Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

SKF India Ltd, SKF India Ltd (ISD) Versus Commissioner of Central Excise, Pune-I

2015 (6) TMI 79 - CESTAT MUMBAI

CENVAT Credit - Trading activity - Revenue is of the view that the appellant is not eligible for credit of input services in proportion to the turnover of trading activities and that of manufacturing activities - Invocation of extended period of limitation - Held that:- Eligibility of credit is defined in Rule 3 read with definition in Rule 2(l). It is only after that various questions in Rule 6, come into play. Rule 6(5) cannot be read in isolation but has to be read in the overall scheme of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ars. For example, if the turnover in particular period is say ₹ 1000 crore out of which turnover of ₹ 700 is pertaining to the indigenous cars and turnover of ₹ 300 crores pertains to the imported and traded cars then if the input credit of 10 crores is available then 7 crore should be considered for the manufactured cars in India and credit of ₹ 3 crore should be considered pertaining to imported and traded cars.

Credit of input or input services is allowed on .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng activities was also being availed by them. Therefore, this is a clear case of suppression, and conduct of the appellant in this regard does not take him further and the extended period of limitation has been rightly invoked.

No hesitation whatsoever in holding that taking credit in respect of services used in trading activity cannot be considered as bona fide at all. Just because the Government has put a trust in the trade and permitted them to take credit without any reference to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r contains more than what was submitted during the course of hearing as also in the grounds of appeal filed before this Tribunal. As per Rule 10 of the CESTAT (Procedure) Rules, 1982, the appellant shall, except by the leave of the Tribunal, urge or be heard in support of any grounds not set forth in the memorandum of appeal. The procedure being followed by the learned counsel for the appellant is totally incorrect and we, therefore, refuse to discuss the submissions made in the said letter (eve .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and roller bearings and textile machinery components. Besides manufacture of the said goods, they also undertake trading of similar goods which they normally procure from their associate companies in other parts of the world, as also from SKF Technologies India Pvt. Ltd., Ahmedabad. The appellant has depots/hubs situated in different parts of the country from where they sell the said goods. In India they have two manufacturing units, one located in Pune and the other located in Bangalore. Their .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ocated in Pune and the other in Bangalore, they are utilizing the said credit in the two units. For purpose of distributing the said credit, the main appellant took another registration as an input service distributor in Pune itself and based upon their registration as an input service distributor, they are distributing the credit of input services between the two units. 3. The dispute between the Revenue and the appellant is that since trading is not a taxable activity either under Excise Law o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of credit availed by them, including interest and penalty. The show cause notice also proposed a separate penalty on the appellant in their role as 'input service distributor' (ISD) under Rule 15A of the Cenvat Credit Rules, 2004 as they have distributed inadmissible cenvat credit pertaining to service tax paid on services utilized for trading activities. 4. The case was adjudicated by the original authority vide the impugned order and in the said order, the original authority has confi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d that the issue has been decided by the tribunal in the case of Godfrey Philips India ltd. reported in 2009 (14) STR 374 (Tri-Ahmd). It is submitted that the said judgment of the Tribunal has been followed by the Tribunal in the following cases:- (i) United Phosphorus Ltd. reported in 2013 (30) STR 509 (Tri-Ahmd) (ii) Ericsson India Pvt. Ltd. reported in 2011 (24) STR 346 (Tri-Bang); (iii) Castrol India Ltd. reported in 2013 (30) STR 214 (Tri-Ahm), and (iv) SKF India Ltd. final order No. 20723- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

enial of credit, the said self-assessment has to be first set aside. Without setting aside the self-assessment, the credit cannot be denied to the main appellant. The Hon'ble Supreme Court's decision in the case of Flock India Pvt. Ltd. reported in 2000 (120) ELT 285 (SC) is quoted to support the contention. It is further submitted that the Bangalore Bench of this Tribunal in their own case, has set aside the demand vide final order No. 20723-20724/2014 dated 7.5.2014. It is also contend .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat in case of conflict between the Board circular and CESTAT order, CESTAT order has to prevail and in support of the same, certain case laws are submitted. It is further submitted that the ratio of the judgment of this Tribunal in the case of Mercedes Benz reported in 2014 (36) S.T.R. 704 (Tri. - Mumbai) - is not applicable in the present case. According to the learned counsel, in the said judgment this Tribunal has held that in computing the ratio of exempted turnover, the gross value of trad .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

same proportion and in view of this position, the ratio of the judgment in the case of Mercedes Benz is not applicable. 5.2 The learned counsel also submitted that credit relating to category of services specified in Rule 6 (5) of the Cenvat Credit Rules, 2004 should be allowed. 5.3 It was also submitted by the learned counsel that the demand needs to be recomputed based on the provisions of Rule 6 (3D) made effective from 1.4.2011. It is submitted that there were no provisions earlier for reve .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

bunal in the case of Bharat Laundry reported in 1989 (42) ELT 676 (Tri-Del). It is also submitted that the formula prescribed under Rule 6 (3D) has been accepted by the department in the case of Godrej & Boyce Mfg. Co. Ltd. and no appeal has been filed against the said order of the Commissioner. It is submitted that there must be uniformity in application of law for all the assessees and in support of the same, certain case laws are quoted. 5.4 It was further submitted by the learned Counsel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f any reversal provisions, no cenvat credit is to be reversed for trading activity upto March 2011. 6. The learned Commissioner (AR), on the other hand, submitted that the appellant is one and the same and they have taken registration for manufacturing activity. Since they wanted to distribute the credit of input services, they have taken registration as an input service distributor in addition to as manufacturer. It is to be noted that both the registrations are in the name of SKF India ltd., C .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ised with relation to jurisdiction not challenging the assessment etc. are of no consequence and are being made as they have no case on merit and wants to deflect the attention. 6.1 The learned Commissioner (AR) further submitted that the whole issue in the show cause notice as also the order-in-original is relating to Rule 3 read with Rule 2(l) of the Cenvat Credit Rules, 2004 and the appellant intentionally is trying to confuse the issue by bringing in Rule 6 (5). He submitted that the purpose .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Revenue is proposing is to bifurcate the credit of input services and demanding reversal of the credit which they have taken in relation to the trading activities. He drew attention that under Rule 3, a manufacturer or producer of final products (or provider of taxable services) are allowed to take credit of specified duty paid on input or capital goods or any input service received by the manufacturer of final products. "Final product" is defined in Rule 2 (h) as excisable goods manuf .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l products and clearance of final products, upto the place of removal and includes services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or any office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share regist .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nly solution is to divide the credit in proportion to the turnover of trading activity and manufacturing activity. The learned AR further submitted that the issue has been discussed in detail by this Tribunal in the case of Mercedes Benz India Pvt. Ltd. vs. CCE Pune -I reported in 2014 (36) S.T.R. 704 (Tri. - Mumbai) -. In the said judgment, this Tribunal has taken a view that trading is not a service. The learned AR also submitted that even the appellant at the time of original adjudication has .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ure and not for the past. Even the concerned Notification stated that it comes into force w.e.f. 1.4.2011. He further submitted that for the same reasons, the formula prescribed under Rule 6(3D) will be applicable for the future and not the past as it is related to the deeming fiction. 6.3 The learned Commissioner (AR) also submitted that the contention of the appellant that credit relating to category of services provided in Rule 6(5) of the Cenvat Credit Rules can be allowed as long as those s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e credit including the credit of input services used in the trading activities. The learned AR submitted the case laws in support of various contentions - Hon'ble Madras High Court's judgment in the case of F.L. Smidth Pvt. Ltd. vs. CCE, Tiruchirapalli reported in 2015 (317) ELT 225 (Mad.), particularly paras 10 & 11 of the said judgment. The learned AR also submitted that in the facts and circumstances of the case, extended period of limitation would, be applicable, in view of the j .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(Tri.-Mumbai) (para 5.3); (vi) AG Industries Pvt. Ltd. vs. CCE, New Delhi reported in 2001 (129) ELT 218 (Tri.-Del.) (para 2). 7. We have considered the submission of both the sides. The main contentions raised by the learned counsel is relating to jurisdiction. The relevant provision for registration is provided under Section 69 of the Finance Act, 1994. The said provision is reproduced below:- "69. - (1) Every person liable to pay the service tax under this Chapter or the rules made ther .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

taken by (i) every person liable to pay service, tax, and (ii) other person or class of persons as notified by the Central Government. Thus, the service tax registration is required to be taken by a person or class of persons. Normally, a service provider may have office at one place but may be providing services at different places. The registration is not required to be taken for each and every place where service is being provided but by the person where he has his office. Under the above Se .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

voices in respect of such services are raised to their main office. All offices may not even by paying excise duty or service due to nature of activity there. Further, many of the services are of the nature which cannot be said to be for a specific factory or a specific distribution outlet such as warehouse, depots etc. For example, advertisements may be relating to more than one manufacturing units located in different placed. Auditing services may be used in Corporate/Accounts office which may .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fficulties, the concept of input service distributor was introduced. It is to be noted that the concept of input service distributor is that in one place manufacturer or a service provider receives various invoices issued under Rule 4A of the Service Tax Rules, 1994 and thereafter credit available on these invoices is redistributed to their own different factories (or registered places as provider of output service) and such entities in turn avail the credit. Unlike registered dealers of excisab .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h a registration is that the concerned authority is aware that the registered person is receiving invoices relating to input services used in their both the factories /locations. They normally would be paying excise duty in both the factories and accordingly the credit of input services is distributed among both the factories. It is to be noted that all the functions i.e. receipt of the invoices, distribution of the credit of such invoices, availment and utilization of such credit are done by th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the same place and the two registrations, one for excise and the other as an ISD, will not make a difference. Both registrations are for the same legal entity. Both the activities are to be dealt by the same Commissioner. The credit in dispute, if eligible, will also be utilized in the factory located within the jurisdiction of the same Commissioner. The case law relating to Godfrey Philips India Ltd. (supra) is distinguishable as in that case the ISD and the factory were not located within the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n assessee under the Service Tax Law. He is only a distributor. ISD neither provides any service nor pays any service tax as provider of output service and, therefore, there is no question of assessment or self-assessment. No doubt ISD is required to file a half-yearly return. That return only gives the details of credit received and distributed. The relevant part is reproduced below:- Credit details for input service distributor (A) Details of Cenvat credit received and distributed Details of C .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ible to be distributed* Closing Balance * as per rule 7(b) of CENVAT Credit Rules, 2004 (C) The taxable services on which input service credit has been distributed during the half year period _______________ _______________ _______________ _______________ Self Assessment memorandum (a) I/We declare that the above particulars are in accordance with the records and books maintained by me/us and are correctly stated. (b) I/We have assessed and paid the service tax and/or availed and distributed CEN .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ent is relevant for service tax payer alone. Since there is no assessment, the contention of the learned counsel is required to be rejected outright. The judgment of Hon'ble Supreme Court in Flock India Pvt. Ltd. (supra) is altogether in different context and is relating to classification list, where the assessees were required to get the classification list approved from the Revenue. Assessee did not challenge the classification list approved by the Revenue. The Hon'ble Supreme Court he .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

een done to them as an ISD but has been done as factory or vice versa. Factory and ISD, both are one and the same legal entities and are in one place under the jurisdiction of same Commissioner. Two registrations, one as manufacturer and the other for activity as ISD, will not make any difference whatsoever. 11. The learned counsel has submitted that the Bangalore Bench of the Tribunal in their own case has set aside the demand. We have gone through the said order. In the said order, the Tribuna .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ase, both ISD as also the Pune factory are located in the same premises and, therefore, the case laws quoted are distinguishable and hence, in our view, there is no need to refer the matter to a Larger Bench and the contention is rejected. 13. The learned counsel has also submitted that the letter issued by the CBEC dated 10.3.2014 clarifying that the provision of Rule 14 of the Cenvat Credit Rules, 2004 shall only be invoked for denial of credit, is not binding on the CESTAT. There can be no do .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

present case. In the said case, Mercedes Benz were manufacturing cars in India as also trading by importing certain models from abroad. This is exactly what is being done by the appellant. They are manufacturing certain types of ball bearings and they are also involved in trading of certain ball bearings by importing from their associates or procuring from their subsidiary companies in India. We therefore do not find any strength whatsoever in the said contention of the appellant that ratio of t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ices which are common for manufacturing and trading are therefore used in connection with their business and the definition of input service as per Rule 2(l) specifically includes activities relating to business and therefore, they are entitled to take the credit of the same. We are not impressed with the said argument of the Ld.Sr.advocate. The term "input service" is defined under Rule 2(l) as - "input service" means any service,- (i) used by a provider of taxable service f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ment of inputs, activities relating to business such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal; (Emphasis supplied). We observe the definition of "input service" has two parts. The first part provides for use by a provider of a taxable service for providing output service .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

siness such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry and security. Thus we observe that second part of the definition includes services which are required for setting up of the factory or marketing of the goods. For example, advertisement or sales promotion or market research or storage upto the place of removal etc. are activities which may not be directly used in the manufacture of the goods b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to be related to the final products being manufactured by that manufacturer. Thus, if advertisement is relating to the goods manufactured by the manufacturer, then the manufacturer would be entitled for the credit of the same as an input service. Similarly, if the manufacturer's activity relating to accounting, financing, recruitment and quality control etc. are relating to the goods manufactured by him, then the manufacturer would be entitled to the credit of tax paid on input service. In .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(32) S.T.R. 482 (Tri-Bang.). This Tribunal by majority view observed as - "30.2 The proposed order by the Hon'ble Member (Technical) allowing the credit in respect of five services and the proposal to remand for fresh consideration of the eligibility of nine services has been made in the light of decision in Coca Cola case holding that - "all services which constitute activities related to business need not have a nexus with manufacture in a manner different from what was found in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ted with the business of the manufacture of final product, the service would not qualify to be a input service under Rule 2(l) of the 2004 Rules." In view of the above judgment, he was of the opinion that "a manufacturer claiming the benefit of CENVAT credit on any service under Rule 2(l) on the premise that the service is covered by the above expression should establish an integral connection between the activity/service and the business of manufacturing the final product." 31.1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r, the latter decision of the Hon'ble High Court of Bombay, Nagpur Bench in the case of Ultratech Cement Ltd. has dealt with the scope of the said phrase and held as under : "29. The expression "activities in relation to business" in the definition of "input service" postulates activities which are integrally connected with the business of the assessee. If the activity is not integrally connected with the business of the manufacture of final product, the service woul .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

activity must have nexus with the business of the assessee. The expression 'relating to business' in Rule 2(l) of CENVAT Credit Rules, 2004 refers to activities which are integrally related to the business activity of the assessee and not welfare activities undertaken by the assessee." 31.4 On the other hand, a close perusal of the decisions relied upon by the learned advocate for the appellant, reveals that the said decisions did not interpret the expression 'relating to busine .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cars and selling the cars in the Indian market viz. trading activity. In view of above position, we are of the view that the credit of input services which are used both in the manufacturing and trading cannot be entirely allowed. It will also be interesting to see various common services of which credit has been taken and are matter of dispute in the present case. The main common services on which the credit has been taken are advertisement, event management service, business auxiliary service .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s such as accounting, auditing, financing, recruitment and……" Thus the services used in activities such as accounting, auditing, financing, recruitment etc. are only to be allowed. The services under dispute are mainly advertisement, even management, business auxiliary, business support services. None of these services are relating to activities illustrated or enumerated in the definition. On this ground also we do not find any merit in the contention of the appellant assessee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t is for business support service which will be equally applicable for trading and manufacturing. Similar is the position in respect of I.T. services as also all other services listed. 15. The next contention of the appellant was that the credit relating to categories of services specified in Rule 6(5) of the Cenvat Credit Rules, 2004 shall be allowed. We have gone through the said Rule 6(5). Said sub-rule starts with non-obstanta clause with reference to sub-rule (1), (2), & (3) of Rule 6. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and that relating to trading activity. We, therefore, outrightly reject the contention of the appellant. 16. The next contention of the learned counsel is that the demand needs to be recomputed based on the provisions of Rule 6(3D) made effective from 1.4.2011. This issue has already been dealt in detail in the case of Mercedes Benz(supra). Paras 16 to 18 of the said judgemnt are reproduced below: 16. In view of the above, we have come to the conclusion that trading was not a service and therefo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h reference to clause (c) of Explanation I appended after Rule 6(3D) of Cenvat Credit Rules, 2004. The said provision as noted earlier was inserted with effect from 1.4.2011. The argument of the ld.Sr.Advocate is that the said explanation only provides the procedure for computation and since this change is procedural in nature it will have a retrospective effect. Ld.Sr. advocate also argued that in case of traded goods, the value addition by the appellant is only the difference between the sale .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

process like labour, electricity and many other services and it will not be appropriate to take the value addition. In support of his contention that in case of traded goods only value addition should be taken, Ld.Sr. advocate took us through the judgment of the Court (5th Chamber) dated 14.7.1998 in case C-172/96 which was passed on a reference under Article 177 of the EC Treaty by the High Court of Justice of England and Wales, Queen's Bench Division. We have gone through the said judgmen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e turnover for purpose of VAT. It is in that context, the said court has held that the spread, the difference between the selling price and purchase price should be taken for the purpose of VAT. In the present case, the dispute is not relating to computation of turnover for purpose of charging a tax as there is no tax liability in case of traded goods. The question is how to apportion the credit of tax on the input service between the manufactured goods and the traded goods, whether we should ta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

623. In this case, wealth tax was applicable on various assets. A new rule was inserted with effect from 1.4.1979 to determine the market value of properties. The question was whether the new inserted rule can be used for determining the value of properties for earlier period and hence determine the wealth tax. It is in this context that the Hon'ble Supreme Court has taken a view that the same would be applicable to all the proceedings pending at the time of its enactment. In the present ca .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f the present case. 17. Having come to the conclusion that clause (c) of Explanation 1 has no application for determining the apportionment of the credit of service tax on input services, the question is how to determine the same. We find that the major amount pertains to the services in relation to the advertisement, even management, business auxiliary service and business support service. When the appellant is spending certain amounts for sales promotion such as advertisement of the cars and c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cars and turnover of ₹ 300 crores pertains to the imported and traded cars then if the input credit of 10 crores is available then 7 crore should be considered for the manufactured cars in India and credit of ₹ 3 crore should be considered pertaining to imported and traded cars. If we go by the argument of the Ld.Sr.Advocate then the value of traded cars will have to be taken as ₹ 30 crores and total turnover will be considered as ₹ 730 crores and credit of ₹ 10 cr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

would be equally applicable for business auxiliary and business support service. In view of the above analysis, in our view, it would be appropriate to apportion the credit of service tax on input services in the ratio as is the turnover of manufactured cars and imported and traded cars. In fact, we have gone though clause (c) of Explanation I added with effect from 1.4.2011 and are of the view that perhaps the said new method has been adopted to encourage the trading of the goods rather than th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mmissioner of Income Tax, Madras reported in (1997) 1 SCC 729. We have gone through the said judgment of the Hon'ble Supreme Court. The issue in that case was relating to deduction attributable to a priority industry within the meaning of Sec. 80-B(7). It is in that context that the Hon'ble Supreme Court took a view that importing certain spare parts and selling the same in the market would be covered within the scope of priority industry as it was necessary for the appellant to provide .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rejected. 17. Yet another contention of the appellant is that the demand needs to be recomputed as there are certain services which are directly used for manufacturing activity. We find that during investigation, the appellant has not made any such claim and not provided any such detail. Even while filing the appeal, no such claim has been made. It is only at the time of argument, a peculiar claim of this type has been made without giving any details. Under the circumstances, we reject the conte .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is allowed only in order to eliminate the cascading effect of taxes. Thus, for taking credit, the trading activity should be taxable under Service Tax or Excise Law. The credit of input or input services is not allowed in respect of non-taxable activities. Here is a case where the services were used for trading activity. The appellant should have not taken the credit in the first instance itself, which was totally wrong on their part. They did not indicate in the returns that the credit relating .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the Cenvat Credit Rules, there is no manner of doubt that input service means goods which is used by the manufacturer directly or indirectly in relation to the manufacturing of final product and clearance of final product from the place of removal. In the present case, the Department has allowed cenvat credit in respect of the value of goods amounting to ₹ 5.41 crores and denied for the balance. We find no error in such determination, which is in consonance with Rule 2(l) of the Cenvat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uthorities below." This Tribunal in the case of Kalpik Interiors (supra) has observed as under:- "14. As regards the allegation of suppression of facts, it is seen that the appellants deliberately indulged in deducting 67% from the gross value shown in the invoices and paid service tax only on 33% under Notification No. 15/2004-S.T. and Notification No. 1/2006-S.T., admitted to have availed of the said notifications and even mentioned these notifications in their ST-3 Returns even when .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

here benefit of an exemption notification was claimed so brazenly and blatantly to evade service tax when there was no scope for any ambiguity or confusion regarding the inadmissibility thereof. In coming to a finding regarding suppression of facts overall facts and circumstances of the case have to be considered in each case as was also held in the case of Mett Macdonald Ltd. v. CCE, Jaipur - 2006 (2) S.T.R. 524 (Tri.-Del.) = 2011 (134) E.L.T. 799 (Tribunal). In the present case, the fact that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

derance of probability. We must hasten to add though that this doesn't debar them from staking a claim for the benefit of Notification No. 12/2003-S.T. provided, as discussed and elaborated earlier the conditions stipulated thereunder are fully satisfied in the manner prescribed. In the case of Ratnamani Metals & Tubes Ltd. (supra), this Tribunal has observed as under:- "8. The ld. counsel submitted that the issue is covered by the decision of the Hon'ble High Court of Mumbai in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he appellants had used these H.R. Coils for the manufacture of dutiable products also." We have no hesitation whatsoever in holding that taking credit in respect of services used in trading activity cannot be considered as bona fide at all. Just because the Government has put a trust in the trade and permitted them to take credit without any reference to tax authorities, it does not imply that the appellant can avail any credit whether permissible or not under the law and the later on, take .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version