Section 67 of the Finance Act, providing for levy of service tax on the gross amount charged by the service provider for the service provided plus/minus the inclusions/exclusions as mentioned in Explanation 1 to this section, satisfy the test for correctness of the measure prescribed by Supreme Court in the case of UOI v. Bombay Tyre International
The appellant came up in appeal against Order-in-Original dated 27.7.2009 passed by learned Commissioner relating to the period July 2003 to January 2007, giving rise to following consequences
We are of the prima facie view that from the number of invoices, it is clear that the invoices dated 29.07.2005, 26.08.2005, 1.8.2005, 22.10.2005 and 26.11.2005 had been issued at a later date in 2006, as the invoice number of these invoices issued during July 2005 to November, 2005 period is of the year 2006 and under these invoices, the credit amounting to about Rs.60 lakhs had been taken.
For allowing credit of tax paid on input goods/service used in or in relation to manufacture of a finished product, what is relevant is as to whether the items in respect of which input duty credit is being claimed are covered by the definition of “input” or “input service” and finished product is chargeable to duty for allowing the credit of duty paid on input goods and/or of service tax paid on input services; it is not relevant as to whether the duty on the finished product has been paid at specific rate or at ad valorem rate and of at ad valorem rate whether on the assessable value determined under section 4 or section 4A of the Excise Act.
Coming to the merits of the case, the first question that needs to be decided is whether the appellant had a reasonable opportunity to present its case. It is rightly contended by learned counsel for the respondent that there is no requirement of the Commission to invite parties to present their point of view before forming a prima-facie opinion. But the Commission may for the purpose of satisfying itself on any aspect permit the parties to present
As per statutory provision under section 65(105) (zzn) of the Finance Act, 1994 taxable service means any service provided or to be provided – (zzn) to any person, by air craft operator, in relation to transport of goods by aircraft. The definition of the term aircraft appears in Section 65(3A) of the said Act Passenger aircraft is not excluded. The meaning of the goods is assigned from the term sale used in Sale of Goods Act, 1930.
Notwithstanding anything contained in the provisions of Section 76, 77 or 78, no penalty shall be imposable on the assessee for any failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure.” In other words, the assessee has to establish reasonable cause for the failure which could otherwise attract penalty under the said provisions of law. The letter dated 24th August, 2006 merely informs the Department that the appellants were not aware of the statutory provisions.
The appellants, manufacturers of motor vehicles, entered into dealership agreements with their dealers. The agreement provided for servicing and warranty including free service. The dealers margin covered pre-delivery inspection and three after sales services. The issue, therefore, was whether such pre-delivery inspection and after- sale-service charges are to be included in the assessable value of the goods for determining the duty liability under the Central Excise Act, 1944 („the Act?).
The Hon?ble CESTAT, Delhi held in case of Daelim Industrial Co. Ltd Vs CCE, Vadodara (‘Daelim’) (2003-TIOL1 10-CESTAT-DEL) that a works contract cannot be vivisected and a part of it cannot be subjected to service tax. In the case of CCE, Raipur Vs M/s BSBK Pvt. Ltd (2009 (13) STR 26) it was observed by the Hon?ble CESTAT, Delhi that the conclusion in the Daelim case, prima facie, is not in accordance with the law.
Learned Chartered Accountant submits that the excess amount paid in the subsequent period may be treated as mere deposit which can be adjusted against the earlier short payment and it may be paid alongwith interest. I am unable to accept the contention of the learned Chartered Accountant. The assessee paid the service tax of excess amount against the taxable service which cannot be treated as mere deposit. Therefore, such adjustment is contrary to the provisions of Rule 6(3) of the Rules. Hence, demand of tax on this issue is justified.
