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LG Polymers India Pvt. Ltd. Versus CCE, C & ST, Visakhapatnam-I

CENVAT credit - credit availed on this service is denied for the reason that rail freight was brought under service tax net only w.e.f 01.09.2009 - Held that: - if the service provider is a person other than Government Railways the services are liable for levy of service tax. The various invoices produced alongwith the appeal memorandum shows that the appellants have received the services of transportation of goods on rail from M/s Boxtran and Concor. These are agencies which undertake transport .....

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stablish that the said service tax was paid in respect of demurrage charges incurred by them for the goods imported, which was used by them in the factory. Therefore the credit has been wrongly denied. - Appeal allowed - decided in favor of assessee. - E/20554/2015 - A/30361/2017 - Dated:- 7-2-2017 - Ms. Sulekha Beevi, C.S., Member (Judicial) Sh. Rahul Binani, Consultant for the Appellant Sh. P. S. Reddy, Assistant Commissioner (AR) for the Respondent ORDER [Order Per Sulekha Beevi, C. S.] 1 .....

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o the tune of ₹ 5,37,42,920/-. Being aggrieved by the disallowance of credit on input services to the tune of ₹ 23,84,561/-, the appellants have filed the present appeal. 2. On behalf of the appellant, the Ld. Consultant Sh. Rahul Binani explained the various services on which the credit has been denied which is tabulated as below: Services Rejected Amount Transport of goods by rail services 2,356,147 Information Technology Software Services (ITSS) 25,669 Transport of goods by Air Se .....

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nally the service became taxable with effect from 01.10.2012 only. That the authorities below observed that appellant could avail credit of service tax only from 01.10.2010 onwards and not prior to this date. Therefore the credit on rail freight for the period prior to 01.10.2012 was denied. 4. He submitted that the said notifications are applicable in the cases where the services are provided by the railways directly. The appellant has availed the services of transportation of goods by rail fro .....

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relation to transportation of goods in containers by rail, in any manner 5. That in this context, it is pertinent to refer Railways Act, 1989, wherein Government Railways has been defined under Section 2(20) of the Railways act. In terms of section quoted Government railway means a railway owned by Central Government. It could be seen from the combined reading of the definitions that, the services are taxable only if the services are provided by any person other than Government railways (owned b .....

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in containers by rail from one place to another by using the service of trains operated by Indian Railways. These companies are privately owned and managed entities. These companies have collected the service tax from the appellant for providing the service of transportation of goods by rail and therefore appellant has rightly availed the credit of the service tax paid for such services. 7. The credit availed on ITSS to the tune of ₹ 25,669/- has been disallowed for the reason that the sa .....

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in Circular No.96/7/2007-ST dated 23.08.2007 the Board has issued clarifications regarding the taxation of services. In para 053.01/23.08.2007 the question whether maintenance or repair of software service is liable to tax has been answered by the department saying that maintenance or servicing of computer software would come within the taxable service under management, maintenance or repair service under Section 65(105)(zzg) because Explanation to Section 65(64) provides that goods includes co .....

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tory and not for clearance of the final products. 9. The Ld. AR Sh. P.S. Reddy reiterated the findings in the impugned order. 10. The Ld. Consultant has explained in detail with regard to the taxable nature of services of transport of goods by rail. As rightly pointed out by him with effect from 01.05.2006 the transportation of goods by rail service was brought into service tax net and it included the services provided by any other person other than Government Railways. The definition underwent .....

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erson other than Government Railways was included within the tax net. The relevant extracts of the said notification is noticed for ease of reference: In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service provided to any person in relation to transport of goods by rai .....

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ervices are liable for levy of service tax. The various invoices produced alongwith the appeal memorandum shows that the appellants have received the services of transportation of goods on rail from M/s Boxtran and Concor. These are agencies which undertake transportation of goods by rail operated by the Indian Railways. Therefore the service tax has been rightly collected by these companies and rightly paid by the appellant. In that case the appellants are eligible for credit, off the service t .....

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