SERVICE TAX SECTION

2018-TIOL-1145-CESTAT-MUM + Story

Ind Synergy Ltd Vs CCE , C & ST

ST – Commission received in foreign exchange for purpose of sales promotion and marketing of goods produced by foreign firm, in India – service is to be treated as export under Export of Services Rules, 2005 – no tax demand arises – impugned order set aside and appeal allowed: CESTAT [para 6, 6.1] - Appeal allowed : MUMBAI CESTAT

2018-TIOL-1144-CESTAT-DEL

Max New York Life Insurance Company Ltd Vs CCE & ST

ST - Assessee engaged in providing Life Insurance and Management of investment under ULIP and other related services - Certain proceedings were initiated against assessee for not following the provisions of Rule 6(3) of CCR, 2004 - The assessee provided taxable as well as exempted services which calls for maintenance of separate accounts on credit availed on input services - Original Authority imposed penalty under Section 76 - The said section is with reference to payment of service tax in accordance to provision of Section 68 or the Rules made under Chapter V of FA, 1994 - Failure to pay such Service Tax shall attract a penalty which is quantified in said section - The amount which is ordered to be paid by appellant assessee in terms of Rule 6 (3) cannot be considered as a Service Tax - This position has been settled by various rulings of Tribunal with reference to Rule 6 (3) of CCR, 2004 - Payment of said 8 per cent of value of exempted service is to be made by reversing the credit available in books of assessee - In case such reversal is not possible then the amount to be paid can be recovered in terms of Rule 14 of CCR, 2004 - This makes it clear that the amount so calculated under Rule 6 (3) is not a Service Tax and failure to pay such will not attrack the penalty under Section 76 - Accordingly, that portion of impugned order set aside with reference to imposition of penalty under Section 76: CESTAT - Assessee's appeal allowed : DELHI CESTAT

2018-TIOL-1143-CESTAT-MAD

State Bank of India Vs CC, CE & ST

ST - Assessee is registered with ST department under category of 'Banking and Other Financial Services' - They had received an amount as foreign exchange remuneration for year 2004-05 to 2006-07 by profit sharing of their Foreign Department, housed at Calcutta - Pursuant to an audit conducted in 2004-05, it was noticed that assessee was liable to pay service tax on share of profit earned from their Head office at Calcutta - In SCN, the amount received is stated as profit shared from the Head office foreign department branch housed at Calcutta - Even in the accounts, the said amount is not shown as a commission received from the head office and it is shown merely as profit earned from the head office - So also, department has not been able to establish that any activity was done by assessee on which assessee has received a commission from foreign exchange broking - Further, assessee has also made out a case on limitation since being a Public Sector Undertaking, they had been maintaining proper accounts and pursuant to audit had disclosed all details on 17.4.2006 itself - Thus the SCN alleging suppression of facts is without any basis and therefore appeal succeeds both on merits as well as on the ground of limitation: CESTAT - Appeal allowed : CHENNAI CESTAT

2018-TIOL-1142-CESTAT-MAD

Johnson Lifts Pvt Ltd Vs CCE (ST)

ST - Assessee engaged in supply and erection of lifts / elevators and are registered with Service Tax department for various services - During audit, it was noticed that assessee paid service tax on erection, commissioning or installation services adopting a notional value of 15% of gross amount realized for supply and erection of lifts/escalators - On balance portion of 85%, assessee discharged VAT - It appeared to department that such notional adoption of 15% of gross amount realized is not proper and resulted in short payment of service tax - Hence SCN was issued proposing to recover service tax along with interest and also proposing to impose penalties - It is seen that vide OIO dt. 29.05.98 it has been concluded that the service portion of the work order in regard to supply and erection of lift is to be taken as 15% - Assessee has been following the said order to discharge service tax liability - Further, as per Tamil Nadu Value Added Tax Rules, 2007, the service portion of such works contract is to be considered as 15% and assessee has to pay VAT on the balance portion - The very same issue was considered by Tribunal in assessee 's own case for earlier period - Following the said decision, demand cannot sustain: CESTAT - Appeal allowed : CHENNAI CESTAT

CENTRAL EXCISE SECTION

2018-TIOL-1141-CESTAT-DEL

CCE & ST Vs Multani Pharmaceuticals

CX - Assessee engaged in manufacture of various Ayurvedic, Unani and Veterinary medicines - The dispute is with reference to two products manufactured by assessee i.e. "Rovan Poshak Tail" and "Rooh-e-Gulab Sharbat" - The assessee classified both items under Tariff Item 30049011, as medicaments and availed the benefit of area based exemption under Notfn 49/2003-CE while the Department was of the view that the "sharbat" is rightly classifiable under CETH 21069011 as food preparations and "tail", under 33059019 as preparations for use on the hair - Both the products under dispute have medicinal properties as well as other common place properties - The classification of such items is required to be made in the light of pronouncement of Supreme Court in case of Naturalle Health Products (P) Ltd. 2003-TIOL-19-SC-CX as well as Puma Ayurvedic Herbal (P) Ltd. 2006-TIOL-18-SC-CX - In respect of similar products CBEC has also issued a Circular dated 31/10/1991 - The Apex Court in case of Puma Ayurvedic Herbal (P) Ltd. has observed that in order to determine whether a product is a cosmetic or a medicament a "twin test" (in which common parlance test is one of them) has been laid down - Commissioner (A) has analyzed the properties of the items in relation to the twin tests prescribed by Supreme Court - In respect of "sharbat" he has recorded that it contains various ingredients such as Gulab Ark, SITA (sugar) & Jal (water) which are mentioned in various Ayurvedic Authoritative Texts as having therapeutic use - It is also mentioned in the containers of sharbat that it is to be had as per the dozes of 50ml in a glass of 250 ml of water or as directed by the physician - Sharbat merits classification under Chapter heading 3003 as a medicament and not under CETH 3305 - In respect of tail, Commissioner (A) has recorded that it contains items such as Keshraj, Madhuyashti,, Karshphal, Dhatriphal, Nimba, Sarasawati, Nil Pushpa, Indravaruni, Rose Mary Oil, Nimbu Ark, etc. - These ingredients are found mentioned in Ayurvedic Authoritative Texts - In the container for tail there is a clear disclaim to the effect that it is not a cosmetic and toiletry preparation but is an Ayurvedic Medicine for curative and preventive therapy - Both the products have approval granted by State Drug Licensing Authority and also the Directorate of Ayurvedic and Unani Services, certifying the products to be Ayurvedic Proprietary Medicine - No reason found to interfere with the impugned order which is sustained: CESTAT - Appeal dismissed : DELHI CESTAT

2018-TIOL-1140-CESTAT-KOL

CCE Vs Ganesh Wires Pvt Ltd

CX - Assessee engaged in manufacture of Copper Rods and Enamelled Copper Wires - A search was conducted at assessee's factory and records and documents were seized and statement of Shri Sanjay Khaitan, Director of assessee Company was recorded - In an earlier occasion, Commissioner (A) remanded the matter with observation that clandestine removal has to be proved by corroborative evidences - It is also observed that at the time of retraction, he pointed out that the private slips which were recovered do not reflect alleged clandestine removal of goods - Apparently, the investigation officers, had proceeded on basis of statement recorded at the time of visit - Subsequently, statement was retracted - In any event, there is no material on record of further investigation of the case - It may be noted that Revenue has not placed any positive evidence before the Tribunal except the statement of Director which was subsequently retracted - No reason found to interfere with order of Commissioner (A) - Accordingly, appeal filed by Revenue is dismissed: CESTAT - Appeal dismissed : KOLKATA CESTAT

2018-TIOL-1139-CESTAT-MAD

Futura Polymers Ltd Vs CCE

CX - The assessee has not made the predeposit as mandated under section 35F of CEA, 1944 - Compliance of mandatory predeposit stands settled by decision of Madras High Court in case of Dream Castle 2016-TIOL-1009-HC-MAD-ST - Following the same, assessee has to comply with mandatory predeposit - The appeal is therefore dismissed: CESTAT - Appeal dismissed : CHENNAI CESTAT

2018-TIOL-1138-CESTAT-BANG

Dolphin Motors Pvt Ltd Vs CCE, C & ST

CX - M/s. Sipani Automobiles Ltd. engaged in manufacture of motor cars - Entertaining certain doubt regarding correctness of value adopted by M/s. Sipani Automobiles Ltd. to discharge duty, investigations were conducted which resulted in demand proceedings against them - Differential duty confirmed along with various penalties on different noticees including present three assessees - When matter reached Tribunal, Tribunal vide above mentioned order directed the original authority to re-quantify the duty liability after allowing discount allowed to dealers and considering the submissions for cum duty value - The penalties imposed in second round adjudication which was higher than the original adjudication was set aside with a direction that Commissioner is at liberty to impose penalties on all assessees after determining duty liability - Impugned order was consequence of such direction - In impugned order, there is no discussion regarding background or reason for imposition of penalty - Apparently, impugned order restricted the scope of decision with reference to direction issued by Tribunal on valuation issue - However, when liberty is given to Commissioner for imposition of penalty after a due findings, a clear reason based finding should have been recorded by original authority before imposing penalties under Rule 209A - In view of complete absence of any reasoning for imposition of penalty on these assessees, impugned order set aside only with reference to imposition of penalties on these three assessees under Rule 209A of CER, 1944: CESTAT - Appeals allowed : BANGALORE CESTAT

2018-TIOL-1137-CESTAT-BANG

Bharat Petroleum Corporation Ltd Vs CCE, C & ST

CX - Assessee is manufacturer of petroleum products - They had been removing the petroleum products without payment of duty to various warehouses of OMCs across the country under the erstwhile warehousing provisions - Deputy Commissioner permitted the assessee to clear MS, HSD, SKO, LDO, LSHS, HDFO, Raw Naphtha, FO and LPG provisionally on executing a Bond - The only issue involved is whether the duty of Central Excise is payable on Refinery Gate Price i.e. RGP paid by OMCs to the assessee or it is payable on the subsidised price at which the OMCs so sell the goods under PDS and LPG-Liquefied Petroleum Gas -Domestic to their consumers - Assessee is paying duty at subsidised price whereas it is receiving the full price from OMCs - Duty is payable on the full price collected from OMCs - Subsidised value/price collected from the consumer by OMCs cannot be taken as assessable value for the purpose of payment of Central Excise duty - Under the concept of transaction value, the actual value received for goods from OMCs is assessable value on which duty of Central Excise becomes payable by assessee - Tribunal on an identical issue has rejected the appeal of Kochi Refineries Ltd. vide its Final Order dated 06/10/2016 - Since the issue in the present case is squarely covered by decision of this Tribunal dt. 06/10/2016, by following the ratio of said decision, appeal of assessee is rejected and impugned order is upheld: CESTAT - Appeal rejected : BANGALORE CESTAT

2018-TIOL-659-HC-AP-VAT + Story

Vijaya Mining & Infra Corporation Pvt Ltd Vs CTO

Whether an interim order against a judgment can suspend the ratio decidendi or principle of law enunciated in such judgment - NO: HC

Whether a prescription regarding pre-deposit condition for entertaining an appeal, to ensure balance between interest of Revenue as well as Assessee, should be exercised judicially - YES: HC

Whether mere allegations regarding contravention of natural justice, will camouflage assessee's default in statutory compliances - NO: HC - Assessee's Petition Dismissed : ANDHRA PARDESHHIGH COURT

2018-TIOL-656-HC-MAD-CT

Raj Vijay TVS Vs Assistant Commissioner (CT) (FAC)

Whether the dealer should be given a show cause before taking any action, in respect of fault of mismatch or discrepancies in return submitted by him with that of the figures available with the Department in their web portal - YES: HC - Case remanded : MADRAS HIGH COURT

Shanmuga Polymers (P) Ltd Vs Assistant Commissioner (CT)

Whether no additional sales tax was leviable under the provisions of the TNGST Act, in respect of the tax paid u/s 3(4) of the TNGST Act - YES : HC - Assessee's petition partly allowed : MADRAS HIGH COURT