SERVICE TAX SECTION

Microsoft Corporation India Pvt Ltd Vs CCE

ST - the assessee-company is a leading entity engaged in software development - It is registered for providing services under Business Auxiliary Services, Manpower Recruitment Agency and Management & Maintenance and Repair Services - The assessee is a wholly-owned subsidiary of Microsoft Corporation in USA - The Department issued SCNs to the assessee, on issue of taxability of market support services provided by the assessee to Microsoft Singapore, which the assessee claimed to be an export of service - Another SCN was issued regarding taxability of product support services between a particular period - The last SCN was regarding taxability of certain foreign currency expenditure incurred by the assessee during a particular period - The Revenue also opined that by not paying service tax on reimbursement received, the assessee had contravened the provisions of Finance Act, 1994 and Determination of Value Rules, 2006 - Thereupon, duty demands were raised for each of these services, with interest & penalties u/s 77 and 78 -

Held - The first issue in these appeals is whether the income earned out on account of service claimed as export under the category of Business Auxiliary Service is chargeable to service tax during the period 01.04.2009 to 31.03.2011 - Held - One issue at hand is whether the income earned from service claimed as export under Business Auxiliary Service is chargeable to service tax between 01.04.2009 to 31.03.2011 - Considered relevant findings of the Commr.(A) in this regard - An identical issue was examined in the assessee's own case - Following such precedent settled in favor of the assessee, the services provided to Microsoft Singapore amount to export of services & hence not taxable - The other issue pertains to services exported under Business Auxiliary Services - Admittedly, such reimbursements relate to Market Support Services and form part of the consideration received by the assessee for marketing activities of Microsoft Products in India - Thereby, these are not purely reimbursement of out of pocket expenses - Since it has been held that Business Auxiliary Services in relation to MSS is treated as export of service, the reimbursement w.r.t. MSS would also be not taxable - The third issue is regarding the maintenance and repair of software - The assessee claimed that product support services were held as non taxable in their own case by this Court - Following such precedent, the demand on this ground merits being set aside - Lastly, regarding the demand raised to tax the expenditure on foreign currency liable to service tax under the RCM, the Commr.(A) gave no cogent reasons regarding the expenses incurred - Hence the same warrants re-examination - Hence demands raised under Business Auxiliary Services, Manpower Recruitment Agency and Management & Maintenance and Repair Services are set aside whereas the foreign currency expenditure warrants remand: CESTAT (Para 2,8,13-18,21) - Appeals Partly Allowed: CHANDIGARH CESTAT

CENTRAL EXCISE SECTION

Lalitha Equipments Vs CCE

CX - Crane imported in the name of the partner but same was used by the partnership firm - Bill of entry was also endorsed by the partner in favour of the appellant partnership firm, therefore, there is no reason to deny CENVAT credit of the duty paid on the Crane - submission of AR that the partnership firm is paying mobilization charges to the partner and not the value of the crane and, therefore, credit is not admissible, Bench views that payment is not the criteria for taking CENVAT credit - applying the logic that even in case of job worker, credit is admissible though the job worker does not pay the value of the goods, a similar view can be taken in the present case, more so, since there is no provision of payment transaction - impugned order set aside and appeal allowed: CESTAT [para 4] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-994-CESTAT-MUM

CX - CENVAT - On pointing out that the appellant had availed ineligible CENVAT credit on inputs, capital goods and input services, they reversed credit but did not pay any interest - SCN issued and demand confirmed along with penalty and interest - In appeal to CESTAT, appellant submits that the credit was not wrongly availed but due to change over of management as the credit was availed by the earlier company which was amalgamated with company of the present appellant by High Court order, records were not traceable and for this reason appellant admittedly reversed the credit without raising any dispute, therefore there is no wrong availment of credit hence there is no malafide intention; that the credit so taken was lying unutilized and, therefore, no penalty and interest are chargeable.

Held: It is not a case of wrong availment of credit but is due to amalgamation of old company to present company and records were not traceable - Appellant have admittedly reversed the credit, moreover credit so taken was not utilized, therefore, in fact of the present case, there is no reason to impose penalty under Section 11AC; penalty under Section 11AC is set aside - As regard the demand of interest, Bench finds that prior to 01.04.2012 according to unamended Rule 14, interest was chargeable even if the credit was not utilized, which was held by Supreme Court in case of Ind-Swift - 2011-TIOL-21-SC-CX , therefore, interest is chargeable on the Cenvat credit availed up to the period of 31.03.2012 - jurisdictional High Court judgment in GL & V India Pvt Ltd. - 2015-TIOL-1210-HC-MUM-CX shall prevail - after 01.04.2012, interest would not be chargeable when the credit was not utilized - interest from 01.04.2012 is set aside - Appeal is partly allowed: CESTAT [para 5] - Appeal partly allowed: MUMBAI CESTAT

2018-TIOL-993-CESTAT-MAD

CX - Assessee engaged in manufacture of industrial alcohol and chemicals and availing duty exemption from payment of duty on intermediate products used captively in production of final products by Notfn 67/95-CE - Department took the view that duty is payable on said intermediate products cleared without payment of duty to SEZ - Issue at hand is squarely covered by Surya Roshni Ltd. 2013-TIOL-424-CESTAT-DEL and Ultratech Cements Ltd. 2015-TIOL-2110-CESTAT-MAD , which have unequivocally held that supplies made to SEZ / Developers by DTA unit are neither chargeable to Nil rate of duty nor exempt from payment of duty under exemption notification, hence they are not "exempt goods' for purpose of Rule 2 (d) of CCR, 2004 - Following the ratio of said decisions, assessee is very much entitled to benefit of said Notfn in respect of intermediate goods used to manufacture final products which were supplied to a SEZ unit: CESTAT

2018-TIOL-992-CESTAT-AHM

CX - Issue is regarding denial of cenvat credit of service tax paid on catering , maintenance and house keeping services provided to guest house, wharfage charges and water service by tankers - As regards to service tax liability on services received at Guest House, Tribunal in case of JSW (SALAV) Ltd. 2016-TIOL-2078-CESTAT-MUM has held in favour of assessee holding that such credit is admissible - As regards to cenvat credit of service tax on wharfage charges for goods cleared for export, Division Bench of Tribunal in the case of Suraj Impex (India) Pvt. Ltd. 2015-TIOL-2087-CESTAT-DEL has considered that such service tax paid under port services is eligible to be availed as cenvat credit - As regards the cenvat credit of service tax paid on water supply service rendered by service provider, since the cenvat credit of the service tax paid on water supply, such service needs to be considered from the angle for which such service has been used - Without expressing any opinion on this point, the matter is remanded to adjudicating authority to consider this issue after following the principle of natural justice: CESTAT - Appeal partly allowed: AHMEDABAD CESTAT

2018-TIOL-991-CESTAT-AHM

CX - Assessee engaged in manufacture of M.S. Angles and M.S. Channels - On the basis of investigation at the end of manufacturer of M.S. Ingots and the brokers who procured M.S. Ingots and supplied to assessee, a SCN was issued to them alleging clandestine manufacture and clearance of M/S. Angles, M.S. Channels without payment of duty - In levelling said allegation in SCN, statements recorded during course of investigation have been relied upon and used against assessee while confirming demand by adjudicating authority - Further, even though specifically requested by assessee to cross examine these witnesses, no opportunity was not extended to them in this regard - Said statements which are used against assessee are required to be subjected to cross-examination before confirming the demand of clandestine removal based on those statements, in view of the principles of law laid down in cases of Andaman Timber Industries 2015-TIOL-255-SC-CX and Basudev Garg 2013-TIOL-464-HC-DEL-CUS - In the result, impugned order is set-aside and appeals are remanded to the adjudicating authority: CESTAT - Matter remanded: AHMEDABAD CESTAT

2018-TIOL-990-CESTAT-DEL

CX - Assessee is job worker for manufacture of butyl rubber compound and semi finished butyl Rubber tubes and received the raw material from their principal manufacturer M/s Birla Tyre Limited, Haridwar who was availing the area based exemption under Notfn 50/2003 - After receiving goods, assessee has cleared the goods in semi finished condition but without paying the duty - Assessee has claimed the exemption under Notfn 214/86, the same was denied by department - This is mandatory condition mentioned in said Notfn that declaration/ certificate will have to be provide by the principle manufacturer - But no declaration has been filed - Moreover, principal manufacturer was enjoying the benefit of area based exemption - Again, assessee wants to get exemption under Notfn 214/86 - Thus, double benefit of exemption on same raw material is not permissible especially when the assessee has manufactured excisable goods which have industrial market and cleared the same without payment of duty - Assessee has manufactured and cleared the products which are goods for industrial market and thereby have its own marketability - When it is so, then duty is leviable - No reason found to interfere with impugned order and same is sustained: CESTAT - Appeal dismissed: DELHI CESTAT