The appellant brings out that since the liability is determinable after 18-2-2006, it has discharged tax liability with interest in respect of both the appeals although it sought registration after the impugned period. It was given to understand that the period covered in both the appeals are prior to the delivery of the judgment of Apex Court in the aforesaid citation.
Now the issue to be examined is whether shifting of goods within the factory premises amounts to production or processing of goods for, or on behalf of, the client. Obviously the word production cannot cover shifting of goods.
Certainly the procedure prescribed by rule 4(7) of Cenvat Credit Rules needs interpretation in favour of Revenue. But to the extent service tax is paid in respect of an invoice and in a contingency of retention of part of payment for any dispute on the invoice or any other legal purpose, disallowance of cenvat credit to the extent of tax paid shall cause hardship to the taxpayer.
In the case of Kushboo Plastics (P.) Ltd. v. CCE 2002 (149) ELT 694 (Tri.-Delhi), it was held that credit is admissible on the basis of invoices issued by the consignment agent who are registered as a dealer. Clarification issued by the Jaipur Commissionerate, which was based on the Chief Commissioner’s letter dated 26.5.2000 was taken into consideration.
Hence, the Cenvat credit is admissible to the appellant of the service tax paid by them on the service of ‘dismantling’ as the same is duly covered under the definition of input service.
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.
