We are of the prima facie view that from the number of invoices, it is clear that the invoices dated 29.07.2005, 26.08.2005, 1.8.2005, 22.10.2005 and 26.11.2005 had been issued at a later date in 2006, as the invoice number of these invoices issued during July 2005 to November, 2005 period is of the year 2006 and under these invoices, the credit amounting to about Rs.60 lakhs had been taken.
SAP India Pvt. Ltd., the Appellants, entered into end-user license agreements with clients for maintenance of information technology software already installed in the computer systems and made operational. Show cause notice (SCN) was issued alleging
SAP India Pvt. Ltd. (Appellant) is engaged in the provision of consultancy, licensing and maintenance or ERP software. The Commissioner, Service Tax had confirmed service tax demand of INR 20 crores on the Appellant under maintenance and repair’ service during the period July 2004 and January 2006. In addition to the service tax demand, the Commissioner had also confirmed interest and penalties against the Appellant.
On hearing both sides, we find that the issue in dispute is as to whether service tax liability arises on recipient of commission who resides outside India and has no office in India, for the period prior to 18.4.2006. The Apex Court has held that such liability arises only with effect from 18.4.2006 with the introduction of Section 66A of the Finance Act, 1944. The ratio of the Apex Court’s decision in Union of India Vs. India
M/s Coromandel Paints Ltd („the appellant?) are manufacturers of paints & varnishes, thinners falling under chapter 32 and 38 of the schedule to the Central Excise Tariff Act, 1985 („the Central Excise Tariff?). The appellant had entered into an agreement with M/s. Sigmakalon India Pvt. Ltd., Mumbai (SIPL) for manufacture and supply of paints. The paints manufactured by the appellant for SIPL were meant for industrial and institutional use, hence, in accordance with the provision of Standards of Weights and Measures Act, 1976, no MRP was required to be printed on such packages. Accordingly, the valuation of the same is not required to be done under Section 4A of the Central Excise Act, 1944 („the Central Excise Act?). Therefore, the appellant sold the said goods to SIPL by paying Central Excise duty on the transaction value i.e. on the landing cost of the raw materials and the production overheads. Further, the invoice amounts were adjusted against the advances paid by SIPL. The Department demanded duty from the appellant on the ground, that the goods were being manufactured by the appellant on job work basis and the same were required to be assessed in terms of Rule 10A of the Central Excise (Determination of price of excisable goods) Rules, 2000 („the Valuation Rules?). The demand was upheld by the Commissioner of Central Excise (Appeals). Being aggrieved by the order of the Commissioner (Appeals), the appellant preferred an appeal to the Customs, Excise and Service Tax Appellate Tribunal (“CESTAT?).
‘Rent-a-cab’ services utilized by the appellants for transportation of food articles from centralized canteen to appellant’s current factory premises needs to be gone into in detail, which can be done only at the time of final disposal of the appeal. On a specific query from the bench, the authorized representative submits that the amount involved is approximately Rs.8,000/-.
For allowing credit of tax paid on input goods/service used in or in relation to manufacture of a finished product, what is relevant is as to whether the items in respect of which input duty credit is being claimed are covered by the definition of “input” or “input service” and finished product is chargeable to duty for allowing the credit of duty paid on input goods and/or of service tax paid on input services; it is not relevant as to whether the duty on the finished product has been paid at specific rate or at ad valorem rate and of at ad valorem rate whether on the assessable value determined under section 4 or section 4A of the Excise Act.
Coming to the merits of the case, the first question that needs to be decided is whether the appellant had a reasonable opportunity to present its case. It is rightly contended by learned counsel for the respondent that there is no requirement of the Commission to invite parties to present their point of view before forming a prima-facie opinion. But the Commission may for the purpose of satisfying itself on any aspect permit the parties to present
Since the inception of Cenvat Credit Rules, there has been a debate on the application of Cenvat Credit Rules viz a viz trading activity. The Cenvat Credit Rules do not have any provision to govern a situation where common ‘inputs’/‘input services’ are used by an assessee engaged in providing output service/ manufacturing dutiable goods and, at the same time, also undertaking ‘trading activity’.
The Adjudicating Authority has proceeded on the basis of provisions of Rule 7 and Board’s circular which according to him, the credit distributor should have distributed the service tax credit to all units. We find strong force in the contentions raised by the ld. Counsel that the decision of the Tribunal in the case of Ecof Industries (P.) Ltd. (supra) where the provisions of Rule 7 has been analysed in depth and has been settled that the ISD can distribute the credit even to only one unit.
