SERVICE TAX
2018-TIOL-1631-CESTAT-DEL
Hal Offshore Ltd Vs CST
ST - Assessee engaged in providing various taxable services - Dispute relates to service tax liability of assessee with reference to provision of Multi Purpose Support Vessel (MSV) to ONGC and L&T on charter hire basis - There is a dispute also with reference to valuation of management service undertaken by assessee on offshore, supply vessels of ONGC - Original Authority after detailed examination of terms of agreement and nature arrangement came to the conclusion that it is a clear case of supply of tangible goods - Same service cannot be taxed under two different tax entry for different periods - The only contest of revenue is that prior to 16/05/2008 the same service should be taxed under different entry, namely, BSS - No legal support found for such assertion - In case of Diebold Systems (P) Ltd. 2008-TIOL-489-CESTAT-MAD , Tribunal held that in case of introduction of new tax entry without amending the pre-existing tax entry it cannot be said that the same activity will be liable to tax under pre-existing as well as new entry - Following the said ratio, there is no merit in contention of Revenue for tax liability of assessee in respect of supply of tangible goods prior to 16/05/2008.
The second major point contested by Revenue is with reference to eligibility of assessee for concession under Notfn 12/2003 - Tribunal is not dealing with deemed sale situation - The actual sale as evidenced by documents and corroborated by arrangement with client and chartered accountant certificate has been examined and analysed by Original Authority - There is nothing in present appeal to state that said Notfn is not available because of existence of different facts which are evidenced - As such, no reason to interfere with findings of Original Authority.
Assessee discharged service tax now confirmed by Original Authority before issue of SCN - There were delays in payment of such tax - Such delay was the only reason for imposition of penalty under Section 76 - The assessee pleaded that delay was caused due to factors beyond their control and wherever there is a delay they have discharged the tax with interest as applicable during the material time - Noting this as reasonable cause for non-payment of tax in time, provision of Section 80 could be invoked in this case for waiver of penalty under Section 76: CESTAT - Revenue's appeal dismissed: DELHI CESTAT
2018-TIOL-1630-CESTAT-DEL
Mitsui Prime Advanced Composites India Pvt Ltd Vs CCE
ST- The Assessee is a dealer of PP compounds falling under Chapter 39 of the Central Excise Tariff Act, 1985 - Its parent company is located in Japan - During 2007-2012 the principal company deputed the employees for providing services in the factory premises - The Department noted that employees were being paid by the foreign principal and not the Assessee and hence, SCNs were sisued raising demand for payment of service tax under 'Manpower Recruitment and Supply Agency services' - The Commr.(A) confirmed the demand for service tax.
Held - To comprehend whether the Assessee was liable to service tax, the employee contract and agreement between the parent company & the Assessee, must be examined - Considering the same, there was employer - employee relationship between the Assessee as well as the deputees - The salary was paid by the Assessee to such deputees - Even the PF contribution and other social security benefits were discharged by the Assessee - The relationship was strictly in the nature of employer - employee - Hence the O-I-A is set aside, as owing to the employer-employee relationship there was no supply of manpower service and no tax liability arises : CESTAT ( Para 1, 6, 7, 8) - Appeal Allowed: DELHI CESTAT
2018-TIOL-1624-CESTAT-MAD
DM Wall System Company Pvt Ltd Vs CST
ST - The issue was in respect of fresh service tax demand under the category of Intellectual Property Right Service- Earlier SCN had been issued under “consulting engineer service” which arose from the same agreement-Revenue was of the view that Assessee had suppressed facts with the view to evade payment of tax- Revenue invoked the larger period and issued fresh SCN giving the reason that with the introduction of intellectual property right service the Assessee should have come forward on their own and should have filed the ST3 returns as self-assessment procedure is required to be followed.
Held- Following the ratio laid down in Nizam Sugar Factory Vs. Collector of Central Excise, A.P. , the demand is time barred : CESTAT (para 2,5) - Appeal Allowed: CHENNAI CESTAT
CENTRAL EXCISE
2018-TIOL-988-HC-DEL-CX + Case Story
Shiva Alloys Pvt Ltd Vs CCE
CX - Payment of duty, whether made before or after issuing of show cause notice, is not determinative and a relevant factor for deciding whether or not penalty should be imposed under Section 11AC of the Excise Act - mere payment of differential duty would not matter once the conditions for imposition of penalty under Section 11AC was satisfied - appellant does not dispute and does not challenge the conditions mentioned in Section 11AC of the Act were satisfied as the appellant does not contest and submit that fraud, misrepresentation or suppression of facts in contravention of provisions of the Act or the Rules were missing and absent -appellant had not paid 25% of the penalty within the stipulated time of 30 days, therefore, 100% penalty has to be paid by the appellant - Appeal dismissed: High Court [para 7, 8, 10, 12] -Appeal dismissed
:DELHI HIGH COURT
2018-TIOL-987-HC-DEL-CX + Case Story
Prabhat Zarda Factory Company Vs CCE
CX - As the final fact finding authority, the Tribunal can rely upon the reasoning, findings or inferences given in the order-in-original but there has to be also fresh and independent application of mind and not a mere reproduction and repetition, even if the final conclusion is one of affirmation: High Court [para 8 to 11] - Matter remanded
:DELHI HIGH COURT
2018-TIOL-1628-CESTAT-MUM JSW Steel Ltd Vs CCE
CX - Appellants are engaged in manufacture of GP Coils, GP Sheets, CR/CRCA Coils and sheets and H.R Plastes (Ch. 72) and have been receiving goods from their sister concern for job work under Annexure-II challan in terms of rule 4(5)(a) of CCR, 2004 – appellant have been reversing CENVAT credit on consumables used by them in such job work activity – Revenue allegation is that since the said job work is exempted in terms of notification 214/86-CE, the appellant is liable for reversal of 8%/10% amount of the value of the job worked goods in terms of rule 6(3) of CCR, 2004 - since demand confirmed, appeal to CESTAT.
Held: Issue is no more disputable as having been settled by the Larger Bench decision in Sterlite Industries - 2005-TIOL-305-CESTAT-MUM-LB (upheld by the Bombay High Court) and where it is held that credit is available on the inputs used in the job work activity undertaken in terms of notification 214/86-CE – in view thereof, the demands against the appellant and penalties imposed are not sustainable – appeal allowed with consequential relief: CESTAT [para 4, 5] - Appeal allowed: MUMBAI CESTAT
2018-TIOL-1627-CESTAT-MUM
Sandoz Pvt Ltd Vs CCE
CX- The Assessee produces, develops, and manufactures medicine products - The Assessee-company offers products for biosimilars, oncology injectables, anti-infectives, inhalables, transdermal patches and complex oral solids - The employees of the company had travelled for official work for which the Assessee claimed credit under the category of "tours and travels" - Besides tours & travel services, construction services were used by the assessee for housing complex and residential colony - The credit of CENVAT with respect to construction services was denied on grounds that amended definition of 'input service' exclude the construction services as eligible for availment of CENVAT credit - In addition, credit was denied on the activity of Tours and Travels as it would not amount to input services under the provisions of Rule 2(1) of Cenvat Credit Rules, 2004.
Held - CENVAT credit on tours & travels needs to be allowed as the inclusive portion of definition of 'input services' indicates any services used in relation to business activity and the service tax paid on such services are eligible for CENVAT Credit - The construction services were used for repair and renovation of the factory premises - Further, after amendement of the definition of "input services" credit of input services used for repair and renovation of factory or offices is allowed as clarified by CBEC Circular No. 943/4/2011-CX :CESTAT (Para 6, 7, 8, 9, 10) - Appeals Disposed: MUMBAI CESTAT
2018-TIOL-1626-CESTAT-ALL
Simbhaoli Sugar Mills Ltd Vs CC & ST
CX - The Assessee is a manufacturer of sugar and molasses having a distillery division as well - During audit, the Department found the unit have paid amount towards freight that the tax was short paid for the disputed period - Duty demand was raised for payment of ST plus cess with interest & penalty - The penalty was enhanced by the Authorities - The assessee highlighted that the amounts were paid towards molasses handling charges for handling within the factory premises and not meant for transportation of goods, therefore not liable to be taxed under GTA - The Commr.(A) observed that there was suppression of facts with intent to evade payment of ST.
Held - The handling charges form part of the cost of production and/or valuation of excisable goods cleared, therefore, no service tax is leviable : CESTAT (Para 2, 4, 6) - Appeal Allowed: ALLAHABAD CESTAT
2018-TIOL-1625-CESTAT-MUM
CCE Vs Acme Specialities
CX - Respondent assessee availed CENVAT credit on their final products viz. ‘Acmesole Sole 2183', ‘Indole' etc. upon re-entry of the same in the factory - case of the department is that as per rule 2(k) of CCR credit is eligible on ‘inputs' used in or in relation to manufacture of final product whereas the assessee availed credit on their final products itself hence not entitled to - Commissioner(A) set the aside the order confirming the duty demand, hence Revenue in appeal.
Held: Even if it is assumed that no manufacturing process was carried out by the assessee, credit on finished goods is available in terms of rule 16 of CER, 2002 and the only condition being that at the time of re-issue of such finished goods the assessee is required to pay appropriate central excise duty - there is no dispute on payment of duty on the said count, therefore, impugned order is upheld and Revenue appeal is dismissed: CESTAT [para 5] - Appeal dismissed: MUMBAI CESTAT
2018-TIOL-1629-CESTAT-MUM MP Re-Cycling Company Pvt Ltd Vs CC
Cus - Notfn. 102/2007-Cus - Refund of SAD - Order of adjudicating authority allowing refund was reversed by the Commissioner(A) by observing that VAT was paid after one year from the date of payment of SAD - appeal to CESTAT.
Held: Admittedly, the goods were subsequently sold by assessee on payment of VAT and the refund would become eligible only on the subsequent sale - There is no time limit laid down in the law - Order of the Commissioner(A) is not proper and just - same is, therefore, set aside and appeal allowed with consequential relief: CESTAT [para 5] - Appeal allowed: MUMBAI CESTAT
CC Vs Wockardt Ltd
Cus - Respondent imported goods and claimed benefit of notfn. 52/2003-Cus but which was denied by the original authority on the ground that the re-import had taken place after the stipulated period of one year - Commissioner(A) relied upon the Board Circular 60/99 according to which the period of one year for re-import can be relaxed and also the decision in Kar Mobiles Ltd. - 2006-TIOL-1995-CESTAT-BANG upheld by the Supreme Court - Revenue in appeal.
Held : Order passed by Commissioner(A) is a reasoned one and passed by relying upon the decision in Kar Mobiles Ltd. (supra) - no infirmity in the impugned order - Revenue appeal dismissed: CESTAT [para 4, 4.1] - Appeal dismissed: MUMBAI CESTAT
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