There is no clear finding whether the entire tax demanded falls in the category of tax collected from the customers but not deposited with the Government. We notice that provisions of Section 12D of Central Excise Act read with Section 83 of Finance Act, 1992 has not been invoked in the show cause notice or in the order in original. Further no attempt has been made by the Revenue to demarcate the value corresponding to erection of structures which was not taxable prior to 1.5.06. Such Information is very crucial for passing a legal and proper order in this case.
The value of the imported goods cannot be based on the value of the goods in the local market. In the present case, no valid reasons have been given by the commissioner to reject the valuation adopted by the overseas chartered engineer. Similarly, comparing the value of the imported goods which are old and used with the data available in DOV is also not appropriate as the said data do not disclose the age, residual life, physical condition of the goods sought to be compared.
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).
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.
As per clause (zr) of section 65(105), service tax is leviable on any service provided to any person, by a cargo handling agency in relation to cargo handling service. The argument of the Appellant is that they could never understand that they were a cargo handling agency because they are in the business of warehousing of goods for which they were already paying service tax. This was a service provided by the contractors and the charges were recovered from the customers who use such services. But as a corporation owned by the Rajasthan State they did not want to enter into dispute on this issue with the Union of India and as soon as the issue was pointed out to them they started paying tax for the charges collected by them and paid to their contractor who was providing the service.
The Explanation given by the CBEC vide its Circular No. 643/34/2002-CX dated 1-7-2002 cannot apply in the cases where the transaction value of the concerned goods is available on record; to ignore such value on the record and to take resort to the explanation given by the CBEC would virtually amount to defeat the mandate of Rule 3(4) which will result In giving overriding effect to the explanation of the CBEC over and above and contrary to the provisions in the statutory rule comprised under Rule 3(4) of the Cenvat Credit Rules, 2002.
Cenvat credit : Manufacturers are not debarred from availing benefit under Notification No. 8/2003-CE dated 1-3-2003 in relation to goods other than goods which are excluded from benefit of said notification while simultaneously seeking to avail benefit of Cenvat credit or Modvat credit in relation to such excluded goods provided they are cleared on payment of full duty
Till and until both the credit earned and the product on which the credit is earned are lawfully utilized, it cannot be said that the credit has been lawfully and completely utilized; of course, the utilization of credit and utilization of input may not necessarily be in relation to one and the same final product; it can be in relation to two different dutiable final products.
