TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 898
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....actured by the Original Equipment Manufacturers (OEM) and providing Annual Maintenance Contracts (AMCs) for the same. They are registered with the service tax department for providing management, maintenance and repair services and man power recruitment services. They have been paying service tax and filing their returns. On scrutiny of ST-3 returns of the appellant for the period April 2008 to March 2009 it appeared to the Revenue that they had taken ineligible cenvat credit. Accordingly, show cause notice dated 21.10.2009 was issued calling upon them to explain why: i) an amount of Rs. 48,20,564/- equivalent to Cenvat Credit attributable to input services used for provision of exempted services should not be recovered from them under Rule 14 of the Cenvat Credit Rules, 2004 read with Rule 6(3A) of the Cenvat Credit Rules, 2004 and Section 73(1) of the Finance Act, 1994. ii) credit of Rs, 10,60,865/- irregularly taken by them on agency commissions should not be recovered from them under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 73(1) of the Finance Act, 1994. iii) interest at the applicable rate on the amount mentioned at (i & ii) above should not be demande....
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....lows cenvat credit unless the service is used exclusively for providing exempted service. Rule 6(5) as applicable during the relevant period is as follows: (5) Notwithstanding anything contained in sub-rules (1), (2) and (3), credit of the whole of service tax paid on taxable service as specified in sub-clause (g), (p), (q), (r), (v), (w), (za), (zm), (zp), (zy), (zzd), (zzg), (zzh), (zzi), (zzk), (zzq) and (zzr) of clause (105) of section 65 of the Finance Act shall be allowed unless such service is used exclusively in or in relation to the manufacture of exempted goods or providing exempted services. He would therefore urge that the demand needs to be re-computed for this purpose. 8. His next argument is that all the services on which they have not paid service tax were treated as exempted services. This included services which they rendered in the state of Jammu & Kashmir. Chapter V of the Finance Act, 1994 which levies the service tax does not apply to the state of Jammu & Kashmir. Therefore, no service tax is levied on such services. When the Act itself does not apply to the services rendered in Jammu & Kashmir the question of treating them as exempted services does not ar....
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....and pertaining amount of cenvat credit needs to be reversed. He would further submit that the Hon'ble High Court of Madras has also held so in the case of FL Smidth Pvt Ltd., [2014- TIOL-2186-HC-MAD-CX]. 13. We have considered the arguments on both sides and perused the records. With regard to the first question of cenvat credit on agency commission, we find that in respect of the same appellant for a different period it has been held by this Bench that they are not entitled to cenvat credit on the agency commission because the commissions has been paid for procuring orders and not in relation to rendering the service. This decision was based on the judgment of the Hon'ble High Court of Gujarat in the case of Cadilla Healthcare Ltd., [2013-1-TMI-304-Guj-HC]. We respectfully follow the decision of the Hon'ble High Court of Gujarat even in this case and hold that the appellant is not entitled to cenvat credit on the agency commission paid for procuring order either for selling the goods or for procuring orders for AMC. 14. On the question of the trading activity being an exempted service only post 01.04.2011 we find that this issue has been settled by the Hon'ble High Court of Madr....
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....empted services' at all. Therefore, they are not obliged to reverse proportionate amount of CENVAT credit even if some of the services were rendered in J&K. He relies on the following case laws: (1) ECIL Rapisan Ltd vs Commissioner [2014 (35) STR 398 (Tri-Bang) (2) ECIL Rapisan Ltd vs Commissioner [2010 (17) STR 433 (Tri-Bang) (3) Rambol Imisoft Pvt. Ltd (2017 (47) STR 61 (Tri-Hyd) 18. We find that the case law at S.No. 3 above relied on S.No. 1&2 above. None of the three Orders appeared to have considered the definition of 'exempted service' as per Rule 2(e) of the Cenvat Credit Rules, 2004. This definition was amended by Notification no. 28/2012- CE(NT), dated 20-6- 2012 with effect from 01-07-2012. We are also unable to determine whether the relevant periods of these case laws was prior to the amendment or thereafter. 19. On the other hand, the position of the Ld. AR is that when no service tax is payable under the Finance Act, 1994 it falls under 'exempted service' as held in the case of Prathyusha Associates shipping P Ltd. [2014 (36) STR 1145 (Tri- Bang)]. This case pertained to the period prior to the amendment of the definition of exempted service and Rule 2(e) as a....
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....tute are clear and plain and unambiguous and only one meaning can be inferred, Courts are bound to give effect to the said meaning irrespective of the consequences. The relevant paragraphs are as follows: "19. The well-settled principle is that when the words in a statute are clear, plain and unambiguous and only one meaning can be inferred, the Courts are bound to give effect to the said meaning irrespective of consequences. If the words in the statute are plain and unambiguous, it becomes necessary to expound those words in their natural and ordinary sense. The words used declare the intention of the Legislature. In Kanai Lal Sur v. Paramnidhi Sadhukhan, AIR 1957 SC 907, it was held that if the words used are capable of one construction only then it would not be open to the Courts to adopt any other hypothetical construction on the ground that such construction is more consistent with the alleged object and policy of the Act. 20. In applying rule of plain meaning any hardship and inconvenience cannot be the basis to alter the meaning to the language employed by the legislation. This is especially so in fiscal statutes and penal statutes. Nevertheless, if the plain language r....