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2021-TIOL-1222-HC-KAR-CX
Toyota Kirloskar Motor Pvt Ltd Vs CCT
CX - During the period of April 2011 to September 2011, the appellant company had paid service tax of Rs.37,53,952/- to the service provider i.e., Sodexho Food Solutions Private Limited, who rendered outdoor catering services to the appellant and the appellant took CENVAT credit of service tax - The appellant also reversed under protest the said credit availed on 14.3.2013 on account of certain objections raised by the department in respect of entitlement of credit - Department issued a show cause notice on 23.4.2012, wherein it was alleged that outdoor catering services were not eligible input services being excluded vide Rule 2(l)(c) of the CENVAT Credit Rules and accordingly, the show cause notice proposed to demand the credit with interest and imposition of penalty - Adjudicating authority has passed the order on 4.4.2013 confirming the demand of Rs.37,53,952/- with interest and also imposed a penalty of Rs.5 lakhs u/s 11AC r/w Rule 15(1) of CCR, 2004 – As Commissioner(A) rejected the assessees appeal, a second appeal was preferred before the CESTAT/Tribunal and the Tribunal referred the matter as there were divergent decisions across India on the issue to a larger Bench [ 2018-TIOL-3256-CESTAT-BANG.-LB ] and finally, the Tribunal has answered the reference in favour of the department holding that the Outdoor Catering Service was ineligible for CENVAT credit post 01.04.2011 and an order was passed [ 2019-TIOL-934-CESTAT-BANG ] dismissing the appeal – appeal, therefore, to the High Court.
Held: In the considered opinion of this Court, the statutory definition of ‘input service' under Rule 2(l) post amendment w.e.f., 1.4.2011 provides that ‘outdoor catering' services falls under the exceptionary services in Rule 2(l)(c) of the Cenvat Credit Rules, 2004 - Hence, the Tribunal was justified in dismissing the appeal preferred by the assessee - A Taxing Statute has to be strictly construed and in Taxing Statue one has to look merely at what is clearly said - Resultantly, this Court has to look squarely at the words of the statute and interpret them - A Taxing Statute has to be interpreted in the light of what is clearly expressed, it cannot imply anything which is not expressed, it cannot merge provisions in the statute so as to supply any assumed deficiencies - Resultantly, this Court does not find any reason to interfere with the order passed by the Tribunal - The question of law is answered in favour of the revenue and against the assessee - The appeal stands dismissed accordingly: High Court [para 20, 21, 23, 24]
- Appeal dismissed: KARNATAKA HIGH COURT
2021-TIOL-297-CESTAT-HYD-LB
Nilgiri Oil And Allied Industries Vs CCE & C
ST - Following reference was made before the Larger Bench viz. (a) Whether the activity of crushing, pulverizing, converting and packing of spices into powder form amount to manufacture or not? (b) If not, whether service tax is payable under the category of 'business auxiliary service' or not?
Held: Each of the whole spices or seeds is subject to processing for production of powder - The transformed product has its own market similar to, and yet independent of, the harvested product that is subjected to processing - It is the particular use to which powdered spice is put to that prompted the establishment of an entire industry - Furthermore, without such processing, there would be an unsatiated demand for powdered spice which would have to be undertaken, with additional labour, in domestic kitchens - Every aspect of 'manufacture', as settled by judicial determination, is, thus, complied with - The applicability of the decision in Jayakrishna Flour Mills (P) Ltd [ - 2014-TIOL-2354-CESTAT-MAD ] to the impugned products is beyond question - Larger Bench concludes that 'manufacturing' as held by the Tribunal in Jayakrishna Flour Rolling Mills (P) Ltd has relevance to the present dispute that is wanting in the decision in Sara Spices which resolved an entirely different dispute - Issue before the Tribunal in Sara Spices was not the levy of tax under Finance Act, 1994 on rendering of 'business auxiliary service' but on includability of value of powdered spice, exempted from duty as it was, in the computation of value of goods eligible for exemption accorded to a manufacturer - Bench also concludes that the test for 'manufacture', as laid down in Delhi Cloth and General Mills Ltd [ 2002-TIOL-12-SC-CX-CB ] and other decisions that enlarged upon it, complied with in the conversion of 'wheat' to 'wheat products', is, unqualifiedly, existent in the conversion of 'spice' to 'spice powders' in the present dispute - Registry is directed to place this response of the Larger Bench before the Division Bench for disposal of the appeal: CESTAT LB [para 29, 30]
- Reference answered: HYDERABAD CESTAT
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