In this appeal of the department, the short question to be considered is whether the view taken by the lower authorities that the respondent was entitled to take CENVAT credit on stockbroker’s service which was used by the respondent for acquiring shares in another company with which the respondent had entered into an agreement for purchase of electricity for the purpose of manufacture of excisable product is correct or not.
The impugned order was passed by the Commissioner under section 84 as this section stood prior to 19-8-2009. It was passed on 24-3-2011. With effect from 19-8-2009, the date on which a new appellate remedy was granted in the place of the erstwhile revisionary remedy against orders passed by Central Excise officers subordinate to Commissioner of Central Excise, section 84 offers appellate remedy against an order passed by an Assistant Commissioner of Central Excise. The provision for revision of such an order by the Commissioner ceased to be in force on 19-8-2009.
Notification No. 41/2009-ST, dated 23-10-2009 exempted a works contract in respect of canals, other than canals primarily used for commercial or industrial purposes, from the whole of the service tax leviable thereon. This notification appears to be the first of its kind issued after introduction of works contract service as a taxable service, and did not provide for retrospective operation. Therefore, the arguments advanced by the assessee, claiming support from a judgment of the Apex Court in W.P.I.L. Ltd. v. CCE 2005 (181) ELT 359 (SC) and praying for exemption under the said notification cannot be accepted.
Entire demand on the freight element is based on Rule 2(1)(d)(v) of the Service Tax Rules, 1994. Sub-clause (v) was inserted in Rule 2(1)(d) only on 3.12.2004 and the same cast Service Tax liability on the person paying the freight. Prima facie, the appellant did not pay the freight and therefore there is no tax liability on their part.
The appellants are actually implementing applications software like SAP, Oracle, people soft. They are also into upgradation of application software from existing release level to higher version. They are also specifically into running of electronic data processing centre, business of data processing, word processing etc. Even if there is any advisory role, the same appears to be limited only to the field of Engineering and the services would fall under the category of consulting engineers only.
Appellant has been issued with a show cause notice on 19.05.2004 for the demand of Service Tax liability for the period 16.11.1997 to 2.6.1998 on the ground that the appellant has received the services of goods transport agency/operator which is liable to pay service tax as per the retrospective amendment and has not filed returns and discharged Service Tax. On perusal of the show cause notice, we find that the show cause notice has been issued under section 73 of the Act for demand of service tax and consequent for the penalties and interest.
When the department wanted the tax liability of the assessee to be revised, it was incumbent on the appellate authority to record a clear finding and to spell out in quantitative terms what should be the correct tax liability of the assessee.
Adjudicating authority seeks to include the value of free supplied materials received by the appellant in the gross value of the services rendered by the appellant. It is seen that after inclusion of gross value, the adjudicating authority has not given the benefit of Notification No. 15/2004, dated 10/09/2004 in the form of abatement of 67%.
Appellant is not entitled to claim CENVAT credit on the GTA service used by them for transportation of their final product from the place of removal for any period after 31/3/2008:
It was held that till the decision in the case of ITC Ltd., all the decisions were in favour of the respondents and therefore invoking suppression or mis-declaration etc. for confirmation of demand is not in order. Further, I also take note of the submission made by the ld. Counsel that even the original adjudicating authority has taken a view that the failure on the part of the assessee is acceptable as a bona fide error and cannot be attributed to be wilful intention to evade tax. In view of the above discussion, appeal fails on the ground of limitation alone and I am not going into merits since appeal can be rejected only on this ground. Appeal filed by the Revenue as well as the Cross-objection filed by the respondent get disposed of.
