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2018 (11) TMI 1459 - AT - Service TaxLaying of pipelines for transportation of petroleum products for various petroleum companies - benefit of N/N. 15/2004-ST dt. 10.09.2004 and N/N. 01/2006-ST dt. 01.03.2006 - It was also alleged that appellants had taken credit of duty on capital goods and other inputs and input services during the year 2006-07 - Scope of SCN. Held that - The issue whether in cases of abatement has been settled in their favour in the case of Bharat Heavy Electricals Ltd. 2012 (4) TMI 197 - CESTAT, MUMBAI , wherein it has been held that the impugned Notification does not stipulate a condition where non-availment of CENVAT Credit is to be satisfied uniformly in all cases. Scope of SCN - Held that - The Show Cause Notice dated 06.04.2009 has been issued on the proposition that the assessee cannot avail the simultaneous benefit of Credit of duty paid on inputs and capital goods under the CENVAT Credit Rules, 2004 as also the exemption under Notification No. 15/2004-ST dated 10.09.2004 and Notification No. 01/2006-ST dated 01.03.2006. This is specifically indicated in para 3.3 of the Show Cause Notice. However, the discussions leading to the conclusions in the impugned Order take a totally different route - The adjudicating authority proceeds on this tangent and holds that the appellant have not proved with any documentary evidence that they have not availed or taken the CENVAT Credit on the inputs/capital goods/input service in such cases for which they availed abatement - the impugned Order has travelled beyond the scope of the Show Cause Notice. Demand of tax liability related to Credit taken in respect of Commercial or Industrial Construction Service‛ - Held that - This Bench of CESTAT in the case of M/s/ Real Value Promoters Pvt. Ltd. & Ors. Vs. Commissioner of G.S.T. & Central Excise, Chennai & Ors. 2018 (9) TMI 1149 - CESTAT CHENNAI , even for the period post 01.06.2007, the demand relating to indivisible Works Contract will necessarily have to be made only under the category of Works Contract Service, which is not the case here. Appeal allowed in toto.
Issues:
1. Availability of exemption under Notification Nos. 15/2004-ST and 01/2006-ST when CENVAT Credit is taken. 2. Interpretation of conditions for non-availment of CENVAT Credit in abatement cases. 3. Taxability of indivisible works contract before 01.06.2007. 4. Scope of Show Cause Notice and documentary evidence requirement. 5. Demand related to Commercial or Industrial Construction Service and Works Contract Service. Analysis: Issue 1: Availability of exemption under Notification Nos. 15/2004-ST and 01/2006-ST when CENVAT Credit is taken: The Department contended that since the appellants had taken CENVAT Credit, the exemption under the mentioned Notifications was not available. A Show Cause Notice was issued proposing a demand of differential service tax amount. The adjudicating authority confirmed the demand in the impugned Order. The appellant argued that the simultaneous availment of SSI exemption and CENVAT Credit is permissible, citing relevant case laws. The Tribunal found merit in the appellant's contention and held that the impugned Order had traveled beyond the scope of the Show Cause Notice. Issue 2: Interpretation of conditions for non-availment of CENVAT Credit in abatement cases: The Tribunal noted that the issue of non-availment of CENVAT Credit in cases of abatement had been settled in favor of the appellant in previous judgments. The adjudicating authority's conclusions deviated from the Show Cause Notice, and the Tribunal agreed with the appellant's argument that the Order had exceeded the Notice's scope. The requirement of non-availment of CENVAT Credit was found to be service-specific. Issue 3: Taxability of indivisible works contract before 01.06.2007: The Tribunal referred to a Supreme Court decision stating that indivisible works contracts were not taxable before 01.06.2007. This was crucial in determining the tax liability related to the works done by the appellant, especially in the context of the demand raised by the Department. Issue 4: Scope of Show Cause Notice and documentary evidence requirement: The Tribunal highlighted that the Show Cause Notice and the impugned Order took different routes in their discussions. The Order required the appellant to prove non-availment of CENVAT Credit with documentary evidence, a requirement not explicitly mentioned in the Notice. The Tribunal agreed with the appellant that the Order had gone beyond the scope of the Notice. Issue 5: Demand related to Commercial or Industrial Construction Service and Works Contract Service: The Tribunal clarified that even for the period post 01.06.2007, the demand related to indivisible works contracts should be made under the category of Works Contract Service. The Tribunal concluded that the impugned Order could not sustain and was set aside in its entirety. In conclusion, the appeal was allowed with consequential benefits, if any, as per law.
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