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SERVICE TAX
2018-TIOL-225-SC-ST
Broadcast Engineering Consultants India Ltd Vs CST
ST - the assessee company provided broadcast personnel to M/s Prasar Bharti - The assessee received monthly fee of 10% of basic fee payable to the hired broadcasting personnel - Moreover, M/s Prasar Bharti reimbursed the fee payable to the broadcast personnel hired through the assessee - While the assessee paid service tax on fee received from M/s Prasar Bharti for manpower supply service, it did not pay tax on amount reimbursed towards fee payable to broadcast personnel - The Department opined that tax had to be paid on the full amount received by the assessee from M/s Prasar Bharti - Duty demand was raised with interest & penalties - Later on appeal, the Tribunal considered the provisions of Section 67 of the Finance Act 1994 and Rule 5(2) of the Service Tax Valuation Rules 2006 and held that since the assessee could not be treated as a pure agent, it had to also pay service tax on the amount reimbursed towards fee payable to broadcast personnel.
Held - Since the Rule 5 of the Service Tax Valuation Rules has been held to be ulta vires in the decision in Union of India & Anr. Vs. M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. the recovery of the duty demands are stayed - Notice issued to parties: SC - Case Deferred :
SUPREME COURT OF INDIA
2018-TIOL-1937-CESTAT-MAD
Cholamandalam Ms General Insurance Company Ltd Vs CST
ST - Assessee is engaged in providing services of General Insurance Business, Insurance Auxiliary services, Business Support Services, Management and Business Consultants Services, Man-power Recruitment Service and Renting of Immovable Property Service - During verification of documents of assessee, various discrepancies were noticed - Demand confirmed alongwith interest and penalty - Assessee is not disputing the confirmation of differential demand of service tax, which has essentially arisen on account of discrepancies in figures in value of services as shown in their audit records and as reflected in their returns - No explanation is being forwarded by assessee to justify such differentiation - They have also not contested the demand and have deposited the differential duty along with interest - When value of services is reflected in statutory returns on lower side but subsequently stand detected by Revenue on the higher side, same leads to inevitable conclusion that such a lower value was being reflected in statutory records/returns with a malafide intention to evade payment of service tax - If that be so, the benefit of section 80 cannot be extended to them - The provisions of section 73 also makes it clear that in case of suppression, fraud or mis-statement with an intent to evade payment of duty would call for imposition of penalty to the extent of 100% of tax evaded - In such circumstances, no fault can be found with findings of Commissioner (A): CESTAT - Appeal rejected: CHENNAI CESTAT
2018-TIOL-1936-CESTAT-BANG
Sai Radha Developers Vs CCE & ST
ST - The assessee-firm is a partnership firm engaged in the construction and sale of residential apartments - It received construction related advances from its prospective buyers during the construction period - Being unclear on applicability of service tax on construction services, the assessee paid tax on receipt of such advances and disclosed the same in the periodical returns - Subsequently, the CBEC clarified the applicability of tax vide its circular -No. 108/02/2009 stating that the builders are not liable to pay tax on the flat built by them and sold to the ultimate consumer as the service is in the nature of self-service - Thereafter, assessee filed a refund claim - However, a SCN was issued rejecting the claim of refund - The Commr. (A) granted the refund and rejected the balance amount pertaining to the period in dispute on the ground of time bar.
Held - The tax was paid under wrong belief - Besides, the refund claim was filed within the period of one year from the circular - The subsequent circular which clarified that the assessee is not liable to pay tax, based on which the assessee claimed refund, was also issued within the limitation of one year - Therefore the claim of refund is within time - The order-in-challenge is set aside - Matter is remanded to reconsider the refund claim: CESTAT (Para 2, 6, 7) - Matter remanded: BANGALORE CESTAT
CENTRAL EXCISE
2018-TIOL-1939-CESTAT-DEL
Super Steel Vs CCE, CGST & ST
CX- The assessee manufactures MS bars, MS flats - During investigation, it was found that the assessee did not pay any duty & no record was maintained relating to the receipt of raw material, production and clearance of finished goods - Duty demand was raised with penalty on grounds of clandestine removal of goods - Also, such charges were based on high electricity consumption as well as invoices & vouchers recovered during the period of search.
Held - Regarding the high electricity consumption the assesses explained that when there is fluctuation or break down of electricity, for restarting the furnace, more electricity is required is legitimate - The assessee admits that w.r.t removal of goods without payment of duty no buyer of the finished goods was found or examined, no vouchers pertaining to raw material supply or inputs were found during the course of search, no inputs, labour or transport was found - Therefore, the substantial evidence has not been collected to establish the charge - Further, the assessee were claiming SSI exemption as per Notification No. 08/03 as sale was below the prescribed limit - Therefore, keeping in view the totality of the facts the order-in-appeal is set aside: CESTAT (Para 2, 3, 4, 13, 14, 15, 16, 17) - Appeals allowed: DELHI CESTAT
2018-TIOL-1938-CESTAT-CHD
Dhruv Industries Ltd Vs CCE
CX - Assessee engaged in manufacture of metalized polypropylene film and availing Cenvat credit on capital goods and inputs - The said inputs were used for manufacturing finished goods which are metalized films used for manufacturing capacitors - The assessee is also availing benefit of Notfn 25/99-Cus and Notfn 25/2002-Cus, as applicable during relevant period and also registered with Customs Rules, 1996 - A SCN was issued to assessee that the activity of metalizing does not amount to manufacture and consequently the assessee was not entitled to take credit of inputs - From the process of manufacture explained by Shri R.Rohilla working as Production Manager, it is found that as in said process, goods manufactured by assessee have been transformed into good which are different and new after a particular process undertaken by assessee and the goods are marketable as such - Raw material i.e. polypropylene/polyester is subjected to a complex process to ensure that one side of insulting material is converted into a conductor having a desired thickness with adequate free margin and heavy edge - After metallization process, polypropylene film is no longer a film with insulting properties but a metalized film with conducting properties ready to be used in capacitors - Therefore, the raw material has been transformed into something new i.e. Electronic Capacitor Grade Aluminium Metalized Dielectric Plastic Film which can be used for manufacturing electronic capacitors and the Ministry of Communication and Information Technology clarified that there is a great deal of difference between the plastic film and the metalized film manufactured by assessee - From the tenor of notification, it is clear that inputs procured by assessee are altogether different from the goods manufactured by assessee - Therefore, as the name, character and use of product has been changed, activity undertaken by assessee shall amount to manufacture - As it is already held that the activity undertaken by assessee amounts to manufacturer, therefore, assessee is entitled to refund of Cenvat credit under Rule 5 of CCR, 2004 which remains unutilized in Cenvat credit account on export of goods: CESTAT - Assessee's appeal allowed: CHANDIGARH CESTAT
2018-TIOL-1935-CESTAT-AHM
Ahmedabad Packaging Industries Ltd Vs CCE
CX - Interest on delayed refund - Said interest was sanctioned to them on 30.04.2008 by Adjudicating Authority - The department aggrieved by said order initiated action to recover the interest by filing appeal against said order and also issued demand notice alleging the erroneous refund of interest - The appellate proceedings against said order concluded in favour of assessee by order of this Tribunal dated 29.09.2016 - The second proceeding i.e. demand notice confirmed against assessee by both the authorities below is a subject matter of dispute - Commissioner (A) in its order dated 05.04.1999, following the judgement of Bombay High Court in Solar Pesticides Pvt. Ltd . observed that principle of unjust enrichment is not applicable to the goods captively consumed - Needless to emphasise that was the Rule of Law prevailed at the relevant point of time in view of the principle settled in Solar Pesticides Pvt Ltd' s on applicability of unjust enrichment of goods to captively consumed goods - Consequent to the principle laid down by Supreme Court in case of Solar Pesticides (P) Ltd. 2002-TIOL-57-SC-CX-LB , observing that the principle of Unjust enrichment is applicable to refund of duty on goods captively consumed, Tribunal remanded the matter to Adjudicating Authority with the liberty to assessee to produce evidences to establish that the incidence of duty has not been passed on to others - Consequently, assessee produced the evidences before Adjudicating Authority and established that the incidence of duty has not been passed on to others - No basis found for denying interest on delayed refund to assessee as held by Tribunal while disposing their appeal vide order dated 29.09.2016, following the ratio laid down by Gujarat High Court in Purnima Advertising Agency Ltd 's case 2016-TIOL-742-HC-AHM-CX - Impugned order set-aside: CESTAT - Appeal allowed: AHMEDABAD CESTAT
CUSTOMS
NOTIFICATIONS
cnt57_2018
Import Prohibition - Reference to the Patents Act, 1970 omitted from notification 51/2010-Cus(NT)
cnt56_2018
Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 amended
dgft18not014
Import of Milk and Milk Products from China - import prohibition extended till 23.12.2018
CASE LAWS
2018-TIOL-1940-CESTAT-AHM
Anil Ltd Vs CC
Cus - Issue raised in these appeals involves a substantial question of law of classification of Steam Coal and Bituminous Coal and referred to the Larger Bench as conflicting opinions have been expressed by various benches of Tribunal - When the matter was heard before Larger Bench, taking note of the fact that the issue has already been taken up and pending before the Supreme Court, the Larger Bench relegated these appeals to the respective Benches to dispose the same in the light of observations of Larger Bench in its order dt.16.01.2017 - On a plain reading of said order, it is clear that the registry was directed to place the appeals before respective benches for appropriate order and disposal of appeals in the light of direction/observation made in order of Larger Bench, wherein liberty is granted to all the assesses to come again before the Tribunal after receiving the final verdict from Apex Court within prescribed time - Thus, appeals are disposed of with liberty to assessees to approach the Tribunal after final verdict from the Apex Court - Status quo should be maintained i.e. no recovery nor any refund of amounts involved in these appeals would be processed during this period: CESTAT - Appeals disposed of: AHMEDABAD CESTAT
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