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K-Air Speciality Gases Pvt. Ltd. Versus Commissioner of Central Excise, Pune

2017 (5) TMI 822 - CESTAT MUMBAI

Reverse charge mechanism - Supply of tangible goods for use - deemed service provider - It was the case of the appellant before the lower authorities that this activity of paying rent would not be covered under STGU services and that the repacking of helium gas from the containers to small containers, is amounting to manufacture and hence the cost paid by the appellant is towards the manufacturing cost - Held that: - once the appellant has discharged the central excise duty on the very same gas .....

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e empty containers are re-exported to the foreign supplier. - The question of revenue neutrality would arise in this case as if appellant discharges the service tax under STGU under reverse charge mechanism, is undisputedly consuming the said services for supply of raw materials / inputs which are for manufacturing of repacked gas and cleared by discharging central excise duty; accordingly tax paid under service tax would be available as credit to the appellant hence no necessity arises for .....

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ppellants are engaged in manufacturing of goods viz. gases in liquid form exporting and supplying the same in domestic market (herein after referred to as the said goods). During the course of audit, officers observed that the appellant was exporting gases in liquid form and also supplying manufactured gases in liquid form to domestic market. For this purpose appellant requires specialized containers which can withstand minus 270 degrees temperature. These containers are procured from outside In .....

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to supply of tangible goods, without transferring right of possession and effective control of said tangible goods as defined in Section 65 (105) (zzz) of the Finance Act, 1994 introduced in Budget 2008-09 and made taxable with effect from 16.5.2008. As per Section 66A of the Act where the service is provided by any person who has his address outside India, the recipient of the service shall be treated as provider of the service and accordingly the said recipient becomes the person liable to pay .....

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issued to appellant for demand of service tax under reverse charge mechanism for non-payment of service tax liability under the category of supply of tangible goods for use (STGU) during the period in question on an allegation that empty containers were received from foreign supplier and appellant paid of rental. It was the case of the appellant before the lower authorities that this activity of paying rent would not be covered under STGU services and that the repacking of helium gas from the co .....

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hat the demand of service tax needs to be re-determined in accordance with the Rule 3 of Taxation of Services (Provided from outside India and Received in India) Rule, 2006 as per the direction given in paragraph 20 of the impugned order. The first appellate authority upheld the services to be falling under the category of STGU. 5. Learned Counsel would take us though the entire records and submit that there is no service provided by the foreign supplier to appellant. In terms of agreement, appe .....

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age, handling - refilling the gas in smaller or larger specially designed container / cylinders - marking / labeling the cylinders for onward sale to consumers and adaptation of these for making the final product marketable to ultimate consumers, thus there is an activity of manufacturing the question of service is being rendered does not arise, as the foreign supplier sells the gas to the appellant and the appellant undertakes all these process on the very same gas which is received. It is his .....

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002, hence no service tax can be demanded on the said transaction is the law which has been decided by this Tribunal in the case of Kinetic Communications Ltd. - 2017-TIOL-762-CESTAT-Mum, Petronet LNG Ltd. - 2016 (46) STR 513, Meru Cab Co. Ltd. - 2016 (41) STR 444. It is his submission that the impugned order may be set aside and finally he would submit that assuming but not accepting the tax liability arises, the entire exercise is revenue neutral, as the tax paid is on services is in respect o .....

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rs from supplier situated abroad; the said helium gas is transferred to equally specialized containers owned by the buyers for further consumption, repacking and labeling or relabeling by the appellant in the specialized containers and sold to the purchasers on payment of central excise duty, on assumption that the packing/repacking, labeling and relabeling amounts to manufacture; rental which are paid by appellant to the supplier of the helium gas in specialized container is sought to be taxed .....

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