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SERVICE TAX
2018-TIOL-2037-CESTAT-DEL
Subhash Chand Surana Vs CCE
ST- The assessee, an individual provided land to builders for construction - It was agreed between the assessee and builder that he will provide 55% of saleable units to builder and remaining 45% would be retained by him - In addition, they would be independent to sell their respective part of the share - On raid conducted by the Department at business premises of the builder, it was observed that assessee sold few flats after completion of construction of residential complex, one flat was gifted vide Gift Deed and two of the flats were still unsold before builder obtained completion certificate -Therefore, the Department opined that assessee is liable to pay service tax on flats which are unsold - Duty demand was raised along with imposition of penalty & fine plus interest - The Commr. (A) upheld the demand but deleted extra levy on the subsequent sale of flats - Hence, the present appeal.
Held - The issue involved herein is whether liability is confined to the builder/developer or shall be shared by the land owner, who has parted with his land with an intention to be converted into a residential complex and has simultaneously sold the portion of the developed property to the buyers of his choice - With respect to the flat, which has been gifted by assessee to his own son, the liabilities stand exempted under Section 65 (91A) of the FA Act - On the basis of statement recorded of the assessee-individual, it is clear that the service tax liability was deposited before issuance of SCN - Therefore, no further proceedings for recovery of tax is to be initiated against the assessee - The taxing event in the present case is the service tax liability as is incurred in providing the construction services to the prospective buyers - As for the land owner, the flats sold before the completion certificate was obtained, will be liable to service tax - However, the flats sold after the said date of receiving completion certificate, since no more construction services were rendered after the date, there will be no service tax liability - Moreover, the flats sold by the builder and land owner were same - Besides, the flats sold by builder and assessee were same, the builder has included the element of service tax in the value of flats sold - When the assessee has paid service tax before the issuance of SCN and the Authorities are not able to establish any fraud or wilful intention on the part of the assessee, no service tax is payable - Further, before parting the ownership right in the land, any act done for getting the sale consideration and the sale finalized will not amount to rendering of service, but will amount to self-service - Relied on the ratio laid down by Allahabad HC in the case of H.M. Singh and Co. vs. CCE - No evidence on record to prove that assessee has engaged in evasion of tax - Following the decision of SC in Hindustan Steel & Uniworth Textiles Ltd. vs. CCE - Hence, the penalty imposed by Commr. (A) is set aside: CESTAT (Para 2, 7, 8, 9) - Appeal partly allowed: DELHI CESTAT
2018-TIOL-2036-CESTAT-MUM
Neeta P Desai Vs CCGST & CE
ST - the assessee is a distributor in the multi level marketing of products of another entity - The Revenue claimed such service to be taxable as 'Business Auxiliary Service'.
Held - the decision of the Tribunal in Charanjeet Singh Khamtja v. Commissioner of Service Tax is squarely applicable herein - Hence the matter is remanded to the adjudicating authority to examine this decision and reconsider the issue in light of the same: CESTAT (Para 2,3) - Case remanded: MUMBAI CESTAT
CENTRAL EXCISE
2018-TIOL-2035-CESTAT-MUM
Purti Power And Sugar Ltd Vs CGST & CE
CX - Appellants were clearing goods on payment of duty applying the wrong notification and it is not a case of clandestine removal - payment of duty as per the concessional notification as well as availment of CENVAT credit is very much on record, therefore, nothing prevented the department in issuing SCN well within the normal period of limitation - no suppression of facts on the part of the appellant - appellant have not disputed the duty demand and paid the same on being pointed out - as there is no suppression on the part of the appellant, the ingredients for imposing penalty u/s 11AC of the CEA, 1944 was wrongly invoked - penalty set aside and appeal is allowed to that extent - confirmation of duty and interest is maintained: CESTAT [para 4, 5] - Appeal disposed of: MUMBAI CESTAT
CUSTOMS
NOTIFICATION
dgft18pn018
DGFT notifies pre-shipment inspection agency for imports from Malaysia, Singapore, Thailand & UAE
dgft18pn017
Introduction of new Para 3.24 in the chapter 3 of the Handbook of Procedures, 2015-20
CASE LAW
2018-TIOL-2034-CESTAT-MAD
Cheran Spinners Ltd Vs CC
CUS - the assessee imported some cargo classified as "Bamboo Fiber" under CTH 55 of the Schedule to the Customs Tariff Act and discharged duty liability on the same - The issue involved pertains to classification of the goods imported as bamboo fibre made of natural bamboo or as 100% rayon from bamboo - The Revenue issued SCN demanding payment of ADD as the goods were 100% rayon from bamboo on the basis of test report of the Textiles Committee - The imported goods were confiscated & penalty was imposed - The Commr. (A) reduced the redemption fine & penalty - The assessee advanced appeal against confiscation & imposition of redemtion fine penalty.
Held - Test report of Regional Laboratory, Textile Committee describes the product in test report as 'Viscose (Rayon) Staple Fibre' - The classification of this product is in entry 5504-Artificial staple fibres, not carded, " combed or otherwise processed for spinning, namely 5504 10 00 - "of viscose rayon" - Therefore, the order of lower appellate authority is upheld & assessee is liable to ADD as per Notification No. 76/2010-Cus. - As regards confiscation, redemption fine and imposition of penalty, the assessee bonafidely mis-understood that the goods would fall under CTH 55 of the Schedule to the Customs Tariff Act - Hence the confiscation of the goods, imposition of redemption fine and penalty is set aside : CESTAT(Para 1, 5, 6) - Partly allowed: CHENNAI CESTAT
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