2013 (8) TMI 171 - AT - Service Tax

Classification of Services Instead of Site Formation and Clearance, Earth Moving and Demolition service, it should be classified as Cargo Handling Service and he relies on the decision of this Tribunal in the case of Gangadhar Bulk Movers Pvt. Ltd. vs. Commissioner of Central Excise, Nagpur 2011 (11) TMI 358 - CESTAT, MUMBAI Held that - Contention regarding classification has not been raised before the adjudicating authority. Besides, overburden and wastage for removal cannot be considered as cargo. Cargo usually refers to goods or freight carried by a ship or vessel - Prima facie this contention is not convincing Decided against the Assessee. Eligibility of Cenvat Credit - Excise duty on the tippers had been discharged under Chapter 87 by the manufacturer of the vehicles Held that - Appellant cannot claim and seek to change the classification from Chapter 87 to Chapter 84 based on the Tribunal decision in the case of Dipco Metal Fabricators Pvt. Ltd. 2006 (1) TMI 313 - CESTAT, MUMBAI - In the said decision, the only reason given for classification of the tippers under Chapter 84 is that, similarly placed manufacturers in the Mysore Commissionerate has classified the goods under Chapter 84 and therefore, the items should be classified under Chapter 84 - Inasmuch as classification of a product cannot be decided by reference to classification elsewhere but in accordance with the description given in the tariff, the section notes, chapter notes and Rules of Interpretation Decided against the Assessee. Extension of limitation period Held that - There is a huge variation in the amount of consideration received by the appellant as declared in the ST-3 returns and as certified by the recipient themselves. While the figures of actual receipt are Rs. 36,80,16,556/- vis- -vis Rs. 23,83,30,290/- as declared in the ST-3 returns for the period 2008-09 to 2010-11 (upto June 2011) - Appellants has mis-declared the consideration received for the services rendered Extension of limitation period applicable Decided against the Assessee. Held that - Appellant is directed to make a pre-deposit of Rs. 2.8 crores within a period of eight weeks which is approximately the amount of ineligible credit availed by the appellant.

Summary

Issues:
1. Incorrect availment of CENVAT credit
2. Classification of service under "Site Formation and Clearance, Earth Moving and Demolition" vs. "Cargo Handling Service"
3. Time-barred demands and pre-deposit requirement

Issue 1: Incorrect availment of CENVAT credit

The appellant, M/s. ANE Industries Pvt. Ltd., was investigated for not discharging service tax liability and wrong availment of CENVAT credit. The investigation revealed discrepancies in the appellant's filings and payments. The appellant claimed credit on tippers under Chapter 87, which was deemed ineligible as Chapter 87 was excluded from capital goods credit during the relevant period. The Tribunal noted a previous decision that upheld this exclusion and emphasized that classification must align with tariff descriptions, section notes, and Rules of Interpretation. As the appellant misused CENVAT credit, the Tribunal found them ineligible for such credit on goods classified under Chapter 87, prohibiting the use of this credit for service tax payment.

Issue 2: Classification of service

The appellant contested the classification of their service under "Site Formation and Clearance, Earth Moving and Demolition" and argued for classification as "Cargo Handling Service." However, this argument was not raised during the adjudication process. The Tribunal clarified that overburden and waste removal did not qualify as cargo handling, which typically refers to goods transported by ships or vessels. The Revenue supported the original classification based on CBEC circulars. The Tribunal found the appellant's alternate classification unsubstantiated and upheld the initial classification under "Site Formation and Clearance, Earth Moving and Demolition" service.

Issue 3: Time-barred demands and pre-deposit requirement

The appellant contended that a significant portion of the demands was time-barred, emphasizing a cash payment of Rs. 1.3 crore as sufficient. However, they offered an additional deposit of Rs. 35 lakhs. The Revenue argued that the extended period was justified due to fraudulent CENVAT credit availment and non-filing of statutory returns. The Tribunal observed discrepancies in the amounts declared by the appellant, indicating misrepresentation. Considering the lack of evidence for financial hardship, the Tribunal ruled in favor of the Revenue. The appellant was directed to make a pre-deposit of Rs. 2.8 crores within eight weeks, representing the ineligible credit amount. Compliance was required by a specified date, failing which the appeal would be dismissed without further notice.

This detailed analysis of the judgment highlights the issues of incorrect CENVAT credit availment, service classification, time-barred demands, and the pre-deposit requirement, providing a comprehensive overview of the legal proceedings and decisions made by the Tribunal.