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TMI Blog2024 (8) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... Service, it could have utilized Cenvat credit for the purpose of paying such duty.' - thus, there are no merits in the demand made. However as the appellant has already paid the amount in cash no refund shall be admissible to the appellant because the liability to pay the service tax has not been set aside. However the demand for interest of Rs 7,97,345/- made in respect of these amounts is set aside. Availed CENVAT Credit on invoices of Authorized Service Stations for the services provided during the Warranty Period - HELD THAT:- This issue is also no longer res-integra. In case of M/S ESCORTS CONSTRUCTION EQUIPMENT LTD. VERSUS CCE, DELHI-IV [ 2023 (12) TMI 601 - CESTAT CHANDIGARH] after taking note of previous decisions on the issue Chandigarh Bench has observed ' this Tribunal in various decisions relied upon by the appellant on identical issues has consistently held that the assessee is entitled to cenvat credit of service tax paid on Repair and Maintenance during the warranty period as the same fall within the ambit of Input Service as provided in Rule 2(l) of CCR, 2004.' - thus, CESTAT has constantly been taking view in respect of admissibility of CENVAT credit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided by their Authorized Service Centres and order to recover the same along with interest at the appropriate rate as applicable from time to time from M/s LG Electronics (India) Pvt. Ltd., Plot No. 51, Udyog Vihar, Greater Noida under the provisions of Rule 14 of the Cenvat Credit Rules 2004 read with Section 11A and 11AB of the Central Excise Act, 1944. I also impose a penalty of Rs. 2,24,08,117/- under Rule 15 of the Cenvat Credit Rules, 2004 `read with Section 11AC of the Central Excise Act upon M/s LG Electronics (India) Pvt. Ltd., Plot No. 51, Udyog Vihar, Greater Noida for their above act of omission and commission (iv) l also confirm the demand of the differential amount of Service Tax amounting to Rs 2,69,25,575/- on M/s LG Electronics (India) Pvt. Ltd., Plot No. 51, Udyog Vihar Greater Noida due to wrong availment of benefit under Notification No. 19/2003-ST dated 21.08.2003 under the provisions of Section 73(2) of the Finance Act, 1994 and order to demand and recover the interest at the appropriate rate as applicable from time to time from M/s LG Electronics (India) Pvt. Ltd., Plot No. 51, Udyog Vihar Greater Noida under the provisions of Section 75 of the Act ibid. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng irregularities were observed: S No Issue Amount 1. Service Tax on GTA Services through CENVAT Account 12794087 2. Availed CENVAT Credit on invoices of Authorized Service Stations for the services provided during the Warranty Period 22408117 3. Wrongly Availed the benefit of Notification No 19/2003-ST in respect of installation services provided for imported AC 26925575 4 Not paid service tax on Design and Development Fees 42989553 5 Not paid Service Tax on Royalty paid 62537216 6 Not paid service tax on export commission 1386700 7 Not paid service tax on Advertisement and Publicity services received from foreign based service providers 21250176 8 Not paid service tax under category of Business Auxiliary Services against service charges paid for training of its personnel and other similar services to foreign service providers 4279606 Total 194571030 2.3 A show cause notice dated 30.07.2007 was issued to the appellant asking them to show cause as to why,- (i) Service Tax amounting to Rs. 17,21,62,913/- (including education cess as applicable) should not be demanded and recovered under Section 73 of the Act and Service Tax amounting to Rs. 1,27,94,087/- already paid by them should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been held in the following cases:- Carrier Air conditioning Refrigeration Ltd. [2016 (41) STR 1004 (Tri.-Del.)] Delta Electronics India Pvt. Ltd.[Appeal no. 50801 of 2020 [DB]] Leroy Somer India Pvt. Ltd. [2015 (39) S.T.R. 466 (Tri. - Del.)] o Mahindra Mahindra Ltd. [2012 (28) S.T.R. 382 (Tri. - Mumbai)] Danke Products [2009 (16) S.T.R. 576 (Tri. - Ahmd.)] Johnson Controls Hitachi Air Conditioning India Ltd. [2022-VIL-482-CESTATAHM-ST] Escorts Construction Equipment Ltd [2023-VIL-13 10-CESTAT-CHD-CE] Service provided by the appellant were in nature of work contract services which have been made taxable only from 01.06.2007. No service tax was payable prior to that date as has been held in the case of,- Larsen Toubro Ltd, [2015 (39) S.T.R 913 (SC)] Total Environment Building Systems Pvt. Ltd.[ 2022 (63) G.S.T.L. 257 (S.C.)] Praveen Electrical Works [2024 (2) TMI 504- CESTAT Banglore] Aalidhra Textool Engineers Pvt. Ltd. [2022 (12) TMI 11- Cestat Ahmedabad] Blue Star Ltd. [2019 (9) TMI- CESTAT Kolkata] Extended period of limitation could not have been invoked Penalties imposed cannot be sustained as demand itself is bad in law. 3.3 Learned authorized representative reiterates the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be prescribed at the rate specified in Section 66, and all the provisions of said Chapter shall apply to such person as if he is the person liable for paying the service tax in relation to such service. In view of such statutory provisions, Delhi High Court rejected the Revenue's appeal observing as under:- 6. In view of the specific reference to service tax and the benefit allowed to a service provider, read with the fiction created by Section 68(2) of the Finance Act, 1994, this Court is of the opinion that there is no ground to disagree with the judgment and reasoning of the Punjab and Haryana High Court in Nahar Industrial Enterprises Ltd. The appeal consequently fails and the question of law is answered in favour of the appellant and against the Revenue. 7. Learned counsel Shri R.J. Oza produced on record a Notification No. 36/2004 dated 31st December 2004, under which, in terms of subsection (2) of Section 68, various services were notified by the Central Government; one of them being specified categories of goods transport service in relation to transportation of goods by road in goods carriage where a consignor or consignee of goods is any company established by or un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6.1 Further, we find that this issue has also been considered by this Tribunal recently in the case of JCB India Ltd. cited (supra) wherein this Tribunal on identical facts has considered various decisions rendered on the issue of cenvat credit of service tax paid on repair and maintenance service during the warranty period and has also considered the definition of input service prior to 01.04.2011 and after 01.04.2011 and held as under:- 19. The issue, therefore, that arises for consideration in the present appeal is whether CENVAT credit of service tax paid by the appellant on repair and maintenance services provided by the dealers for fulfilling the warranty obligations of the appellant has been denied for good and valid reasons. 20. To examine this issue, it would be necessary to reproduce the relevant portion of the definition of input service , as defined in rule 2(l) of the Credit Rules. Rule 2(l) was substituted by Notification dated 01.03.2011 w.e.f 01.04.2011 and it is reproduced below : w.e.f 01.04.2011 2(l) input service means any service,- (i) used by a provider of output service for providing an output service; or (ii) used by the manufacturer, whether directly or i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nance services are, therefore, linked to the sale. The services are, therefore, used indirectly in relation to the manufacture of final products. 24. Further, we also find that the department has filed appeals before the Hon ble High Court where the Tribunal has given the relief to the assessee but the decisions of the Tribunal in those cases have not been stayed and hence, the ratio of the said decisions are binding on the lower authorities. 25. Further, we also find that the department has not been able to distinguish the latest two decisions of the Tribunal in the case of Johnson Controls Hitachi Air Conditioning India Ltd. and M/s Case New Holland Construction Equipment (I) Pvt. Ltd. cited (supra) involving identical issues wherein all earlier decisions of the Tribunal were considered and thereafter, the demands were dropped. 26. Further, we are of the opinion that the decisions relied upon by the Revenue are not directly on the issue and does not reflect the controversy involved in the present case. 27. In view of our discussion above, we hold that the appellant has correctly availed cenvat credit on the amount of service tax paid for the services provided by the dealers to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the services provided by the dealers to the customers on behalf of the appellant for fulfilling the warranty obligations of the appellant. 43. The order dated 25.05.2018 passed by the Commissioner (Appeals), therefore, cannot be sustained and is set aside. The appeal is, accordingly, allowed. 6.3 Further, we find that the contention of the Revenue is that the earlier decisions of the Tribunal in the appellant s own case as well as in the case of CCE, Nashik vs. Mahindra Mahindra Ltd. cited (supra), the department has filed appeal which is pending before the Hon ble High Court of Punjab and Haryana and Hon ble High Court of Bombay will not help the case of the Revenue because in both the cases only appeal has been admitted and no stay granted. 6.4 Further, we find that this Tribunal in various decisions relied upon by the appellant on identical issues has consistently held that the assessee is entitled to cenvat credit of service tax paid on Repair and Maintenance during the warranty period as the same fall within the ambit of Input Service as provided in Rule 2(l) of CCR, 2004. In view of the above we find that CESTAT has constantly been taking view in respect of admissibility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces. The Noticee was not availing Cenvat credit on inputs and capital goods used for providing erection, commissioning service It or installation iS observed that at one place the party has asserted that in the centralized accounting system for both manufacturing and service activities they were availing Cenvat credit in respect of only those inputs and capital goods which were used for manufacturing other dutiable products or for providing taxable services and, therefore as a corollary not for the exempted goods services. However at other place in the case file itself [Para 1.A.14 1.A.15 of their defence reply of the first issue], they pleaded that there cannot be one to one correlation in respect of Cenvat Credit availed U cannot be accepted that the party has not availed cenvat credit in respect of these Centralised accounting system. In view of such contradictory stand of the party it cannot be accepted that the party has not availed cenvat credit in respect of these goods or services which were used for Erection, Commissioning or Installation services provided by them. 31. I find that the legal requirement in respect of availing benefit of abatement under Notification No. 19/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification that the gross amount shall include the value of the plant, machinery, equipment, parts and any other material sold by the service provider along with the commissioning or installation service. The benefit of this notification can be availed for a contract only if the exemption under Notification No. 12/2003-ST, dated 20.06.2003 on the value of goods and materials sold is not availed for the contract. Further, with effect from 10.09.2004, the benefit under this notification shall be allowed only if no credit of duty paid on inputs or capital goods has been taken under the provisions of the CCR 34. From 10.09.2004, Notification No. 19/2003 dated 21.08.2003 exempts the taxable service provided to a customer in relation to commissioning or installation by a commissioning and installation agency, from so much of the service tax leviable thereon under section 66 of the said Act, as is in excess of the amount of service tax calculated on a value which is equivalent to thirty-three per cent. of the gross amount charged from the customer under a contract for supplying a plant, machinery or equipment and commissioning or installation of the said plant, machinery or. equipment, sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , equipment, parts and any other material sold by the commissioning and installation agency, during the course of providing erection, commissioning or installation service. 33 Provided that this notification shall not apply in cases where,- i) the CENVAT credit of duty on inputs or capital goods or the CENVAT credit of service tax on input services, used for providing such taxable service, has been taken under the provisions of the CENVAT Credit Rules, 2004; or ii) the service provider has availed the benefit under the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 12/2003- Service Tax, dated the 20th June, 2003 [G. S.R. 503 (E), dated the 20th June, 2003]. 35 It is observed that, in the first proviso to the notification No. 01/2006 dated 01.03.2006, it has been clearly mentioned that this notification shall not apply in cases where the CENVAT credit of duty on inputs or capital goods or the CENVAT credit of service tax on input services, used for providing such taxable service, has been taken under the provisions of the CENVAT Credit Rules, 2004 .I find that, with effect from 01.03 .2006, the law has been amended to limit the condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ⁃ Section 25 of Customs Act, 1962. Again, in the case of COMMISSIONER OF C. EX. CUS. INDORE Versus PARENTERAL DRUGS (!) LTD. [2009 (236) E.L.T. 625 (S.C.)] Hon'ble Supreme Court observed and held that exemption notifications to be interpreted strictly -Burden on assessee to prove that the item falls within four corners of exemption notification ⁃ Section 5A of Central Excise Act, 1944. The Apex Court in the case of BOC INDIA LTD. Versus STATE OF JHARKHAND [2009 (237) E.L.T. 7 (S.C.)] held that for purpose of claiming exemption from paymcnt of tax/special rate of tax applicable to a commodity, assessee must bring on record sufficient materials to show that it comes within the purview of notification - Bihar Finance Act, 1981. Further more, in the case of COMMISSIONER OF C. EX., NEW DELHI Versus HARI CHAND SHRI GOPAL [2010 (260) E.L.T 3*(S.C.)] it was held that person who claims exemption or concession has to establish that he is entitled to that exemption or concession. Also in the case of NOVOPAN INDIA LTD. Versus COLLECTOR OF C EX. AND CUSTOMS, HYDERABAD1994 (73) E.L.T. 769 (S.C.), it was held that interpretation of statute - Exemption being in the nature of exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lment of cenvat credit against inputs, Capital Goods and Input Services and still they are contesting the issue on the basis that they were covered under the Works Contract Service. While it is evident on a perusal of the record that they were availing the benefit under Notification No. 19/2003-ST in respect of Erection, Commissioning and Installation service. It proves that the party has suppressed the facts with intent to evade the payment of Service Tax. Thus, they rendered themselves liable for penal action under the provisions of Section 78 of the Act in view of the facts as discussed hereinabove. However, I am not inclined to impose the penalty under Section 76 of the Act. 4.6 We are not in position to agree with the above findings. In case of Larsen and Tubro [2015 (39) S.T.R 913 (SC)] Hon ble Supreme Court observed as follows: 1. This group of appeals is by both assessees and the revenue and concerns itself with whether service tax can be levied on indivisible works contracts prior to the introduction, on 1st June, 2007, of the Finance Act, 2007 which expressly makes such works contracts liable to service tax. 6. Service tax was introduced by the Finance Act, 1994 and vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, and hit by Mcdowell's case. 43. We need only state that in view of our finding that the said Finance Act lays down no charge or machinery to levy and assess service tax on indivisible composite works contracts, such argument must fail. This is also for the simple reason that there is no subterfuge in entering into composite works contracts containing elements both of transfer of property in goods as well as labour and services. 44. We have been informed by counsel for the revenue that several exemption notifications have been granted qua service tax levied by the 1994 Finance Act. We may only state that whichever judgments which are in appeal before us and have referred to and dealt with such notifications will have to be disregarded. Since the levy itself of service tax has been found to be non-existent, no question of any exemption would arise. With these observations, these appeals are disposed of. 4.7 The request made by the revenue for reconsideration of the Larsen and Tubro case has also been rejected by the Hon ble Supreme Court in case of Total Environment Building Systems Pvt. Ltd.[ 2022 (63) G.S.T.L. 257 (S.C.)]. 4.8 Thus we are of considered view that in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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