In the present case, M/s Kijiji (India) (P.) Ltd. (hereinafter referred to as appellants) was engaged in providing Business auxiliary services to their customers located abroad. The appellant filed a refund claim for the service tax paid on input services such as legal services, market data, payroll processing, customers support activities, etc.,
Undisputedly, late Smt. Bimla Rani was the proprietor of the respondent firm M/s Shree Ambica Steel Industries. She died on 17.9.2006 and after her death the legal heir applied for cancellation of Excise registration in the name of the firm and the registration was admittedly cancelled by the Department in October, 2006.
Technical inspection and testing under the Indian Explosives Act, 1884 is a statutory obligation, therefore the same is not liable to tax under Technical Testing and Certification Service. Therefore, the appellants are liable to pay service tax as prayed by the learned counsel.
Notification No. 12/2003-ST dated 20-6-2003 excludes the value of the goods and materials sold by the service provider to the recipient of service, from the value of the taxable services. The said exclusion is subject to the condition that there is documentary proof specifically indicating the value of the said goods and materials.
We have considered arguments on both sides. Firstly, we notice that if the DGM (Projects), Salem followed the procedure of getting registered as “input service distributor” and then distributed the credit to SSA Salem there was nothing wrong in the credit availed by the appellant. Basically the issue involved is one of procedures and not a case of mis-utilisation of any ineligible credit. Further, we note that there has not been any distribution of credit involved because of the entire credit taken at one location was taken in one office making it easy for Revenue to conduct verification as may be necessary.
The question that is to be examined is whether it can be said that appellant has failed to disclose any material facts or tried to mislead the Chief Commissioner. I have already reproduced the contradictions observed by the Chief Commissioner. Before the compounding of offence takes place, the penalty imposed is liable to be paid and the basic principle while filing application for compounding of offence is that the offence is admitted.
On a perusal of the Hon’ble High Court’s judgement, I have found that the period of dispute involved in that case was prior to April 2006. The Hon’ble High Court, on a set of facts similar to the facts of the instant case, framed the following question of law
Cenvat credit in respect of duty paid by the job worker has already been considered by the Tribunal and in the case of Multi Organics (P.) Ltd. v. CCE [Order Nos. A/180-181/2010/SMB/C-IV, dated 31-3-2010]. It has been held that even though the job worker is entitled to exemption under Notification No. 8/2005-ST and if he has not availed to exemption, the service tax credit would be admissible to the person who availed the services of job worker.
It is evident that all the services are essential in running the business of rendering the output service ‘Business Auxiliary Service’ which is exported. If that be so, all the services come within the purview of Rule 2(l) of CENVAT Credit Rules, 2004 which defines the input service.
There is no dispute that the respondent has paid an amount as Service Tax liability on the income received from the non-members, working backwards the Service Tax liability. I find that the adjudicating authority, as correctly pointed out by the ld. Counsel, has recorded a factual finding that the respondent has not charged Service Tax on any of the amount which has been charged by him to the non-members. Both the lower authorities have correctly held that the respondent is not liable to discharge the Service Tax liability on the non-members under the category of Club & Association Services.
