9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (2) TMI 111 - AT - Service TaxCENVAT Credit - Providing Job work services - Business Auxiliary Service - benefit of N/N. 8/2005-ST - Manufactured goods liable to duty of excise - HELD THAT - The notification does not prescribe any condition of submission of proof of payment of excise duty by the principal manufacturer. The only condition is prescribed that on the final products manufactured by the client of the job worker, the excise duty is payable. Once the appellant have received the goods under Annexure-II Challans indicating rule 4(5)(a) of Cenvat Credit Rules, 2004. It is sufficient to establish that the final product of the principal manufacturer is chargeable to excise duty. If at all the adjudicating authority is not satisfied with this evidence, it is up to him to cross verify with the concerned Central Excise Jurisdiction offices of the principal manufacturers that are paying excise duty. Therefore the finding in this regard given by the adjudicating authority is absolutely incorrect and not acceptable. Time Limitation - HELD THAT - In the present case the appellant admittedly received the raw material under the cover of Annexure-II Challans, which also indicates the supply of raw material in terms of Rule 4(5)(a) of Cenvat Credit Rules, 2004. All the transactions were duly recorded by the principal manufacturer as well as the appellant. Therefore, the demand for the extended period is not sustainable on the ground of time bar also. Since the adjudicating authority has not carried out any verification as regard payment of excise duty by the principal manufacturer and also with respect to the fact of revenue neutrality, the matter needs to go back - appeal allowed by way of remand.
Issues:
1. Eligibility of exemption notification No. 8/2005-ST for service tax on production of goods. 2. Compliance with conditions of the exemption notification. 3. Proof of payment of excise duty by the principal manufacturer. 4. Applicability of service tax prior to 16.06.2005. 5. Limitation period for demand of service tax. 6. Revenue neutrality in case of service tax liability. Issue 1: Eligibility of Exemption Notification No. 8/2005-ST The case revolves around whether the appellant qualifies for the exemption under notification No. 8/2005-ST for the service of production of goods on behalf of the client. The appellant's activity involves powder coating metal components using their own chemicals, and the dispute arises from the source of raw materials and consumables. Issue 2: Compliance with Exemption Conditions The appellant claims that despite using their own powder coating chemicals, they are eligible for the exemption under notification No. 8/2005-ST as the major raw material, i.e., metal components, is supplied by the principal manufacturers. The appellant argues that the notification does not mandate proof of payment of duty by the principal manufacturers, and the Annexure-II Challans indicating rule 4(5)(a) of Cenvat Credit Rules, 2004 suffice as evidence of excise duty payment. Issue 3: Proof of Payment of Excise Duty The appellant contends that the Annexure-II Challans and certificates from major principal manufacturers confirm the payment of excise duty on the final products. The appellant argues that the adjudicating authority's requirement for additional proof of payment of duty is unwarranted as per the notification's conditions. Issue 4: Applicability of Service Tax Prior to 16.06.2005 The appellant asserts that service tax liability is not applicable before 16.06.2005 due to an amendment in the entry under Business Auxiliary Service. The appellant relies on precedent judgments to support this argument. Issue 5: Limitation Period for Demand The appellant argues that the demand for the period 10.09.2004 to 31.3.2008 is time-barred as they received raw materials under Annexure-II Challans, believing they were not liable for service tax under the exemption notification. The appellant claims there was no suppression of facts or intention to evade service tax. Issue 6: Revenue Neutrality The appellant contends that even if service tax is payable, it is cenvatable to the principal manufacturer, making the entire exercise revenue-neutral. The appellant cites a tribunal judgment to support this argument. The Tribunal found that the appellant's activity qualifies as job work, and the use of their own consumables does not disqualify them from the exemption under notification No. 8/2005-ST. The Tribunal emphasized that the evidence provided through Annexure-II Challans is sufficient to establish excise duty payment by the principal manufacturers. The matter was remanded to the adjudicating authority for a fresh order, emphasizing the need to verify the revenue neutrality aspect and the payment of excise duty by the principal manufacturer.
|
