SERVICE TAX SECTION

2018-TIOL-1004-CESTAT-MUM

ST - Refund - Issue is whether limitation of one year for filing of refund claim should be computed from date of receipt of foreign exchange or from the date of invoice in terms of Rule 5 of CENVAT Credit Rules, 2004 and Notification issued thereon.

Held: There is no dispute that the refund claims were filed within one year from date of receipt of convertible foreign exchange - In case of export of service, as per the definition of ‘export' under the Export of Services Rules, 2005, the export is completed when convertible foreign exchange is received against the export of service - Accordingly, in case of export of service, date of receipt of convertible foreign exchange being the date of export, the refund claim should be filed within one year from the said date, as per section 11B of CEA, 1944, which is not in the dispute - Therefore, the refund was well within time and Commissioner (Appeals) has correctly and legally allowed the refund considering the date of receipt of convertible foreign exchange as date of export - no infirmity in the impugned order, therefore, Revenue's appeals are dismissed: CESTAT [para 5] - Appeals dismissed : MUMBAI CESTAT

2018-TIOL-1003-CESTAT-BANG

ST - Assessee engaged in developing and export of software - They availed CENVAT credit on various input services - Since almost the entire turnover of assessee's unit is made up of export of software services, they claimed refund of accumulated CENVAT Credit under Rule 5 of CCR, 2004 from time to time - In impugned orders, several input services have been held to be not eligible for availing CENVAT credit for the reasons that these services have no nexus with output service of assessee i.e., the Information Technology Software Service - In addition, various amounts also came to be disallowed for a variety of other reasons - All these services have been held to be eligible input services as per the decisions cited by assessee - Consequently, CENVAT Credits on these services allowed during the disputed period.

As regards to CENVAT credits disallowed on Procedural errors in documentation, CENVAT credit stand disallowed for the reason that assessee has not submitted copies of relevant documents such as invoices at the time of claiming refunds but assessee is in a possession of such documents and in a position to submit the same to make good the deficiency in the documentation - Consequently, matter remanded to adjudicating authority.

As regards to CENVAT credits disallowed on Export Turnover Ratio and Apparent error and double disallowance - Dispute is with reference to whether the maximum refund allowable is to be calculated on basis of gross or net CENVAT credit which has been taken by assessee - The related point is also with reference to definition of "exports turnover services" from 4/2012 which may also have a bearing on the total refund allowable to assessee - Findings of the lower authorities on the subject matter of export turnover ratio set aside and matter remanded to original authority.

As regards to Credit availed in particular quarter and payment made in next quarter - Even though the payment was not made by assessee for the services within the quarter for which the refund was claimed, the same has been made in subsequent quarter - If that is so, then it becomes only a procedural lapse for which the substantial benefit of refund cannot be denied to assessee - Hence, the original authority is directed to verify the fact of payment for such services in subsequent quarter and then allow the refund: CESTAT - Appeals partly allowed : BANGALORE CESTAT

2018-TIOL-1002-CESTAT-MAD

ST - Assessee engaged in various consultancy services and were registered with department for payment of service tax under 'Management Consultancy Service and Others' - Dispute relates to some part of their activities which are essentially with reference to giving opinion, updates on tax, legal position, filing of tax returns under various statutes relating to Income Tax, Service Tax and Sales Tax under various auxiliary services with reference to compliance of these tax laws by client - The nature of services, in dispute are mentioned in impugned order as opinion and updates including assistance to the client in fiscal compliance with the legal requirement of various tax laws - This no doubt may involve advisory / consultancy work also - However, the scope of statutory definition is more focused on management consultant who is engaged in providing consultancy for an organization to improve the working system of any organization - The legal assistance either for direct planning or compliance is within the ambit of various tax laws has no direct relevance to working or improving any organization of the client in order to avoid penal consequence - It may indirectly keep the organization within ambit of legal promotion work for their further business - This by itself will not make the consultancy or advisor in tax matters management consultant - In this connection, decision of Tribunal in case of Ernst & Young Pvt. Ltd. 2012-TIOL-704-CESTAT-DEL is referred - No merit found in impugned order, same is set aside: CESTAT - Appeals allowed : CHENNAI CESTAT

CENTRAL EXCISE SECTION

2018-TIOL-1016-CESTAT-MUM + Story

Akzo Nobel India Ltd Vs CCE

CX - Rule 2(l) of CCR, 2004 – Input Service - Automatic Colour Dispensing machine given on lease to authorized dealers and service tax paid on lease rent – Repair and maintenance service becomes an input service for rendering of output service i.e. leasing of machine – CENVAT credit admissible: CESTAT [para 5] - Appeal allowed : MUMBAI CESTAT

2018-TIOL-1009-CESTAT-MUM

CX - CENVAT - Appellants have availed CENVAT credit on diesel locomotive, which is admittedly used for handling of raw material/finished goods in the factory of the appellant - credit denied on the ground that the diesel locomotive is not covered under the definition of ‘capital goods' since falling under chapter heading 86 of CETA, 1985.

Held: There is no dispute that the said goods is used in or in relation to the manufacture of the final products, therefore, it qualifies as an Input and credit is admissible - very same issue has been considered by tribunal in Bhushan Steel and credit has been allowed - similarly, in appellant's own case, mono block for railway track was held as admissible for CENVAT credit - relying upon the same, impugned order is set aside and appeals are allowed: CESTAT [para 4, 5] - Appeal allowed : MUMBAI CESTAT

2018-TIOL-1008-CESTAT-MUM

CX - CENVAT credit in respect of SAD was denied on the ground that said duty is not excise duty and has not been paid by appellant but by importer.

Held: SAD is paid under sub-section 5 of section 3 of the CTA, 1975 and is specified in terms of rule 3(1), clause (viia) of the CCR, 2004 as being eligible for credit – thus it is absolutely clear that the CENVAT credit in respect of SAD is admissible – It does not make any difference whether the SAD is paid by importer or otherwise – if the goods are suffering SAD, the same can be passed onto the ultimate buyer who is eligible for CENVAT credit – impugned order set aside and appeal allowed: CESTAT [para 4] - Appeal allowed : MUMBAI CESTAT

2018-TIOL-1007-CESTAT-MUM

CX - CENVAT –Rule 2(l) of CCR, 2004 - Services of Air Travel Agents, Event Management service, Mailing list compilation & service, Mandap Keepers, Membership of clubs, Photography service, Public Relation service, Rail travel agents, Sound recording service, Telecommunication service, Telephone services, Tour operators, Club & Association, Insurance service, Intellectual property service, Renting of immovable property and Technical testing and analysis service are Input Services – Appellant is entitled to CENVAT credit on all the services listed, hence impugned order is set aside and appeal is allowed: CESTAT [para 4, 4.1, 4.2, 5] - Appeal allowed : MUMBAI CESTAT

2018-TIOL-1006-CESTAT-MUM

CX - CENVAT - Issue is admissibility or otherwise of Input service credit in respect of Guest House which is near the factory premises.

Held: There are contrary judgments in respect of admissibility of credit on Guest house services in appellant's own case, however, there are other judgments where the Tribunal has consistently held that input service credit in respect of Guest house used for activities related to manufacturing factory is admissible – considering the decision of the Bombay High Court in the case of Ultra Tech Cement - 2010-TIOL-745-HC-MUM-CX , guest house used for overall activities of the appellant qualifies as Input service in terms of rule 2(l) of CCR, 2004 – impugned order is set aside and appeal is allowed: CESTAT [para 4] - Appeal allowed : MUMBAI CESTAT

2018-TIOL-1005-CESTAT-MUM

CX - Appellant availed CENVAT credit in respect of Sponsorship service – case of department is that since the brand promotion is not related only to the Akurdi unit but also for the unit situated at Pithampur, they are supposed to take proportionate credit – appeal to CESTAT as lower authorities denied credit.

Held: During the material period April 2012 to March 2014, there is no condition that the input service credit should be distributed on proportionate basis and it was only vide notification 13/2016-CX(NT) that it was mandated that if the service was used commonly by all the units then the credit should be distributed based on the ratio of turnover of each unit – inasmuch as since there was no restriction for distributing the credit or availing the credit by one unit alone, credit availed is proper – impugned order set aside and appeal allowed: CESTAT [para 4] - Appeal allowed : MUMBAI CESTAT