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of <h1>Tribunal emphasizes proper classification headings & CENVAT credit eligibility in service tax appeal</h1> <h3>M/s. Mando India Ltd. Versus Commissioner of GST & Central Excise, Chennai</h3> M/s. Mando India Ltd. Versus Commissioner of GST & Central Excise, Chennai - TMI Issues involved:The issues involved in the judgment are the non-payment of service tax on various charges under dispute, demand of service tax under reverse charge mechanism, classification of services, eligibility to utilize CENVAT credit for payment of service tax, invocation of extended period of limitation, and imposition of penalties.Classification of services:The appellant had not paid service tax on charges including salaries paid to foreign service engineers, fees for technical know-how, fees for product testing/product validation, reimbursement of air travel expenses, and service charges for loan guarantee. The demand confirmed by the Commissioner of Service Tax was challenged by the appellant. The appellant argued that the show cause notice did not disclose the classification of services for which service tax was demanded, rendering the demand unsustainable. The Tribunal held that the demand for service tax under reverse charge mechanism must fail due to lack of specific classification headings in the notice.Utilization of CENVAT credit:The appellant contested the eligibility to utilize CENVAT credit for payment of service tax under reverse charge mechanism. The Tribunal referred to a Bombay High Court judgment and noted that the appellant was eligible to pay service tax using CENVAT credit until a specific date. However, as the amount in question had not been confirmed and demanded in the order, the issue failed on merits. The Tribunal emphasized strict interpretation of taxing statutes and ruled that the question of penalties did not arise due to the unsustainable demand.Conclusion:The Tribunal set aside the impugned order and allowed the appeals, providing consequential relief as per law. The judgment highlighted the importance of specific classification headings in show cause notices for service tax demands under reverse charge mechanism. The decision also underscored the eligibility to utilize CENVAT credit for payment of service tax within the specified period. The Tribunal's ruling focused on upholding natural justice principles and strict interpretation of tax laws in resolving the issues presented in the case.
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