SERVICE TAX

2018-TIOL-1268-HC-MAD-ST + Case Story

ST - Assessee renders export services to its client and in the process paid a total sum of Rs.9,72,458/- as service tax during financial year 2015-16 - It may be noted that of this amount a sum of Rs.4,39,683/- was paid on 07.04.2015 - The assessee, on realising that under Rule 6A of Service Tax Rules, inserted w.e.f. 01.07.2012, they did not have a liability to pay Service Tax, made a representation for refund of this tax paid by him, which was in excess of his liability - In the refund order, refund of Rs.5,32,772/- was allowed and the refund claim of Rs.4,39,683/- was disallowed on the ground of limitation - In view of decisions in case of ITC Ltd. , Oil and Natural Gas Corporation Ltd. 2017-TIOL-822-HC-AHM-CX and Parijat Construction 2017-TIOL-2170-HC-MUM-ST , court opined that when service tax is paid by mistake, a claim for refund cannot be barred by limitation merely because the period of limitation under Section 11B had expired - Such a position would be contrary to the law laid down by Apex Court and therefore claim of assessee for a sum of Rs.4,39,683/- cannot be barred by limitation and ought to be refunded: HC - Appeal allowed : MADRAS HIGH COURT

ST- The assessee paid service tax on GTA after availing the abatement of 75% on freight paid to the Goods Transport operator on the transportation of their goods during the period in dispute - It availed benefit under Notification No. 32/2004-ST - The Revenue took a view that since the unit is not the GTA, hence benefit of the Notification No. 32/2004-ST was not available to the unit - Duty demand was raised as assessee was liable to pay the service tax on full amount of the freight paid - The Commr. (A) set aside the order-in-original and allowed the appeal of assessee - Hence, the present appeal by Revenue.

Held - Any person who is made liable to pay service tax, while discharging its service tax liability is entitled to avail the benefit of exemption in terms of Notification Nos. 32/2004-ST and No. 1/20006-ST - This was clarified by the Board vide its Circular No 166/13/2006-CX - Thus, the Revenue's view of not extending benefit of abatement is incorrect - The assessee has complied with all the conditions of abatement of 75% given in Notification - Moreover, in terms of the Board circular the required declaration is mentioned on the consignment notes - Therefore, the abatement in taxable service of goods transport by road is available on the condition that the GTA has not availed credit on inputs and capital goods used for providing taxable service - In addition, they did not avail benefit of Notification No. 12/2003-ST - Following the decision of Patna HC in the case of Commissioner of Central Excise vs. H.T. Media , the order challenged is upheld : CESTAT (Para 1, 5, 6) - Revenue's Appeal Dismissed : AHMEDABAD CESTAT

ST - Assessee is engaged in providing various services - During audit, Revenue found that assessee was providing staff to their different related companies and was recovering certain amount of salary from them, the Revenue, therefore, felt that assessee was providing service in category of "Manpower Recruitment or Supply Agency" to their group Companies - Accordingly, the SCN was issued - Issue is no longer res-integra and is squarely covered by decision of High Court of Gujarat in case of Arvind Mills Limited. 2014-TIOL-441-HC-AHM-ST - Said judgment has been followed by Tribunal in case of Spirax Marshall P. Limited 2016-TIOL-238-CESTAT-MUM , the department went in appeal against the said Tribunal order which has been dismissed by Supreme Court - By following the said judicial pronouncements on the issue, it is held that the order of Commissioner (A) is not sustainable: CESTAT - Appeal allowed : AHMEDABAD CESTAT

ST - Assessee as a Floating Production Unit (FPU) was engaged in offshore for drawing crude oil from subsea wells in sea and processes and transfers the processed crude oil through a buoy into a vessel called Floating Store and Offloading Unit (FSO) through which the crude is further transported to fleets - Real process of crude oil occurs at FPU - One foreign company called M/s. Prosafe Production Services Pvt. Ltd. Singapore was paid certain amount by assessee for provision of operations personal, maintenance, spare parts, supplies and all other resources necessary for operation of FSO - The payments made by assessee to M/s. Prosafe Production Services was held to have been paid for storage and warehouse charges on the ground that temporary storage of processed crude and offloading of same was provided by Prosafe Production Services - Revenue considered that storage and warehousing was taxable service and raised demand by impugned order - Tribunal in assessee's own case 2012-TIOL-1874-CESTAT-MAD has held that assessee is not liable to pay service tax as recipient of service of nature not falling within the purview of section 65(105)(zza) of FA, 1994 r/w section 65 (102) of the said Act - Though the department's appeal has been admitted by Supreme Court, no stay has been granted by said Court - Following the decision of Tribunal, in assessee's own case, impugned order set aside: CESTAT - Appeals allowed : CHENNAI CESTAT

CENTRAL EXCISE

CX - Assessee is engaged in manufacture of galvanized transmission towers - In their factory, they fabricate various steel angles and plates, galvanize the same and clear the same upon payment of duty to the site, where the transmission towers are to be erected - For purposes of erection of such transmission towers, assessee also requires various other components such as nuts, bolts, washers and other accessories, which are procured from various other manufacturers, who supply them directly to the site - The Department took the view that the assessee is required to discharge duty on the entire value of transmission tower contract including the value of components delivered directly at the site - The crux of the issue for decision is whether the value of nuts, bolts and washers which are bought out items and dispatched directly to the site are required to be included in assessable value of the items supplied by assessee - Tribunal in various cases has considered the identical issue of transmission towers and has observed that nuts and bolts are optional item which is sold as a bought out item to the customers, which is nothing but a trading activity - By following the decision of the Tribunal in said case, no justification found for including the value of nuts, bolts and washers in the assessable value - Impugned order is set aside: CESTAT - Appeal allowed : DELHI CESTAT

CX- The assessee-company is engaged in production of aerated water - It entered into an agreement with a contractor for construction of industrial building - On completion of the assigned job, invoice was issued by the contractor - The price approved was paid by the assessee to the service provider along with tax amount - A certificate was issued by the architect firm confirming that the service provider was entitled for payment of service tax - The assessee availed Cenvat credit, but the Revenue opined that since amendment in CCR in 2011, construction activities were specifically excluded from the purview of input service - While the SCN was dropped, the Commr.(A) confirmed the duty demand - Hence, the present appeal.

Held - As the invoice is issued prior to the effective date of amendment,therefore under the unamended definition of input service no restriction can be imposed for not taking cenvat credit for construction service - The taxable service is used for manufacturing purpose, the benefit of Cenvat credit would be available to it : CESTAT (Para 2, 6, 7) - Appeal allowed : DELHI CESTAT

CX- The assessee is engaged in manufacture of cement - A portion of electricity generated was allowed by the assessee to be drawn at the its own plants situated in other place by virtue of agreement entered with another entity - The Department was of the view that since a portion of electricity was not used for manufacture of cement - The assessee availed ineligible credit - Duty demand was raised along with interest and penalty - The Original Authority confirmed the demand and hence, the present appeal was filed.

Held - The issue of eligibility of credit assessee has been decided in assessee's own case in appeal Mo. E/40444/2015, vide Final Order No. 40498/2018 wherein it was held that the transaction related to sale of electricity led to transfer of rights in respect to the portion of electricity sold - Even if, the portion of electricity sold was used for manufacture of final product by the dealer, it cannot be said that electricity was used by the assessee - Therefore, it is liable to reverse the credit wrongly availed : CESTAT (Para 2, 5, 6, 7) - Revenue's appeal allowed : CHENNAI CESTAT

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