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December 2014

[2014] 50 taxmann.com 434 (Ahmedabad – CESTAT) Aims Industries Ltd. vs. Commissioner of Central Excise Daman

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 2 mins
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Repairs and maintenance of gas cylinders – no service tax paid on sale of valve which is separately indicated on invoice – CENVAT on such input requires reversal being ‘inputs’ cleared as such – matter remanded.

Facts:
Assessee was supplying valves in course of repair and maintenance of gas cylinders and
did not pay service tax thereon. CENVAT Credit was taken of duty paid on the said valves. Revenue included value of valves in the value of services. It was argued that, VAT was paid on supply of valves and therefore, same was not includible in value of services. Revenue contended that since credit was taken on valves, exemption under Notification No.12/2003-ST dated 20-06-2003 could not be allowed.

Held:
The Hon’ble Tribunal observed that from the invoices it is not clear whether VAT is paid on the sale of valves as claimed and therefore remanded the matter to the adjudicating authority for such verification. It was also held that even if it is accepted that while providing the services there is sale of valves the same will amount to clearing of inputs as such on which CENVAT Credit is required to be reversed at the time of clearance as per CENVAT Credit Rules 2004.

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