Indian Tax Solution
Calculation for quantification of cenvat credit to be reversed by the principal manufacturer has been worked out on some percentage basis with no cross examination of manufacturing process at the job worker s end and the emergence of off-cuts and other waste products, which is not useable to the same intended purpose further by the job worker
The confiscation of goods ordered in terms of Rule 25 of Central Excise Rules, 2002 is not justified as the said Rule applies to only excisable goods. In the present case, the raw Betel Nut lying in with the appellants are not excisable goods and, as such, the confiscation of the same is not legally sustainable.
We find that the said sub-Rule provides for penalty where Cenvat credit in respect of inputs have been utilized wrongly by reason of fraud, collusion or willful mis-statement or suppression of facts or contravention of any of the provisions of Excise Act or Rules made thereunder with intent to evade payment of duty.
The dispute is as regards the documentation placed on record and the fact of the non-payment of service tax to the exchequer. The issue that the debit notes are legal documents for the purpose of refund also stands held in the favour of the assessee by the referred decisions.
We are of the considered view that carrying excess baggage on payment of certain fee/tariffs for the passengers who have opted to use air services of the appellant is an integral part of the main service provided by the appellant. The incidental service of transportation of excess baggage by air cannot be charged service tax under the category of service of transportation of goods by air as defined under Section 65 (105) (zzn) of the Finance Act, 1994.
In cases where the objection/default is about non-service of any of the respondent, on expiry of the extended period, the concerned matter will stand dismissed for non-prosecution only against the unserved respondent(s), without further reference to the Court. The matter would then proceed against the remaining respondent(s).In cases where the office objection/default has already been cured before passing of this order, it will be open to the concerned party to bring that fact to the notice of the Registrar (Judicial-II), who may examine the same and proceed with the matter as per the listing /scheme, if ready for hearing.
We find that with the declaration of law by the Hon\'ble Supreme Court in the case of CCE, Kerala Vs. Larsen & Toubro Ltd. (supra), the issue again requires fresh consideration for which purpose we again set aside the impugned order and remand the matter to the adjudicating authority. All other issues including the issue of applicability of small scale industries Notification No.06/2005 shall be taken into consideration.
Payment of service tax on GTA services can be made by the appellant by way of utilisation/ adjustment of Cenvat credit. Both the appeals are allowed with consequential relief, if any, to the appellants.
The provisions of Section 80 of the Finance Act are very clear that when there is reasonable cause for failure to pay the taxes, no penalty is to be imposable under Sections 76, 77 and 78 of Finance Act, 1994.
It is the case of the appellant that they are eligible for such captive consumption exemption in view of the proviso in the said Notification more specifically to clause (vi) of the proviso as the final product is exempted and cleared after discharging the obligation prescribed in Rule 6 of Cenvat Credit Rules, 2004.
The Revenue seeks to assess the impugned goods under the provisions of Section 4 on the ground that the product is of such nature, that can be used only by industrial consumer, namely, tyre re-treading units
Taking note of the fact that by amendment to the Rule 2(l) in the year 2011, which was enforced w.e.f., 1.4.2011, whereby, construction services were excluded from the definition of \'input service\', the Hon\'ble Court held that if the said services were not covered by Rule (l), there was no necessity to introduce the said amendment. This made it clear that prior to the amendment, setting up of a factory premises of a provider for input service relating to such a factory fell within the definition of \'input service\'. As the amendment was not retrospective, it was held not to cover the case of the assessee, which related to the period 2007-08 to 2009-10, prior to the amendment. The question was thus answered against the revenue and availing of CENVAT credit was upheld.
As is seen from the above, the statements recorded by the Revenue during the course of investigations, without procuring other evidences, so as to substantiate the investigations, cannot be held to be sufficient evidences to uphold the clandestine removal findings and no adverse opinion can be arrived at, on the basis of the same. The purpose of reproducing the above notesheet notings, on the file of the Revenue, is recorded by the ADG, is only to show that the Revenue was aware of the loop holes in their own case and the ultimate success or failure of the same. The said lapses in the investigation, do not stand removed by the officers, by further doing the investigations and a huge demand of duty cannot be based upon the surmises and conjunctures or on the basis of doubts entertained by the officers.
Revenue by entertaining a view that the appellant are under obligation to pay service tax under the category of renting of immovable property initiated proceedings against them, which resulted in passing of the present impugned orders. At this stage, we find that the issue is no more res integra and the Tribunal in the case of 2014-TIOL-992-CESTAT-DEL has held that leasing/renting of immovable property for a hotel is expressly excluded from the ambit of the taxable service under Section 65 (105). Based on the discussions and observations of CESTAT given above, there is no liability of service tax in respect of property of Hotel Chandela leased out for running, operating, etc. to IHCL.
The Bench further observed that on account of bona fide belief, no penalty is required to be imposed. By applying the ratio of the above decision to the facts of the present case, we hold that the demand beyond the period of limitation is time barred and no penalty is required to be imposed. Matters are remanded for re-quantifying the duty demand falling within the period of limitation. While re-quantifying the duty, the claim of the appellants as regards the credit of duty/tax paid on the raw materials is required to be considered and if found eligible, to be allowed.
Huge relief for manufacturers -No GST payments on advances received for supplying goods
On Wednesday, the Central Government spared businesses from paying GST on advance amounts they have received for goods which are to be supplied later in the future. The step was aimed to help clear the confusion over tax liabiliti ...