SERVICE TAX SECTION

2018-TIOL-343-CESTAT-BANG

CST Vs Xora Software Systems Pvt Ltd  

ST - the assessee-company is a 100% EOU engaged in export of software development service - The assessee is registered under category of 'Business Support Service' - The assessee filed claim for refund of unutilised Cenvat credit for a particular period - Such credit was availed on input services used in services exported, as per Rule 5 of CCR, 2004 r/w Notfn. No. 5/06-CE - The Revenue partly allowed the refund w.r.t. input services of renting of immovable property, management or maintenance or repair and telecommunication services and rejected the remaining amount claimed, on grounds that it pertained to input services having no relation with the output service - Later, the Commr. (A) allowed the refund of input services like recruiting charges, Chartered Accountant and insurance w.r.t. transport of output service as input service & directed the Adjudicating Authority to quantify the refund amount - Held - the input services on which Credit was availed were related to the business of the company and so could be considered 'Input services' - Hence, O-i-A in question upheld: CESTAT (Para 1,4) - Appeal Dismissed: BANGALORE CESTAT

Verifone Technology India Pvt Ltd Vs CST

ST - Assessee is registered with ST department for providing taxable services of Information Technology Software Service (ITSS) and is also registered with STPI as a 100% EOU - The assessee filed the refund claims seeking refund of unutilized CENVAT credit paid on input services used for providing output services exported during impugned period under Rule 5 of CCR, 2004 read with Notfn 27/2012-CE - In all cases, refund claims were rejected in toto for the reasons that export proceeds were realized in Indian rupees and not in convertible foreign exchange - Issue has been considered by various Benches of Tribunal and it has been consistently held that merely because payment is received in Indian rupee, it cannot be said that payment against export has not been received in "convertible foreign exchange" as provided in Export of Service Rules, 2005 - Since the Indian rupee is received from recipient of services through their foreign bank, Bank of America, USA, receipt of Indian rupee shall be treated as "convertible foreign exchange" - Further, it is also clearly certified in FIRC issued by Bank of America, USA that remittances are in "convertible foreign exchange" - Further, an identical issue has been decided by Tribunal in case of M/s. Support.com India Pvt. Ltd. 2017-TIOL-3182-CESTAT-BANG - It is clear that payment received in Indian rupee for which FIRC issued by Standard Chartered Bank and payment is routed through foreign bank, shall fulfill the condition of payment and therefore, denial of refund on this ground is not sustainable: CESTAT - Appeals allowed: BANGALORE CESTAT

2018-TIOL-341-CESTAT-MAD

Ambika Cotton Mills Ltd Vs CC  

Cus - Assessee obtained Advance License from Jt. DGFT for import of cotton yarn - As per the terms of said License, import was to be completed within 12 months - So also export obligation had to be completed within 18 months from the date of license that is on or before 20.4.2001 - Assessee had utilized the license for value of Rs.24,19,70,855/- - Even though they fulfilled export obligation to the tune of Rs.32.58 crores upto 20.4.2001, the export obligation fell short quantitatively - They sought extension of time for fulfilling the export obligation, however, no extension was granted - Against this, they approached the High Court of Madras by way of writ petition for extension of time but the same was dismissed - In the meantime, departmental officers visited Unit II (EOU) of assessee for verification of documents - It emerged that assessee had declared value of export made through Unit- I as Rs.3.76 crores and had categorized Unit I as Status Holder - It was further noticed that raw materials used in manufacture of final products had been imported duty free - These facts clearly indicate that assessee had exported substantially fulfilling the export obligation and in fact had been seeking extension of time to complete the quantitative obligation also - It is not the case of department that they were involved in any diversion of imported raw material clandestinely for purposes other than that intended - No doubt, discrepancies have been found concerning manner of clearance in name of Unit I, these facts cannot also be disputed that department was fully aware of these and particularly when they visited the factory on 11.10.2003 - It is also not in dispute that assessee immediately after the visit of officers have paid up the amount of Rs.10,69,643/- on 20.10.2003 - There is no case for invoking extended period of limitation - SCN, therefore should have been issued within a period of six months provided for normal period of limitation under section 28 of Customs Act, 1962 as was in force at the relevant time - However, this was not done and SCN was issued only after six months period i.e. on 29.12.2004 - Without doubt, proceedings are therefore clearly hit by limitation - In arriving at the conclusion, substanance drawn from judgment of High Court of Madras in case of Lalchand Bhimraj 2013-TIOL-560-HC-MAD-CUS wherein duty was paid on 1.6.2000 and SCN was served on imported on 2.12.2000 - It was held that notice was time-barred - Impugned order is set aside: CESTAT - Appeal allowed: CHENNAI CESTAT

2018-TIOL-340-CESTAT-DEL

G And G Enterprises Vs CC

Cus - O-I-O contested in present appeal, is dated 25.06.04 - Appeal is filed on 17.02.2017 after a gap of more than 12 years and 7 months - The plea of assessee is mainly on the ground that they did not receive the impugned order and change of address indicated was not duly followed up for dispatching the letter by Revenue - This is mainly on the principle that assessee should not be deprived of an appellate remedy and to get an order on merit only on ground that there was a delay in preferring the appeal - Case of assessee is that they neither received the letter for personal hearing nor the final order - They have changed their address from Sadar Bazar to Punjabi Bagh and intimated the Department in September, 2003 itself - The Revenue did not take note of this change in address and continued to wrongly send the communications to the earlier address, which were reported to have been returned by postal authorities - Assessee pleaded that Revenue intentionally continued to dispatch the letters to Sadar Bazar address when they were aware that assessee changed the address to Punjabi Bagh - Tribunal is not fully convinced with such assertion - Tribunal could not interfere any motive or intentional act by Revenue in dispatch of statutory orders - In fact, the import, which is subject matter of dispute, happened in 1997 - Case was finally adjudicated in 2004 - Assessee did file a written reply on 28.07.2003 through their Advocate - Thereafter, personal hearing was fixed on various occasions - In fact, as already noted that even a letter was sent to the proprietor of assessee firm in his Paschim Vihar address on 11.09.2003 - For this a reply has been sent by assessee stating that they have filed a reply to SCN through their Advocate - Appeal has been filed after more than 12 years after issue of the impugned order - Tribunal is not convinced with submissions made by assessee for the reasons stated: CESTAT - Appeal dismissed: DELHI CESTAT

2018-TIOL-164-HC-DEL-PMLA

Virendra Jain Vs Enforcement Directorate

PMLA - The applicants herein were apprehended following a complaint by the Ministry of Corporate Affairs, and a pursuant direction to the Serious Fraud Investigation Office, to investigate into alleged incriminating activities of certain companies - The Trial Court dismissed the bail applications - Later, the applicants filed SLP before the Apex Court, which remanded the bail applications back to their respective courts, whilst also declaring Section 45 of the Act to be unconstitutional - Section 45 prescribed twin conditions which had to be satisfied, for granting release on bail - Armed with such directive, the applicants sought bail from the Special Judge, PMLA, who however, rejected the bail applications - Hence the present bail applications.

Held - The Apex Court in Y.S. Jagan Mohan Reddy vs. Central Bureau of Investigation held that when granting bail, the court had to keep in mind the nature of accusations, of evidence in support thereof, the severity of the punishment which conviction would entail - Other things to be kept in mind would be the character of the accused, circumstances peculiar to the accused, reasonable possibility of securing the presence of accused during trial, reasonable apprehension of the witnesses being tampered with, as well as the larger interests of the public and the State - In the present case, the applicants have been in custody for over 10 months - The evidence is primarily documentary in nature - Further, w.r.t. those documents which were collected, the trial would take place some time in the future - Moreover, the maximum sentence on conviction would be seven years imprisonment - Notably, the applicants have no criminal history, except one instance in which the SFIO had apprehended them for a similar offence - However, the applicants had been granted bail therein - Hence the applicants are eligible for bail and the same is granted, subject to furnishing of surety - The applicants cannot leave the country without seeking permission of the court and are cautioned against tampering with evidence or witnesses: High Court (Para 2,4,14,15) - Bail Application Allowed : DELHI HIGH COURT