SERVICE TAX

2018-TIOL-1795-CESTAT-MUM + Case Story

Indeus Life Science Pvt Ltd Vs CCE

ST - Refund - Rule 5 of CCR, 2004 - While restricting the claim to a lesser amount, the original authority had not issued any show cause notice to justify the proposed restriction - Proper course of action for Revenue to dispute the sanction of refund claim by the original authority should have been the issue of a notice u/s 73(1) of the FA, 1994 - from a harmonious construction of section 73 and section 85 of the Finance Act, 1994, it appears that it is not within the jurisdiction of the first appellate authority to enhance the amount of rejection of a refund claim that was disposed off by the lower authority in the absence of a show cause notice - failure to issue such a notice stultifies the present proceedings before the first appellate authority - impugned order passed by Commissioner(A) disallowing the entire claim of refund fails to meet the requirement of the statute - moreover, in view of the Tribunal decision in Sai Life Sciences Ltd - 2016-TIOL-433-CESTAT-MUM issue is settled in favour of the appellant - order set aside and appeal is allowed: CESTAT [para 4 to 7] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-1794-CESTAT-BANG

International Trimmings and Labels India Pvt Ltd Vs CCT

ST - Assessee engaged in manufacture of 'Fabric Screen labels', 'Fabric H/T VD Labels', 'Paper S/S VD Labels' and 'Ribbons and Substrates' - Point of dispute is that assessee was using common input services and availing and utilizing CENVAT credit on both manufacturing activity as well as trading activity and had not maintained separate inventory of input services that were used in providing exempted service - Assessee has reversed the proportionate CENVAT credit before the adjudication order was passed - Though the assessee has submitted that he has submitted the detailed worksheet relating to his trading activity and has also disclosed everything in their return, but the authorities have not considered this aspect at all - Assessee is not required to pay 6% of value of exempted service - Further, Commissioner (A) has observed that assessee has not filed the worksheet/CA certificate to establish that they have reversed the proportionate credit - Therefore, case remanded to original authority for purpose of verification whether the assessee has reversed proportionate credit as per Rule 6(3) of CCR, 2004: CESTAT - Matter remanded: BANGALORE CESTAT

2018-TIOL-1793-CESTAT-DEL

CCE & ST Vs Shree Nakoda Ispat Ltd

ST - The assessee were engaged in manufacturing of iron & steel - For installation of power plant, the assessee entered into a contract with foreign-entity for assistance in implementing clean development mechanism (CDM) - These services included assisting in project design, validation, registration and regular verification of CDM project - The execution of CDM project resulted in emission reduction certificated carbon credits (CER) - The CER can be transferred or sold for a consideration - The generation of CER and their saleability are in terms of Kyoto Protocol of international convention - Duty demand was raised for recovery of service tax on reverse charge basis on the consideration paid by the assessee to the foreign service provider - On appeal, the Commr. (A) set aside the demand & held that the CERs are 'goods' sold by the assessee to foreign service provider - Further relying on the Circular of CBEC wherein it held that the service provider acted as an agency in pursuance of an Act/Regulation and as such, is not liable to tax - In conclusion, there was no service provided by the foreign service provider under the category of "management or business consultant service".

Held - The nature of transaction between the assessee & the foreign entity is purely commercial in nature - The terms of the agreement and manner of consideration to be paid clearly makes it so - The services received by the assessee are covered under the category of management or business consultant service - The assessee did receive consultancy or technical assistance in relation to production and management in the power plant set up by the assessee - Hence, Revenue's appeal is allowed and restored to original order: CESTAT (Para 2, 5, 6, 7) - Revenue's Appeal Allowed: DELHI CESTAT

CENTRAL EXCISE

2018-TIOL-1802-CESTAT-CHD

CCE Vs Krishna Ishizaki Auto Ltd

CX - Assessee has availed Cenvat credit on input service - The credit sought to be denied on premise that in some invoices either invoice no. is not mentioned or invoices having hand written number -The credit also sought to be denied on renting service which has been availed for residence of Technical Director of company on the premise that said input service is not covered under 2(l) of CCR, 2004 for period prior to 1.4.2011 - Credit on invoices wherein in some invoices either serial no. is not mentioned or invoices having hand written serial number allowed but disallowed credit on renting of immovable property service for residence of Technical Director of company - Against the said order, both sides are in appeal - With regard to the appeal filed by Revenue that invoice no. is not printed on the invoice, in case of Chandra Laxmi Tempered Glass Co.Pvt.Ltd. , High Court had rendered the decision with regard to the interpretation of provisions of Rule 57GG (4) in Notification No.23/95-CE (N.T.) - Admittedly, Rule 57GG which has been examined by High Court has not invoked in the case in hand - It is not in dispute that assessee has not received input service having not paid service tax thereon - These services have been used by assessee in course of their business of manufacturing, in that circumstance, it is not the case of Revenue that these input services are not covered under Rule 2(l) of CCR, 2004 - Therefore, Commissioner (A) has rightly allowed the Cenvat credit to assessee against the invoices wherein the invoice No. is not written or hand written.

With regard to appeal filed by assessee, in case of Ultratech Cement Limited 2010-TIOL-745-HC-MUM-ST , Bombay High Court has held that any input service availed by assessee in course of their business of manufacture of excisable goods, assessee is entitled to avail credit on these services - Technical Director is an employee of company who assisted the assessee to do day to day manufacturing operation - The rent paid for technical director as terms of employment and is a part of expenses incurred by assessee - Admittedly, said service has been availed prior to amendment in Rule 2(l) of CCR, 2004 w.e.f. 1.4.2011 - Once such service has been excluded specifically, in that circumstance, credit has been correctly availed by assessee prior to that period, it is mandate of law, the assessee was entitled to avail credit - Therefore, in view of decision of Bombay High Court in case of Ultratech Cement Limited , assessee is entitled to avail credit of service tax paid on rent for residence of Technical Director: CESTAT - Revenue's appeal dismissed : CHANDIGARH CESTAT

2018-TIOL-1801-CESTAT-DEL

Aditya Polysacks Pvt Ltd Vs CCE & GST

CX - Assessee have established their factories in State of Rajasthan which were operating under Rajasthan Investment Promotion Scheme as notified by Government of Rajasthan - The objective of scheme was to facilitate investment in establishment of new enterprises under various schemes of Rajasthan Government - Assessee was eligible for subsidies as per various schemes applicable to assessees and they were required to deposit VAT/CST/SGST as per applicable rate and in terms of scheme notified, will be entitled to disbursement of subsidy by appropriate authorities - The subsidy concern is sanctioned and disbursed in Form 37B and as such challans in form VAT 37B can be utilized for discharge of VAT liability of assessee for subsequent period - Revenue was of the view that such subsidy amounts would be includible in value of the goods cleared by assessee and demanded the difference of duty - Identical issue has came up before Tribunal in a number of cases including M/s Greenlam Industries Ltd. wherein it was observed that there is no other justification for inclusion in assessable value, the VAT amounts paid by assessee using VAT 37B Challans - By following the decision, impugned order set aside: CESTAT - Appeal allowed : DELHI CESTAT

2018-TIOL-1101-HC-MAD-CT

Kalpataru Power Transmission Ltd Vs Assistant Commissioner

Whether when principles of natural justice have been meticulously complied with by affording ample opportunity of hearing, then no writ interference is maintainable without exhausting alternative remedies - YES: HC - Assessee's petition dismissed : MADRAS HIGH COURT