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On a careful consideration of the case records and the submission made by both sides, we find that the appellants have not made out a prima facie case for complete waiver of the dues adjudged against them. The impugned order sustained demand of service tax of Rs 7,67,673/, applicable interest, penalty @ 200/- per day or @ 2% of the tax confirmed per month for the period the tax was in arrears, penalty of Rs 5000/- under Section 77 of the Act and penalty of Rs 12,00,000/- under Section 78 of the Act. We find that a pre-deposit of Rs 1,00,000/- (rupees one lakh only) will be appropriate to hear and dispose the appeal. Hence we direct the appellants to pre-deposit Rs 1,00,000/- within four weeks from to day and report compliance on 20 th September 2010. Subject to such compliance, we order waiver of balance dues pending decision in the appeal.
Service Tax – Service tax paid on input services like house keeping/cleaning service, tours & travels, outdoor catering service, clearing & forwarding agent service and custom house agent service eligible as CENVAT credit in view of consistent decisions of CESTAT – Prima facie case for full waiver of pre-deposit
M/s Flextronics Technologies (India) Pvt. Ltd. Vs. Commissioner of Central Excise (CESTAT Bangalore)- On a conjoint reading of Section 11AB of the Act and that of Rules 3 and 4 of the Credit Rules, we hold that interest cannot be claimed from the date of wrong availment of CENVAT credit. The interest shall be payable from the date CENVAT credit is wrongly utilized.
The Customs, Excise & Service Tax Appellate Tribunal has directed JetLite (formerly Sahara Airlines Ltd) to pay Rs 100 crore (Rs 1 billion) as a pre-deposit on a service tax dispute, pending final settlement.Of the amount, Rs 64 crore (Rs 640 million) is towards service tax arrears and the rest is penalty for non-payment. The amount in dispute, of alleged service tax arrears, is Rs 128 crore (Rs 1.28 billion). It is a tax demand based on the operations of the earlier Air Sahara, before its takeover by Jet.
Orion Appliances Ltd (hereinafter referred to as the „appellant?) was engaged in providing maintenance and repair and commissioning and installation services. The appellant was also engaged in trading activities. The appellant availed CENVAT credit of service tax paid on various input services including advertising, security, courier, telephone and banking services which were used in provision of taxable output services as well as for trading activities.
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.
The CESTAT (Ahmedabad Bench) in case of Orion Appliances Ltd. v. CST, Ahmedabad. [Arising out of Appeal No. ST/120/09 and order dated 07-05-2010J has observed that Rule 6(2) and Rule 6(3) of the CENVAT Credit Rules, 2004 are not attracted in case where an assessee is providing ‘taxable output services’ and also undertaking ‘trading activity’.
BACHA MOTORS (P) LTD Vs CST, AHMEDABAD (CESTAT Ahemdabad)- It was also submitted that in several decisions of the Tribunal, reliance was placed on the decision of Hon’ble Supreme Court in the case of M/s MIL India Ltd. 2007 (210) ELT 188 (S.C.) = (2007-TIOL-30-SC-CX) to support the view that the Commissioner has no power to remand. After considering all these decisions, I find that in the case of M/s MIL India, the main issue before Hon’ble Supreme Court was entirely different and hence it was only observation during the course of discussion of the issue wherein Hon’ble Supreme Court mentioned about the amendment of the Section.
Recently in the case of Kbace Tech Pvt. Ltd. v. CCE/CST CESTAT ruled that the refund or CENVAT credit on input services is allowed only if the services are consumed in the output service. It is held that the Board’s Circular No. 120/01/2010-ST, dated 19-1-10 does not have the effect of amending the statute and cannot be seen as authorizing sanction of refund if the credit of service tax does not relate to services consumed for providing the output service.
Appellant is engaged in the manufacture of pharmaceutical products and bulk drugs falling under Chapter 29 of Central Excise Tariff Act. It avails credit on inputs, packing materials, etc. The unit was converted into 100% EOU and its entire stock of inputs was transferred to EOU without reversing the credit availed thereon.
