9911796707
TMI Blog2021 (2) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... received by them by way of suppressing the value of services willfully with intent to evade payment of Service Tax. It was propos-ed to demand and recover the service tax leviable on the taxable amounts received by the appellants in lieu o! providing taxable services, and Section 73 of the PA. 1994 reed with Section 142(8}(a) & Section 174 of the Central Goods & Service Tax Act, 2017 (in short CGST, 201%) along with interest under Section 75 of the FA, 1994 read with Section 142(8)(a} & Section 174 of the CGST, 2017, Penalties under Section 76, 77 & 78 of the FA, 1994 read with Section 142(8)(a) & Section 174 of the CGST, 2017 were also proposed, 2. During the course of Audit of the financial records of the appellants, it was observed that, the appellant were engaged in providing taxable services by way of designing and Preparing dies, tools and molds {in short tooling kit) based on the orders/ specifications of their overseas clients and once the tooling kits were approved by the overseas buyers the same were reserved for them for use of repetitive Service in relation to subsequent orders for the manufacture p',desireg forgings. It suggested that the tooling kits as designed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 94 and has proceeded to confirm the demand. f. The impugned order has travelled beyond SCN to demand service tax on declared services, ignoring the fact that the tax on the activity in question under the category of 'design services' as defined under sub-clause (zzzzd) of clause(105) of Section 65 of PA' 1994 was not applicable from 01.07.2012. g. The activity undertaken by the appellant amounts to manufacture and therefore no service tax is payable. I the impugned order it is stated that the activities of the appellant do not fall under category of manufacture as per definition given in the Oxford dictionary and hence the benefit under Section 66D(f) of FA'1994 i.e. Negative List which deals with "any process amounting to manufacture or production of goods" is not allowed. It was also stated by the LD adjudicator that since the activity of the appellant falls under the category of "Declared Services" under 66E(d) of the FA'1994, therefore their claim was not valid and unsustainable. Section 66D of FA'1994 lays down the negative list of services. The negative list provides a list of services on which no service tax shall be levied. During the relevant period, cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the place of provision of service shall generally be location of the recipient of service which is outside India in this case. The appellant is satisfring all the conditions for the so called service etc qualify as export of service and consequently, the activity of design, development and manufacture of forge will qualify as an export of service and will not be leviable to service tax. l. In terms of Section 67(2) of FA'1994, value received by the appellant must be treated as tax cum and tax component must be deducted while determining the value for the purpose of payment of service tax. m. Extended period of limitation cannot be invoked in the present case as there is either no intent to evade payment of or no suppression of facts. n. No penalty is imposable in the instant case as there is no contravention of any provisions of law. For this the they have relied upon some judicial pronouncements. 6. Virtual Personal hearing was held through Webex App on 12.01.2021 at 01.20 PM during which Sri Akash Agrawal, Consultant and Sri Pankaj Dubey, Authorised Representative appeared on behalf of the appellant and stated that the matter is decided by Hon'ble Tribunal in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing supplied by the customers have been utilized by way of design and preparation of the moulds within the factory. It is evident that the moulds are, in fact, prepared within the factory and the product came into existence in the factory and is liable to payment of Excise Duty if the same is cleared out of the factory. We are convinced that the activity undertaken by the appellant is nothing but the manufacture of moulds and hence levy of Service Tax on such amount under the category of design service under Section 65(105)(zzzzd) of the Finance Act, 1994 is not Justified." 11. A similar view was taken by the Hon'ble Tribunal in the case of M/S Metzeler Automotive Profiles India Put. Ltd. Vs CCE Ghaziabad as reported in 2005{187)DLT244 (Tri-Del). Wherein, the amount received on account of design and development of tooling has been held to be not chargeable to service tax. The relevant portion of the said judgement is as under- "4. We find that as per the provision of the Finance Act, 1994, the consulting engineer means any professionally qualified engineer or engineering firm who either directly or indirectly, renders any advice, consultancy or technical assistance in any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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