AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 787
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....the same is ordered to be appropriated and adjusted against the total amount confirmed. I alsc impose penalty amounting to Rs. 1,27,94,087/- upon M/s LG Electronics (India) Pvt Ltd., Plot No. 51, Udyog Vihar, Greater Noida under the provisions of Section 78 of Chapter V of the Finance Act, 1994 (ii) I order to demand and recover the interest amounting to Rs. 7,97,345/- from M/s LG Electronics (India) Pvt. Ltd., Plot No. 51, Udyog Vihar, Greater Noida under the provisions of Section 75 of the Finance Act, 1994: (iii) l disallow the inadmissible Cenvat Credit of service tax amounting to Rs 2,24,08,117/- availed on "Maintenance and Repair Services' provided by their Authorized Service Centres and order to recover the same along with interest at the appropriate rate as applicable from time to time from M/s LG Electronics (India) Pvt. Ltd., Plot No. 51, Udyog Vihar, Greater Noida under the provisions of Rule 14 of the Cenvat Credit Rules 2004 read with Section 11A and 11AB of the Central Excise Act, 1944. I also impose a penalty of Rs. 2,24,08,117/- under Rule 15 of the Cenvat Credit Rules, 2004 `read with Section 11AC of the Central Excise Act upon M/s LG Electron....
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....& Customs Commissioner, Central Excise & Service Tax (Audit), Audit-l Ghaziabad. New Delhi. Accordingly, vide C. No. V(15)Adj./Noida/LG/13/ 07/1554-58 dated 30.12.2016, a corrigendum to the show cause notice was issued and matter has been adjudicated by the Commissioner (Audit). 2.1 Appellant is engaged in the manufacture of electronic and electrical goods. They also undertake sale and installation of the Air Conditioner imported by them. They pay appropriate taxes and duty as leviable under the Finance Act, 1994 and Central Excise Act, 1944. They are availing the credit of taxes and duties paid by them on inputs, input services and capital goods. 2.2 During course of audit of the records of the Appellant for the period July 2004 to August 2005 following irregularities were observed: S No Issue Amount 1. Service Tax on GTA Services through CENVAT Account 12794087 2. Availed CENVAT Credit on invoices of Authorized Service Stations for the services provided during the Warranty Period 22408117 3. Wrongly Availed the benefit of Notification No 19/2003-ST in respect of installation services provided for imported AC 26925575 4 Not paid serv....
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....ELT 206 (Bom)] • Parle International Limited [2021 (375) ELT 633 (Bom)] • Appellant had rightly paid service tax, in respect of GTA service on reverse charge basis from the CENVAT account, and there was no requirement to make the payment in cash as have been held in following cases: • Oundh Sugar Mills Ltd. [2017 (52) STR 353 (ALL)] • Panchmahal Steel Ltd [2014 (34) STR 351 (T-LB)] affirmed in [2015 (37) STR 965 (Guj)] • Pallipalyam Spinners Pvt Ltd [2008 (9) STR 544 (T-Chennai)] affirmed in [2014 (36) STR J20 (Mad)] • Mccann Erickson (India) Pvt Ltd [2019 (30) GSTL 425 (Del)] • Godrej & Boyce Mfg Co Ltd [Order dated 24.06.2019 in Central Excise Appeal No 23/2019] • Trinayani cement Pvt Ltd. [2017 (47) STR 91 (T-All)] • As appellant was not required to pay the said amount in cash demand for interest needs to be set aside. • Services provided by ASC are input services for the appellant and appellant is entitled to avail CENVAT credit of service tax paid on such services as have been held in the following cases:- • Carrier Air conditioning & R....
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....l Steel, Hon'ble Gujarat High Court while upholding thje decision of larger bench of tribunal observed a s follows: "4. We notice that the Punjab and Haryana High Court in the said decision in the case of M/s. Nahar Industrial Enterprises Ltd. (supra), for accepting the payment of service tax on GTA service out of Cenvat credit relied on Rule 3(4 )( e) of Cenvat Credit Rules, 2004. The view of the High Court is that the said Rule allowed utilization of Cenvat credit for payment of service tax of any output service. This would also include the GTA service. 6. The view of the Punjab and Haryana High Court in the case of M/s. Nahar Industrial Enterprises Ltd. (supra) was taken into account by the Delhi High Court in the case of Hero Honda Motors Ltd. (supra). While pursuing the same line, Delhi High Court also placed heavy reliance on Section 68 of the Finance Act, 1994, and in particular sub-section (2) thereof. Sub-section (2) of Section 68 of the Finance Act, 1994, provides that every person providing taxable service to any person shall pay service tax at the rate specified in Section 66 in the same manner and within such period as may be prescribed. Sub-section (....
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....ould have utilized Cenvat credit for the purpose of paying such duty. In view of the decisions of Punjab and Haryana High Court and Delhi High Court noted above, we do not find any error in the view of the Tribunal." Thus we do not find any merits in the demand made. However as the appellant has already paid the amount in cash no refund shall be admissible to the appellant because the liability to pay the service tax has not been set aside. However the demand for interest of Rs 7,97,345/- made in respect of these amounts is set aside. 4.4 Availed CENVAT Credit on invoices of Authorized Service Stations for the services provided during the Warranty Period This issue is also no longer res-integra. In case of Escorts Construction Equipment Ltd, supra after taking note of previous decisions on the issue Chandigarh Bench has observed as follows: "6. After considering the submissions of both the parties and perusal of material on record, we find that the issue involved in the present case has been considered in the appellant's own case for a different period by this Bench of the Tribunal and vide its order dated 05.07.2018 cited (supra), it has been held as under:- ....
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.... to 01.04.2011, is also reproduced below : 5. prior to 01.04.2011 "2(l) "input service" means any service,- (i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;" (emphasis supplied) 22. "Input service' either prior to 01.04.2011 or w.e.f. 01.04.2011 means any service used by the manufacturer, whether directly or indirectly, or in relation to the....
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.... the appellant has suppressed the material facts with intend to evade payment of service tax. Besides this, the audit of the record of the appellant was conducted in February/March 2007 whereas the show cause notice was issued in 2009 after the expiry of two and half years which makes the substantial demand beyond the period of limitation. 30. In view of our discussion above, the impugned orders are set-aside and both the appeals of the appellant are allowed with consequential relief, if any, as per law." 6.2 Further, we find that the Tribunal in the case of M/s New Hollend Construction Equipment (I) Pvt. Ltd. cited (supra) has considered the identical issue and has held as under:- "41. It is, therefore, considered appropriate to follow the three decisions rendered by the Tribunal in Carrier Airconditioning & Refrigeration, Honda Motorcycle and Samsung India Electronics in preference to the later decision rendered on 24.11.2017, which has distinguished these three decisions on a non-existent ground. This is what was observed by the Supreme Court in Babu Parasu Kaikadi and the relevant portion is reproduced below: "18. Furthermore, this Court, whi....
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.... wherein as per sub clause (a) transfer of property in goods involved in the execution of such contract is leviable to sales tax. Secondly, under clause (b) such contract is for the purposes of carrying out erection, commissioning or installation; commercial or industrial construction; construction of residential complex, 'Turnkey projects including engineering, procurement and construction or commissioning (EPC) projects. The party had provided the "Installation and Commissioning Services" to their customers during the period 10.09.2004 to 31.03.2006 and the 'works contract was introduced with effect from 01.06.2007, therefore, it is observed that it is unwarranted to go in so much of details to discuss the provisions laid down there under 'works contract". It is also irrelevant that they were not liable to pay service tax in the period under examination because there was no 'works contract. It is important to mention here that the business activity undertaken by the party has to be tested under the existing law at the material time and Erection of plant, machinery or equipment was taxable since 10.09.2004 whereas Commissioning or installation of plant, machinery o....
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....rovided by a commissioning and installation agency in relation to:- (i) erection, commissioning or installation of plant, machinery or equipment; or (ii) installation of - a. electrical and electronic devices, including wiring or fitlings thereof; or b. plumbing, drain laying or other installations for transport of fluids; or c. heating, ventilation or air-conditioning including related pipe work, duct work and sheet melal work; or d. thermal insulation, sound insulation, fire proofing or water proofing; or e. lift and escalator, fore escape staircases or travelators; or f. such other similar services 32. It is observed that the Finance Act, 1994 has defined 'Commissioning and Installation Agency' under erstwhile Section 65(29) of the Act as any agency providing services in relation to commissioning or installation. With effect from 10.09.2004, the definition stands amended, so as to read as 'any agency providing the services in relation to erection, commissioning or installation'. Thus, I find that the services provided by the party were well covered under the then existing 'Erection c....
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....vice Tax dated the 20th June, 2003, [G.S.R. 503 (E). dated the 20th June, 2003], for the said contract; (iii) the benefit under this notification shall be allowed only if no credit of duty paid on inputs or capital goods has been taken under the provisions of the Cenvat Credit Rules 2004.] *Inserted w.e.f. 10.09.2004 Explanation. - For the purposes of this notification, the gross amount charged shall include the value of the plant, machinery, equipment, parts and any other material sold by the commissioning and installation agency, during the course of providing commissioning or installation service This notification was effective until rescinded with effect from 01.03.2006 by the Notification No. 01/2006-ST dated 01.03.2006, with similar provisions, which exempts the taxable service of the description specified in column (3) of the Table below and specified in the relevant sub-clauses of clause (105) of section 65 of the Finance Act " specified in the corresponding entry in column (2) of the said Table, from so much of the service tax leviable thereon under section 66 of the said Finance Act, as is in excess of the service tax calculated on a va....
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.... on inputs/ capital goods that the same should have been 'used for providing such taxable service'. Therefore, 1 am of the considered opinion that credit taken on any input / capital goods debarred the party from the benefit of notification No. 19/2003-ST dated 21.08.2003 in the period prior to 01.03.2006 36. Further, in respect of the period from 01.03.2006 to 31.03.2006 the party in their defence have contended that they have not availed Cenvat credit on any input, capital goods and input service used for providing the impugned taxable services of Erection Commissioning or Installation during he period under consideration. However, the party have not furnished any material evidence in support of their contention. They were required to produce / furnish the evidences in support of their claim that no CENVAT credit was taken on the inputs/ capital goods/ input services used for providing the services under ' Erection, commissioning or installation'. The party had to adduce material evidences to corroborate their claim. The burden of proof regarding the admissibility of Notification No. 19/2003-ST dated 21.08.2003 and also Notification No 01/2006 dated 01.03....
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.... of Central Excises and Salt Act, 1944 ⁃ Section 25 of Customs Act, 1962". 38 In the instant case, it was on to the party to furnish adequate evidences in support of their claim. The party failed to substantiate their claim. In the case of Steel Authority of India Limited versus Commissioner, Central Excise Raipur [2007 (208) EL.T 367 (Tri.- Del.)], the Hon'ble Tribunal observed that assessee failed to produce any supporting documentary evidence regarding period/duration of use of such CI/Steel rolls before sale/removal of same as waste and scrap- No efforts made by assessee to substantiate their claim......... Also, in the case of WHIRLPOOL OF INDIA LTD. Versus UNION OF INDIA [2001 (137) E.L.T. 42 (P&H)], the Hon'ble High Court of Punjab & Haryana at Chandigarh held that the submission is misconceived. The petitioner has come with a complaint against the action of the authorities. The merits have been examined. It has failed to substantiate its claim. Thus, the relief as prayed for cannot be granted. In the case of Commissioner of Central Excise, Bangalore v. Brindavan Beveragaes (P) Ltd. & Ors. [(2007) 5 SCC 388], the Apex Court held that as no sufficient m....
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....he present cases are cases which arise before the 2007 amendment was made, which introduced the concept of "works contract" as being a separate subject matter of taxation. Various amendments were made in the sections of the Finance Act by which "works contracts" which were indivisible and composite were split so that only the labour and service element of such contracts would be taxed under the heading "Service Tax". 24. A close look at the Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to service contracts simpliciter and not to composite works contracts. This is clear from the very language of Section 65(105) which defines "taxable service" as "any service provided". All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service is the gross amount charged by the service provider for such service rendered by him. This ....