SERVICE TAX SECTION
2018-TIOL-1291-CESTAT-MUM + Case Story
Reliance Securities Ltd Vs CST
ST - Sharing of fee cannot be interpreted as rendering of services by Appellant to the clients of M/s RMIL- Amount of 95% has been received by appellant from M/s RMIL and not from the clients - Once service tax has been discharged by M/s RMIL on the fees collected from investors before remitting the 95% amount to the Appellant, demand of tax on this amount from the Appellant would be double taxation on same amount which itself is erroneous - Once the service tax on entire value has been discharged, there cannot be double taxation- Impugned order set aside and appeal allowed with consequential relief: CESTAT [para 5, 6, 9] ST - On the one hand the SCN has demanded service tax under the category of ‘Business Support Service' on the ground that the appellant had made available its infrastructure, namely its internet based trading platform to clients of M/s RMIL and on the other hand the impugned order confirmed the demand on the ground that the appellant is providing Stock broking service to investor- This amounts to confirmation of demand beyond the scope of SCN and which is not permissible under law: CESTAT [para 6]
ST - Limitation - Discharge of service tax on entire card fee by M/s RMIL clearly shows that the Appellant had bonafide belief that M/s RMIL is only liable to tax - No element of fraud, suppression or intention to evade service tax has been brought on record - Extended period of limitation is, therefore, not invokable and no penalty is payable: CESTAT [para 7]
ST - Revenue neutrality - Assuming contentions of revenue regarding levy of service tax is accepted, the whole of the service tax paid by RMIL shall be available to the Appellant as Cenvat Credit which will result into revenue neutrality - On this count also demand does not sustain: CESTAT [para 8] - Appeal allowed
: MUMBAI CESTAT 2018-TIOL-1290-CESTAT-DEL + Case Story
Gulshan Jhurani Vs CCE & ST
ST - VCES, 2013 - Delay in payment of second tranche of tax dues - rejection of application - Section 110 is a standalone section and makes no reference to Section 107(4) of FA, 2013 - applicability of s. 110 is required to be examined independently - matter remanded: CESTAT [para 5, 7] -Matter remanded
: DELHI CESTAT
2018-TIOL-1283-CESTAT-BANG
Novell Software Development India Pvt Ltd Vs CST
ST - Assessee filed refund claims for different periods in terms of Notfn 5/2006-CE (NT) being unutilized CENVAT credit of service tax availed in respect of certain services which were used in providing output service - Same was rejected by both the lower authorities on the ground that payment for export service is to be received by service provider in convertible foreign exchange was not satisfied - The proceeds for export of service were not received directly in foreign exchange but the same was routed by Foreign Service receiver through M/s. Wells Forgo NA, USA through HSBC Bank - Ultimately the amount was received by assessee in rupees - Issue has been decided in favour of assessee by Tribunal in case of BBC World Services India Pvt. Ltd. 2018-TIOL-607-CESTAT-DEL - By following the said decision of Tribunal, impugned orders set aside: CESTAT - Appeals allowed: BANGALORE CESTAT
2018-TIOL-1282-CESTAT-MAD
Schafer Leathers Vs CST
ST - Assessee engaged in leather manufacturing, trading and agency - M/s. Wega International Ltd, Hongkong, a foreign commission agent appointed leather exporters / manufacturers to place orders for them - Assessee was appointed to co-ordinate and expedite the shipments keeping a close liaison with shippers - The shippers paid 3.2% on invoice value to M/s.Wega International and paid 1.8% to assessee - Department was of the view that this commission of 1.8% received is subject to levy of service tax - Though the amount is paid by local manufacturers to assessee, this amount belongs to M/s.Wega as the local manufacturers pays only 3.2% and retain the balance to be paid to assessee - Said amount is out of the purview of taxable services - The department has raised the demand for reason that commission is received in Indian Currency - Supreme Court in case of J.B.Boda&Co. (P) Ltd. 2002-TIOL-2578-SC-IT held that deducting the commission due before remitting the amount to foreign company should be treated as commission received in convertible foreign exchange - The Tribunal in case of Arafath Travels Pvt. Ltd. 2017-TIOL-3659-CESTAT-MAD, following the said decision had decided on similar line - Following these judgements, demand is unsustainable - Impugned order is set aside: CESTAT - Appeal allowed: CHENNAI CESTAT
CENTRAL EXCISE SECTION
2018-TIOL-1289-CESTAT-DEL + Case Story
Prism Cement Ltd Vs CCE CX - CENVAT - Input Service - Rule 2(l) of CCR, 2004 - Employee is earning not for himself but also for the family members - Service tax on insurance premium paid by company on the group policy for the employees as well as their family members is allowable as CENVAT credit - Appeals allowed: CESTAT [para 6, 7] -Appeals allowed
: DELHI CESTAT 2018-TIOL-1281-CESTAT-DEL
Jindal Steel And Power Ltd Vs CCE & ST
CX - Assessee engaged in manufacture of various products of iron and steel and availed credit on various inputs and input services in terms of CCR, 2004 - They have two power plants to generate electricity, which is captively consumed by them in manufacture of iron and steel products - The assessee removed fly ash and it was used as backfilling material in coal mines for leveling - For this activity of removal and disposal of fly ash, they used various inputs services - There is another issue regarding the availment of cenvat credit on basis of supplementary invoices issued by service provider - Removal and disposal of fly ash in a manner prescribed by Government is a mandate requirement for continued production of electricity for activities used by assessee - In other words, without such due disposal of fly ash, generation of electricity cannot happen - Impugned order cannot be sustained on merit, regarding denial of various input services or credit with reference to removal and disposal of fly ash is mandate of law - Regarding the dispute relating to supplementary invoices, assessee is contesting the case on the ground that since the amount has already been paid, they are contesting the imposition of penalty - Penalty on the dispute of supplementary invoice is also not sustainable: CESTAT - Appeal allowed: DELHI CESTAT
2018-TIOL-1280-CESTAT-DEL
Mittal Corps Ltd Vs CCE & ST
CX - Proceedings were initiated against assessee for demanding duty on unaccounted stock/clearances of excisable goods, confiscation of unaccounted stock and for imposition of penalties under various provisions of Central Excise Act, 1944 and rules made thereunder - During visit of officers, there was more than 800 M.T. of SS flats found in premises which were not accounted in statutory records - Admittedly, assessee's factory worked round the clock and had a standard process of accounting based on production slips on shift basis and having internal control mechanism for the same - The reason adduced by assessee for non-accountal of such huge quantities of such manufactured products is not convincing - The panchnama prepared in the presence of witnesses was admitted to be true and correct by the authorized person of assessee without any protest - Assessee could not come up with any admissible reason for non-accountal of production claimed to have been made on 11th and 12th October 2009 till the visit of officers on 13/10/2009 - Even if statutory records were not updated for any reason, assessee could have produced the production slip or any other internal document to satisfactorily explain the difference - As such, no reason found to differ with finding of lower authorities regarding confiscability of goods and penalty on assessee - A fine of Rs. 1,10,00,000/- on the value of Rs. 2,05,00,000/- is certainly on higher side, same can be reasonably fixed at 15% of value of goods - Accordingly, the redemption fine of Rs. 30,00,000/- will meet the end of justice - The penalties imposed on main assessee is also reduced - As regards to penalty on Shri Ashok Mishra, a paid employee acting in discharge of his duty as per directions of controlling official cannot be held liable to penalty unless a specific role with a malafide intend for personal gain can be brought out with the evidences - Accordingly, penalty imposed on Shri Ashok Mishra set aside.
As regards to shortage of SS billets, case of clandestine removal cannot be upheld only on the basis of shortage of excisable goods, it is imperative for the assessee to explain satisfactorily the non-availability of excisable goods which were produced and accounted for in their records - In absence of satisfactorily explanation an inescapable conclusion as drawn by the lower authority regarding non-duty paid clearance of such accounted goods cannot be contested.
Regarding unaccounted clearance of SS billets and flats, Original Authority relied on a private note book maintained by Shri Desai, Chief Executive of main assessee - Tribunal is not convinced with the submission of assessee regarding lack of authenticity of records maintained by Chief Executive in his own hand writing - Burden is on assessee to establish that the said goods were never in existence or not clandestinely cleared - The Apex court in D. Bhoormull 2002-TIOL-253-SC-CUS observed that it is extremely difficult, if not absolutely impossible for the prosecution to prove the facts which are especially within the knowledge of the opponent or the accused does not obliged to approve them as parts of its primary burden - Considering the overall facts and evidences examined by the lower authority, same cannot be varied in the absence of concrete contrary evidence: CESTAT - Appeals partly allowed: DELHI CESTAT
2018-TIOL-1279-CESTAT-MAD
Bharat Heavy Electricals Ltd Vs CCE
CX - Assessee had a contract with Grasim Industries Ltd. for supply of boilers and other equipments for setting up of a power plant - The equipment which was to be manufactured by Trichy unit of BHEL was partially sub-contracted to Ranipet Unit of BHEL and such practice was normally followed for most of the contracts executed by BHEL, Trichy - The assessment of goods cleared for such projects were done on provisional basis due to various reasons and assessments were finalized after completion of project - Pursuant to finalization of provisional assessment pertaining to clearances made by assessee to M/s.Grasim Industries, assessing officer excluded the value and weight of Electrostatic Precipitator (ESP) - The Original Authority following the remand direction of Tribunal finalized the assessment by including the value of ESP - Against this, department filed appeal before Commissioner (A), contending that while quantifying differential duty, refund granted to M/s. Grasim should be deducted - Commissioner (A) allowed the appeal filed by department, thus holding that cost of ESP is not to be included in assessable value - Matter remanded to Commissioner (A) to await the judgement of Apex Court in matter of appeal filed by department against the Tribunal's order and then to decide the issue thereupon on merits, following the principles of natural justice: CESTAT - Matter remanded: CHENNAI CESTAT
2018-TIOL-1278-CESTAT-BANG
BPL Ltd Vs CC, CE & ST
CX - Assessee engaged in manufacture of excisable goods - The dispute is for period January 1997 to March 1998 in respect of two models of "DC Defibrillators" which were manufactured in their Palghat factory - Original dispute was regarding benefit of exemption under Notfn 8/96 as well as succeeding notfn No.4/97 - The issue on merits has been decided against assessee by Supreme Court - But Apex Court has directed the Tribunal to re adjudicate the issue on limitation - The dispute regarding eligibility of goods manufactured by asseseee to the benefit of notfn came up before Tribunal - Different views were taken by Member (J) as well as Member (T) - The issue was referred to Third Member who decided that assessee will not be eligible for benefit of notfn - The assessee appears to have declared only the model number of DC Defibrillators manufactured by them and claimed the benefit of notfn - It cannot be said that the benefit was claimed by suppressing any fact - There is no positive act recorded on the part of assessee to fraudulently claim the benefit of notfn by willful misstatement - In absence of any willful suppression, extended period of limitation for making such demand will not be available to Revenue - Matter remanded for requantification of demand: CESTAT - Matter remanded: BANGALORE CESTAT
CUSTOMS SECTION
2018-TIOL-1277-CESTAT-BANG
KCM Appliances Pvt Ltd Vs CC
Cus - Assessee had filed various Bills of Entry for import of "Multimedia Speakers" - At the time of clearance of goods, assessee self-assessed the goods under CTH 8518 2200 of CTA, 1975 which reads as "Multiple Loud Speakers" mounted in same enclosures - The Department rejected the classification of assessee and reclassified the goods under CTH 8519 8100 for speakers with USB playback and 8527 9990 for speakers with FM radio - Issue is no more res integra and has been settled in favour of assessee in their own case in 2016-TIOL-1800-CESTAT-BANG which has held that Multimedia Speaker are classifiable under 8518 2200 even though they have additional functions of USB port with play back port and facilitation of FM radio along with USB port play back - The Tribunal has also noted that the impugned goods are known and sold in the market as speakers only - Decision of Tribunal has also been confirmed by Apex Court - By following the ratio of said decision in assessee's own case, impugned orders are not sustainable: CESTAT - Appeals allowed: BANGALORE CESTAT
2018-TIOL-1276-CESTAT-MAD
Sanco Trans Ltd Vs CC & CE
Cus - SCN was issued by DRI - Preliminary issue which emerges in present appeal is regarding the jurisdiction of DRI Officers to issue notice under the Customs Act - By following the ratio laid down by High Court of Delhi in case of BSNL as well as by considering totality of facts and circumstances, impugned order set aside and matter remanded to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Supreme Court decision in case of Mangli Impex and then on merits of the case but by providing an opportunity to the assessee of being heard - Till the final decision, the status quo will be maintained: CESTAT - Matter remanded: CHENNAI CESTAT |
