (Appeals) as the show cause notices were challenged on the very foundation that they are vague and without particulars as to classification of works that attracts service tax. - Matter remanded back - Decided in favour of assessee.
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2015 (6) TMI 473
Application to move to the settlement Commissioner - Demand of duty and interest - Held that:- Petitioner admitting their tax liability, has also paid a sum of ₹ 14,57,464/= towards service tax and ₹ 9,70,000/= towards interest. Therefore the request made by them in their application dated 03.11.2014 to permit them to approach the Settlement Commissioner could have been considered by the respondent. As he did not do so, this court, taking note of the fact that the petitioner had also paid the tax liability alongwith interest as mentioned above, is of the view that this is a fit case to find out whether they should be allowed to settle and redress his grievance before the Settlement Commissioner. - Decided in favour of assessee.
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2015 (6) TMI 472
Constitutional validity of proviso to Section 85(3) of the Finance Act, 1994 - Condonation of delay - Held that:- Petitioner filed an appeal beyond the condonable period of three months, provided by the proviso to Section 85(3) of the Act. The appellate authority, therefore, dismissed the appeal. The right to file an appeal is conferred by a statute and must, therefore, be availed along with all its impediments. Section 85(3) of the Act allows an assessee to file an appeal within 90 days. The proviso to Section 85(3) of the Act empowers the appellate authority to condone delay but not beyond three months. We are unable to discern any legal flaw in the proviso to Section 85(3) of the Act, that would enable us to hold that the proviso impedes the rights of the petitioner to file an appeal or is in any manner in excess of legislature power or should be read down - Decided against assessee.
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2015 (6) TMI 471
Rejection of appeal on ground of late filing - Received by the adjudicating officer in time, not by the appellate authority - Held that:- Admittedly, the appeal has been preferred in time and in fact, it has reached two different sections in the very same office. After all, it is a transfer from one portion of the building to another portion and especially when the appeal has been received by the very adjudicating officer, who has passed an order, he ought to have sent it to the other wing of the very same building, but the same has not been done so. The order passed by the second respondent/appellate authority cancelling the very appeal on the ground that it was not received in time cannot be accepted. Referred case Radha Vinyl Pvt. Ltd. [2014 (3) TMI 621 - ANDHRA PRADESH HIGH COURT]. - Decided in favour of appellant.
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2015 (6) TMI 442
Banking and Financial services - Service tax liability on Leasing of equipments, hire purchase agreements , Business Auxiliary services - Securitization transactions - Collection Commission - Failure to deposit recovered amount as service tax under section 11D of the Central Excise Act, 1944 - Levy of service tax on penal interest , prepayment/termination charges & management fees - Held that:- From the ratio laid down by the Hon'ble Supreme Court in Sundaram Finance Ltd.'s case [1965 (11) TMI 123 - SUPREME COURT OF INDIA], it is crystal clear that the effect of transaction be determined from the terms of the agreement considered in the light of surrounding circumstances and the court has power to go behind the documents and to determine the nature of transaction whatever may be the form of the documents. An attempt has been made by us to analyze the true nature of the transaction between the Appellant and its customers from the agreements/documents placed before us.
We find that in almost all the cited agreements/contacts, the Appellant had been approached by the respective customers for procuring/purchasing a vehicle, (except agreement dated 22.03.2000 between the Appellant and M/s.Shiva Cement Ltd. which relate to lease of equipment). We find that the customers were required to pay the amount/value shown in the schedule-II of the agreements in monthly installments for the period specified in schedule-III agreed between the appellant and the customers. We find that most of these transactions are not supported with purchase and allied documents by which it could be ascertained as to the true intention of the parties in advancing/purchasing the equipment/vehicle. Even though theoretically it has been argued that the equipment/vehicle was purchased by the appellant and thereafter leased to the customer's against. lease rent, but examining such agreements, we noticed that some amount was initially paid, thereafter, the remaining amount was paid by the appellant to the dealer and the initial payment is described as down payment, margin money, etc., but it is not clear in all cases as who had paid this initial payment. In the event such margin money is paid by the customer, and from other attendant circumstances it could not be said that the arrangement is as an operating lease and the asset is owned by the Appellant.
In the result, we are of the firm opinion that ascertaining of the facts are vital, to application of the principle of law, in the interest of justice this aspect need to be remitted to the ld. Commissioner for verification of the facts in detail and ascertain the true nature of transaction between the appellant and its customers during the period under dispute and arrive at the conclusion whether the transaction/services falls within the scope of taxable services of banking and other financial services defined at Section 65(12) of Finance Act, 1994.
Taxability of securitization transactions - From the submissions advanced by both sides we find that the securitization as narrated by the ld. Advocate, taking cue from the RBI guidelines, is claimed by the Appellant to have been limited to the first stage, however, whether it involved the second stage of rendering service has not been scrutinized/examined by the ld. Commissioner before deducting the said securitization amount from the gross taxable value for two financial years considering the same as non-taxable under the Finance Act, 1944. Therefore, in our opinion the true transaction of securitization contracts entered into with respective Banks/customers ought to be examined before arriving at any conclusion whether the amount claimed by the appellant is the result of a sale transaction or service as argued by the revenue, and accordingly are leviable to service tax or otherwise. Therefore, this aspect also needs to be remitted to the Ld. Commissioner for consideration afresh.
Taxability of Collection Commission - After analysis of the agreement/transaction documents following the principle laid down in Pagaria Auto centre's case [2014 (2) TMI 98 - CESTAT NEW DELHI (LB)], the Tribunal in a subsequent case viz. Atamaram Auto Enterprises [2015 (6) TMI 440 - CESTAT NEW DELHI] held that such services are taxable being in the nature of promoting or marketing services provided by the Banks under the heading of Business Auxiliary services.In the present case we find that the Ld. Commissioner has without scrutiny of the agreements/contracts with the client Banks, arrived at the conclusion that the service rendered by the Appellant are in the nature of promoting the business of client-banks and hence classifiable under BAS. As held in Pagaria Auto centre's case, it is necessary to examine/scrutinize the transaction to ascertain whether it is BAS or otherwise. Therefore, this issue also needs to be remitted to the Ld. Adjudicating authority for consideration afresh.
Non deposit of amount collected as service tax - It has not been substantiated by the appellant as to how the said contingency deposits had been collected from the customers, that is, whether it was collected in lump sum or was shown as deposits in the respective agreements/contracts or Bills raised by the appellants or any other manner during the relevant period. Advancing the bare claim that collection was towards contingency deposit could not lead to any conclusion that these amounts have been collected as deposits, not as representing service tax as alleged by the department since at the initial stage of investigation the said facts were admitted by the Assistant Vice President (AVP) of the appellant/ Thus, it is necessary to lead more evidences by the appellant to substantiate their claim that the amount of ₹ 69,52,945/- which was collected from the customers/clients were nothing, but contingency deposits and not service tax. In the interest of justice, therefore, the Appellant be provided a further fair chance to produce before the adjudicating evidence in favour of the said claim. So this issue has also needs be remanded for consideration afresh. - Decided partly in favour of assessee.
Penal interest , prepayment/termination charges & Management fees - Tribunal in the case of Bank of Baroda [2014 (3) TMI 653 - CESTAT NEW DELHI ] & Small Industries& Development Bank of India [2011 (1) TMI 495 - CESTAT, NEW DELHI] held that penal interest, prepayment charges are not be leviable to service tax under the category of banking and financial services. Following these decisions we're of the view that service tax is not payable on the penal interest and prepayment/termination charges. With regard to the Management fees the Ld. Commissioner is directed to record a detailed finding supported with reasons on its leviability to service tax. - Decided partly in favour of revenue.
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2015 (6) TMI 441
Health and fitness services - Meditation services - Held that:- The argument that, Meditation does not induce any physical well-being is erroneous, inasmuch as that by undergoing meditation course, an individual will definitely be physically well as he is at peace with his inner soul, the fact that cannot be disputed by any one. If that be so, the argument of the appellant's that spiritual meditation as conducted by the appellant does not help physical well-being is to be discarded. - meditation courses offered by the appellant may be for spiritual balance, in life, but fundamentally contributes towards the physical well-being and the physical benefits of an individual. In our considered view, there cannot be a dispute that meditation helps an individual attaining mental peace. In our view, physical well-being of an individual would also encompass the mental peace of that individual, would mean that the claim of the appellant that physical well-being is incidental would not carry the case any further. - appellant was first informed as to there being no tax liability on the meditation courses conducted by them, subsequently there was a change in view of the Board and it was opined that service tax liability arises on the meditation courses. In our considered view, revenue authorities cannot demand service tax liability from the appellants for the period prior to 18 March 2009 - Decided in favour of assessee.
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2015 (6) TMI 440
Business Auxiliary Service - Commission received from banks and insurance companies - Waiver of penalty on ground of no mens rea - Held that:- Commissioner (Appeals) has given a clear finding based on documentary evidence that the commission received by the appellants from banks and insurance companies was in relation to marketing of their product. The appellants have not given any evidence to the contrary. The service rendered in relation to marketing of the products of banks and insurance companies is expressly covered under the category of Business Auxiliary Service as seen from the definition thereof given in Section 65(19) of Finance Act, 1994 which includes service in relations to promotion or marketing of service. Further this issue is covered in favour of Revenue in the CESTAT Larger Bench decision in the case of M/s. Pagariya Auto Center [2014 (2) TMI 98 - CESTAT NEW DELHI (LB)]. - Decided against the assessee.
Waiver of penalty - Commissioner (Appeals) has categorically observed that there was no mens rea or intention on the part of the appellants to evade Service Tax which they had paid along with interest even before the issue of Show Cause Notice. It is pertinent to mention that the impugned order cannot be overruled merely because some other equivalent authority may have come to a different conclusion with regard to extending the benefit of Section 80 in the given circumstances. To set aside the impugned order, Revenue has to show that the said order is illegal, perverse or unreasonable with regard to extending the said benefit in the given circumstances. The Revenue has evidently failed to do so. - Decided against the revenue.
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2015 (6) TMI 407
Denial of CENVAT Credit - Security services - Held that:- Credit has been taken in respect of services which were availed in the residential colony/club house of the appellant - what is permitted is the input services which are integrally connected with the manufacturing of the final product, and residential colony for the employees and the clubs are welfare activity for the staff undertaken by the appellant while carrying the business but has no nexus with the business of the manufacturing the final product. Under these circumstances, the appeals filed by the appellant are devoid of any merits. - However, penalty is set aside - Decided partly in favour of assessee.
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2015 (6) TMI 379
Waiver of pre deposit - outdoor catering service - tiffin food prepared in the appellants premises was supplied in boxes to the premises Shri Ramswaroop Memorial College of Engineering & Management, Lucknow - Held that:- Appellants prima facie fall under the scope of outdoor caterers as they provided service of supplying food (prepared at their premises) at a place other than their own. The judgement of Delhi High Court referred to by them, prima facie, does not seem to remain good law in the wake of say the Supreme Court judgements in the case of L & T Ltd. Vs. State of Karnataka - [2013 (9) TMI 853 - SUPREME COURT]. We find that the appellants have duly been given the benefit of abatement while arriving at the impugned service tax liability. Thus, in the given circumstances, the appellants have not been able to make out a prima facie case in their favour - Partial stay granted.
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2015 (6) TMI 378
Benefit of abatement of 67% of the tax liability (towards the value of the goods incorporated), under. Notification No. 1/2006-S.T., dated 1-3-2006 - Whether the value of free supplies made by the recipient of commercial or industrial construction service require to be disclosed as part of the gross consideration received for rendition of taxable construction services, to be entitled to the benefits of Notification No. 1/2006-ST - Held that:- This issue stand settled by the decision of Larger Bench of this Tribunal in Bhayana Builders (P) Ltd. v. CST [2013 (9) TMI 294 - CESTAT NEW DELHI (LB)] - Impugned order cannot be sustained and is accordingly quashed. The appeal is allowed - Decided in favour of assessee.
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2015 (6) TMI 377
Denial of refund claim - input services - Nexus with manufacturing activity - rent-a-cab service, air travel service and rent paid on office premises - Held that:- All the three services, have nexus to the appellants' activity. The rent-a-cab service has been used for providing transportation facility to the customers and air travel service has been used for travel of partners and employees of the company for business purposes and rent on office premises has been paid. Each action is directly connected to the business of manufacture. In view of the above, appellant is eligible for the refund claims. - refund allowed - Decided in favour of assessee.
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2015 (6) TMI 343
Waiver of penalty u/s 80 - Whether the fact of the appellant's mother suffering from heart decease, resulting in non-payment of tax, can be held to be sufficient reasonable cause so as to set aside the penalty imposed on the appellant - Held that:- Appellant did not shut their business on the said ground and continued to do so as during the said period, As is seen they have done the business to the extent of more than ₹ 17 lakhs. They also filed the returns showing their tax liability. The said facts are sufficient to observe that the appellant was aware of his liability to pay service tax. I also note that the service tax required to be paid by the appellant was not much on the higher side and they have done business of around ₹ 17 lakhs. They were definitely in a position to deposit the service tax of ₹ 2,00,000. However, instead of doing so, they took more than one and a quarter year to deposit the amount in question. - ill-health of the mother of the assessee's partner cannot be considered as a reasonable cause so as to invoke the provisions of Section 80 of the Finance Act, 1994. - Decision in the case of Triton Communication Pvt. Ltd. Vs. Commissioner of Central Excise, Mumbai [2005 (7) TMI 595 - CESTAT, MUMBAI] - no justifiable reason to interfere with the order of the lower authority - Decided against assessee.
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2015 (6) TMI 342
Valuation - Classification of service - Business Auxiliary Services or management, maintenance or repair service - Collection of electricity and water charges - Held that:- Charges, which the appellant received from the tenants, on account of the actual consumption of electricity and water and which are further deposited by them to the respective departments, cannot be considered to be the value of the services being provided by them. At the most the commission which they received for doing the said service would be the value of the services. - it is with the change of definition of input service w.e.f. April 2011, Assessee can be held as not entitled to CENVAT credit. - Partial stay granted.
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2015 (6) TMI 341
Waiver of pre deposit - Manpower Recruitment or Supply Agency - Appellant arranged loading and unloading from/to the trucks at M/s Hindustan Unilever Ltd. as required - Held that:- Service provided by the appellant does not fall under the category of 'Manpower Recruitment or Supply Agency'. Accordingly, we grant waiver from pre-deposit of the dues adjudged against the appellant and stay recovery thereof till disposal of the appeal - Stay granted.
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2015 (6) TMI 307
Waiver of pre deposit - Capital goods - erection of pipelines - whether appellant is eligible for the Cenvat credit of the service tax paid by the contractors who were laying pipelines for transportation of gas through pipeline - Difference of opinion - Majority order - Held that:- appellant is procuring pipes which are imported by them under EPCG system. The said pipes are then handed over to the pipeline laying contractors, who lay the pipes undertake the entire job of pipeline and bill the appellant as for providing the services of "commercial or industrial construction services" and there is also no dispute that contractors classification of service is not accepted. It is noted that there is no dispute that as to the fact that the pipeline system which is put in place by the contractors is used for rendering of out put services falling under the head of "transport of goods (other than water) through the pipeline or conduit services". - services rendered by the pipeline laying contractors would be eligible for Cenvat credit on the ratio of the law as has been laid down by the Hon'ble High Court in the case of CCE Vs. Sai Samhita Storages (P) Ltd. - [2011 (2) TMI 400 - ANDHRA PRADESH HIGH COURT]
GSPL had floated a tender for laying of pipeline system of transportation of oil and gas under EPC contract. The pipes which were procured by the award winning contractor and the Cenvat credit of the Central Excise duty paid of such pipeline was availed by GSPL which was disputed and the Tribunal had held the dispute in favour of the Revenue. In the same case, the services were provided by various service providers to the EPC contract winner, was also denied and upheld by the Tribunal on the ground that service providers, provided services to EPC contract winner and not to the said GSPL. The facts of the GSPL case and the facts of the case in hand are totally different as has been already recorded by me. In my view if the services which are rendered by the pipeline laying contractors directly to appellant herein for laying the pipeline and other input services which are required for rendering of the service by the appellant, prima facie the Cenvat credit cannot be denied to the appellant; the same view is applicable in respect of the capital goods which are procured by the appellant directly for construction/laying of the pipeline. - appellants have made out a prima facie case for complete waiver of pre-deposit of the amounts involved - Stay granted.
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