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 →

Commissioner of Central Excise Versus M/s Federal Mogul TPR India Ltd.

2015 (8) TMI 308 - KARNATAKA HIGH COURT

Availability of Cenvat Credit of Service Tax paid on Exempted Services of Job work - process of chrome plating - Business auxiliary service - Notification No. 8/2005-ST, dated 01-03-2005 - Held that:- A bare reading of this notification denotes that this notification is issued under section 93(1) of the Finance Act, 1994 which exempts the taxable services of production of goods on behalf of the principal manufacturer from the whole of service tax leviable under Section 66 of the Finance Act. How .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es for power to grant exemption from duty of excise. Section 5A(1A) of the Central Excise Act specifically provides that "for the removal of doubts, it is hereby declared that where an exemption under Sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer of such excisable goods shall not pay the duty of excise on such goods". - The contention urged on behalf of the Department that the FMGIL having wro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

.25/2012 AND CEA NOS.26-28/2012 - Dated:- 1-4-2015 - VINEET SARAN AND MRS. S. SUJATHA, JJ. For The Appellant : Y. Hariprasad, Sr. CGSC For The Respondent : G. Shivadass and Siddartha, Advs. JUDGMENT Mrs. S. Sujatha, J. - These appeals are filed by the Department challenging the common order passed by the CESTAT, South Zonal Bench at Bangalore, dated 12-01-2012, wherein the Tribunal has held that the Notification No. 8/2005-ST, dated 01-03-2005 is a conditional notification and the demand raised .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ome plating done by their sister concern on job work basis under cover of material movement challans, without reversing the CENVAT credit availed thereon. FMGIL had returned the goods after completion of process of chrome plating to FMTPR under cover of an invoice on payment of service tax on the value of job work charges and further, the said goods received from FMTPR undergo various manufacturing processes and then gets cleared on payment of duty. 3. The activity of chrome plating was covered .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tax and passed on the benefit of CENVAT credit to FMTPR. On gathering this information, the authorities issued show cause notices demanding inadmissible CENVAT credit of service tax of ₹ 2,02,00,725/- availed by the FMTPR for the period from April 2007 to June 2008 and proposing to demand ₹ 6,11,96,239/-from FMGIL. These show cause notices were adjudicated by the Commissioner of Central Excise and then order in original dated 25.09.2009 was passed confirming the demand on FMTPR and 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

hether the Tribunal is correct in allowing the appeal filed by the assessee without appreciating the fact that M/s. Federal Mogul Goetze India Ltd., the job worker, has irregularly availed CENVAT Credit and wrongly paid Central Excise Duty/Service Tax, so as to enable their sister concern i.e., M/s. Federal Mogul TPR India Ltd., to avail inadmissible credit thereby giving undue benefit for the company as a whole? 2. Whether the CESTAT has erred in holding that the obligation or condition in 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

efit of the credit to their principal manufacturer, is a violation of Section 5A(1A) of Central Excise Act or not?" 4. Learned Counsel Shri Hariprasad appearing for the revenue contended that FMTPR had sent CENVAT Credit availed goods viz., Piston Rings in Coil Form to their sister concern for Chrome Plating on job work basis under cover to material movement challans without reversing the CENVAT Credit availed thereon and after completion of the process of chrome plating, the sister concern .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2(f) of the Central Excise Act, 1944 and it is an activity covered under the category of 'business auxiliary service' and liable for payment of service tax. However, in view of Notification No. 8/2005-ST, dated 01-03-2005, the job work which does not amount to manufacture was exempted from payment of service tax, provided the job worked goods are further used in the manufacture of final products on which appropriate duty of excise is discharged by the principal manufacturer, the FMGIL 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

able to the facts of the case, the Tribunal without considering the same, had wrongly allowed the appeals filed by the assessee. 7. Learned counsel Shri Shivadass, appearing for the respondent contended that the exemption Notification No. 8 of 2005 dated 01-03-2005 is a conditional notification and the provisions of section 5A(1A) of the Central Excise Act, are not applicable to the facts of the present case. There is no compulsion on the assessee or the job worker to avail the exemption notific .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nces, the Tribunal has rightly concluded that the said Notification No. 8 of 2005 dated 01-03-2005 is a conditional notification, not falling under Section 5A(1A) of Central Excise Tax Act and there is no compulsion on the assessee i.e., the job worker, FMGIL to avail the benefit of the exemption notification. 8. After hearing the learned counsel for the parties and perusing the records, it is clear that the entire issue involved in this case revolves round the interpretation of the Notification .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hole of service tax leviable thereon under section 66 of the said Finance Act: Provided that the said exemption shall apply only in cases where such goods are produced using raw materials or semi-finished goods-supplied by the client and goods so produced are returned back to the said client for use in or in relation to manufacture of any other goods falling under the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), as amended by the Central Excise Tariff (Amendment) Act, 2004 .....

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 not include 'Nil' rate of duty or duty of excise wholly exempt.' 9. A bare reading of this notification denotes that this notification is issued under section 93(1) of the Finance Act, 1994 which exempts the taxable services of production of goods on behalf of the principal manufacturer from the whole of service tax leviable under Section 66 of the Finance Act. However, this exemption notification is subject to the condition that the said exemption shall apply only in cases where 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

priate duty of excise on these manufactured goods. Any job worker who undertakes services of processing is not free to avail the benefit of the said notification unless the recipient of the services pays appropriate duty of excise on the goods returned back by the job worker. This condition of payment of appropriate duty of excise by the recipient i.e., the principal manufacturer is sine qua non for availing the benefit of the notification by the job worker. Thus, the condition stipulated in 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

 

 

 

 

 

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