ST - The assessee is manufacturer of P&P medicaments and obtained registration under 'Technical Inspection and Certification Service' and were paying service tax under said category for services rendered to their customer M/s. LRL - Later on, on receiving legal advice that services rendered to LRL does not amount to Technical Inspection and Certification Service, assessee stopped paying service tax - SCN was issued proposing to demand service tax under category of Technical Inspection and Certification Service on income received by assessee from LRL - Demand confirmed alongwith interest and penalty - There is nothing in the SCN as to how the assessee would fit into the classification of Technical Inspection and Certification Service - In SCN, it is alleged that assessee have not disclosed their receipts in regard to technical consulting fees - Thus, department themselves are not fully clear whether the assessee is rendering Technical Consultancy Service or Technical Inspection and Certification Service - SCN is foundation of all charges and when nothing is brought out in SCN as to how the assessee is liable to pay service tax under particular category of service, demand proposed in said SCN cannot sustain - Merely because they obtained registration and paid service tax for a short period, they cannot forced to pay service tax under a category which is not applicable to the assessee or their activity rendered by them - The income received from LRL does not fall under category of Technical Inspection and Certification Service - The impugned order is set aside: CESTAT

- Appeal allowed : CHENNAI CESTAT

2018-TIOL-2578-CESTAT-AHM

ST - The case of department is that the assessee have misused the benefit of Notfn 15/2004-ST by not including the value of free supplies used in providing output Services, namely, Commercial and Industrial Construction Service - When the issue was raised by department, the assessee had availed the CENVAT Credit on all the input services and capital goods and discharged the entire Service Tax liability raised in SCN and they have also paid the interest on Service Tax demand - Before availing the CENVAT Credit, the issue was remained in their favour in terms of larger bench judgment in case of Bhayana Builders 2013-TIOL-1331-CESTAT-DEL-LB , however, assessee had availed CENVAT Credit paid on Service Tax, since availed the CENVAT Credit even though the judgment of Bhayana Builders was in their favour on the point of inclusion of free supply material - But since they availed the credit they were no longer entitled for the exemption Notfn - In this peculiar fact, even on the dispute raised by Revenue, the issue was in the favour of assessee in terms of Bhayana Builders case, therefore, there is no question of any malafide intention on the part of assessee - Hence, penalties imposed under Section 76 and 78 are clearly not sustainable in terms of Section 80 of FA, 1994: CESTAT

- Appeal partly allowed : AHMEDABAD CESTAT

2018-TIOL-2577-CESTAT-MUM

CX - Issue is whether appellant is entitled for CENVAT credit in respect of Civil Works i.e. repair and maintenance of road and drainage system within the factory premises, rent-a-cab service provided after and before 01.04.2011 and loan processing fees for funds obtained for capital requirement.

Held: Civil work service is related to repair and maintenance of road and drainage system as ‘renovation, modernization and repairs at factory premises' and is included in the inclusive category of ‘input service', credit is admissible - rent-a-cab service is excluded from definition of Input service w.e.f 01.04.2011 and appellant has reversed credit with interest; for prior period credit is admissible - financing is the most important part of any business organization, hence credit in respect of service tax paid on loan processing is clearly admissible - in the circumstances, penalty is set aside - appeal is partly allowed: CESTAT [para 5]

- Appeal partly allowed : MUMBAI CESTAT

CX - The assessee process raw vegetable oil for manufacture of vanaspati ghee and refined vegetable oil - Dispute relates to maintenance of separate accounts and inventory of inputs meant for dutiable final products as well as exempted final products - As assessee was not maintaining separate inventory/account of receipt and use of said common inputs, demand was issued to them for recovery of amount of equal to 8% of value of exempted goods cleared during the period 10.02.1998 to 31.03.1999, in terms of provisions of Rule 57CC of Rules by invoking extended period of limitation - Assessee's claim is that they have reversed the Modvat credit on proportionate basis in respect of said inputs used in manufacture of exempted final product - It is not disputed that assessee have also paid the interest on reversed credit @24% per annum - At the relevant time, entitlement of assessee to reverse the credit to the extent of common inputs used in manufacture of exempted final products was in doubt - However, subsequently Rule 57CCC was inserted in CER, 1944 through FA, 2010 for reversal of actual credit by manufacturer availing credit of specified duty in respect of inputs used for manufacture of final product which are not chargeable to duty or chargeable to nil rate of duty by payment of amount equivalent to amount of credit attributable to inputs used in manufacture of such final products - Said amendment was retrospective in nature and covers the impugned period - As held by Gujarat High Court in case of Shree Rama Multi Tech Ltd. 2011-TIOL-940-HC-AHM-CX , delay in filing application under said amendment statutory scheme is condonable as assessee was prosecuting remedy before Tribunal - Since the assessee have reversed Cenvat credit attributable to common inputs used for manufacture of exempted final products and paid interest @24% per annum, by following the judgment of Gujarat High Court in said case, assessee has made met the requirement of scheme of retrospective amendment of Section 69(2) of FA, 2010 - Therefore, demand of 8% of value of exempted goods is not sustainable and is accordingly set aside: CESTAT

- Appeal allowed : CHANDIGARH CESTAT