SERVICE TAX SECTION
2018-TIOL-1119-CESTAT-ALL
PVS Construction Pvt Ltd Vs CCE & ST
ST - Whether the assessee is liable to pay service tax on the amount of security deposit collected from prospective flat owners which was subsequently handed over to newly formed flat owners society, and whether they are liable to penalty - There is no case of suppression or contumacious conduct or any attempt on the part of assessee to evade payment of service tax - There was disturbance in normal carrying out of business due to freezing of withdrawal in bank account of assessee, which is a reasonable cause for delay in submission of their payment of taxes - Same was reason for delay in submission of the ST-3 Returns as well as other compliances - Accordingly, penalty levied under Section 78 is set aside - So far the penalties under Section 77(2) for taking service tax registration late, it is not the case of Revenue that assessee had taxable receipts during period prior to the date of taking registration and as such no case of penalty under Section 77(2) is made out and accordingly the said penalty is also set aside - So far the penalty/late fee of Rs.1,03,000/- under Section 70 of Finance Act read with Rule 7C of STR 1994 is concerned, there is reasonable cause for furnishing of returns late due to disturbance in business, being freezing of withdrawal from the Bank account, but as levy of late fee is not discretionary the same is not interfered with - So far levy of service tax on the amount of security deposit is concerned, said amount was received by assessee having character of pure agent and on behalf of the flat owners as their trustee, which amount have been subsequently given to the society formed of the flat owners and this fact is not disputed - Accordingly, demand is set aside - Accordingly, concerned adjudicating authority is directed to grant refund/adjustment of the amount paid in excess, giving appeal effect of this order, and to refund such excess amount with interest as per rules: CESTAT - Appeal allowed: ALLAHABAD CESTAT
2018-TIOL-1118-CESTAT-BANG
NT Zameer Ahmed Khan Associates Vs CST
ST - Assessee engaged in transportation of persons on a point-to-point basis making use of vehicles for contract carriage permit - In period in question, the adjudicating authority has held that service tax is liable to be paid under tour operator service - However from the subsequent development on subject, explained at length by assessee, services of the type rendered by assessee have been exempted from payment of service tax vide Notfn 20/2009 - This notification has further been amended to give retrospective effect as per Section 75 of FA, 2011 - The retrospective benefit has been granted for period with effect from 01/04/2000 - In the light of these legal developments, demand of service tax made on the activities carried out by assessee is not justified: CESTAT - Appeal allowed: BANGALORE CESTAT
CENTRAL EXCISE SECTION
2018-TIOL-1116-CESTAT-MAD
Dymos India Automotive Pvt Ltd Vs CCE
CX - Assessee engaged in manufacture of PU Foam meant for use in automobile seat cushion and availed Cenvat Credit of service tax paid for construction services during the period 2008-2009 - It was found that portion of premises at Papparambakkam for which the input service credit was availed was leased to another company viz; M/s Hanil Lear India Ltd for storage of their input material - The department was of the view that assessee has not used the input services, on which credit was availed, in or in relation to the manufacture of their finished products - The dispute is confined to quantum of credit availed on construction services on that portion of building leased out to M/s Hanil Lear - The input credit whether availed on capital goods, inputs or input services is accounted in a common pool of credit - While utilising credit it is not necessary that there should be one to one correlation - To be more specific, the Cenvat Credit Rules does not prohibit the credit availed on capital goods to be utilized to discharge duty on finished products or for payment of service tax - So also the credit availed on payment of service tax can be utilized for discharge of central excise duty - The Tribunal in case of Nvaratna S.G. Highway Prop. Pvt Ltd. 2012-TIOL-1245-CESTAT-AHM held that without construction of mall/building the renting of immovable property services cannot be provided and therefore construction service is an eligible service for credit for providing output service of Renting of immovable property - The said decision is applicable to the facts of the present case - Following the judgement, disallowance of input service credit is unjustified: CESTAT - Appeal allowed: CHENNAI CESTAT
2018-TIOL-1115-CESTAT-DEL
Rai Bahadur Narain Sugar Mills Vs CCE
CX - Assessee is operating a sugar mill and availing area based exemption under Notfn 50/2003 CE - They have to put up additional facility as a distillery, adjacent to the said sugar factory but did not take separate Central Excise registration for said distillery - Assessee did discharge duty on carbon dioxide and denatured spirit cleared from distillery during 2014 - It is not clear as to how such duty payment was accepted/ assessed when the revenue contends that assesee is one license holder and availing area based exemption for such license - In other words, if the unit is one and the same as contended by Revenue, the products which are otherwise eligible for exemption under the said notification are to be cleared without payment of duty - It is not tenable to hold that some products can avail area based exemption and others need not avail area based exemption - Hence, contradiction found in the approach by Revenue while denying the credit on capital goods and input services which were admittedly used in setting up and further manufacture in distillery unit - The issue relating to recognition of distillery unit and sugar unit as separate entities for purpose of Central Excise and Cenvat Credit Rules requires a fresh consideration: CESTAT - Matter remanded: DELHI CESTAT
CUSTOMS SECTION
2018-TIOL-1117-CESTAT-MAD
Sri Anjaneya Cotton Mills Ltd Vs CC
Cus - Assessee made a written request to convert shipping bills from "EPCG scheme to drawback cum-EPCG scheme" - Said request was examined and rejected - The exports concerned have been made against zero duty imports made under EPCG scheme - There is no bar in EPCG scheme to avail simultaneous drawback on exported goods - Hence the exporter is very much entitled to seek conversion of "zero duty EPCG shipping bills" to "zero duty EPCG scheme cum drawback scheme shipping bills" - This ratio has been followed in a slew of decisions like in Cargil India Pvt. Ltd 2015-TIOL-263-SC-CUS and Essar Oil Limited 2014-TIOL-754-CESTAT-AHM - The reason for grounds for rejection of request by adjudicating authority also does not pass muster since the said authority has only found fault with the assessee that "lack of coordination and ignorance of provisions cannot be considered as reasons beyond control of exporter" - However, following the ratio of said case laws, impugned order is not sustainable: CESTAT - Appeal allowed: CHENNAI CESTAT
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