SERVICE TAX

2018-TIOL-1819-CESTAT-BANG + Case Story

Krishna H T Vs CCT

ST - Assessee engaged in providing the service to M/s. SIPM in respect of promotion, marketing and collection of payment from customers - On being pointed out by audit, assessee has obtained registration and paid entire tax liability along with interest and vide letter dt. 02/01/2013 duly addressed the Assistant Commissioner informing him regarding the payment of service tax and interest and requested not to issue SCN since the amounts were paid - Case of assessee is squarely covered by Section 73(3) of Finance Act - Following the ratio of decisions in Adecco Flexione Workforce Solutions Ltd. 2011-TIOL-635-HC-KAR-ST , Shriram Epic Ltd. 2014-TIOL-966-CESTAT-MAD , Calderys India Refractories Ltd. 2013-TIOL-2134-CESTAT-MUM and Tejas Agency 2014-TIOL-1332-HC-AHM-ST , impugned order is not sustainable in law - Accordingly, impugned order imposing penalty set aside: CESTAT [para 6] -Appeal allowed : BANGALORE CESTAT

2018-TIOL-1813-CESTAT-BANG

NXP Semiconductors India Pvt Ltd Vs CCT

ST - Issue relates to denial of refund on account of 'Diesel Consumption Charges' and 'Out of Scope Charges' by holding that they do not fall in definition of 'input service' - 'Diesel Consumption Charges' have been wrongly considered as 'inputs' by both the authorities; whereas, in fact it is electricity back-up which is provided by Landlord - In case of non-availability of electricity, the company requires diesel generators to resume the operation for which service provider is collecting service tax for electricity support without which it would affect the productivity of service provided and therefore, it falls in definition of 'input service' - Further, if 'Diesel Consumption Charges' is considered as 'inputs' then the service tax would not have been collected; in that case, the duty would have been collected - Further, charges in case of 'Out of Scope Charges' are in relation to building maintenance and repair service, which are also essential for rendering the software services and therefore, they are rightly classifiable as 'input service' - Section 67 specifically mentions that all reimbursements shall be included in gross amount charged for collecting service tax and 'Out of Scope Charges' are in relation to building maintenance and falls under the definition of 'input service' - Therefore, impugned order denying the refund claim on these two services are not sustainable in law and therefore, impugned order set aside: CESTAT - Appeals allowed: BANGALORE CESTAT

CCE, C & ST Vs Lakshmanan And Company

ST - Assessee is a registered service tax provider for services of Commercial/Industrial Construction Services and Construction of Residential Complex services - On verification of records it was noticed that assessee provided construction services in relation to construction of building for Co-operative Hospital at Thaliparamba for which they have received an amount of Rs. 4,10,60,800/- and the same was not included in value of taxable services declared in their returns - In another case, in construction of 'City Centre', a shopping complex, assessee had paid service tax only on amount exclusive of TDS - The total service tax short paid was worked out to be Rs. 14,38,536/- along with education cess and secondary and higher education cess for which SCN was issued - However, before issuance of O-I-O, they paid service tax mentioned in SCN along with interest, and also requested to drop the penalty proceedings - By impugned O-I-O, the amount Rs. 19,75,859/- paid by assessee was appropriated towards service tax liability along with applicable interest - Other proposals in SCN was dropped - Appeal was filed as per Order-in-Review dated 28.05.2010 in which it is alleged that suppression of value of services provided by them was intentional to avoid payment of service tax; and non imposition of penalty under Section 78 stating ignorance of Law is not an excuse, and cited case laws of Kedia Business Centre, Dharmendra Textile Processors 2008-TIOL-192-SC-CX-LB and also Visranthi Builders 2010-TIOL-03-CESTAT-MAD - Commissioner (A) has observed that there was no malafide intention on the part of assessee to evade payment of service tax - Service tax along with interest was paid - Further Commissioner (A) after considering various decisions has come to the conclusion that assessee had no intention to evade payment of service tax and therefore by resorting to Section 80 of Finance Act, Commissioner (A) has held that lower authority has correctly given the benefits under Section 80 because the assessee has paid service tax along with interest - No infirmity found in impugned order, same is upheld: CESTAT - Appeal dismissed: BANGALORE CESTAT

2018-TIOL-1811-CESTAT-BANG

Arris Group India Pvt Ltd Vs CCE & ST

ST- The assesee is inolved in research and experimental development on natural sciences, medical sciences, agriculture and engineering & technology - The assessee is providing Information Technology Software Services (ITSS) and Business Auxiliary Service(BAS) - They filed rebate claims on the service tax and education cess paid on input services used in providing the ITSS - The claims were rejected as the Department took a view that the conditions and the procedure prescribed under Notification No.12/2005-ST was not fulfilled - Moreover, the assessee availed CENVAT credit on input services and no declaration was filed before the export of service - The Commr. (A) rejected the claims of the assessee leading to the present appeal.

Held - By amendment in section 86 of the FA Act, 1994 vide Finance Act, 2015 the jurisdiction of the Tribunal to entertain such appeal has been ousted - Therefore according to the CE Act, 1944 the appeals lies before the Revisional Authority :CESTAT ( 2, 6, 7) - Appeal Dismissed: BANGALORE CESTAT

CENTRAL EXCISE

2018-TIOL-1820-CESTAT-MUM + Case Story

Shree Tatyasaheb Kore Warana SSK Ltd Vs CCE

CX - CENVAT credit taken on Cement, angles, channels, CTD & TMT bars for construction of factory shed, building etc. - appellant could have had a bonafide belief of entitlement in view of order dated 09/01/2006 passed by Tribunal in their case; however, after rule 2(k) was amended on 07/07/2009 specifically excluding such items, bonafide belief could not have continued and appellant could not have continued to avail credit - demand for the period up to 07/07/2009 is required to be set aside and the demand for the period after 07/07/2009 is upheld and the penalty is modified accordingly - paragraph 8 of order dated 12.09.2017 is substituted and appeal was partially allowed - ROM allowed in above terms: CESTAT [para 4, 5, 6, 7] - Application allowed : MUMBAI CESTAT

Action Construction Equipment Ltd Vs CCE

CX- The assessee were involved in the projects financed by the Asian Development Bank - Such projects were approved by the Govt - The assessee manufactured hydraulic mobile crane & tower crane and cleared the same - It claimed exemption under Notification No.108/95 - The Department opined that the benefit of the notification would not be available to the assessee since it supplied the goods to the contractors instead of the project - Duty demand was raised with interest & penalty.

Held - On production of necessary certificate from the Project-implementing Authority, the assessee can avail exemption - A similar issue was settled in the assessee's own case for a previous AY - Hence, the order challeneged is set aside: CESTAT (Para 2, 5, 6) - Appeal Allowed: CHANDIGARH CESTAT

2018-TIOL-1810-CESTAT-BANG

Associated Cement Companies Ltd Vs CCE, C & ST

CX - The assessee manufactures clinker & cement - It avails the CENVAT credit on inputs and capital goods such as explosives, lubricants & on capital goods and spares exclusively used in mines - The Revenue denied credit on the same & Commissioner (A) rejected the appeals advanced by the assessee.

Held - Following the various decisions of tribunal, high court & supreme court the issue is no more res integra - Therefore, the order is set aside and cenvat credit is allowed: CESTAT (Para 2, 4, 6, 7) - Appeal Allowed: BANGALORE CESTAT

Fouress Engineering India Ltd Vs CCT

CX - The Assessee manufactures industrial valves - The assessee availed cenvat credit of ST paid on services like event management, club membership, outdoor catering - The Revenue denied credit on all these services on grounds that they were not valid 'input service'.

Held - With regard to event management, credit card charges for MD, repair and maintenance of vehicle and miscellaneous services have been held to be 'input service' in assessee's own case of Murugappa Morgan Thermal Ceramics, Sundaram Fastners Ltd, Suzuki Motor Cycle India Pvt Ltd.& Honda Motor Cycle & Scooter India Pvt Ltd. - Therefore, following the ratio these services are 'input services' - The services related to club membership and survey conducted for projects of land, fall in the definition of 'input service' in view of Coca Cola India Pvt. Ltd. & Nhava Sheva Intl. Container Terminal P. Ltd, respectively - The medi-claim for employees and dependent of employees is an 'input service' and even after 01.04.2011 this medi-claim services allowable since the company is statutorily required to take medi-claim as per ESI and Factories Act - The cenvat credit on security at residence of CMD/JMD is not eligible for credit as it falls out of the purview of definition of 'input service' - In the case of Wipro Ltd it is held that outdoor catering services is not eligible for cenvat credit - Therefore, credit is allowed on Event Management, Credit Card, Repair and Maintenance, Segregation services, medi-claim insurance, Club Membership, Survey conducted for purchase of land and cenvat credit is rejected for security at residence of CMD and Outdoor Catering post 01.04.2011: CESTAT (Para 1, 5) - Appeal Partly Allowed: BANGALORE CESTAT