SERVICE TAX

Malar Publications Ltd Vs CST

ST - the assessee company is engaged in canvassing advertisements for two publications, for which it receives fixed retainership fee - The Revenue opined that such activities were taxable under heading Business Auxiliary Service & that the assessee promoted business of both publications & received consideration - Duty demand was raised with interest & penalty u/s 78 of the Act -

Held - The assessee is not a space selling agent - Its activities pertain to general promotion of advertisement revenue of the two publications - Though promotion is with reference to advertisement revenue, it is not taxable service under advertising services - The same was clarified many times by the Board - Also advertising agency & also auxiliary activities of space selling are not relevant to the assessee's activities - Since the assessee is improving advertisement revenue of the clients & promoting the client's services, such services on part of the clients are exempted & will not make the assessee as not providing any taxable service - The scope of Business Auxiliary Service which includes promoting or marketing of services provided by the clients, clearly covers the assessee's activities - However, invocation of extended limitation is unwarranted as the assessee was under bona fide belief that its services were not taxable under Business Auxiliary Service but in fact taxable as auxiliary advertising agency service - Hence imposition of penalty is unwarranted too: CESTAT (Para 2,3,4) - Appeal Partly Allowed: CHENNAI CESTAT

CENTRAL EXCISE

Real Image Media Technologies Pvt Ltd Vs CCE

CX - Assessee is manufacturer of "Servers" falling under category of "Automatic Data Processing (ADP) machine" - It appeared that assessee had sold some servers directly to cinema theatres/halls under normal transaction value and in respect of remaining servers, assessee had raised stock transfer invoices - In some cases, in name of their Head office from where they were dispatched and in other cases invoices though addressed to Head office but servers were shipped to customers directly - To determine assessable value of stock-transferred servers, assessee adopted cost construction method based on CAS-4 value as envisaged under Rule 8 of CEVR, 2000 for purpose of payment of duty - Department took the view that procedure followed by assessee was not in order - The core issue that comes up for decision is whether impugned clearances are to be treated as stock-transfer meriting valuation under Rule 8 of Valuation Rules or otherwise, whether they require to be construed as "sale" as per Rule 4 of the Valuation Rules - There is definitely transfer of possession of impugned goods from assessee to their customers partly by cash and partly by other valuable considerations (right to collect advertisement charges from sponsors of advertisements and receipt of "pay per show" amount for QUBE products at theatre premises - The contours of transaction between assessee and their customers in respect of impugned servers therefore satisfy the definition for "sale" under Section 2(h) of CEA, 1944 - This being so, valuation of such sale of sold goods for purposes of levy of Central Excise duty will have to be within the parameters of Section 4 of the Act read with CEVR, 2000 - No merit found in arguments and contentions of assessee against the decision of adjudicating authority concerning method of valuation of impugned goods, demanding differential duty liability with interest thereon and also appropriating the amount paid by assessee during investigation towards duty and interest liability respectively - It is noticed that even before issue of SCN assessee had paid up differential duty liability, albeit under protest - From all accounts, the issue boils down to mis-interpretation of valuation provisions by assessee - Ingredients for imposition of equal penalty under Section 11AC are not attracted - Hence the imposition of equal penalty under that Section by adjudicating authority cannot be sustained and is therefore set aside: CESTAT - Appeal partly allowed: MADRAS HIGH COURT

2018-TIOL-1453-CESTAT-DEL

CX - the assessee company manufactures Ferro Vanadium and Ferro Molybdenum - Pursuant to a visit to the assessee's factory, an SCN was issued raising duty demand for alleged shortage of raw material & finished goods - Separate demand was raised based on statements of transporters - Further demand was raised based on photocopies of two invoices - Another demand was raised based on diary entry, purpoted to have made sale - Duty demand was also raised on grounds that the assessee availed GTA services but did not pay tax as service recipient - Such demands were upheld by the Commr.(A) .

Held - The largest duty demand raised is based on documents recovered from the premises of a transporter - There are numerous decisions stating that clandestine removal cannot be alleged based on documents recovered from third parties - Such demand with penalty is set aside - Regarding the demands raised for shortages of input & finished goods, the entire stock verification was conducted on eye estimation basis - Besides, the shortage was of a mere 7MT & 22MT, which can be attributed to faulty accounting, wastage or manufacture of sub-standards goods - Apart from shortages there is no other evidence of clanedestine removal - It is settled law that shortage per se cannot be used to allege clandestine removal - Hence demand raised on this count is unsustainable - Regarding the demands raised based upon diary entry and photocopy of invoices, the Revenue did not conduct independent investigations into their veracity - Moreover, the director of the assessee company gave exculpatory statements in this regard - Hence demands raised on these grounds are unsustainable - Regarding the non-payment of duty on GTA service as service recipient, the assessee claimed to have paid the same - Although this claim is unproven, nonetheless tax paid would be available to the assessee as credit, leading to a revenue-neutral situation - It is settled law that extended limitation cannot be imposed in revenue-neutral situations - Hence demands are set aside: CESTAT (Para 1,2,4-7) - Appeal Allowed: DELHI CESTAT

Om Disposals Vs State Of UP

GST - the assessee company, engaged in manufacturing disposable paper cups & plates, is registered under GST - It order machine for making paper cups from vendor based in Delhi The vendor issued advance receipt of about Rs 7 lakhs - After a delay, the vendor dispatched the machine without informing the assessee & issued invoice - The vehicle ferrying the machine was intercepted on grounds that grounds were being ferried without e-Way bill - When the assessee came to know of the interception, it immediately generated e-Way bill & submitted supporting documents - However, the machine was confiscated and duty demand was raised, with penalty equivalent to the sale amount being imposed - The assessee's appeals before the appellate authority & Tribunal were dismissed - Hence the assessee filed the present petition challenging the Notfn. issued by the Govt of UP which brings into force the E-way Bill 01 - Such bill was prescribed for importing goods over Rs 50000 from outside UP - The assessee seeks the quashing of such enabling notfn as well as the release of the machine & scrapping of the penalty.

Held - considering the submissions of both sides as well as the precedents relied upon by them, this court is faced with two judgments given by the Coordinate Benches of this Court with diametrically opposite conclusions - Besides, while the first judgment apparently omitted to consider relevant provisions of law, the second judgement overlooked the earlier judgment which could have constituted binding precedent - In such circumstances, the doctrine of per incuriam applies to both decisions - Thereby, it would not be correct to adjudicate such issue - The question as to whether the State Government is empowered under Rule 138 of U.P. GST Rules to issue a notification prescribing carrying of any forms or documents along with a consignment during inter-State movement is referred to the Larger Bench headed by the Chief Justice - Nonetheless, the machine & the vehicle be released on furnishing of bond: High Court (Para 1-10,28-34) - Case Deferred: ALLAHABAD HIGH COURT

2018-TIOL-01-AAR-VAT

Borsad Tobacco Company Pvt Ltd

MVAT - Shahin Bhajki Masheri is covered by schedule entry D-12 of MVAT Act, 2002 and liable to tax @20% - prayer to grant prospective effect to this order is rejected: AAR

2018-TIOL-854-HC-MAD-VAT

Sharoff Syndicate Vs ACCT

2018-TIOL-841-HC-MUM-VAT

Carestream Health India Pvt Ltd Vs State Of Maharashtra

Whether when an identical issue is found to be settled in favour of taxpayer, then no conditional pre deposit should be insisted from him for disposing of an appeal - YES: HC - BOMBAY HIGH COURT