2018-TIOL-NEWS-063, Dated: Saturday, March 17, 2018

ST - Assessee had issued separate invoices for professional fee as well as reimbursable cost, but paid ST only on professional fee - Case of revenue is that ST is payable on gross amount charged by service provider, including expenses incurred by assessee and subsequently reimbursed by service receiver – In appeal, CESTAT held that considering the nature of service provided by assessee, all such expenditure would go towards provision of event management services by assessee; that such amounts are to be considered as part of gross amount charged by assessee; that by issuing separate invoices for professional fee as well as reimbursable cost, assessee had attempted to avoid payment of ST; that since the CA certificate submitted by assessee indicating actual amount reimbursed by clients was not considered, matter was remanded for the limited purpose of recomputing the demand – appeal by assessee to Supreme Court. Held: Delay condoned and further proceedings stayed – Notice issued, returnable in six weeks: Supreme Court [para 3] - Stay granted: SUPREME COURT OF INDIA

ST - Assessee engaged in construction activities - Certain inquiries were conducted against them with reference to their service tax liability under category of "construction of complex service" and proceedings were initiated against them to demand and recover service tax under said category - Admittedly, required clarification is not available in impugned order - Certain inquiries have been made regarding availability of common facilities to apply the tax entry to activities carried out by assessee - Assessee constructed individual houses of less than 12 nos. and also G + 3 buildings, having multiple units, in large numbers - They have constructed housing units in such different multi-story buildings numbering 96, 48, etc - It is apparent that such complexes would be having common facilities - However, this requires categorical finding upon perusal of approved layout by the competent authority as well as the blue print of layout.

Regarding service tax liability confirmed on construction of road as well as construction of drainage system, water supply, these part of residential complex is required in order to hold the assessee liable to service tax - If these activities are independent of any residential complex or constructed in already existed residential complex, the same will not be categorized under "construction of complex service" - These aspects require factual finding by Original Authority.

Regarding limitation and imposition of penalties, in case of construction activities, there has been a substantial litigation on applicability of various tax entries - In case of composite works contract, the position got clarified only after the decision of Supreme Court in case of Larsen & Toubro Ltd. 2015-TIOL-187-SC-ST - Case against assessee has to be restricted to normal period and there can be no penalty for such tax liability: CESTAT - Matter remanded: DELHI CESTAT

ST - After introduction of levy Service Tax on GTA service through reverse charge mechanism, assessee have deposited the service tax for period Jaunary 2005 to August 2005 - However, due to financial crunch, they could not pay the service tax for period September 2005 to March 2008 regularly, but paid the said amount before August, 2009 that is, before issuance of SCN - Out of the total liability of Rs.28,49,579/- for period January 2005 to March 2008, they have deposited Rs.14,06,442/- during the said period, and the remaining amount was also paid with interest later - Further, adjudicating authority had imposed penalties both under Sections 76 and 78 of Finance Act, 1994 - Issue is covered by judgment of Gujarat High Court in Raval Trading Company's case 2016-TIOL-112-HC-AHM-ST and accordingly penalty imposed under Section 76 of FA, 1994 is set aside - Also, assessee is entitled to discharge 25% of penalty imposed under Section 78 of FA, 1994 subject to fulfillment of condition of said provision: CESTAT - Appeal partly allowed: AHMEDABAD CESTAT

2018-TIOL-89-SC-CX

Sampark Industries Ltd Vs CCE

CX - Shortage of some quantity of finished goods was found whereas another variety of finished goods were found in excess - SCN was issued proposing confiscation of goods and imposition of penalty – lower authorities and CESTAT confirmed the allegations and, therefore, appeal was filed before High Court when, while rejecting appeal, it was held that since SCN pertains to confiscation and there is no demand made u/s 11A(1) of the CEA, deposit of duty prior to issue of SCN had no effect on adjudication proceedings done and completed u/s 33A of the CEA, 1944; that s. 11A(2B) does not apply - appeal to Supreme Court. Held: Delay in filing appeal condoned and notice issued limited to penalty: Supreme Court [para 1, 3] - Notice issued: SUPREME COURT OF INDIA

2018-TIOL-850-CESTAT-MUM

Ghatge Patil Industries Ltd Vs CCE

CX – CENVAT credit denied on account of mismatch of description of goods shown by supplier in the invoice and recorded in their statutory records – appeal to CESTAT. Held: It is an admitted fact that appellant has received MS scrap against the duty paying documents issued by the supplier - As appellant has paid duty on such goods, which has been received and used in manufacturing of finished goods, which has been cleared on payment of duty, therefore, in terms of rule 3 of CCR, the CENVAT credit cannot be denied to appellant – Further, charge of Revenue against the appellant is that they have not received the same goods as described in the invoices, therefore, they have not received the goods – However, no proceedings were initiated against the supplier for issuing invoice to avail inadmissible CENVAT Credit – since appellant has admittedly received the goods, CENVAT credit cannot be denied – impugned order set aside and appeal allowed: CESTAT [para 6, 8] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-849-CESTAT-BANG

Indian Telephone Industries Ltd Vs CCE, C & ST

CX - Issue that falls for consideration in this appeal is i) The dispute regarding computation of credit attributable to exempted goods manufactured / exempted services provided during year 2010-11; ii) Eligibility of CENVAT credit on services received for gardening and security at Guest House and Staff Quarters and construction / repairing of Guest House and Staff Quarters; and iii) Eligibility of CENVAT credit availed during year 2010-11 on input services used for exempted goods, manufactured during previous financial years 2008-09 and 2009-10, without reversing the appropriate amount equal to credit attributable to input services for exempted goods, manufactured during the financial years 2008-09 & 2009-10 - As regards to eligibility to CENVAT credit on services received for gardening, security and construction/repairing at Guest House and staff quarters, the law is well settled on this issue - Accordingly to that extent, findings of adjudicating authority in denying CENVAT credit availed of service tax paid on these services which are rendered at staff quarters and guest house are ineligible is correct and it is held that impugned order to that extent is correct and does not require any interference.

As regards to issue No.i and iii, said quantification of reversal of CENVAT credit attributable to common input services for manufacturing exempted goods and providing exempted services needs to be reworked out considering the explanation to Rule 6(3A) of CCR, 2004 - Same can be followed as guidance, by adjudicating authority to arrive at the quantum of the reversal of CENVAT credit on the common input services - To that extent for a limited question of quantification of the amount, matter is remitted back to the lower authorities - As regards to interest liability, it does arise and assessee is required to discharge interest on the amounts upheld as payable of course on requantified amount as directed - As regards to penalty, since the issue is of interpretational one, penalty is not warranted: CESTAT - Appeal partly allowed: BANGALORE CESTAT

2018-TIOL-848-CESTAT-BANG

Felsomat India Pvt Ltd Vs CCE & ST

CX - Assessee is holder of Central Excise Registration and manufacturer of Basic Gantry & others - They had filed a claim for refund on the ground that they had mistakenly debited the duty on CT-3 clearance - Same was rejected by lower aothority - Assessee has paid duty erroneously while filing the return with regard to invoice No. 44/2011 which he did not charge - Assessee has produced all the documents before original authority but same has not been properly considered by original authority - In view of this, case needs to be remanded back to original authority with the direction that original authority will examine whether the assessee has submitted only 10 invoices during that month and if so, the adjudicating authority should verify as to whether there are any other clearances besides these invoices or not - It is a fact that through invoice No. 44/2011 supplies were made to EOU which is also confirmed by re-warehousing certificates produced but assessee wrongly paid the duty which he was not required to pay - With these directions, original authority will verify all the documents as has been submitted by assessee in support of his claim - Therefore, matter remanded: CESTAT - Matter remanded: BANGALORE CESTAT

CUSTOMS SECTION

2018-TIOL-851-CESTAT-MAD

Bestways International Company Vs CC

Cus - Assessee filed Bill of Entry for import of goods 'parts of assembled machineries' classifying the same under CTH 84314900 and declared the value - The goods were declared to be of Chinese origin and supplied by M/s.Century Oriental Equipments and Machineries, Singapore - On scrutiny of Bill of Entry, department was of the view that declared value is very low - The Tribunal vide Final Order stated in assessee's own case had occasion to analyse a similar issue and has held that enhancement done on basis of NIDB data is not sustainable - Out of 23 items imported, in some items, declared value has been accepted by department - In respect of some other items, enhancement is made merely on the basis of NIDB data and therefore requires to be set aside - In respect of items in S.Nos.1,12 and 21, enhancement is not on the basis of NIDB data or contemporaneous imports of identical goods, but the value is enhanced on the basis of other models' descriptions which cannot be taken as basis for enhancement - Such enhancement is set aside - In respect of Item No.22, enhancement is based on enhanced value of Bill of Entry which was in dispute in assessee's own case - The enhancement having been set aside by this Bench vide Final Order, enhancement in respect of Item No.22 also set aside.

In respect of Items in S.Nos.8,14,17, enhancement is made on the contemporaneous imports - But however, the adjudicating authority has taken the highest value on such contemporaneous imports, whereas the law prescribes to adopt the lowest - Thus following the decision in assessees own case, enhancement requires to be set aside and the matter has to be remanded to the adjudicating authority to re-determine the value on the basis of lowest value of the contemporaneous imports: CESTAT - Appeal partly allowed: CHENNAI CESTAT