2018 (2) TMI 407

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..... are not denying the use of the repaired stators for repair of compressors without which such repairing process is not completed As such the stator is an inputfor rendering the output service and therefore the cost of the input is to be added to the value of the taxable service. Extended period of limitation - Penalty u/s 78 - Held that: - the dispute in the instant case regarding valuation was not .....

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..... needs to be repaired. In these circumstances, the appellant replace the stator with a different stator. The defective stator is thereafter repaired by the appellant, or on job work from outside by the process of re-winding. Since the compressor as well as stator belongs to their client M/s.Emerson Climate Technologies (India) Ltd. (M/s.ECTIL), the rewinding charges of the stator are also recovere .....

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..... e unit was earlier audited and no objection was raised and therefore, the extended period of limitation has been wrongly been invoked in their case. Ld. Counsel argued that they have no malafide intention and it is a revenue neutral exercise as their claim would be entitled to avail credit on the said compressors. 3. Ld. AR relies on the impugned order. 4. It is seen that the impugned order upho .....

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..... ivity but was an integral part of the repair of compressor and accordingly held that the rewinding charges are to be included in the taxable value and chargeable to service tax. I find that the appellants are not denying the use of the repaired stators for repair of compressors without which such repairing process is not completed As such the stator is an input for rendering the output service and .....

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..... r. In such circumstances, non-inclusion of said value was obviously with intent to evade payment of duty and thus imposition of penalty and invocation of extended period of limitation are justified. The impugned order also apart from confirming the demand and imposition of penalty under Section 78 remand the matter for re-quantification on certain issues. The said issues have not been challenged b .....

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