After the amendment of Rule 6 of CENVAT credit Rules, 2004 by Finance Act, 2010, in view of the provisions section 73 of Finance Act, 2010, when an assessee gave a calculation of credit attributable to the inputs used in the manufacture of exempted products, the only option available to Revenue was to either accept the calculation or say what is wrong with the calculation and give Revenue’s calculation with proper basis and ask the assessee to rebut Revenue’s calculation. It was no longer open to demand 10% of the price or 5% of the price as the case may be of the exempted products. Therefore, we feel that the order has not been passed properly. Therefore, after waiving the requirement of predeposit for hearing the appeal, we proceed to decide the appeal itself.
In the instant case, the expenditure in respect of CMC charges was incurred by the assessee in discharging its primary responsibility as a CHA. In view of the clear provisions of rule 5 of the Service-tax (Determination of value) Rules, 2006, the CMC charges are to be included in the assessable value of the taxable service provided by the assessee. As regards the issue of time bar, it was found that the assessee never disclosed the fact that CMC charges are recovered from its customers in the ST-3 returns in which the statutory returns were filed by the assessee, wherein there was a separate column in which the assessees had to show the reimbursable expenses. Therefore, there was no merit in contention of assessee in respect of time bar also.
Appellants made a request before the adjudicating authority for an opportunity to produce evidence to show that the cost of design and drawing are included in the assessable value of patterns/castings and appropriate duty is paid. This contention has not been taken into consideration by the adjudicating authority. In view of the above, the impugned orders are set aside and the matter is remanded to the adjudicating authority to decide the matter afresh upon showing the proof of deposit of the amount so directed and after giving adequate opportunity of hearing to the appellants.
Service Tax – Construction of complex service -The Appellants argue that there is no relationship of service provider and service recipient between the Developer and the Land Owner. According to them it is a relationship in a joint venture for profit. Both the parties have joined together in the business of construction of complex and the land owner brings in the capital by way of his land. The Developer by way of his capital and services and they jointly construct the complex and use or sell the flats for profit. He argues that CBEC had clarified the position that no service arises in such context. This clarification dated 29-01-09 is examined later in this order.
3. The dispute relates to eligibility of CENVAT Credit of Service Tax paid in respect of services received in relation to ‘Repair and Maintenance’ of the staff colony relating to the period Apr.’08 to Dec.’08. Learned SDR submits that the identical issue relating to the same respondent stands decided in favour of the department in the case of Commissioner of Central Excise, Trichy Vs Grasim Industries reported in 2011 (21) S.T.R.378 (Tri.-Chennai) = (2011-IST-68-CESTAT-MAD) .
Term Input services clearly include services relating to setting up, modernization, renovation or repairs of a factory. It inter-alia includes services received in connection with security. Insuring plant and machinery to safeguard against interruption/destruction/break-down and to cover loss of profit due to stoppage of work due to perils like fire, riot, terrorist attack, damages etc. is necessarily a precautionary measure to safeguard against any unwarranted situation of the business. The security of a company does not merely depend upon the physical security and insurance against such perils definitely assures the financial security of the business.
We find that the abatement of 75% from the gross freight value under Notification No. 32/2004-ST dated 03.12.2004 as amended is not available in the absence of such declaration/consignment note containing transaction particulars. The Commissioner has therefore rightly confirmed the demand in respect of 14 transporters. The plea of limitation also cannot be considered by the Tribunal as earlier remand order of the Tribunal does not contain any direction for reconsideration of the issue of time bar. We, therefore, uphold the impugned orders and reject the appeals.
Assessees have made out a strong prima facie case on the ground that, although they were charging management fees from the bank who lend/advance money to the SHGs, they were a non-profit making organization as no profit or income or profit was paid or transferred to their members directly or indirectly by way of dividend or bonus. This view finds support from the decision of the Tribunal in M/s. Institute of Banking Personnel Selection Vs CST, Mumbai [2007 (8) STR 529].
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.
We have heard both sides. The provision of security at the Calcutta guest house has no nexus or relation with the business of manufacture of the assessees, who are manufacturers of ‘Titanium-di-oxide’, ‘Ferrous Sulphate’ etc., in Tuticorin. Therefore, the security service for the guest house cannot be considered as an input service so as to make credit of tax paid on such services admissible to the assesses. I, therefore, uphold the impugned order and reject the appeal.
