SERVICE TAX SECTION

Umesh Yadav Vs CCE

ST - Appellant-assessee is a cricketer who plays cricket for the Indian National Cricket Team and he has been selected by Delhi Daredevils, a franchisee owned by M/s. GMR Sports Pvt. Ltd., and received retainer fee - a show cause notice was issued to the appellant demanding service tax under taxable head of business support service – demand confirmed by original authority as well as the Commissioner(A), in fact Commissioner(A) upholding demand under the category of ‘brand promotion service' – both, assessee and Revenue in appeal to CESTAT.

Held: It is noticed that SCN was issued proposing to demand service tax under Business Support Service and the original authority has confirmed demand under the said category whereas the Commissioner(A) has changed the classification from BSS to ‘Brand Promotion Service' suomotu and unilaterally which is not permitted under the law – issue has also been settled in favour of the assessee appellant by various decisions of Tribunal in SwapnilAsnodkar vs. CCE, Goa - 2018-TIOL-92-CESTAT-MUM etc. – Bench is of the considered opinion that the impugned order passed by Commissioner(A) is going beyond the show cause notice and is not sustainable – order set aside and appeal allowed – As for Revenue appeal, the department is holding the view that the appellant is not liable to tax under the category of ‘brand promotion service', there is no merit in Revenue appeal in view of various decisions cited – assessee appeal allowed and Revenue appeal dismissed: CESTAT [para 6] - Assessee Appeal allowed/Revenue appeal dismissed

2018-TIOL-1178-CESTAT-ALL

Vijay Associates Vs CCE & ST

ST - Assessee is a proprietorship concern of Mr. Pankaj Singh engaged in providing 'Recovery Agent Services' to ICICI Bank Ltd - The assessee had not taken any registration nor was making any compliances - From perusal of information provided by Bank, it revealed, among other persons, assessee had also received payments/commission from the Bank for providing of Recovery Agent Service - In statement recorded, assessee have stated that he was not aware of provisions of service tax - He was entirely dependent on the bank which used to calculate the payments/commission payable to him, which was credited to his account, after deducting of income tax - TDS at source - Further, assessee was not preparing any bills on the Bank nor have charged service tax and/or collected any service tax - After allowing threshold exemption almost 80% to 90% of his turnover was below the exemption limit and only for marginal part of this turnover, assessee has fallen on taxable side attracting the provisions of service tax - In this view of matter, there is no deliberate attempt and/or contumacious conduct on the part of assessee in compliance with service tax provisions - Accordingly, penalty under Section 78, so far penalty under Section 77 is concerned, the same is reduced to Rs.5,000/-: CESTAT - Appeal partly allowed: ALLAHABAD CESTAT

CENTRAL EXCISE SECTION

2018-TIOL-1176-CESTAT-MAD

Supreme Cables Vs CCE & ST

CX - M/s. Acer India Pvt. Ltd. engaged in manufacture of 'Personal Computers, Laptops and Computer Systems' - It emerged that the imported laptop computers had been sent to Supreme, for dismantling of Hard Disk Drive (HDD) copying of software into the HDD, mounting the HDD again in laptop computer and also for subsequent testing - It appeared that as per Section 2 (f) (iii) of CEA, 1944, the processes carried out on imported laptop computers amounted to manufacture - It is not disputed that imported laptops are subsequently sent to Supreme in unit containers - It is not the case that purpose of sending these laptops to Supreme is only for quality control checks, or for that matter, to ensure that imported laptops are in working condition - On the other hand, master hard disk drive is totally dismantled and removed from laptops and various softwares are loaded on them, only after which the HDDs are fixed back into the laptops - There are extensive processes which are undertaken subsequently - The name ELCOT is screen printed on each laptops - The ingredients of Section 2 (f) (iii) of the Act will definitely get attracted in respect of processes undertaken, hence the impugned activity will definitely fall within the legal definition of manufacture under the said Section 2 (f) (iii) ibid - Hence, no interference required with the duty demand with interest thereon made against Acer and Rs. 1,11,95,801/- with interest made against Supreme Cables - However, coming to the matter of confiscation of goods and imposition of penalty, assessee had imported the laptops for intended resale and had in fact claimed and obtained refund of SAD on these imports - They have however erred in having subjected the imported goods to post import processes which amount to manufacture within the meaning of Section 2 (f) (iii) of the Act - Nonetheless, they undertook these processes as required by ELCOT, a Govt. undertaking, as laid out in tender and contract, which certainly was public knowledge - Ingredients of Section 11 AC will not be attracted in this case, hence, penalties imposed under Section 11 AC on both the assessees are set aside - So also, for the same reason, confiscation of 1095 laptops from Acer and 651 laptops from Supreme set aside and redemption fines imposed thereon also set aside: CESTAT - Appeals partly allowed: CHENNAI CESTAT

Fives Cail Kcp Ltd Vs CCE

CX - Assessee engaged in manufacture of machineries required for sugar industry, viz. centrifugal machine and boiler parts - They undertook manufacture of some of the machineries while the other goods are manufactured by job workers on the basis of drawing supplied and are directly despatched to the customers and some items are bought out goods - Department took the view that assessee have availed ineligible input service credit of tax paid attributable to non-manufacturing activities mainly in respect of sales commission and other input services like, advertisement charges, audit fees, bank charges and cleaning charges - SCN indicates that these goods have been supplied on the basis of contracts for supply sugar machinery procured by them - For procuring such orders and also for other business activities, they have appointed a commission agent to whom they pay sales commission - They also availed other input service credits which are necessarily for their business/manufacturing activities like advertisement charges, audit fees, bank charges etc - It cannot be then said that these goods manufactured by the job workers are not being done on behalf of assessee - Job workers are not responsible for the marketing or sales of goods, that has to be looked after by assessee only - Hence input services like sales commission are very much eligible input services in terms of Rule 2(l) of CCR during the period under dispute - This being so, there cannot be any denial of input service credits availed by assessee for which reason, the impugned order cannot sustain: CESTAT - Appeal allowed: CHENNAI CESTAT

2018-TIOL-1174-CESTAT-MAD

Bonfiglioli Transmissions Pvt Ltd Vs CCE

CX - Assessee engaged in manufacture of Gear Box, Gear Motor and parts thereof and cleared their manufactured products to SEZ without payment of excise duty, being deemed exports - They were also availing exemption on inputs such as parts of gear box and motor captively consumed in terms of Notfn 67/1995 - Department was of the view that assessee is not eligible for benefit of exemption of duty under said Notfn for the reason that the said notfn does not specify clearances made to SEZ - The clause (1) in said notfn has been amended by Notfn 25/2016-CE, whereby the words "Free Trade Zone" has been substituted by words "Special Economic Zone" - The amendment has been made by way of substitution - The decision in case of Lotus Power Gears Pvt. Ltd. 2016-TIOL-1410-HC-KAR-CX has held that the amendment brought by way of substitution would take effect retrospectively - Tribunal in case of Ultratech Cements Ltd. 2015-TIOL-2110-CESTAT-MAD had occasion to consider the very same issue and observed that the benefit of notification cannot be denied for the reason that the finished goods are cleared to SEZ - Following the said decision, demand cannot sustain: CESTAT - Appeals allowed: CHENNAI CESTAT

Shiva Kant Jha Vs UoI

Miscellaneous - the petitioner is a beneficiary of the Central Government Health Scheme (CGHS) - He is entitled to receive treatment in private ward for life - He filed two bills claiming reimbursement of expenses incurred during treatment received in two private hospitals - Suffering from cardiac ailments, he had a CRT-D device implanted - Later, the Technical Standing Committee rejected the first bill without giving reasons for rejecting it - Later it claimed that the petitioner did not require the CRT-D device - Later, the Committee observed that its approval was not sought for receiving implant of such device - Thereupon, the petitioner approached the Director General of the CGHS, after which a sum of about Rs 5 lakhs was credit to his account - However no speaking order was communicated to the petitioner in this regard - Regarding the second set of bills, the petitioner's claim was restricted to one-fourth of the original amount claimed - Such order too was passed without granting opportunity of personal hearing - Hence in totality for both bills, the petitioner received less than half of the total expenses incurred out of his own resources - Although in an interim order, this Court had directed disbursement of Rs 3 lakhs to the petitioner, the present writ was filed, highlighting the petitioner's advanced age and need for funds to continue treatment.

Held - It is settled legal position a serving or retired employee of the Govt is entitled to receive benefit on medical facilities - The same can be claimed as a right - It is known that the doctor is the best person to decide the course of treatment and the patient has little say in this regard - Also speciality hospitals are established to provide specialized treatment - Thereby, receiving treatment in a speciality hospital not empanelled with the Govt, will not deprive a patient from claiming reimbursement - Such right cannot be denied on this ground alone - Also, once the authorities conclusively determine from records certified by doctors & hospitals, proving that the patient actually took treatment, claim for reimbursement cannot be denied on technical grounds - In the present case, the CGHS authorities meted out literally inhuman treatment to the petitioner by denying reimbursement in full - They cannot mechanically deprive a Govt employee of legitimate reimbursement - The petitioner was admitted in hospitals in emergency conditions - The law does not require prior permission to be taken where the survival of the person is the prime consideration - In such circumstances the CGHS authorities cannot insist on observing procedural formalities - Therefore, in such circumstances, the treatment of the petitioner in a non-empanelled hospital was genuine, due to no other option presenting itself at the critical moment - Hence the balance amount be reimbursed to the petitioner - Such relief is confined to this case only - Also to ensure that senior citizen beneficiaries do not suffer mental harassment & financial loss, each Ministry is directed to set up a grievance redressal committee - Further claims should be finalized & disbursed within one month: Supreme Court (Para 2,13-16) - Writ Petition Allowed: SUPREME COURT OF INDIA

2018-TIOL-678-HC-MAD-CT

Chandra Textiles Ltd Vs State Of Tamil Nadu

Whether in the absence of any enquiry, by making necessary verification, the Revenue can disallow the assessee's claim of exemption by rejecting the Form F declaration as provided by the assessee - NO: HC - Case Remanded: MADRAS HIGH COURT