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SERVICE TAX SECTION
2018-TIOL-735-HC-KAR-ST
National Co-Operative Bank Ltd Vs CST
ST - the assessee herein is a cooperative bank - Some of its activities were made taxable under heading 'Banking & Other Financial Services' upto June 30, 2012 as well as for the period thereafter - On audit, the Department raised demand on account of Cenvat credit availed, along with interest & penalty - The assessee requested that excess amount paid be refunded, or else SCN be issued under proviso to Section 73(1) to determine tax demanded and recovered & which was not legally payable or barred by limitation - The Department stated that proceedings had concluded at the assessee's option, under second proviso to Section 78(1) - It further stated that since the assessee paid 15% of the duty demand, no further action was required u/s 73(3) r/w proviso to Section 78(1) - Thereby, the assessee claimed that no SCN was issued despite several requests - It also contested imposition of penalty & its collection at time of audit.
Held - In the present circumstances, the decisions of the Apex Court in Larsen & Toubro Ltd., Raj Bahadur Narain Singh Sugar Mills Ltd., and HMM Limited. are applicable - Thereby, extended limitation is not invokable unless SCN is issued highlighting the various commissions or omissions of the assessee, as stated in proviso to Section 73(1) - Section 78 deals with penalty for failure to pay service tax or short payment by reason of fraud or collusion or willful mis-statement or suppression of facts - Second proviso thereof contemplates 15% penalty where tax with interest is paid within 30 days of service of notice - Explanation 2 to Section 73 provides that no penalty is imposable on payment of service tax u/s 73(3) with interest - Thereby, even if the Revenue invokes Section 73(3), no penalty is leviable - Also when invoking provisions of Section 78(1), service of SCN is mandatory - Penalty cannot be imposed automatically, if assessee pays tax within 30 days of being issued an SCN - Hence opportunity to show cause cannot be denied to the assessee who is disputing the liability to tax extending the period of limitation - Matter remanded to Department for issue of SCN & considering assessee's objections: High Court (Para 2,3,18,19) - Writ Petition Allowed: KARNATAKA HIGH COURT
ST - Assessee engaged in activity of Membership of 'Club or Association Services' and 'Business Exhibition Services' - Their major activity was to provide facilities to members by conducting exhibitions to promote their business - A SCN was issued to assessee demanding an amount of Rs.4,81,383/- under category of 'club or association service' and Rs.22,28,567/- under the category of 'Business Exhibition Service' along with interest under section 75 and penalties under Section 76, 77 and 78 of FA, 1994 - Service tax along with interest was paid substantially before issue of SCN and there was short payment of interest which was quantified by O-I-O and the same was also paid - Further, assessee is a non-profit making organization and they had a bona fide belief that they are not liable to pay service tax as they are a society registered under Travancore-Cochin Literary Scientific and Charitable Societies Registration Act, 1955 and paid the service tax before the issue of SCN showing their bona fide - Case of assessee is covered by decisions in Geneva Fine Punch Enclosures Ltd. 2011-TIOL-980-HC-KAR-CX , Adecco Flexione Workforce Solutions Ltd. 2011-TIOL-635-HC-KAR-ST and Bhoruka Aluminium Ltd. 2016-TIOL-3060-CESTAT-BANG , wherein it has been consistently held that if the tax along with interest is paid before issue of SCN, then penalty under Section 78 is not imposable - Therefore, assessee is entitled to benefit under Section 80 of Finance Act and therefore impugned order set aside: CESTAT
ST - Assessee engaged in providing taxable services under category of Business Auxiliary Service - It is alleged that they had also promoted and marketed computer reservation system (CRS) of M/s Amadeus India Pvt. Ltd., a company engaged in global computerized air and hotel booking system and E-Commerce Portal to various airlines and hotels - Alleging that services provided by assessee to said company is in nature of business promotion service, falling under scope of BAS, accordingly, leviable to service tax, demand notice was issued for recovery of service tax with interest and penalty - Adhering to judicial discipline, following the principle laid down in D Pauls Consumer Benefit Ltd. 2017-TIOL-908-CESTAT-DEL and M/s GovanTravels 2017-TIOL-3866-CESTAT-Del , service tax is leviable on amount received by assessee from CRS companies under the category of BAS - However, there has been uncertainty and confusion relating to applicability of levy of Service Tax on incentives received by assessee against use of CRS system provided by various companies namely, Gallilieo and amadus during relevant period of time - This has been clarified by issuance of circular dated 29.02.2016 - In these circumstance, demand be restricted to normal period limitation and no penalty is imposable on assessee - To ascertain/compute, the demand for normal period, the matter remanded to the adjudicating authority: CESTAT - Matter remanded: AHMEDABAD CESTAT
CENTRAL EXCISE SECTION
CX - Assessee is a manufacturer of power supply systems for telecom sector - They import Rectifiers and avail cenvat credit of CVD as well as SAD paid at the time of import - Such Rectifiers after receipt in factory are sometimes cleared for further manufacture of power supply systems and in certain other cases they are cleared for use as spare parts - The dispute is with reference to clearance made by assessee for use as spare parts - High Court has remanded the matter with specific directions to examine the technical write up which was submitted by assessee at the time of appeal before Tribunal in last round of litigation - In addition to technical specifications of Rectifiers which has been imported by assessee, there is a process flow chart indicating the various processes which are carried out by assessee in their factory prior to clearance of same - The write up further lists out the tests and also indicates sample test logs - Further copies of test logs have also been furnished - These test logs indicate that whereas most of the imported goods passed the various tests, a few failed the same and hence are not considered fit for clearance to the spare part market - After understating the various tests carried out, these tests as well as programming carried out within the factory are in nature of acceptance testing i.e. to mean that tests are required to ensure that the goods which are being cleared in spare parts market satisfied the conditions which are prevailed in India - Without carrying out these tests, imported Rectifiers are not considered fit for use in Indian conditions - The processes carried out are in nature of finishing process which can be considered as ancillary to manufacture of a finished product - No justification found for demand of such amount under Rule 3 (5) - Impugned order is set aside: CESTAT - Appeal allowed: BANGALORE CESTAT
CX - Issue in this appeal is whether the transaction being, transfer of rights and privilege of export of 'sugar quota' by assessee on receipt of consideration, whether the same is a service or transaction in goods - In view of ruling of Supreme Court in case of Vikas Sales Corporation 2002-TIOL-608-SC-CT-LB which have been reaffirmed by Supreme Court in Yasha Overseas 2008-TIOL-97-SC-CT , transaction in question regarding sale of rights and privilege of export of sugar quotais sale of goods and no service is involved: CESTAT - Appeal dismissed: ALLAHABAD CESTAT
CUSTOMS SECTION
Cus - Assessee had imported a consignment of silk fabrics in month of March 2007 and claimed benefit of Notfn 30/2004-CE, in respect of additional duty of customs equal to excise duty chargeable on imported silk fabrics classifiable under Tariff item No. 5007 - Original authority however held that exemption was not available to imported on the ground that it was applicable only to the goods manufactured in India and not to imported goods since there is a condition that there is no cenvat credit is availed on inputs - On appeal, Commissioner (A) held that assessee had not produced any evidence to show that they claimed the benefit of notification at the time of assessment, nor had they made the assessing officer known that they were aggrieved over the assessment order - On these grounds, he rejected the appeal as not maintainable - On identical issue which had been agitated before High Court of Madras in case of Prashray Overseas Pvt. Ltd. 2016-TIOL-1157-HC-MAD-CUS , in which judgment, issue has been held against assessee - Following the ratio of said judgment, appeal has no merit for which reason it is dismissed: CESTAT - Appeal dismissed: CHENNAI CESTAT
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