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SERVICE TAX SECTION
2018-TIOL-37-SC-ST CC & CE Vs Nagpur Municipal Corporation
ST – CESTAT had held that the very fact that amount is collected by virtue of an agreement between the two parties shows that they are not in the nature of tax, but are in the nature of income other than tax; that if the amount collected for the activities undertaken in these agreements were tax then no such agreement would have been needed; that Revenue generated by collecting license fee from private property for permitting advertisement on the private properties is not exigible to service tax – Revenue appeal to Supreme Court. Held: Delay condoned, Appeal admitted and tagged with Civil Appeal no. 695/2012: Supreme Court [para 2, 3] - Appeal admitted: SUPREME COURT OF INDIA
2018-TIOL-178-HC-DEL-ST + Story
Bharat Hotels Ltd Vs CCE
ST - Invocation of the extended limitation period under the proviso to Section 73(1) does not refer to a scenario where there is a mere omission or mere failure to pay duty or take out a license without the presence of such intention to evade tax - Revenue has not been able to prove an intention on the part of the appellant to evade tax by suppression of material facts - In fact, it is clear that the appellant did not have any such intention and was acting under bona fide beliefs - For these reasons, it is held that the revenue cannot invoke the proviso to Section 73(1) of the Finance Act to extend the limitation period for issuing of SCN - SCN with respect to short-payment of service tax for Mandap Keeper Service for the years 2004-2006 is barred by limitation - The SCN with respect to short-payment of service tax for Management, Maintenance and Repair Services for the years 2005-2007 is also barred by limitation - The SCN for the year 2007-2008 is, however, not barred by the limitation period of one year and the assessee is liable to pay service tax on the same - Appeal allowed in above terms: High Court [para 20, 27, 28, 29, 32]
Penalty - Section 77, 78, 80 of Finance Act, 1994 - Conduct of the appellant of prompt payment of service tax during the enquiry and after gaining knowledge about its liability to pay service tax, is sufficient reason to believe that the assessee did not have an intention to evade the payment of service tax - Therefore, no penalty can be imposed on the appellant: High Court [para 31] - Appeal partly allowed: DELHI HIGH COURT
2018-TIOL-370-CESTAT-MUM
CCE Vs Sharda Industries
ST - Issue is regarding taxability of the amount received by the respondent from various sugar factories for allegedly rendering the services of manpower supply and recruitment agency services –Commissioner(A) dropping demand, hence Revenue before CESTAT.
Held: Respondent was awarded specific jobs and the consideration paid for such specific jobs was based upon per piece and not on salary basis to the employees/labour utilized for such activity -no reason to interfere with the order passed by the first appellate authority relying upon various decisions on similar issues – order is correct and legal and does not suffer from any legal infirmity - Revenue appeal dismissed: CESTAT [para 6, 7] - Appeal dismissed : MUMBAI CESTAT
2018-TIOL-369-CESTAT-MUM
Yohan Poonawalla Vs CCE
ST - Renting of Immovable Property Service - Appellant had purchased certain property - At the time of purchase of property, the same was given by the seller to some third party on rental basis and rent agreement was with seller -Appellant received an amount from the seller as compensation for the period for which the property was rented by the seller to the third party, after the same was purchased by the appellant - It is the case of the appellant that what was received is compensation and not rent and hence not taxable under Finance Act, 1994 - Appeal before CESTAT against confirmation of service tax demand and imposition of penalty.
Held: The said amount received by the appellant is clearly in respect of renting of immovable property - Though there was no agreement between the seller and appellant, still in the current circumstances, it is seen that the appellant had allowed the seller to use premises for further renting, for a consideration - appellant have also claimed the same service cannot be taxed again, as the seller would have already paid on the said amount, however, there is no evidence to substantiate this claim - no merit in appeal, hence dismissed: CESTAT [para 4] - Appeal dismissed : MUMBAI CESTAT
CENTRAL EXCISE SECTION
CX – Valuation – Section 4 of the CEA, 1944 – cum-duty benefit – High Court held that since the finding recorded by the tribunal on the issue of grant of cum-duty benefit to the respondent-assessee does not give rise to any substantial question of law, the appeal was dismissed – Revenue appeal before Supreme Court. Held: In the matter of SLP Diary No. 9450/2017, Delay condoned and leave granted & in respect of SLP Diary No. 42125/2017, appeals dismissed on ground of delay: Supreme Court - Leave granted/Appeal dismissed: SUPREME COURT OF INDIA
2018-TIOL-374-CESTAT-DEL
Guljag Industries Ltd Vs CCE & ST
CX - the assessee-company manufactures Sulphuric Acid & Oleum, amongst other things - The assessee also availed Cenvat credit on inputs & capital goods used and on service tax paid - The assessee would burn Sulphur to generate steam, which was used in the manufacture process - Excess steam generated would be used to generate electricity, which would be captively consumed in the factory - Some part of such electricity would be wheeled out for a price - The Revenue alleged that credit could not be availed on the inputs used for generation of steam, the electricity generated using such steam, was not captively consumed in entirety - Hence availment of credit was denied on credit availed on input goods & services used to generate electricity wheeled out - Extended limitation was invoked to impose penalties -
Held - The assessee was not entitled to avail credit on such inputs used in generating electricity which was wheeled out - The assessee could otherwise have reversed proportionate credit - However, this aspect was not considered in the order in dispute - Hence no opinion on applicability of Rule 6(3) of CCR, for payment of amount for electricity wheeled out - However, during period of dispute, Rule 6(3) was in contention, with no clarity on manufacture of both dutiable & final product - Thereby, no mala fide is attributable to justify invoking extended limitation - Consequently, penalty set aside: CESTAT (Para 2,6) - Appeal partly allowed : DELHI CESTAT
2018-TIOL-373-CESTAT-ALL
Wave Industries Pvt Ltd Vs CCE & ST
CX - Dispute relates to availment of Cenvat credit on service tax paid by one M/s Global Weighing Technologies, on the ground that the same have been availed on basis of photocopies which are not having full details - Fact of payment of service tax by service provider stands verified by Jurisdictional Central Excise Authorities and as such denial of the same on technical ground that it was only the photocopy invoices which was produced, cannot be appreciated - If assessee can proof by production of parallel evidences that service tax stands deposited by service provider and they have received and utilized the said services, substantial benefit should not be denied on Technical Procedural Violation - As such, this part of order set aside and matter remanded to Original Adjudicating Authority for verification of subsequent details filed and produced by assessee with invoices issued by M/s Global Weighing Technologies -
Further, a part of demand to the tune of Rs.8,845.00/- stands confirmed in respect of 90.40 Quintals of sugar lost during reprocessing of 904 Quintals of sugar on the ground that assessee did not apply for remission of the same - Tribunal in case of M/s Kisan Sahkari Chini Mills Ltd. have held that the loss of sugar during processing of same or during reprocessing cannot be considered as having being clandestinely removed without payment of duty - Inasmuch as in present case Revenue has not produced any evidence that said processing loss was not actual and assessee had removed such sugar from their factory without payment of duty, no reason found to uphold the said confirmation of demand: CESTAT - Appeal partly allowed : ALLAHABAD CESTAT
2018-TIOL-372-CESTAT-MUM
Bharat Bijlee Ltd Vs CCE
CX – CENVAT credit availed by appellant assessee between April 2007 to December 2012 on 'gardening service', 'rent-a-cab service' and 'maintenance service' denied by lower authorities for the period post 01.04.2011 when rule 2(l) of CCR, 2004 was amended – appeal to CESTAT. Held: In the absence of evidence of personal consumption, availment of credit of tax paid on these services is admissible in view of the decisions in Thiru Arooran Sugars Ltd. - 2013-TIOL-1270-CESTAT-MAD , Reliance Industries Ltd. - 2016-TIOL-1654-CESTAT-MUM and Interface Microsystems - 2016-TIOL-34-CESTAT-DEL – order lacks merit, hence set aside and appeal is allowed: CESTAT [para 4] - Appeal allowed : MUMBAI CESTAT
2018-TIOL-371-CESTAT-MUM
Sai Wardha Power Ltd Vs CCE & C
CX – Commissioner (Appeals) denied of refund of tax on inputs procured for generation of electricity by the appellant, a unit in a Special Economic Zone – In view of the Larger Bench decision in Sai Wardha Power Ltd - 2015-TIOL-2823-CESTAT-MUM-LB , the jurisdictional appellate authority is the Government of India under the proviso to section 35B(1) of Central Excise Act, 1944 - Appeal is, therefore, dismissed with liberty for approaching the competent authority for disposing of their grievance against the impugned order: CESTAT [para 3, 4] - Appeal dismissed : MUMBAI CESTAT
CUSTOMS SECTION
2018-TIOL-181-HC-P&H-CUS
Om Refoils Ltd Vs UoI
Cus - Interest on delayed refund - The only question is the period for which petitioner is entitled to interest on the amount of refund - Petitioner submits that interest is liable to be paid from expiry of 90 days from the date of application under Section 27(1), which in this case is 23.07.2007, is well founded - A plain reading of Section 27A of Customs Act, 1962 supports his submission that the word "applications" throughout Section 27A refers to the application for refund under Section 27(1) - There is no other application contemplated therein - Section 27A then provides for the payment of interest from the date immediately after expiry of three months from the date of receipt of "such application" - The words "such application" refer to the application under Section 27(1) - This view is supported by judgment of Supreme Court in Ranbaxy Laboratories Ltd. 2011-TIOL-105-SC-CX - In that case Sections 11B and 11BB of CEA, 1944, fell for consideration - The provisions of Sections 11B and 11 BB of CEA, 1944 correspond to Section 27(1) and 27A respectively insofar as they are relevant to this case - Even assuming that petitioner furnished the evidence with respect to issue of unjust enrichment later it would make no difference as Section 27A mandates the payment of interest from the date of the application - The revenue in any case does not suffer any loss as it has the benefit of the use of the money, in fact, even prior to the date of filing of application for refund under Section 27(1) - The petitioner shall be paid interest from 23.10.2007 i.e. 90 days after the date of the application under Section 27(1) viz. 23.07.2007 till payment: HC - Petition allowed: PUNJAB AND HARYANA HIGH COURT
2018-TIOL-375-CESTAT-DEL
C And C Product Vs CC
Cus - The assessee imported 60 numbers of electrical tricycle without battery in CKD condition along with spare parts - The assessing authority held that said goods cannot be allowed to be cleared as importation is in violation of Import Export Policy applicable to relevant time - More specifically, it is held that new vehicle imported is not meeting the requirement of Centre Motor Vehicle Rules (CMVR), 1989 - Original authority ordered confiscation of imported goods under section 111(d) and (m) of Customs Act, 1962 and imposed penalty of Rs. 5 lakh on assessee under section 112 (a) of Customs Act, 1962 - View of assessee is that present products will be assembled in India to make a vehicle - Such narrow view of issue will not lead to proper appreciation of licensing condition - Admittedly, goods imported are motor vehicle brought in CKD condition for the ease of import and transport - Necessarily, these items are to be used as motor vehicle in India and are governed by Motor Vehicle Rules - When assessee intended to import 'motor vehicle' requirement of Motor Vehicle Rules are to be complied - The Policy stipulations clearly make out that various conditions including Type Approval Certificate by competent authority is a mandatory requirement for any vehicle imported into India - Present vehicle (in CKD condition) was imported having a electric capacity of more than 250 watt which as per mandatory requirement is to be registered with Motor Vehicle Authority - Considering these stipulations of Policy and conditions of CMVR, imported goods are in violation of Import Policy Notes applicable during relevant time - Penalty reduced to Rs.2,00,000/- - Accordingly, no reason found to interfere with impugned order: CESTAT - Appeal partly Rejected : DELHI CESTAT |
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