SERVICE TAX

2018-TIOL-2059-CESTAT-MAD

IMA Mental Arithmetic Academy Pvt Ltd Vs CST

ST - Assessee is engaged in imparting training/coaching in mental arithmetic and entered into Franchisee Agreement with IMA Mental Arithmetic Academy, Malaysia - They had also entered into Franchisee Agreement with various franchisees appointed by them in India - Department took the view that gross amounts collected by assessee including admission fee, course instructor fee and tuition fee would be eligible for service tax under category of Franchisee Service under section 65(47) of FA, 1994 - Assessee contest the amounts received from students on the ground that they are not at all relevant to franchisee service provided by them viz. Admission Fee, Tuition Fee and Competition Fee - As per the definition, payment to be made by franchisee to franchisor is only for the 'right' to sell or manufacture goods or to provide service or undertake any process identified by franchisor - The payment required to be paid for use of IMA Mental Arithmetic course have been indicated as 25% of gross fees collected - From the copy of agreement, Tribunal do not find any other tax which are required to be paid towards royalty or franchisee fee by any other name called - Hence, the cost of admission fee, tuition fee, competition fee and course instructor fee charged by assessee either from their franchisees or from the instructor cannot then form part of value to be adopted for levying service tax on franchisee service - Impugned order is therefore modified to the extent of holding that tax liability for assessee in respect of franchisee appointed by them within India will not include the amounts relatable to admission fee, tuition fee, competition fee and course instructor fee: CESTAT - Appeal partly allowed: CHENNAI CESTAT

2018-TIOL-2058-CESTAT-CHD

Agarwal Traders Vs CCE & ST

ST - Assessee is providing services in relation to distribution of electricity to Dakshin Haryana Bijli Vitran Nigam (DHBVN) & Uttar Haryana Bijli Vitran Nigam (UHBVN) and upto 21/06/2010, the benefit of Notfn 45/2010-ST has already been granted to assessee - The sole ground for denial of benefit of exemption Notfn 32/2010-ST is that assessee is not a distribution licensee or distribution franchisee or any other person authorized under the Electricity Act for distribution of electricity - It is to be seen that whether the assessee got the right for transmission of electricity from their principals - Admittedly, assessee has provided these services on behalf of distribution licensee, who are having license to distribute the electricity - Therefore, it is to be seen that whether the assessee is entitled to the benefit of Notfn or not - As Tribunal held that an exemption to principal would be available to agent also and further in case of State Bank of Patiala 2016-TIOL-2849-CESTAT-DEL-LB , Tribunal followed the same principle and allow the benefit of exemption notfn - Therefore, the benefit exemption Notfn 32/2010-ST cannot be denied to assessee - No merit found in impugned order, same is set aside: CESTAT - Appeals allowed: CHANDIGARH CESTAT

2018-TIOL-2057-CESTAT-AHM

CST Vs Sorath Builders

ST - The Revenue issued notice on the basis of the Circular & clarification issued by the Board - As per this circular if the Revenue decides to reject VCES application it has to issue notice within 30 days from the date of filing the declaration stating the reasons for proposed action of rejection of the declaration - The Commr.(A) observed that the notice was time-barred.

Held - To expedite the process of VCES application the clarification by Board was issued making it necessary to issue notice within 30 days, if it is proposed to reject the application - An upper limit of one year from the date of declaration is provided for u/s 111 of FA Act, 2013 - Therefore, it is clear that provisions of the Finance Act would prevail over the Circular - Hence, the order challenged is set aside and matter is remanded to Commr.(A) for adjudication: CESTAT (Para 2,3,7) - Matter remanded: AHMEDABAD CESTAT

CENTRAL EXCISE

INSTRUCTION

F.No.275/15/2018-CX.8A

Defence against Writ Petitioners/PILs relating to GST

CASE LAWS

2018-TIOL-2056-CESTAT-AHM

Gurudev Dyestuff India Pvt Ltd Vs CCE

CX - Assessee is engaged in manufacture of excisable goods and availed CENVAT credit of service tax paid by service provider in relation to input service viz. 'Man-power supply service' which were used in or in relation to manufacture of finished goods in factory - Alleging that as per Notfn 30/2012-ST, assessee was required to pay 75% of Service tax amount as service recipient whereas, the service provider was required to pay 25% of the service tax liability, instead, since the service provider had paid the entire service tax amount, therefore, assessee is not eligible to avail credit of the service tax paid by the service provider - Assessee though required to pay 75% of service tax liability, on receiving man-power supply service from service provider, however, initially the entire amount of service tax was paid by the service provider and later recovered from assessee by indicating the same in the invoice - The amount which the service provider paid whether to be consider as a deposit or service tax for deciding the eligibility of credit has been more or less settled by Gujarat High Court in Nahar Granites Ltd. 2014-TIOL-582-HC-AHM-CX - No merit found in impugned order, same is set aside: CESTAT - Appeal allowed: AHMEDABAD CESTAT

2018-TIOL-2055-CESTAT-CHD

Haryana Textile Corporation Ltd Vs CST

CX- The Assessee are processing Cotton Fabrics and Man-Made Knitted Fabrics - The value and quantity of production declared by the assessee for the purpose of fixation of annual capacity during the disputed period was re-calculated by Commr. - The Assessee filed an appeal before the Tribunal seeking re-determination of duty liability whereupon the matter was remanded to determine whether or not to include length of gallery/closed while re-determining the Annual Capacity Production - This issue was decided in favour of the Revenue wherein it was decided that hold that the length of galleries was not includible - Hence, the duty liability was re-determined in terms of Notification No.19/2000-CE.

Held - The notification was issued to specify the rate of duty - The notification envisages two situations wherein the processor who wants to retain option of re-determination of duty or forgoes the re-determination of duty payable on the basis of actual production - In the instant case, the assessee retained their option for re-determination of duty payable on the basis of actual production - Therefore, the assessee is liable to pay duty - However, interest cannot be demanded as the assessee-company is declared to be a sick unit under BIFR : CESTAT (Para 2, 13, 14, 15, 16) - Appeal dismissed: CHANDIGARH CESTAT

2018-TIOL-2054-CESTAT-CHD

India Forge And Drop Stampings Ltd Vs CCE

CX - Assessee engaged in manufacture of excisable goods - During audit, it was observed that assessee received a sum from various parties for manufacture of tools which were to be used for manufacture of motor vehicle parts but duty was not paid on tools cost received from their customers when the tools manufactured in house were to be used by assessee for the manufacture of motor vehicle parts - As it was not mentioned in purchase orders that the tooling cost/charges would be included in assessable value of final products manufactured with these tools, Department alleged that the element of cost of tooling had not been included and apportioned in assessable value of their final products by assessee in violation of Section 4 of CEA, 1944 - Issue of apportioning the cost of patterns to assessable value of castings made from patterns was considered by CBEC in Circular dt. 23.01.1996 - There is an element of surmise or presumption in order of Commissioner (A), wherein he says that even they have not paid 50% of duty in period of six years and on that basis, without testing the assertions made by assessee in their submissions and documentation before him, concludes that amortization was done incorrectly - Assessee have been correct in adopting the formula of tooling cost per unit as laid down in judgment of Flex Industries Ltd. - Hence, stand of Commissioner (A) that assessee should have amortized the entire cost of tools by taking into account the ordered quantity of goods appears to be fallacious, same is not sustainable in law: CESTAT - Appeal allowed: CHANDIGARH CESTAT

Indus Integrated Information Mgmt Ltd Vs PR CGST & CS

GST - Writ petition filed challenging the final order passed by respondent No. 1 determining the Service Tax finally payable by petitioner along with interest and penalty - Petitioner submits that as per provisions of Section 4(B)(b) of Finance Act, 1994, Authority responsible for determining tax should complete the adjudication within one year from the date of Demand Notice - It is argued that the respondent No. 2 is the only officer who heard the petitioner and, therefore, the Demand having been decided by a different respondent No. 1, cannot be sustained - GST Law was introduced in July, 2017 and under the deeming provisions of Section 3 of the 2017 Act, the respondent No. 1 in his earlier avatar as the respondent No. 2 conducted the hearing - However, since with the implementation of the GST Act, 2017 the designation of respondent No. 2 was converted to that of the respondent No. 1, in exercise of deeming provisions of Section 3 of the 2017 Act signed the final order - Accordingly, there is no infraction of principles of natural justice or limitation qua the petitioner - Respondents submits on the purposive interpretation of the legal provisions in the light of the deeming provisions under Section 3 that it never was the intention of Legislature to frustrate a pending/continuing adjudication - Arguments advanced by petitioner are based on hyper technicalities which are not of a nature so as to derail the adjudication process - This Court is satisfied that the statutory provisions relied upon by respondents to take care of the contingencies sought to be exploited by the petitioner for filibustering the adjudication: HC - Writ petition dismissed: CALCUTTA HIGH COURT

2018-TIOL-60-HC-MUM-GST

All India Liquid Bulk Importers & Exporters Association Vs UoI

GST - Petitioner relies upon Circular No.39/13/2018-GST to submit that they are victim of an IT glitch and as IT glitches or technical issues pertaining to GST portal are involved, the present Circular sets up a IT-Grievance Redressal Mechanism to address the grievance of the tax payers relating thereto - The petitioner would, therefore, withdraw this writ petition and approach this IT-Grievance Redressal Mechanism and request it to take a decision in terms therewith, but in accordance with law - Writ petition allowed to be withdrawn: HC - Writ petition allowed: BOMBAY HIGH COURT