SERVICE TAX

2018-TIOL-2067-CESTAT-DEL + Case Story

Altech Equipments Pvt Ltd Vs CCE

ST - Assessee is engaged in renting-out heavy duty cranes to various parties engaged in construction of Delhi Metro - Department took the view that the consideration received by assessee is liable to be charged to Service Tax under category of supply of "Tangible Goods Service" falling under Section 65 (105) of FA, 1994 - The Supply of Tangible Goods Service was introduced w.e.f. 16.05.2008 and is covered under Section 675 (105) (zzzzj) - At the time of introduction of said services, CBEC vide their circular dated 29.02.2008, has explained the scope of levy of said service - Assessee has supplied machinery on hire along with the operators - The customer is free to make use of equipment along with the operator for activities as per necessity - It is evident that the assessee has also paid VAT/ST on the consideration received, considering the same as "deemed sale of goods" - Said circular of payment has clarified that levy of Service Tax on transaction as well as levy of VAT, considering the transaction as deemed sale, will be mutually exclusive - By following the decision of Tribunal in Chhattisgarh Earthmovers - 2017-TIOL-2963-CESTAT-DEL , impugned order set aside: CESTAT - Appeal allowed: DELHI CESTAT

2018-TIOL-2066-CESTAT-DEL

Infocom Network Ltd Vs CST

ST - Assessee is engaged in providing service of "On Line Mail Marketing" - As part of service, assessee offers two schemes i.e. free service as well as paid service extended to paid members - The Department during verification observed that certain amount was received by assessee from overseas customers in foreign currency and took the view that said amount received will be liable to payment of Service Tax under category of "BAS", in as much as the activities undertaken by assessee did not satisfy all the conditions to consider the same as export of services - Similar issue was considered by Larger Bench in case of Paul Merchant Ltd. wherein it has been held that the activities similar to those undertaken by assessee will be covered as export of services - Said case has been discussed by Tribunal in case of Alpine Modular Interiors P. Ltd. 2014-TIOL-517-CESTAT-DEL - While the ratio laid down by Delhi Tribunal will be applicable to the dispute in question, certain facts will need verification before extending the benefit of decisions - It is to be verified whether the entire demand is covered by decision of Tribunal or whether a part of demand is pertaining to the similar services rendered to domestic customers - Assessee's submission is that all necessary details for verification was placed for consideration before Adjudicating Authority - Adjudicating Authority at the relevant time did not have the benefit of decision of Larger Bench and other case laws: CESTAT - Matter remanded: DELHI CESTAT

2018-TIOL-2065-CESTAT-MAD

Bharti Airtel Ltd Vs CGST & CE

ST - Assessee engaged in providing mobile phone services - During audit, it was noticed that they availed credit on inputs and capital goods as well as duty paid on towers and shelters and credit availed on various input services - It was also noticed that they had wrongly availed exemption under Notfn 4/2004-ST on Telecom Services provided to SEZ units - Said issue stands covered by decision of Larger Bench in 2016-TIOL-539-CESTAT-DEL-LB and High Court of Bombay in 2014-TIOL-1452-HC-MUM-ST as well as assessee's own case - Following the same, credit is not eligible - Assessee has argued that the demand raised invoking extended period cannot sustain for the reason that they had availed credit on bonafide belief that such credit is admissible - The issue whether credit is admissible on inputs / capital gods as well as towers / shelters was contentious for a long time and had travelled upto the Larger Bench of Tribunal and thereafter to higher fora - Demand on this count for extended period is set aside - Thus the demand for the normal period will sustain, however, the penalties for the normal period are set aside - With regard to disallowance of credit on input services, issue stands covered by decision in case of Vodafone Essar South Ltd. - The Tribunal in said decision analysed the eligibility of credit on the very same services - The various services were used for providing output services - Further, the period is prior to 1.4.2011 when the definition of input services had a wide ambit as it included the words 'activities relating to business' - Following the said decision, credit is admissible - With regard to denial of exemption under Notfn 4/2004 alleging that the telecom services are not consumed wholly within the SEZ Unit, it is found that the mobile services are provided by assessee to SEZ units - Merely because the facility of mobile phone is used outside the SEZ unit also, the exemption in terms of Notfn 4/2004 cannot be denied - Further, the period involved is after 10.2.2006 when the SEZ Act 2005 came into existence - Denial of exemption is unjustified: CESTAT - Appeals partly allowed: CHENNAI CESTAT

2018-TIOL-2064-CESTAT-MUM

Sanskruti and Essen Associates Vs CCE

ST- The assessee-company is engaged in Construction of Residential Complex - It did not pay service tax in respect of taxable service being provided by them under the category of Construction of Residential Complex - Duty demand was raised and penalty u/s 77 and 78 was imposed - Owing to the pending litigation in the Apex Court with respect to levy of service tax on construction of residential complex, there was non-payment of service tax on time.

Held - As the assessee made out a fit case for invoking the provisions of Section 80 of the Act the penalties imposed u/s 77 & 78 of the Act are set aside - The entire industry involved in the construction of residential complex challenged the validity of levy of service tax on the construction of residential complex - In addition, the matter was under litigation yet the assessee paid service tax - Hence, the order challenged is modified: CESTAT (Para 1,5) - Appeals allowed: MUMBAI CESTAT

CENTRAL EXCISE

2018-TIOL-2063-CESTAT-MUM

JSW Steel (Salav) Ltd Vs CCE

CX - CENVAT - Input Service - Rule 2(l) of CCR, 2004 - Service tax paid on the aircraft services hired by appellant for logistical convenience of senior management - no allegation in the SCN that the activity of chartering of aircraft by appellants is for leisure purpose - there is no reason for the lower authority to ignore the definition of input service when the services rendered by appellant are directly covered by the initial part of the definition - credit admissible - appeal is allowed: CESTAT [para 5, 6] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-2062-CESTAT-MUM

CCE Vs Unitech Power Transmission Ltd

CX - Respondents engaged in manufacture and supply of transmission towers - they also supply bought out items like Nuts and Bolts and other accessories required for erection and installation of towers at site - Case of Revenue is that the value of the bought out items should be included in the value of the towers - proceedings were dropped by the lower authorities, therefore, Revenue in appeal before CESTAT.

Held: Entire activity of manufacturing is completed without the need of nuts, bolts etc. and the bought out items were sent directly from the supplier to the customer's site, therefore, same is obviously not taking part in the manufacture of the final product of the respondent - any additional consideration can be included in the assessable value of the goods manufactured and sold - nuts and bolts etc. are optional items which is nothing but a trading activity, therefore, same cannot be considered as additional consideration - no infirmity in the findings of the lower authorities, hence impugned order is upheld and Revenue's appeal is dismissed: CESTAT [para 4, 4.1, 5] - Appeal dismissed: MUMBAI CESTAT

2018-TIOL-2061-CESTAT-MUM

Mahindra and Mahindra Ltd Vs CCE

CX - Valuation - Appellant clearing ‘crank cases' on payment of duty to their own factory during the period 2003-04 for use in manufacture of finished goods - valuation arrived at based on rule 8 of Valuation Rules, 2000 - upon finalization and audit, revised cost certificate was prepared and based on the revised cost differential duty paid - Revenue alleging that valuation is not in conformity with CAS-4 guidelines - new cost certificate produced indicated that CE duty was paid on lesser assessable value - SCN issued and differential duty demanded and confirmed by adjudicating authority with penalties - appeal to CESTAT.

Held: It was only after persistent enquiry by the department in the year 2006 that the appellant submitted revised cost certificate which indicated that the appellant had paid less duty - If not for the enquiry, the actual AV would have remained unnoticed - when the appellant were well aware of the fact that they are liable to pay duty, they should have voluntarily come forward to pay the same, therefore, ground of revenue neutrality cannot be invoked for dropping demand - no reason to waive penalty as it is not a case of non-payment of duty due to lack of knowledge on the part of the appellant - impugned order upheld and appeal rejected: CESTAT [para 4] - Appeal rejected: MUMBAI CESTAT