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SERVICE TAX SECTION
2018-TIOL-827-CESTAT-DEL
BCC Developers And Promoters Pvt Ltd Vs CST
ST - Assessee engaged in construction activities and entered into an agreement with M/s IOC for construction of expansion project of Panipat Refinery Township mainly consisting of residential units - In pursuance of said contract, assessee executed civil construction work for IOC - Similarly, in pursuance of a contract with Jamia Milia Islamia University, New Delhi, assessee constructed a practice venue for Common Wealth Games, 2010 - These two activities were subject matter of dispute - Assessee did not discharge any Service Tax - In fact, they had all along had a view that no Service Tax is liable to be paid - In such situation it is noted that the present proceedings regarding application of Section 73A (2) is substantially based on inference with no supporting evidence - Assessee did establish that they have not collected any amount in any manner representing Service Tax - Provisions of Section 73A has no application to the facts of the present case, accordingly, the demand in terms of Section 73A (2) will not survive - On the second issue, practice venue for Common Wealth Games cannot be considered as a commercial building - The impugned order held against the assessee only on the ground that fee/ charges are collected for admission into the stadium - Collection of fee and charges for use of stadium does not make the stadium as a commercial building - In case of B.G. Shirke Construction Technology Pvt. Ltd. 2013-TIOL-1424-CESTAT-MUM, Tribunal held that merely because some amount is charged for using the facility will not make the facility as commercial or industrial construction - Accordingly, sports facility constructed by assessee cannot be considered as a commercial construction liable to Service Tax.
As regards to interest, assessee have a strong case on merit - There is no evidence of existence of any common facilities for various independent houses which are within the approved layout available only to the said complex - In such situation, tax liability may not arise - However, having already collected and paid the tax, assessee is not disputing on merit - Since the tax liability may not stand there can be no question of interest payment on such non-existing tax liability: CESTAT - Appeal allowed: DELHI CESTAT
2018-TIOL-826-CESTAT-MAD
Srilankan Airlines Ltd Vs CST
ST - Assessee is an airline - In addition to basic fare for air tickets, additional charges are also collected under heads Fuel Surcharge (YQ Tax), Passenger Service Fee (PSF), GDS cost collected (YR), Service Tax collected (JN tax) and Other Taxes (various codes) - Department initiated proceedings against assessee on the plea that service tax liability would arise on these additional heads collected from passengers also - The controversy concerning taxability of Passenger Service Fee collected by the airlines from the passengers in their air ticket has indeed been set to rest in case laws adduced by assessee - Hence, there can be no service tax liability on quantum of 'passenger service fees' collected by assessee under this head - However, from annexures/worksheet attached to both the SCNs and the impugned order, tax liability has not been calculated item wise and only a consolidated taxable income and tax liability has been indicated - For this reason, it is not able to ascertain from record as to the exact quantum of tax liability that would accrue under head 'Passenger Service Fee' - So also, notwithstanding the averment of assessee that they have paid up tax liability in respect of "other taxes", that is not forthcoming either from SCNs or in impugned order - Accordingly, for limited purpose of ascertaining whether the tax liability that was alleged in respect of "other taxes" has also been paid up by assessee along with interest as averred, matter is being remanded back to the adjudicating authority.
Coming to the matter of penalty, there was confusion on taxability under various heads on which tax was demanded - There was indeed lack of clarity in matter - There was sufficient cause for the assessee's failure to discharge their tax liabilities - Another mitigating factor is that the assesseev have paid up entire tax liability as admitted by them along with interest, before the issue of SCNs - Imposition of penalty would be an overkill, for which reason, they are set aside: CESTAT - Appeal partly allowed: CHENNAI CESTAT
2018-TIOL-823-CESTAT-HYD
Ecil Rapiscan Ltd Vs CC, CE & ST
ST - the assessee-company paid commission to some individuals for procuring Annual Maintenance Contracts, for the maintenance of X-Ray Baggage, Cargo Inspection Systems (XBIS) and door frame X-Ray screening machines - The assessee sought to avail Cenvat credit on the same, which was denied by the Department as being ineligible - The assessee, being engaged in trading activities, also sought to avail credit on common input services - The Revenue denied this too, alleging that the assessee was not maintaining separate accounts - The Department sought that the assessee reverse an amount equivalent to 10% of the purchase value under Rule 6(3)A of CCR, 2004 - Duty demands were raised & penalties imposed -
Held - Considering the decision of the Gujarat High Court in Cadila Healthcare Ltd., the assessee is ineligible to avail credit of service tax paid on Commission Agent Services - Hence demand in this regard is upheld with interest - However, penalty in this regard is unwarranted - Regarding the demand raised on trading activity being exempted, the issue stands settled by the decisions in FL Smidth Pvt. Ltd. and Ruchika Global Interlinks - Hence the assessee needs to reverse credit availed on trading activity - While the assessee claims to have reversed such credit, the same is contested by the Department - Hence such issue warrants fresh verification: CESTAT (Para 4,6,7) - Case Remanded: HYDERABAD CESTAT
CENTRAL EXCISE SECTION
2018-TIOL-440-HC-KAR-CX + Story
Schevaran Laboratories Pvt Ltd Vs UoI
CX - Garnishee proceedings initiated for recovery of confirmed demand - Argument that since the Gujarat High Court had struck down Rule 8(3A) of the CER, 2002 the impugned demand had no legs to stand is a fallacious one - so long as the order passed by the Commissioner (Appeals) held the field, the demand in question was recoverable from the petitioner - petitioner-Company ought to have kept the lis alive by filing the regular appeal before the Tribunal u/s.35 B of the Central Excise Act, 1944 - operation of the Gujarat High Court judgment was stayed by the Supreme Court, where the matter is still pending - directed that if an appeal is preferred by the petitioner-company within a period of four weeks, the Tribunal may entertain the said appeal without raising the objection of bar of limitation, subject to the petitioner-company satisfying the other conditions for maintaining such appeal – Petition disposed of: High Court [para 5, 6] - Petition disposed of: KARNATAKA HIGH COURT 2018-TIOL-825-CESTAT-ALL
Standard Niwar Mills Vs CCE
CX - Assessee was manufacturer of processed cotton fabrics - The period of dispute in this case is from January 1999 to June 1999 - During said period, they had opted for payment of duty under Section 3A of CEA, 1944 r/w Rule 96ZQ of CER, 1944 under compounded levy scheme - A SCN was issued to assessee requiring them to show cause as to why compounded levy scheme facility should not be withdrawn and why the duty should not be charged on basis of actual production under Section 3(1) of CEA, 1944 - Directions in earlier final order dated 11.02.2015 of Tribunal were for adjustment of excess paid duty under compound levy scheme during period from July, 1999 to November, 1999 for recovery of duty for period from January, 1999 to June, 1999 - When said appeal filed in 2005 was pending disposal, on 24.05.2011, Rs. 20 lakhs refund was granted to assessee which was the compounded levy duty paid during period from July, 1999 to November, 1999 - Tribunal had directed that for period from July, 1999 to November, 1999 duty should be paid on the basis of actual clearances made by assessee - The Original Authority has further confirmed the demand of Rs. 12,39,947/- for the period from January, 1999 to June, 1999 and assessee has no objection for the same - The only prayer that assessee has made is to adjust Rs. 3,50,000/- paid by them during the period from 08.09.2014 to 01.12.2014 as recorded in impugned O-I-O - Revenue is directed to adjust the said amount of Rs. 3,50,000/- towards partial recovery of duties confirmed and directed through impugned order: CESTAT - Appeal partly allowed: ALLAHABAD CESTAT
2018-TIOL-824-CESTAT-DEL
CCE Vs Right Steels And Alloys Pvt Ltd
CX - Revenue is aggrieved by impugned order wherein Commissioner determined the duty liability of assessee in terms of actual production for year 1998-1999 and 1999-2000 - He quantified only the actual production of excisable goods for the material period but did not indicate the quantum of duty in real terms as per sub-Section (iv) of Section 3A of CEA, 1944 - Legal provision referred to by Revenue in their appeal stipulates that the Commissioner should determine the actual production and re-determine the amount of duty payable by assessee with reference to such actual production at the rate mentioned in sub-Section (iii) - Iimpugned order only determine the actual production without the quantification of duty amount of such production - This aspect may be completed by Competent Jurisdictional Authority at the earliest: CESTAT - Appeal allowed: DELHI CESTAT
2018-TIOL-820-CESTAT-MAD
Mak Controls And Systems Pvt Ltd Vs CCE
CX - the assessee-company manufactured Ground Power Units - The Revenue alleged that the assessee manufactured and cleared Control Panels for captive consumption without payment of duty - The Revenue opined that the same was classifiable under Heading 85.37 - Duty demand was raised with interest & penalty, under Rule 25 of CER, 2002 - The demands were upheld by the Commr.(A) - Held - The Tribunal in the assessee's own case, held that Ground Power Unit is classifiable under 8803 - The Revenue's appeal against such order was dismissed - Considering such order, the demands are unsustainable: CESTAT (Para 1,5) Appeal - Allowed: CHENNAI CESTAT
CUSTOMS SECTION
2018-TIOL-451-HC-MAD-CUS
C21 Vs Assistant/Deputy Commissioner of Customs
Cus - Release of cargo - Petitioner sought clearance of goods covered under Bill of Entry without taking into consideration Notfn 26/2015-20 - Considering the effect of recent notification which has been issued in public interest, that the cargo cannot be released without appropriate testing at the prescribed lab which facility appears to be available as of now at New Delhi - However, the problem expressed by importer/petitioner is that the cargo contains children toys and there are several varieties of children toys and if sample is drawn from each of the category of toys then it will be an expensive affair and totally unviable - Department is permitted to draw representative samples of one(1) piece per variety - While drawing the samples, CHA of the petitioner should be permitted to be present and after the samples are drawn, the same shall be sent to approved laboratory for testing and on receipt of the test report, respondents are directed to pass appropriate orders on merits and in accordance with law: HC - Writ petition disposed of : MADRAS HIGH COURT
2018-TIOL-450-HC-AHM-CUS
Pr.CIT Vs Hazira Lng Pvt Ltd
Cus - The issue pertains to refund of excess duty collected - Perusal of documents on record would suggest that the excess payment of customs was on account of short import of goods - Primarily when the goods imported by an importer truned out to be in short quantity as compared to export consignment the question of passing on the burden of customs duty on such quantity of goods would not arise - In any case, Tribunal noted that the assessee had produced the Chartered Accountant's certificate before the adjudicating authority certifying that customs duty element was not passed on to the customers: HC - Appeal dismissed : GUJARAT HIGH COURT
2018-TIOL-822-CESTAT-MAD
CC Vs Usha International Ltd
Cus - Assessee filed a Bill of Entry for clearance of goods declared as "Shriram" Brand water dispensers model YLRS1-5K/B-20" from China - As Bill of Entry was facilitated through RMS scheme, the goods were assessed as per declared classification under CTH/CETH 84186920 - Original authority observed that said model has a hot and cold water dispenser with an inbuilt mini-refrigerator of 20 litres capacity with R-134A refrigerant for preserving/refrigerating food products, therefore, goods be classified under CTH 84186920 - Lower appellate authority delved deep into the meaning and function of a refrigerator - Although the impugned goods has an inbuilt mini refrigerating unit, temperature cannot be controlled and it does not have a freezing cabinet inside as found in normal refrigerator, therefore this is not a refrigerator in functional sense and that further in trade parlance the goods are known only as water dispense, sold as water dispenser and not as a refrigerator - Tribunal is unable to find fault with this analysis and conclusions of lower appellate authority - Indubitably, impugned goods are composite goods, and hence, component which provides machine its essential character will be determined the factor for classification - The principal function of goods is that of a dispenser of hot and cold water with an added feature of a mini refrigerator - Hence, lower appellate authority is spot on in his conclusion that impugned items are required to be classified as water dispenser and not as a refrigerator: CESTAT - Appeal dismissed: CHENNAI CESTAT
2018-TIOL-821-CESTAT-MAD
Nanda Incorporated Vs CC
Cus - Assessee filed the shipping Bill for export of 10 metric tons of activated carbon in 250 bags to Sydney, Australia - The declared cargo was stuffed into the container - On examination, it was found to contain 420 numbers of wooden logs of Red Sanders - Since the export of Red Sanders is restricted and required specific licence these Red Sanders were seized under mahazar - Summons was issued to assessee and subsequently proceedings were initiated by issuing SCN - Assessee strongly contends that they had no involvement in attempt to smuggle Red Sanders - On going through the records, discussions in order passed by adjudicating authority, this contention appears to be not without substance - Thus after investigation, department has not been able to adduce any evidence with regard to direct or indirect involvement of assessee - The goods exported by assessee, viz. Activated Carbon was loaded in presence of officers and sealed and the seals were intact on the container as per report of authorities - These being the facts, there is no evidence to establish the involvement of assessee in attempt to smuggle Red Sanders - Adjudicating authority after recording a finding that assessee has no involvement and has been befooled by Shri Sampath Kumar, has imposed penalty of Rs.5 Lakhs on assessee alone - Penalty imposed is unjustified and same is set aside: CESTAT - Appeal allowed: CHENNAI CESTAT
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