It is true that the service rendered by the assessee by way of sale of pre‐paid SIM cards through distributors was ultimately received by the subscribers. However, where the law prescribes the value of taxable service to be the gross amount charged by the service‐provider, Service tax can be levied on that amount only.
The issue of limitation of claim under Sec 11B as raised by Revenue is also not maintainable because the amount paid by the appellant in excess of their service tax liability ceased to be in nature of service tax paid by them and is merely an excess deposit paid by the appellant.
The crucial fact required to be seen is whether the main appellant should have enquired beyond the cenvatable document showing payment of duty that whether the inputs were due to the result of manufacture or not.
On behalf of the revenue a counter affidavit was filed contending, inter alia, that the NRC was very actively associated not only in arranging loan but also in providing various services which fall within the ambit of both managerial as well as consultancy services ,thus, It was urged that it squarely falls within the ambit of Section 9(1)(vii)(b) of the Act.
The process of sterilization does not mean that such articles are not complete in themselves . Surgical instruments continue to be the same even after sterilization and if the contention of department is accepted, every time such instruments are sterilized, the same surgical instruments are manufactured again & again when the same is sterilized again & again. This would lead to absurd results and fly in the face of common sense.
Providing of first-aid facilities to the workers, whether in the factory or in mines is the requirement of the Factories Act, 1948 and also the Mines Act, 1952 and if a manufacturer wants to carry on manufacturing activities, he has to comply with the provisions of the Factories Act and the Mines Act.
It is only in cases duty is determined coupled with the fact that the duty is evaded by a reason of fraud, collusion or any willful mis-statement or suppression of facts or contravention of any of the provisions of this Act or the rules made there under with intent to evade payment of duty
As regards, second issue CIT(A) has rightly adopted the peak credit theory by considering the fact that that there was only rotation of overdraft funds whereby the funds advanced on earlier dates were received back subsequently and there were no fresh deposits.
According to the learned counsel for the department, the assessee company as per the provisions of section 195(1) was liable to deduct tax at source from the payment made to a non-resident of any sum chargeable under the provisions of the Act at the time of credit of such income to the account of the payee or at the time of payment
Assesse submitted, the additions made as cash credits being in nature of trade credits on account of purchase of sunflower seeds, thus, are not in the nature of cash credits as envisaged under section 68 and the same therefore cannot be added to the income of the assessee by invoking the said provision.
