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TMI Blog2020 (4) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.65 crores cannot sustain - Demand set aside. CENVAT Credit - input - fuels - penalty - HELD THAT:- The appellant could not establish that the goods used by the appellants were eligible to be inputs and therefore, the impugned order is upheld in so far as the same is concerned, with disallowance of cenvat credit of around ₹ 34 lakhs with penalty of ₹ 2 lakhs. Demand of interest on reversal of cenvat credit - HELD THAT:- Once the inputs are issued for use, there is no need to reverse the cenvat credit. However, the appellants have voluntarily reversed the cenvat credit and we do not interfere with such voluntary reversal. We hold that on such reversal interest is not payable - the demand of interest is set aside. Appeal allowed in part. - Service Tax Appeal No.42109 of 2013 - FINAL ORDER NO. 40345/2020 - Dated:- 30-1-2020 - HON BLE MS. SULEKHA BEEVI C.S., MEMBER (JUDICIAL) AND HON BLE MR. ANIL G. SHAKKARWAR, MEMBER(TECHNICAL) Shri Harish Bindhumadhavan, Advocate For the Appellant Ms.Sridevi T., JC (AR) For the Respondent ORDER PER : ANIL G. SHAKKARWAR The present appeal is directed against Order-in-Original No.13/2013 dt. 26.02.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruitment or Supply Service as recipient of service from foreign company, in terms of Section 66A of the Finance Act, 1994 read with Rule 2(1)(d)(iv) of Service Tax Rules, 1994. During the period from November-2010 to July-2011, the assesse have paid a sum of ₹ 16,09,39,555/- to overseas service provider and the service tax payable on the said amount under Manpower Recruitment or Supply Agency Service works out to ₹ 1,65,76,774/-. 2.3 During the course of verification of cenvat credit account, it was noticed that the assessee have taken cenvat credit as detailed below :- Sl.No. Head Amount (Rs.) 1 Capital goods 5,67,140/- 2 Inputs 1,64,70,557/- 3 Inputs (but reversed subsequently) 1,10,28,187/- The assessee have taken credit of ₹ 5,67,140/- on goods which do not fall under the category of capital goods specified in the Cenvat Credit rules, 2004 claiming as capital goods. They have utilized credit of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of allegation of supply of man power they submitted that salaries of said employees were paid by them and were merely disbursed through JDN Pacific Ltd. and no separate charge was paid by them to JDN Pacific Ltd. and therefore the employees were their own employees to whom salaries were paid by them and such transaction is not covered levy of service tax. As regards the credit availed on inputs, they contended that same were covered by definition of inputs . In respect of demand on interest of around ₹ 10 lakhs, it was stated that the goods were cleared as such and as per sub-rule (5) of Rule 3 of CCR 2004 when the inputs are removed as such and amount equal to the credit availed is debited then interest is not payable. The original authority adjudicated the said issue through impugned order in original wherein he has confirmed the demand of service tax of around ₹ 21 crores under the category of Supply of Tangible Goods Services‟. He has further confirmed the demand of around ₹ 1.60 crores under Man Power Recruitment and Supply Agency Services. Further, out of demand of around ₹ 1.64 crores, original authority confirmed the demand of around ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vessel under this charter, including foreign general municipality and/or taxes. It is the responsibility of the charterer to comply with all the regulations regarding officers and crew of the vessel as per the applicable law. Clause 7 deals with Maintenance and operations, are reads as the Lessee shall maintain the Vessel, her machinery, appurtenances and spare parts in a good state of repair, in efficient operating condition and in accordance with good maintenance practice and shall keep the Vessel with unexpired classification of its class and with other required certificates is force at all times. The Lessee shall take immediate steps to have the necessary repairs done within a reasonable time failing which the Lessor shall have the right of withdrawing the Vessel from the service of Lessee without noting any protest and without prejudice to any claim the Lessor may otherwise have on the Lessee under this Charter. Clause 9 deals with liabilities and indemnities. The Lessor shall not be responsible for loss or damage to the property of the Lessee or of its (sub)-contractors including any equipment of the Lessee or personal injury of death of the employees of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or taxes. It is the responsibility of the charterer to comply with all the regulations regarding officers and crew of the vessel as per the applicable law. Clause 12 (a) stipulates that the vessel shall be kept by the charterers at their expense against marine, war and protection and indemnity risks in such form as the owner shall in writing approve. Clause 14 talks about redelivery of the chartered vessel. On expiry of charter period, charterer shall redeliver the vessel at safe and ice-free port or place as per the approval He further submitted that in the case of International Seaport Dredging Ltd. in para23 this Tribunal had held that there was transfer of right of possession and effective control of the vessel and dredger was with the appellant and therefore the transaction was outside the purview of service tax levy. He further submitted that this Tribunal has relied on the judgment of Delhi Tribunal in the case of Petronet LNG Ltd. Vs CST New Delhi reported oin 2016 (46) STR 513 (Tri.Del.) for arriving at decision in the case of International Seaport Dredging (supra). Further, he has submitted that Hon‟ble Supreme Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and submissions made by both sides and finding in the final order of this Tribunal in the case of TPSC India Pvt. Ltd. We find that in para-3 of the said final order, this Tribunal had held that remuneration was remitted to overseas principal employer for being credited to the account of the seconded employees in the said case and held that the said transaction was not covered by service tax as man power recruitment and supply agency service‟. We note that in the present case, the appellants have issued Form-16 series to the said employees as their employer and deducted TDS from their salaries and therefore the appellants were employer and there was employer-employee relationship and therefore, we hold that the said demand of around ₹ 1.65 crores cannot sustain. We therefore set aside the same and allow the appeal to that extent. 11. The next issue involved is in respect of cenvat credit availed by the appellant on fuels. 12. Ld. counsel for the appellant has submitted that Cenvat Credit Rules have disallowed credit of duty paid on motor spirit and high speed diesel oil whereas the goods used by the appellants were different than that. He submitted that cenv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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