9911796707
TMI Blog2024 (8) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... L and also had to carry out some modification in the existing plant to make it suitable for use by GCL. Thus, it has been alleged that by providing the plant, the assessee had provided the services viz. "Management, Maintenance or Repair" to M/s. GCL and for which the assessee had recovered an amount of Rs. 22,52,07,488/- for the period from April-2015 to June-2017 by raising debit note in the name of M/s. GCL. Earlier 6 show Cause Notices had been issued on the same issue, which are detailed as under: 2. The assessee was asked by the JRO vide letter F. No. Ank- I/SCN/Gujarat Insect./ST/13-14 dated 07.11.2017 & 07.12.2017, to provide information for subsequent period 1.e. April 2015 to June 2017, regarding providing taxable services under the taxable category of "Management, Maintenance or Repair Services". The information was provided by the assessee vide their letter F. No. GIL/EXC/103/2017-18 dated 15.12.2017 in response to JRO's aforesaid letters. On going through the information provided by the assessee, it appeared that the assessee has received Rs. 22,52,07,488/- in lieu of taxable services provided to M/s. GCL, during the period from April 2015 to June 2017 which attra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king them as to why:- i. Service Tax amounting to Rs. 3,30,64,254/- (Rupees Three Crore Thirty Lakh Sixty Four Thousand Two Hundred Fifty Four only) should not be recovered from the assessee under Section 73(1) of the Finance act, 1994, for the providing taxable services l.e. 'Management, Maintenance or Repair' by the assessee to M/s. Gharda Chemicals Ltd. during the period from April 2015 to June 2017. ii. Interest at an appropriate rate should not be recovered from them on the service tax mentioned at (i) above, under Section 75 of the Finance Act, 1994. iii. Penalty should not be imposed on them under Section 76 of the Finance Act, 1994 for failure to pay Service Tax amounting to Rs. 3,30,64,254/- on providing taxable services of 'Management, Maintenance or Repair provided to M/s. Gharda Chemicals Ltd. during the period from April 2015 to June 2017. iv. Penalty should not be imposed upon them under Section 77 (1)(a) of the Finance Act, 1994 for not obtaining Service tax registration for providing taxable services i.e. "Management, Maintenance or Repair'. v. Penalty should not be imposed upon them under Rule 7C of the Service Tax Rules, 1994 for failing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn back the processed goods, either on the duplicate copy of Job-work Challan, furnished by them or if, part supply of processed goods is made, the same, were required to be dispatched by them, under subsidiary Challan, in accordance with and subject to the instructions, issued by the Central Board of Excise & Customs, from time to time. * For undertaking the aforementioned activities, for and on behalf of the said M/s. Gharda Chemicals Ltd., the said M/s. Gharda Chemicals Ltd., were required to compensate the noticee, in the form of Processing or Job-work Charges, as stated in the said Agreement. * This means that the entire activity consists of Job-work, undertaken by them, for and on behalf of the said M/s. Gharda Chemicals Ltd., under the provisions of Rule 4(5)(a) of the CENVAT Credit Rules, 2004. * In the premises, the said activity, undertaken by the noticee, under the aforementioned agreement, is nothing but a simple Job-work, under the CENVAT Credit Scheme. 2.5. Further, they stated that from what is stated hereinabove, it is manifestly clear that the noticee do not understand, as to, how the Central Excise Auditors, could come to a conclusion that the noticee have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, Maintenance or Repair Service. 2.8. They submitted that it means that the entire transaction between the noticee and M/s. Gharda Chemicals Ltd., undertaken by the noticee, under Rule4(5)(a) of the CENVAT Credit Rules, 2004, is nothing but production or processing of Inputs, for and on behalf of the Client and accordingly, it is Job-work, under Business Auxiliary Service, classifiable under Section 65(19) read with, Section 65(105)(zzb) of the Finance Act, 1994 and therefore, the demand raised through the impugned Notice, under Management, Maintenance or Repair Service, classifiable under Section 65(64), read with, Section 65(105)(zzg) of the Finance Act, 1994, is something foreign to the facts and circumstances of the case and accordingly, the impugned Notice, is required to be set-aside, in toto. 2.9. Thereafter they submitted that now the question arises that whether Service Tax was required to be paid by the noticee, under Business Auxiliary Service, falling under Section 65(19) read with, Section 65(105)(zzb) of the Finance Act, 1994; that it is to be noted that as per the provisions of Section 65(19)(v) of the Finance Act, 1994, production or processing of goods, for o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced out of the processed goods, supplied by the noticee, without payment of duty. 2.11. Further, they submitted that as the Job-work, undertaken by the noticee, for and on behalf of the said M/s. Gharda Chemicals Ltd., does not attract any Service Tax, a question may arise that as the Job-work has resulted into the process of manufacture, undertaken by the noticee, for and on behalf of the said M/s. Gharda Chemicals Ltd., are the noticee liable to pay any Central Excise Duty on the processed goods, cleared from our Factory, in favour of the said M/s. Gharda Chemicals Ltd.; that it is to be noted that the entire Job-work activity, undertaken by them, in their Plant, by using own Machinery, Equipment, Labour, Supervisory and Managerial Personnel, Water, Electricity and some quantum of Consumables, was carried out under the authority and subject to the terms and conditions of Rule 4(5)(a) of the CENVAT Credit Rules, 2004 and by now it is settled question of Law that under the said provisions, a Job-worker, can undertake Job-work, of Inputs and Packaging Materials, supplied free of charge, by the Principal and return back the processed goods, to the said Principal, without paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quested for a speaking order, without any Personal Hearing. 2.15 The crux of departmental notice thus is that the assessee has provided their plant with manpower along with common infrastructure facilities for exclusive use to M/s GCL (Mou dated 1 April 2015). As per the agreement, the assesses had to provide their plant exclusively for the use of M/s. GCL and also had to carry out some modification in the existing plant to make it suitable for use by M/s GCL and thus by providing the plant, the assesse have provided the services viz. "Management, Maintenance or Repair" to M/s GCL. The notice fastened the liability of Service Tax on taxable services under the category of "Management, Maintenance or Repair Services" under Section 65(64) of the Finance Act, 1994. 3. The department was thus of the view that the services provided by the assessee to M/s GCL are covered under the taxable category of "Management, Maintenance or Repair Services" as per the definition given under Section 65(64) of the Finance Act, 1994 or otherwise. 3.1. The impugned order gave its adverse findings to the assessee and upheld the demands despite noting that manufacture of excisable goods was the ultimate ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
