SERVICE TAX

2018-TIOL-1962-CESTAT-BANG

Assistant Commandant Vs CC,CE & ST

ST - Assessee was providing security services to M/s. KIOCL and were paying service tax on amounts received as consideration i.e., on the deployment charges from KIOCL - It was found that establishments availing security services from CISF are providing additional facilities and assessee is not discharging the service tax on such expenses - A SCN was issued to them demanding service tax on differential value, interest under Section 75 and proposing to impose penalty under Section 76 and 78 of FA, 1994 - There is no profit motive and business objective of assessee in rendering the security agency service and they have paid service tax after adjudication order was passed and prayer in present appeal is only for dropping the demand of interest and penalty imposed under various provisions of Finance Act - By following the ratio of decision in case of CISF , penalty imposed vide impugned order is not sustainable in law and therefore, by resorting to Section 80, penalty imposed by impugned order waived as there was no intention to evade payment of service tax by assessee - As far as liability to pay interest is concerned, assessee is liable to pay interest as held by Commissioner (A) for the delay caused in payment of service tax - The original authority will quantify the amount of interest which the assessee is liable to pay for this purpose: CESTAT - Appeal partly allowed : BANGALORE CESTAT

2018-TIOL-1958-CESTAT-DEL

Tanay Landcon India Pvt Ltd Vs CCE & ST

ST- The assessee is engaged in construction of buildings - During the period of dispute the assessee entered into agreements with two entities for construction of buildings - While the assessee did not pay tax on grounds that the service receivers were not providing any activities concerning commerce or industry, the Department opined that such activities were taxable under commercial or industrial construction service - Duty demand was raised - The Commr. (A) imposed penalty for non-payment of ST

Held: The entity for which assessee was providing construction services is non-commercial organization - It are not involved in any business or commercial activity - Hence the mandatory condition in definition of commercial or industrial construction is absent - The definition mandates that the activity of commercial or industrial construction should only be taxed - Therefore, the assessee is not liable to pay tax under this category of service - With regard to mobilization advance received by the assessee, although it was adjusted towards the supply of material by the assessee, the documents are required to be verified to ascertain whether the amount was towards supply of material or for providing service - Therefore, the matter is remanded to Revenue for verification of documents: CESTAT (Para 2, 7, 8, 9) - Case Remanded : DELHI CESTAT

2018-TIOL-1957-CESTAT-AHM

Swayam Shipping Services Pvt Ltd Vs CCE & ST

ST - Assessee engaged in movement of wooden logs from Port area to importer's premises and paying Service Tax under category of GTA services - Assessee has contended that they are primarily involved in loading/unloading of timber logs into the truck/trailer and transport of same to the nearby location of importer - They have also pointed out that they are issuing consignment note for these transportations and they are discharging duty liability under the category of GTA - Assessee argued that mere loading and unloading of timber logs at the port or at the premises of importer does not confirm the activity undertaken by them into cargo handling activity - He pointed out that the clarification of CBE&C also substantiated their argument in this regard - He had also relied on CBE&C clarification dated 5.10.2015 - Tribunal in case of R.K. Transport has also examined similar issue - Merit found in appeal and same is allowed being covered by clarifications of CBE&C and decisions of judicial forum: CESTAT - Appeal allowed : AHMEDABAD CESTAT

2018-TIOL-1956-CESTAT-MAD

Wild Orchid Estates Owners Association Vs CCE & ST

ST- The assessee is a society undertaking agricultural activities like maintain estate roads, street lights in the estate, water pipelines, security, safety of the estate - The assessee were not collecting any subscription from members of the association and the money deposited is a corpus fund, out of which the association is providing maintenance activities in the farms & estates - Due to this reason they did not pay service tax on the amount received - The Department took a view that assessee were liable to discharge service tax being engaged in the business of providing club or association services - Duty demand was raised along with imposition of penalties which was upheld by the Commr. (A)

Held: The interest received by the association from the bank cannot be treated as consideration for any service rendered by it to its members - The accrued interest received from the bank on an amount deposited cannot be treated as "subscription" - Hence, the demand is set aside: CESTAT (Para 1, 5) - Appeal Allowed : CHENNAI CESTAT

CENTRAL EXCISE

2018-TIOL-1961-CESTAT-DEL

Man Structurals Pvt Ltd Vs CCE

CX - The assessee is engaged in the manufacture of galvanized tower parts - Even though during the period in dispute, their right to pay duty by utilizing the cenvat credit was forfeited, the assessee paid duty though cenvat credit account - On objection by Revenue , the assessee deposited a part of the amount from PLA account - An SCN was issued for recovery of remaining amount with a direction to the assessee to deposit it in cash - Later the Commr. (A) observed that payment via cenvat credit account was legitimate - Thereafter, the assessee filed for refund which was rejected on grounds of being time-barred - Meanwhile, in the order-in-original, the Authority sanctioned the refund, but rejected the claim on being time barred - The Commr. (A) allowed the appeal of the assessee on grounds that refund was filed within a period of one year from the date of passing of the Order-in-Appeal - The Revenue appealed for recovery of erroneously sanctioned refund - Held - The present order-in-appeal has been challenged by the assessee before the Rajasthan HC has set aside the order and restored the Commr. (A) order holding the refund to be within the limitation period - Hence, the order challenged are set side: CESTAT (Para 2, 6, 8, 9) - Appeal Allowed : DELHI CESTAT

2018-TIOL-1960-CESTAT-MAD

Ambika Cotton Mills Ltd Vs CCE

CX - Assessee engaged in manufacture of cotton yarn - They opted to move out of EOU scheme on completion of five years of period that expired on 4.3.2005 and obtained no objection from Development Commissioner on 9.3.2005 and thereafter final exit order was issued by Development Commissioner on 17.5.2005 - It is noticed that Certain items such as accessories used as capital goods namely HDPE Card Cans, Simplex Bobbins, PC Ring Tubes and HDPE Cans procured duty-free under cover of CT3 on which duty was not paid at the time of debonding - Department has issued a letter dated 21.6.2007 requiring the assessee to pay duty on impugned items like HDPE card cans, PP simplex bobbins and tubes on the scrap value of such goods - When department has requested the assessee to discharge duty on scrap value, later the department has changed their stand and issued the SCN alleging the same goods to be capital goods and demanding duty on depreciated value - Said SCN is issued after one year of intimation requesting the assessee to pay duty on scrap value of goods - On receiving intimation, assessee had discharged the duty - Original authority has taken note of Chartered Engineer's certificate and observing that the goods have been procured duty free under cover of CT3 certificates has dropped the proceedings upholding payment of duty and interest thereof - It is to be mentioned that impugned goods were procured under CT3 certificate and the department was in full knowledge about such procurement as well as the exit of assessee from EOU scheme - Therefore, SCN issued invoking extended period alleging suppression of facts cannot sustain - Further, assessee cannot be saddled with intention to evade payment of duty when on receiving the intimation to pay duty on scrap value, assessee has discharged duty accordingly - Assessee has made out good case on limitation - The demand is time-barred - Appeal succeeds on limitation: CESTAT - Appeal allowed : CHENNAI CESTAT

2018-TIOL-1959-CESTAT-CHD

Bedi Steel Rolling Mills Ltd Vs CCE

CX - DGCEI officers visited M/s. Bedi Steel Rolling Mills Limited (BSRML), M/s. Bedi Steels Pvt.Ltd. (BSPL) and their group office - It was alleged that there was shortage of raw materials and finished goods - Certain records resumed from common office of Bedi group and on the basis of investigation, it was alleged that M/s. BSRML and M/s. BSPL engaged in manufacture and clearance of clandestine removal of goods - No physical verification of stock has been produced by Revenue in the form of weightment slips or weighment chart and how weighment was done during the short span of time in a single day for both the units - In that circumstance, allegation of shortage of raw materials and finished goods against M/s. M/s. BSRML and M/s. BSPL is not sustainable - With regard to electricity consumed during impugned period, there was no abnormal consumption of electricity, the average consumption of electricity is more or less same - Therefore, no demand is sustainable for the period March, 2005 to February, 2006 and further March, 2007 to June, 2007 - On the basis of annual capacity determined and electricity consumption, pattern does not show any clandestine manufacture and removal of goods - As no corroborative evidence brought on record by revenue, in that circumstance, demand against M/s.BSRML is not sustainable.

As demand against M/s. BSRML and M/s. BSPL are not sustainable, therefore, impugned order quo demanding duty from M/s. BSRML and M/s. BSPL along with imposition of penalty on Shri Amarjeet Singh Bedi is set aside: CESTAT - Assessee's appeals allowed : CHANDIGARH CESTAT

2018-TIOL-1949-CESTAT-AHM + Case Story