SERVICE TAX

2018-TIOL-1393-CESTAT-MUM + Case Story

Onward E-Services Ltd Vs CST

ST - Merely because the Service Tax was collected (but not paid to the exchequer) the ingredient available under Section 78 of FA, 1994 does not get attracted when the fact of the matter is that the appellant had a clear intention to pay service tax as correct value was declared in the ST-3 returns - appellant has clearly made a case to get immunity u/s 73(3) of FA, 1994 as they have paid the entire short paid service tax amount of Rs.2,61,64,235/- along with interest before issuance of show-cause notice - Penalty imposed u/s 78 of FA, 1994 set aside, however, service tax paid along interest and confirmed by adjudicating authority is maintained - appeal allowed in above terms: CESTAT [para 4, 5, 6] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-1392-CESTAT-MUM + Case Story

CST Vs Reliance Communication Ltd

ST - Prior to 01.03.2011 the gross value of the service shall be the value received by the Respondent - It is only w.e.f. 01.03.2011 that an explanation has been added after rule 5 (1) of the Service Tax (Determination of Value) Rules, 2006 clarifying that for the purpose of telecommunication service [Section 65(105)(zzzx)] the value shall be the gross amount paid by the person to whom the service is provided by the telegraph authority - Thus, only after insertion of aforesaid explanation in case of service provided by way of recharge coupons or prepaid cards or the like, the value shall be the gross amount charged from the subscriber or the ultimate user of the service and not the amount paid by the distributer or any such intermediary to the telegraph authority - Period involved is June 2006 to October 2006 - Impugned order upheld and Revenue appeals dismissed: CESTAT [para 5, 6]

ST - Refund - Mere pendency of appeal before High Court does not take away the binding effect of the earlier Tribunal order in the respondent assessee’s own case: CESTAT [para 7] - Appeals dismissed: MUMBAI CESTAT

2018-TIOL-1391-CESTAT-DEL

V3S Infratech Ltd Vs CCE

ST - Assessee is providing various taxable services such as, works contract service, renting of immovable property service, goods transport agency service, intellectual property service and commercial or industrial construction services - During relevant period, assessee was engaged in providing inter-alia, works contract service in respect of various projects - Taking the view that assessee has failed to pay Service Tax properly, demand has been confirmed against assessee under Section 73 of FA, 1994 and equal amount of penalty under Section 78 of the Act - Service Tax demands in impugned order have been worked on the basis of bills raised by assessee - The tax was payable upto 31.03.2011 on the basis of actual receipts and not on the basis of bills raised by assessee - To this extent, the entire demand confirmed needs to be re-cast - Further claim of assessee that Service Tax liability on the basis of actual receipt has already been discharged by them also needs to be considered - Assessee submits that he is in a position to produce evidence before adjudicating authority, if an opportunity is extended - Matter remanded to the adjudicating authority for de-novo decision: CESTAT - Matter remanded: DELHI CESTAT

CCE, C & ST Vs Vibhutigudda Mines Pvt Ltd

ST - Assessee engaged in export of iron ore fine and lumps - During course of manufacture of goods, assessee received certain input services on which they have availed cenvat credit and as they could not utilize cenvat credit, filed the refund claim under Rule 5 r/w Notfn 5/2006 CE - The Revenue is of the view that as the goods exported by assessee is an exempted goods, therefore as per Rule 6(1) of CCR, 2004, they are not entitled to cenvat credit on input/input services used for manufacturing of exempted goods - Identical issue came up before this Tribunal in case of Jolly Board Ltd. 2014-TIOL-316-CESTAT-MUM which was held in favour of assessee - The said order of Tribunal was carried before the High Court and the High Court dismissed the appeal filed by the Revenue and in the said order the High Court has observed that the appeal filed by the Revenue in the case of Drish Shoes Ltd.2010-TIOL-350-HC-HP-CX has been dismissed by Apex Court - In that circumstances, no infirmity found in impugned order, therefore, same is upheld: CESTAT - Appeals dismissed: BANGALORE CESTAT

CENTRAL EXCISE

2018-TIOL-1389-CESTAT-AHM

Shivom Industries Vs CCE & ST

CX - During audit, it came to the knowledge of department that assessee has purchased certain scrap and waste in E. Auction from Hindustan Unilever Limited and taken Cenvat credit on the same as capital goods which has been cleared by them after refurbishing, on payment of duty - Case of Revenue is that as assessee is engaged in manufacture of Cosmetics and Toiletries and said scrap purchased from Hindustan Unilever Limited is not capital goods for them - It is fact on record and is recorded in SCN that scrap purchased by assessee in E. Auction has been refurbished as capital goods and same has been cleared on payment of duty - When this fact was in knowledge of department, then SCN was not required to be issued to assessee - However, to drag into unnecessary litigation, SCN was issued to assessee - Admittedly, assessee has not claimed refund of duty paid by them as refurbished goods - The goods in question do not amount to manufacture but the same has been cleared on payment of duty - Therefore, the duty payment made by assessee on the said goods shall amount to reversal of amount as Cenvat credit - Impugned order deserves no merit and same is set-aside: CESTAT - Appeal allowed: AHMEDABAD CESTAT

Sundaram Clayton Ltd Vs CCE

CX - The assessee who is engaged in manufacture of 'Aluminium Dye castings', availed Cenvat Credit of service tax paid on 'Rent a Cab service' and 'Aviation Service' availed and utilized by them in ordinary course of their business - Revenue has denied such credit on the ground that after the amendment to definition of Rule 2(1) of CCR, 2004, under exclusion clause such services cannot be held to be cenvatable input services - Issue of availability of credit in respect of rent a cab service was subject matter of dispute before Tribunal in case of M/s. Marvel Vinyls Ltd. 2016-TIOL-3071-CESTAT-DEL and it was held that the same would be available to assessee using such services in course of their business - As regards aviation services, issue is covered by Tribunal's decision in case of Force Motors Ltd. 2008-TIOL-1199-CESTAT-MUM - Impugned order set aside: CESTAT - Appeal allowed: CHENNAI CESTAT

CCE Vs Bhagwati Power And Steel Ltd

CX - the assessee company manufactures Sponge Iron & availed Cenvat credit on inputs & capital goods - Upon search of assessee's factory, the Department found certain incriminating records showing suppression of production & clandestine removal of Sponge Iron - Duty demand with penalty u/s 11AC was imposed, along with personal penalty on the director of the assessee company, under Rule 26 of CER, 2002 - Such demands were set aside by the Commr.(A)

Held - The duty demanded was based primarily on loading advice, test certificates (Joint Analysis Report), loose records & documents recovered - The Department also considered the input-output ratio before alleging clandestine removal - Further, an inculpatory statement taken from one employee was also considered - However, the Department omitted to investigate into the procurement of raw materials, actual manufacture of goods & their clearances from factory as well as identity of buyers - Charges of clandestine removal must be based on tangible evidences & not on presumptions - Hence the O-i-A in question warrants no interference: CESTAT (Para 3,4,5,6,8,9) - Appeal Dismissed: DELHI CESTAT

2018-TIOL-1386-CESTAT-DEL

Vaibhav Global Ltd Vs CCE

Cus - Assessee imported pre-forms semi precious stones and claimed classification under CTH 7103 9990 as other of otherwise worked precious stone, semi-precious stone under main heading 7103 - They have claimed assessment of rate of duty of 2% in terms of Sl. No. 313 of Notfn 12/2012 Cus - Revenue sought to classify the product as 'other' category under main heading but as intermediate stage between 'rough' and 'cut and polished' semi precious stone - By classifying the product as partly cut, proceedings were initiated to demand and recover differential customs duty with a proposal to confirm rate of duty at 10% - Original authority as well as first appellate authority confirmed the view of Revenue by holding the product as semi-worked and cannot be considered either as totally 'rough' or 'cut or polished' stone - Support was drawn from later amendment of notfn by Notfn 13/12-Cus - Said notfn specifically inserted S. No. 312 A for pre-form of precious and semi-precious stone with rate of duty of 2% - Since these imports were prior to that date, Revenue held that no concessional rate was available and accordingly, lower authorities confirmed the demand of 10% on said goods - Case of assessee that the product should be considered as rough gem stone is not sustainable - Infact as correctly pointed out in impugned order, later amendment carried out by notfn 12/13 brings more clarity to the issue - Accordingly, pre-forms imported by assessee are not covered by any concessional rate of duty during the period of import: CESTAT - Appeal dismissed: DELHI CESTAT

2018-TIOL-1385-CESTAT-BANG

Mohamed Sageer Vs CC

Cus - Assessee was intercepted at airport by Customs officers and in his personal search, 4 white coloured heavy packets found and on examination, 6 yellow metallic bars which appeared to be made of gold was found wrapped in tissue paper and covered with white adhesive tape - Same were confiscated and a penalty was imposed - Assessee vide his statement under Section 108 of Customs Act, 1962 has conceded that he brought the gold bars for one Mr. Habeeb who has paid him Rs.25,000/- in addition to his travel expenses - Further, in the case set up by assessee, he has stated that he brought the gold as an investment from his funds as well as funds given by his friends - Assessee was searched in the presence of Gazetted officers and he was found concealed this gold bars in his socks which he was wearing and was trying to exit from the green channel without any declaration - Statement made under Section 108 of Customs Act, 1962 by assessee has not been retracted till now - Further, assessee has failed to discharge the burden of proof that the gold is licit - In case of Md. Akhtar 2011-TIOL-988-HC-PATNA-CUS, High Court of Patna has observed that the statement made by persons under the provisions of Section 108 of Customs Act are admissible as evidence and the conclusion of culpability can be based on such statements - There is no infirmity in impugned order which is upheld - As far as imposition of penalty on assesee, same is reduced to Rs.50,000/- under Section 112(a) and Section 112(b) of Customs Act, 1962: CESTAT - Appeal partly allowed: BANGALORE CESTAT