SERVICE TAX SECTION

2018-TIOL-900-CESTAT-DEL + Story

ST - Commercial Training or Coaching - Only those activities which are excluded by a specific and legislated exclusionary clause would alone be outside the fold of the taxable activity - There is no scope to exclude "Academic Courses" conducted by respondent IIPM from the purview of Service tax levy - Larger Bench decision in the case of Great Lakes Institute of Management Ltd. - 2013-TIOL-1480-CESTAT-DEL-LB has settled the matter - even though the tax on Commercial Training or Coaching Centre was levied w.e.f. 01/07/2003, since respondent had failed to obtain registration or file returns or even intimate the Department of the activities undertaken, the Department is fully justified in issuing show cause notice to demand of Service Tax along with interest by invoking the extended period of time - Adjudicating Authority has erred in dropping the demand of the Service Tax - impugned order, to the extent of dropping of Service Tax demand is set aside and the entire demand of Service Tax raised in the show cause notice dated 10/02/2006 is upheld - Penalties imposable u/s 77 and 78 of FA, 1994 along with interest u/s 75 of the FA, 1994 - Revenue appeal allowed: CESTAT [para 11, 12, 15, 16] - Appeal allowed : DELHI CESTAT

Sonic Biochem Extractions Ltd Vs CCE & ST

ST - the assessee-company claimed to have exported goods by utilising taxable service - It claimed exemption under Notfn No 18/2009-ST, which was denied for alleged non-fulfilment of conditions -

Held - Such Notfn was issued to exempt taxable service used for exporting goods - Once it is proven that goods were exported and taxable service was used in export, the substantive part of the Notfn is deemed to be satisfied - In such case, other conditions are merely procedural - Considering Tribunal's decisions in M/s Praj Industries Ltd. Vs. CCE, Pune -III and M/s Radiant Textiles Ltd. Vs. CCE, Chandigarh-II the assessee would be eligible for exemption if such fact is proven - However, the Revenue held that the assessee had not produced requisite documents to prove eligibility for exemption - Herein the onus lies on the assessee to prove its eligibility and for which it must submit the necessary documents - Hence the Revenue directed to verify the documents & allow exemption to the assessee, if found eligible: CESTAT (Para 2,5,6) - Case Remanded: DELHI CESTAT

2018-TIOL-890-CESTAT-MAD

ST - Assessee is a non-banking financial company and is in business of extending loans to various clients for purchase of vehicle - The loans are paid back on regular EMI basis - Assessee entered into an agreement with another person viz. "Trust/Special Purpose Vehicle (SPV)" to whom they have sold the receivables towards these loans extended to various clients - On sale of such future receivables, assessee received a discounted consideration when compared to actual receivables, which included interest - Simultaneously, they have entered into an agreement with Trust/SPV which mandates the assessee to collect all these receivables on fixed periodicity from loan clients and deposit the same in return of said consideration received on sale of receivables - For such operation of receiving EMI payments and remitting the same to SPV/Trust, assessee is paid a consideration in percentage terms - Revenue held a view that this fee is liable to service tax under BAS as assessee provided service to SPV/Trust which will fall under clause (iv) of Section 65 (19) prior to 10.9.2004 - Contractual arrangement between assessee and Trust/SPV is on principal to principal basis and obligation to collect the cheque and deposit as per the schedule of agreement is nothing but an obligation in pursuance of main agreement of upfront sale of future receivables which would be recouped on regular basis later - There is no linkage between these two obligations and the assessee has no privy to obligation of Trust to PTC holders - Securitization Service Fee in fact which is sought to be taxed under BAS cannot be attributed to any of the services rendered under the categories mentioned under BAS as evident from the facts discussed in impugned order - Obligation of Trust for PTC holders is identified as main activity which is incidentally or auxiliarily supported by assessee - No reason found for such inference - It is neither supported by contractual arrangements nor factually established - As such, no merit found in appeal filed by Revenue: CESTAT - Appeal dismissed: CHENNAI CESTAT

CENTRAL EXCISE SECTION

2018-TIOL-488-HC-ALL-CX

CCE Vs Advance Steel Tubes Ltd

CX - Issue is with regard to question as to whether the assessee had indulged in unjust enrichment - The assessee engaged in manufacturing of M.S. Tubes & Pipes (Black & Galvanised) - During search, variation found in finished good as compared to balance shown in RG- 1 - The stock of finished products was also found short - The stock of H.R. coils, viz. inputs was found excess as compared to stock register - An investigation was made and party debited an amount of Rs.15.00 lacs and another sum of Rs.3.75 lacs under protest on account of said discrepancies - Matter relating to discrepancies of party were settled by Settlement Commission for a total sum of Rs.8,40,150/- - The assessee therefore, made a refund claim for a sum of Rs.10,34,000/- - The third Member of Tribunal was of categorical view that this was not the case of unjust enrichment because the duty involved in refund was not paid at the time of clearance of goods but subsequently during course of investigation for past period - The third Member also emphasized that the confirmed duty was adjusted from pre-deposit made at the time of investigation by treating it as a sanctioned refund - Contest made in present appeal is only with regard to refund of balance amount of Rs.10 lacs and no issues have been raised by department with regard to any unjust enrichment in respect of amount which was adjusted by them for a sum of Rs.8,40,150/- - The third Member has also taken note of this in his judgment and has noted that a sum of Rs.8,40,120/- had been adjusted by department from the amount of Rs.18,75,000/- - This amount had been paid by way of debit entries RG23A and therefore, he has come to the conclusion that if amount of Rs.8,40,120/- was adjusted without invoking the bar of unjust enrichment to the said amount - The department was not justified in applying the bar of unjust enrichment to the remaining amount of Rs.10,34,880/- without there being any cogent material or evidence to support it and without the department having considered the cost structure of goods for that amount - Final decision taken by the third Member that the bar of Section 11B of the Act did not apply in the present case, is correct and justified: HC - Appeal dismissed : ALLAHABAD HIGH COURT

2018-TIOL-889-CESTAT-MUM

CX - Appellant manufactured and supplied Pipes and Pipe Fittings to ‘Water Treatment Plants' - Revenue denied exemption under notification 6/2006-CE on the ground that exemption is available for ‘Pipes' and not on ‘Pipe Fittings'.

Held: By amending notification 6/2011-CX, it the word "Pipes" was substituted with the words "Pipes and Pipe Fittings" – In view of the clarification by the Government notification, held that exemption applicable to "Pipes" is squarely applicable to "Pipe Fittings" – Appeal allowed with consequential benefits: CESTAT [para 2 to 4] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-888-CESTAT-MUM

CX - Whether the appellant is liable to pay 10% in terms of Rule 6(3)(b)/6(3)(i) of held Credit Rules, 2004 on the goods supplied to SEZ Developers without payment of duty for the period April 2007 to March 2008. Held: Though by Notification No. 50/2008-CE (NT) dt. 31.12.2008 it was made explicitly clear that the payment of 10% provided under Rule 6(3) of Cenvat Credit Rules, 2004 is not applicable on the supplies made to SEZ Developer, but even prior to that Notfn. supplies made to SEZ Developer has been considered as export in terms of Special Economic Zone Act - issue is no longer res integra as per the settled legal position – Impugned orders set aside and appeals allowed: CESTAT [para 4] - Appeals allowed: MUMBAI CESTAT

2018-TIOL-887-CESTAT-DEL

CX - Assessee engaged in manufacture of cement and one of the inputs used in such manufacture is pet coke, which is used as fuel - The assessee procures this input from M/s. Reliance Industries Ltd., Jamnagar, which is a 100% EOU - Payment of Central Excise duty by EOUs is governed under the base notfn dated 31.03.2003 and subsequent amended notfn dated 01.03.2008 - Said notfns providing exemption/concessions are applicable only to EOUs, on removal of excisable goods to the domestic area - Since, the assessee has availed Cenvat credit of CVD amount paid on the inputs; it is required to comply with the provisions of Cenvat statute - At the time of taking Cenvat credit on disputed inputs, assessee did not comply with conditions/formula laid down in Rule 3(7)(a) of CCR, 2004, existed at the material time - Rather, it had taken Cenvat credit of CVD amount paid by supplier as per notfn dated 31.03.2003 read with notfn dated 01.03.2008 - The fact is not under dispute that the said notifications are not applicable to assessee as a domestic manufacturer of excisable goods - Accordingly, assessee cannot plead that Notfn 48/2008-C.E.(N.T.) , issued subsequently, providing the formula for Cenvat credit will be applicable with retrospective effect - Further, the said notification nowhere prescribed that the same will have the retrospective operation - In this context, the law is well settled that in absence of any express provision contained in notification, ordinarily it cannot be presumed that same is retrospective in nature - Thus, formula prescribed in notification dated 05.12.2008 will be effective prospectively, from its date of publication in the Official Gazette - Accordingly, impugned orde correctly confirmed the Cenvat demand alongwith interest on assessee - Since the assessee has taken Cenvat credit due to wrong interpretation of statutory provisions, it cannot be said that it had indulged into the activities of fraud and collusion - Therefore, provisions of Rule 15 of CCR, 2004 cannot be invoked against assessee for imposition of penalty: CESTAT - Appeal partly allowed: DELHI CESTAT

2018-TIOL-886-CESTAT-HYD

CX - Issue is regarding refund of service tax paid on various input services which are utilised for iron ore mining and subsequent export of said iron ore - Revenue in grounds of appeal is arguing that assessee could not have availed CENVAT credit of service tax paid on various services as iron ore is exempted from payment of duty - It is the case of the Revenue that when CENVAT credit itself is not available, question of availing the same and claiming refund under Rule 5 does not arise - Assessee had filed/submitted all the documents which were verified by adjudicating authority - In impugned order, Appellate Authority has also come to the same conclusion and as regards the minor objections raised, he has held that the documents indicated all the required particulars for availment of CENVAT credit - Concurrent findings as recorded by both the lower authorities seems to be in consonance with the law as it is the avowed policy of Govt of India that the exports should not be burdened with taxes, specifically when there is no dispute as to the services rendered and utilised for exported consignments, non-sanctioning of the refund claims of the service tax paid would add to the value of export consignments - Impugned order as well as the order of adjudicating authority for sanction of the refund seems to be correct - Impugned order upheld: CESTAT - Appeal rejected: HYDERABAD CESTAT

2018-TIOL-885-CESTAT-MAD

CX - Assessee engaged in manufacture of parts of cooler, parts of o-separators, parts of mill and machinery parts and availed the facility of CENVAT credit of inputs, capital goods and input services - On verification of records, it was found that assessee had manufactured and supplied excisable goods only to the tune of Rs.8,26,73,721/- to M/s. Binani Cement Ltd and remaining part of materials valued to the tune of Rs.111,51,44,499/- were not goods manufactured by them, but were bought out materials - Department views that assessee is not eligible for CENVAT credit of service tax on value of bought-out goods as they are not manufactured in factory of assessee - The main ground of argument put forward by assessee is that the input services of BAS upon which they paid sales commission and availed credit of service tax paid need not have any direct nexus with manufacture of final products - It is thus submitted by him that though assessee has availed credit on service tax paid on commission for procuring work order and even though bought-out items were supplied to customer, it would not make the input services ineligible for credit - No merit found in this contention - The allegation in SCN is that the assessee is not eligible for credit for the reason that the major part of the goods supplied for which the commission was received is for bought out items and not goods manufactured by assessee - Assessee has not been able to put forth any persuasive argument on this finding of Commissioner - Therefore, no ground to interfere with impugned order: CESTAT - Appeal dismissed: CHENNAI CESTAT