SERVICE TAX

Central Industrial Security Force Vs CCGST

ST - the assessee herein is a unit of the Central Industrial Security Force (CISF) - During the period of dispute, it was served an SCN proposing to tax the medical reimbursement paid to CISF personnel - Later, duty demand was raised with demands for Education Cess & Higher Education Cess - Equivalent amount of penalty was also imposed u/s 78 as well as late payment fee u/s 70 r/w Rule 7C of Service Tax Rules 1994 - The assessee's appeal to the Commr.(A) was dismissed as being barred by limitation as was a rectification application filed by it.

Held - the delay in filing appeal was caused due to circumstances beyond the assessee's control - However, the Commr.(A) too cannot be faulted for dismissing the appeal as the Finance Act does not empower the appellate authority to condone a delay beyond 30 days of prescribed limitation - However, in the interest of justice, the assessee merits an opportunity of hearing: HC - Case remanded: ALLAHABAD HIGH COURT

2018-TIOL-1187-HC-KERALA-ST

Bekal Recreation Centre Ltd Vs UoI

ST - the assessee is a club which received receipts from members for availing the benefits & facilities offered by the club - Duty demand was raised to tax such amounts received by the assessee - The assessee claimed that Section 66B of the Finance Act 1994 did not intend to levy tax on the same - The assessee further claimed that its case was covered squarely by the High Court decision in Ranchi Club Ltd., v. Chief Commissioner of Central Excise & Service Tax, Ranchi Zone.

Held - This decision was assailed before the Apex Court and which is yet to pronounce its verdict on the issue - Besides, the matter has been referred to a larger bench - Hence both sides are bound to follow the decision of the Apex Court - Now while admitting the present writ, the recovery of the duty demand had been stayed and later extended - Hence such interim status quo will remain in effect till pronouncement of the judgment by the Apex Court: HC (Para 1,4,5) - Writ Petition Disposed Off: KERALA HIGH COURT

CENTRAL EXCISE

CCE Vs Roop Textiles Ltd

CX - the assessee company is engaged in manufacture of textiles - Under the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 2000, the assessee's annual production capacity was determined and the resultant duty liability was calculated - The Asst. Commr. redetermined the annual capacity, noting that the assessee was granted permission to remove one chamber from Stenter, which was accordingly removed - Also noted that although no permission was granted to remove the gallery, one gallery was also removed - Hence the Asst Commr redetermined the annual capacity after accounting for such gallery - Consequently, the duty payable was increased - On appeal, the Tribunal noted that length of galleries was not to be considered when determining annual capacity of production, as per the decision of the Apex Court in Sangam Processors Bhilwara Limited - It remanded the matter for fresh determination of annual capacity.

Held - the Department claimed that the communication challenged by the assessee was not an appealable order - Also that the annual capacity had not been challenged - However, the facts show otherwise, that the assessee essentially contested the fixation of the annual production capacity - Hence issues answered against the Revenue: HC - Appeal Dismissed: GUJARAT HIGH COURT

CCE & C Vs Clasic Industries Pvt Ltd

CX - the assessee company manufactured crimped texturised yarn - The Department alleged clandestine removal of certain goods by passing them off as waste resulting from manufacture process - The Department noted that the assessee reported a higher than usual generation of waste - Besides, statements taken revealed unaccounted excess prodution of yarn - Duty demands were raised & penalties were imposed - The Commr.(A) held there to be no evidence pointing towards clandestine removal - The Revenue's appeal to the Tribunal was dismissed.

Held - The Commr.(A) noted that the recipients of the goods manufactured by the assessee had owned up to having received the goods through proper delivery challans & invoices - Details of payment were also put forward - Thus the Commr.(A) believed that the Department incorrectly alleged clandestine removal in the guise of wastage - Evidence suggested omplete co-relation of goods with invoice, receipt of goods and payment received - Besides, excess wastage caused due to fire accident had duly been recorded by the assessee in its accounts - Hence the issue is answered in favor of the assessee: HC - Appeal dismissed: GUJARAT HIGH COURT

2018-TIOL-1973-CESTAT-MUM + Case Story

Mahanagar Gas Ltd Vs CCE

CX - CENVAT - Input Service - Rule 2(l) of CCR, 2004 - Dismantling of cement & brick work, excavation for foundation, plastering etc. are not 'construction and civil work' so as to be excluded from the purview of the definition of 'input service' in terms of rule 2(l) of CCR, 2004 - credit of service tax paid on such services is admissible as CENVAT - impugned order set aside and appeal allowed: CESTAT [para 4] - Appeal allowed: MUMBAI CESTAT

Nicholas Piramal (I) Ltd Vs CCE

CX - Physician Samples - Valuation - section 4 of the CEA, 1944 - Samples distributed free as part of marketing strategy or as a gift or donation to doctors.

Held: It is seen that the physician samples are not sold by the appellants but are cleared free of cost - since no transaction value is available, the assessment cannot be done u/s 4(1)(a) but u/s 4(1)(b) of CEA, 1944 - assessment also cannot be done u/s 4A as the said goods are not marked with MRP - it is apparent that neither rule 4 nor rule 8 are directly applicable to the situation and both the rules have to be applied as reasonable alternatives with suitable adjustments in terms of rule 11 of the Valuation Rules, 2000 - in the instant case, it is seen that identical goods different only in respect of size of packing and marking of MRP are being assessed u/s 4A of CEA and such comparable value after suitable adjustments can be adopted for the purpose of assessment of physician samples - this does not amount to application of section 4A of CEA, 1944 to physician samples but is only a measure of taking an alternate value of similar goods for the purpose of Valuation Rules, 2000 in terms of rule 11 thereof - demand insofar as it relates to clearances of physician samples is sustained and appeal is dismissed: CESTAT [para 4] - Appeal dismissed: MUMBAI CESTAT