SERVICE TAX
2018-TIOL-203-SC-ST
Air India Ltd Vs CST
ST - the assessee company is a leading airline company - It engaged General Sales Agents to perform functions such as promotion & marketing of its business and other anciliary activities - The Department raised duty demand with interest, under heading Maintenance & Repairs Services & Business Auxillary Services, and imposed penalty - The Tribunal upheld the demands, based on the rationale that even though the services were performed abroad, their ultimate consumer was the assessee having permanent establishment in India - Duty demand was upheld under reverse charge - The penalty too was upheld on grounds of suppression of facts leading to loss to State exchequer & that the assessee could not claim ignorance of law - Subsequently, the High Court set aside the demand for pre-deposit of duty, raised by the Tribunal & directed the Tribunal to hear the matter again.
Held - Notice issued. - Notice Issued: SUPREME COURT OF INDIA 2018-TIOL-1565-CESTAT-MAD
Interfreight Services Pvt Ltd Vs CST (Dated: March 14, 2018)
ST - the appellant herein is engaged in providing Customs House Agent service and Business Auxiliary Service - On audit, the Department opined that the assessee is engaged in booking space for cargo transportation in airlines & ships - The assessee also paid charges for space bookings to respective airlines & steamers - The assessee also collected freight charges for transportation of goods - While charging freight the assessee collected extra charges - The Department sought to levy tax on such charges under the heading Business Auxiliary Service - Duty demand was raised with interest & penalty.
Held - the issue at hand stands settled by the Tribunal in Greenwich Meridian Logistics (I) (P.) Ltd. v. CST as well as in Bax Global India Ltd. v. CST - In this case, it was ultimately held that the notional surplus earned arises from purchase & sale of space and not by acting for a client who has space or slot on a vessel - Following such decision, the demands are set aside: HC (Para 1,5) - Appeal Allowed: CHENNAI CESTAT
2018-TIOL-1562-CESTAT-HYD
MMTC Ltd Vs CCE, C & ST
ST - Assessee's is a public limited company and engaged in rendering Business Auxilliary Services of various metals/minerals, non ferrous metals, fertilizers, agro products, general trading and other commodities in bulk-Its main activities are import and export of various bulk commodities such as minerals, iron, ore, gold, agro, fertilizers, coal and Hydrocarbons, non ferrous metals - In the instant case, Assessee exported goods and claimed refund of the Service Tax paid on the services which went into production and export of those goods-Central Government issued Notification No. 41/2012-ST clarifying that the date of export shall be the date on which the proper officer of Customs makes an order permitting clearance and loading of the said goods for exportation under Section 51 of the Customs Act, 1962 (commonly referred to as Let Export Order) - The Commissioner (Appeals) upheld the O-I-O rejecting the claim for refund - Assessee's were in appeal against the O-I-A contesting that they should be granted refund of Service Tax paid on services used in the goods exported by them beyond one year from the date of LEO -
Held - The Tribunal held that the time limit laid down in the statute or notification for claiming a refund is sacrosanct and this cannot be modified either by the officers or by the Tribunal when the statute itself does not provide for any such relaxation-Notification is a subordinate legislation made by the Government in exercise of the powers delegated by the Parliament - Following decision in UOI Vs. Kirloskar Pneumatics Company the claim for refund of service tax paid on services used in the goods exported by them is rejected : CESTAT ( para 1,2,3,8,9) - Appeal Dismissed: HYDERABAD CESAT
2018-TIOL-1561-CESTAT-MUM
Jet Airways India Ltd Vs CST
ST - During the period September 2004 to December 2004, appellant were entitled to utilize the CENVAT credit of Rs.1,24,19,300/- being 20% of the total service tax liability of Rs.6,20,96,495/- for the payment of service tax - However, they did not utilize the same and paid the whole amount in cash - In January 2005, they utilized the CENVAT credit inasmuch as the available CENVAT credit for the months of September 2004 to December 2004 was utilized by appellant in January 2005 - Alleging that the Appellant had taken credit of an amount more than 20% of the total service tax liability in contravention of rule 6(3)(c) of the CCR, 2004 and adjusted an amount more than Rs.one lakh which was more than the limit specified in rule 6(4B)(iii) and also did not inform the department,SCN issued and demand confirmed with penalties - appeal to CESTAT.
Held: Once the assessee becomes entitled to the credit, its utilization cannot be restricted on the ground that he has not utilized the same in the period for which it could have been used - whole issue is also revenue neutral - there is no element of suppression or malafide intention as the appellant by non-utilizing the credit early did not cause any loss to the exchequer - no merit in the demand and also case is hit by limitation - impugned order set aside and appeal allowed with consequential relief: CESTAT [para 4] - Appeal allowed: MUMBAI CESTAT
2018-TIOL-1560-CESTAT-MAD
CCE Vs Sakthi Sugars Ltd
ST - the assessee company raised funds through issue of Foreign Currency Convertible Bonds (FCCB) in capital markets - Such funds were raised through overseas lead arrrangers, to whom the assessee paid upfront fee, management fee, commitment fee, underwriting fee, out-of-pocket expense & legal fee - The Department opined that such amounts paid would attract service tax under heading 'Banking & Other Financial Services' and that the assessee must pay tax under reverse charge - Duty demand was raised with interest & amounts already paid were appropriated with imposition of penalties - On appeal, the Commr.(A) upheld the duty demand with interest but set aside the penalties - Hence the cross appeals were filed by both the assessee and the Revenue -
Held - The Tribunal in the assessee's own case had earlier held that demand on legal fees were unsustainable since they would not fall under 'Banking and Financial services' - Also such service became taxable only w.e.f. 1.9.2009 - The penalties were also set aside on grounds that prior to introduction of Section 66A, only the Rules provided for levy of service tax on reverse charge mechanism & there was doubt as to whether service tax could be levied based on the Rules & without having a charging section in the Act - Since this precedent case is squarely applicable in the present case, the demand on legal fees is set aside - Thus, excluding such legal fees, the matter is remanded for requantification of the remaining duty demand - Deletion of penalties is upheld: CESTAT (Para 2,6,7) - Department's Appeal Dismissed: CHENNAI CESTAT
CENTRAL EXCISE
2018-TIOL-1559-CESTAT-AHM
Jenil Empire Vs CCE & ST
CX - Assessee, M/s Jenil Empire is first stage dealer and M/s Bansilal S. Kabra is second stage dealer - These dealers procure inputs and supply it to manufacturer, namely, M/s Innova Cast P. Ltd. who in turn avail credit of duty mentioned in invoices issued by second stage dealer M/s Bansilal S. Kabra - It is alleged that M/s Innova Cast P. Ltd. availed Cenvat credit without receipt of inputs - Assessee submits that supplies made by M/s Jenil Empire and Bansilal S. Kabra, to other manufacturers, namely, M/s S.S. Aloys Products Pvt. Ltd. and M/s Apex Alloys (P) Ltd. has been considered by Tribunal, in similar facts and circumstances examinig the receipt of and use of inputs mentioned in those input invoices, against backdrop of allegation by Department of non-receipt of goods, by said manufactures, but availing of credit on invoices only, and after analysis of evidences vide 2014-TIOL-3276-CESTAT-AHM held that credit is admissible to manufacturer M/s S.S. Alloys Products Pvt. Ltd. on the invoices issued by M/s Jenil Empire and M/s Bansilal S. Kabra and allowed their appeal - In view of aforesaid finding relating to M/s S.S. Alloys Products Pvt. Ltd. and following the same, impugned order set aside: CESTAT - Appeals allowed: AHMEDABAD CESTAST
2018-TIOL-1558-CESTAT-AHM
Western India Ceramics Pvt Ltd Vs CCE & ST
CX - the assessee company's factory was visited by Revenue officers - Verification of stock revealed excess of stock as well as shortage of some finished goods - The Revenue alleged clandestine removal of finished goods without payment of duty - The assessee admitted the shortages & paid duty - Further, some goods lying in the premises of a customer were also seized - Duty demand was raised with equivalent penalty & personal penalty on director of assessee firm - Duty already paid was also appropriated - Such findings were upheld by the Commr.(A) -
Held - The assessee failed to explain how come the excess stock was found in its premises - Considering shortage in the stock, clearance of the of vitrified tiles cleared clandestinely & seizure of some quantity of goods in the buyer's premises, it can be inferred that excess quantity of Vitrified Tiles found in packed in boxes was not in semi finished condition - It was meant to be cleared without payment of duty and hence the goods are sliable for confiscation - Since the excess production and clearance took place at the behest of the director, the personal penalty imposed on him is upheld - The O-i-A in question warrants no interference: CESTAT (Para 2,5) - Appeals Dismissed: AHMEDABAD CESTAT
CUSTOMS
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