Saraswati Engineering Vs CCCES (Cestat) – If the assessee has discharged the service tax liability on his own ascertainment or on the basis of ascertainment by the Central Excise officers and inform the Central Excise officer of payment of such service tax then, no notice under sub-section (1) in respect of the amount so paid shall be served.
CCE, Trichy Vs. SBI, Kumbakonam (CESTAT Chennani) – The fourth proviso to the said Section 78 provides that the reduced penalty of 25% is available if the same is paid within 30 days of the Commissioner (Appeals) but this proviso applies in the case where the Commissioner (Appeals) enhances the penalty and not where he reduces the penalty. In this case, the Commissioner (Appeals) has reduced the penalty and hence the respondents cannot take advantage to the provision under the fourth proviso to Section 78.
In this case the appellant have deposited the amount under protest on differential value of the goods cleared by them to their sister unit/group companies. While adjudication, the show-cause notice demanding the differential duty was dropped and it was subsequently held in the order that the supplementary invoices issued by the assessee under rule 57AE of Central Excise Rules, 1944 is declared void for the purpose of taking MODVAT/CENVAT credit.
The Appellants are engaged in the manufacture of sugar mills machinery, heavy gears and steel casting, paper mill machinery, Diesel Engines etc. They also do de-shelling and re-shelling of old and worn out sugar mill rollers which are sent to them by various sugar mills when such rollers become old and worn out and requires reconditioning before further use.
Turnkey contracts can be vivisected and discernible service elements involved therein can be segregated and classifiable as well as valued for levy of service tax under Finance Act, 1994 provided such services are taxable services as defined by that Act and depending on the facts and circumstance of each case, services by way of advice, consultancy or technical assistance in the case of turnkey contract shall attract service tax liability.
2. The issue involved in this case is the payment received by M/s Indian Oil Corporation Ltd for transfer of technical specifications and knowhow for manufacture of product called “ZSM-5 Additive” which when added to the Fluid Catalytic Cracking Catalyst enhances LPG yield. This knowhow is provided to Sud-Chemie India Ltd,90, Nehru Place, New Delhi (SCIL).
In this case, the Commissioner (Appeals) has reduced the tax amount and hence the respondents cannot take advantage of the provision under the fourth proviso to Section 78. Having not paid the penalty amount within one month from the date of the Order-in-Original even though the legal provision was clearly brought to the notice of the respondents by the original authority in para 14 of his order, the respondents cannot be given the benefit of paying 25% of the reduced penalty.
The question whether ‘Mithi River’ is a river or not, is a pure question of fact which needs to be examined and settled at the final hearing stage of the appeal. For the present, we consider the fact that the activity undertaken by the appellant in the aforesaid stream of water was ‘dredging’. Their limited case is that the activity was undertaken in a drain and not in a river. WE note that even the agreement between the appellant and MMRDA describes the stream as ‘Mithi River’. It cannot be called otherwise merely by reason of the fact that rainwater or domestic sewage from the surrounding areas are also flowing into it or that industrial effluents are discharged into it.
Revenue in their memo of appeal have sought to distinguish the Hon’ble Bombay High Court judgment in the case Indian Ship Owners Association vs. UOI, on the ground that in that decision the services were received outside the India, whereas in the present case, the services were received inside the India from the person having his office in India. We do not find any merit in the above distinction being made by the Revenue. Section 66-A having been inserted in the Finance Act with effect from 18.4.2006 clearly laying down that recipient of services in India from outside India shall be liable to pay tax, cannot be made applicable retrospectively. We find no merits in the Revenue’s contention. Accordingly, the appeal is rejected. Stay petition also get disposed off.
Ld. Counsel Shri Pahwa argues that the second category of work carried out with M/s. Unitech Machines Ltd., Gurgaon is exhibited by para 34 of the adjudication order at page 94. In this case, the appellant acted as a sub-contractor and tax liability has been discharged by the principal contractor. According to him such aspect remains undisputed by Revenue, in which no liability arose. But this is subject to scrutiny in the course of regular hearing.
