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2016 (4) TMI 777 - CESTAT CHENNAI

2016 (4) TMI 777 - CESTAT CHENNAI - 2016 (45) S.T.R. 110 (Tri. - Chennai) - Eligibility of Cenvat credit - on payment of service tax - rendered by their Foreign Agent - Held that:- once what was received by the respondent being output services, the same would automatically become input service in the hands of the respondent (the service receiver) in terms of Rule 2 (l) of Cenvat Credit Rules. There can be no second thought that the service of foreign clearing & forwarding agent was an integral p .....

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ment had accepted the payment of tax under reverse charge but objected to the availment and future utilization of credit for discharge of future liability by the Respondent. This stand adopted by the department does not seem to be an approach in the right direction. The further finding given by the Commissioner (Appeals) with regard to non-invocation of extended period holding that the issue is purely interpretative in law cannot also be faulted with. The submission made by the Advocate for the .....

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ure of moulded rubber products and other rubber articles. The respondent / assessee are also registered for payment of service tax in respect of Clearing & Forwarding Services (C&F Services, for short) received from abroad for selling their goods. The Respondent Company was discharging its service tax liability, based on Section 68 (2) of the Finance Act, 1994 read with Rule 2(1)(d)(4) of the Service Tax Rules, 1994. During the period from June 2006 to March 2007, on the scrutiny of the .....

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ion of equal penalty under rule 15 (4) of the Cenvat Credit Rules read with section 78 of the Finance Act 1994. An appeal was filed before the Commissioner (Appeals) who had allowed the appeal on merits and on non-invocation of extended period. The Commissioner (Appeals) had observed that all the activities relating to the business falls under inputs service and the words such as appearing in the definition are purely illustrative and the services of the Clearing & Forwarding Agent are very .....

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cilities; that since the respondent is only a manufacturer, they are not eligible for credit; that the mere fact of integrated definition of input service would not enable the Respondent to claim the credit in respect of services revolving round post manufacturing activities and included in the definition as such claims have to be restricted by applying the doctrine of reading down ; that the phrase such as appearing in the inclusive part of the definition before the words accounting, .. cannot .....

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Appeal and further stated that in the Order in Original, there was no finding whatsoever justifying the imposition of penalty and invoking extended period which itself is a ground to show that there was indeed nothing to justify the levy of penalty traceable to invocation of extended period. 5.The issue in this case relates to eligibility of cenvat credit on payment of service tax rendered by their Foreign Agent during the period 1.6.2006 to 31.3.2007. The respondent has relied on a plethora of .....

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r the Respondent does not figure in the reply to the show cause notice. The said reply is not filed by the department but, the extract of the same is found in para-4 of the Order in Original dated 25.6.2008. The Learned AR submitted that the case laws relied on by the Advocate are for C&F services whereas the appeal is for service of Commission Agent. 6. It is to be noted that once what was received by the respondent being output services, the same would automatically become input service in .....

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o business . The findings of the Commissioner (Appeals) that the clearing & forwarding service received is vital for business activity cannot, therefore, be faulted with. Reliance placed by the Commissioner (Appeals) in para 25 of the Judgment of the Bombay High Court in the case of Coca Cola Pvt. Ltd. Vs. Commissioner of Central Excise, Pune, 2009 (15) STR 657 (Bom.) dealing with the expression business is very apt. Relevant portion is extracted below. 25.The expression Business is an integ .....

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