SERVICE TAX

2018-TIOL-2138-CESTAT-MAD

CCE Vs Lanco Tanjore Power Company Ltd

ST - The assessee, M/s. Senthil Constructions was engaged by M/s. Lanco for construction of quarters for use by their employees - The assessee carried out the construction of quarters which were charged to service tax under category of residential complex defined under section 65(91a) of FA, 1994 - Commissioner (A) vide the impugned order set aside the demand of service tax and held that since the residential complex has been constructed for personal use of employees of M/s. Lanco, it falls within the exclusion clause of definition of residential complex and no service tax will be liable - The definition of section 65(91a) of FA, 1994 specifically excludes construction undertaken for personal use and such personal use includes permitting the complex for use as residence by another person - Said exclusion clause covers the construction activity undertaken by assessee - Following the decision of Tribunal in Nithesh Estates Ltd. , no reason found to interfere with impugned orders, same are sustained: CESTAT - Appeals rejected : CHENNAI CESTAT

2018-TIOL-2137-CESTAT-AHM

Kalpataru Power Transmissions Ltd Vs CCE & ST

ST - Whether assessee is entitled to avail Cenvat Credit of Service Tax paid on 'Outdoor Catering Service' provided to employees pursuant to the provisions of Building and other Construction Workers Act, 1996 - Division Bench of Tribunal in case of Reliance Industries Ltd 2016-TIOL-2392-CESTAT-MUM considered the admissibility of Cenvat Credit of 'Outdoor Catering Service', after amendment to the definition of input service w.e.f. 1.4.2011 and held that the credit is admissible if 'Outdoor Catering Service' is not meant to be used for personal use - Assessee has categorically submitted that the 'Canteen Services' has been provided to employees in pursuance to the aforesaid Building and other Construction Workers Act, 1996 and not for personal use - Following the judgment of Reliance Industries Ltd. impugned order is set aside: CESTAT - Appeal allowed : AHMEDABAD CESTAT

2018-TIOL-2136-CESTAT-HYD

CC, CE & ST Vs Janata Digital Lab and Studio

ST - Assessee had taken service tax registration in year 2002-03 for rendering photography services; they filed ST-3 returns upto September 2002 and from September 2002 onwards they did not file any ST-3 returns and despite reminders, did not pay service tax liability - Subsequently, they were issued a SCN for non-filing of ST-3 returns for the period 2002-03 to 2005-06 - Entire case regarding confirmation of demand is correct, as the srvices rendered by assessee are covered under photography services - Revenue's argument that the first appellate authority has erred in extending the benefit of reduction of cost of materials as per notfn 12/2003 as amended, is on the ground that assessee had not maintained separate records in details that they have procured and used the material for rendering such services - This objection of revenue on the findings for reduction of cost of materials is incorrect, inasmuch that first appellate authority has clearly recorded how he has worked out the exclusion of value of material from gross receipts - Calculation as recorded by first appellate authority and the reason are as per the acceptable principles of accountancy norms and has correctly arrived at the decision based on materials consumed as reported in the balance sheet -

As regards to CENVAT credit availed on machinery procured by assessee, first appellate authority has relied upon the duty paid document issued by Kodak India Limited which is correct as on perusal of document, it is found that the machinery has been sold to assessee by the dealer/importer of Kodak India Limited and it is indicated that total duty and the CESS amount has been passed on to assessee under Registered Dealers invoice - First appellate authority was correct in extending the benefit of CENVAT credit to assessee in respect of machinery procured by them.

Demand is confirmed for period 2001-02 to 2006-07 by invoking the proviso of Section 73 of FA, 1994, hence, the penalty imposed by first appeallate authority under section 78 is correct and no reason found to interfere in such a reasoned order passed by first appellate authority - Appeal filed by Revenue and by assessee, both are rejected: CESTAT - Appeals disposed of : HYDERABAD CESTAT

2018-TIOL-1328-HC-MAD-CX + Case Story

Irbaz Shoe Company Vs CCE

CX - Complete non-observance of procedure cannot be said to be a mere procedural lapse - stringency and the mandatory nature of any notification is decided on the basis of the purpose it seeks to achieve: High Court [para 20, 21, 22, 24, 25, 26] - Civil Miscellaneous appeal dismissed : MADRAS HIGH COURT

2018-TIOL-2135-CESTAT-ALL

Eveready Industries India Ltd Vs CC, CE & ST

CX- The assessee is a manufacturer of Dry Cell Batteries and availed Cenvat credit facility - The defective dry cell batteries were dumped as waste & scrap through government approved treatment, storage & disposal facilities and there is no as such use of defective dry cell batteries - On these batteries, duty is required to be paid on such disposal and no credit reversal is required - Thus, the assessee did not pay duty on manufacture of dry cell batteries which were defective dry cell batteries - The Revenue took a view that Cenvat credit going into manufacture of defective batteries on which duty was not paid, was not admissible to the assessee - Duty demand was raised - The Adjudicating Authority held that the CBEC Circular based on the provisions of Rule 57D issued earlier have no relevance to the present case and confirmed the demand in the show cause notice.

Held: CBEC instructions stand in or valued during the relevant period and hence Cenvat credit is admissible in respect of the amount of inputs contained in any of the waste, refuse or bye products - This follows from the decision of Tribunal in assessee's own case in Final Order No. A/70280-70281/2016-EX[DB] - Hence, the order is set aside : CESTAT (Para 2, 5, 6) - Appeal Allowed : ALLAHABAD CESTAT

2018-TIOL-2134-CESTAT-ALL

Saini Alloys Pvt Ltd Vs CCE & ST

CX- The assessee were engaged in the manufacture of M.S. Ingots, M.S. Casting & Alloys Castings - The Revenue noticed that there was overvaluation of of scrap leading to higher Cenvat credit being availed by the supplied on the overvalued inputs - Duty demand was raised for recovery of inadmissible credit on grounds that it was commercially not possible for the assessee- company's to buy raw materials at 50-220% higher price than the prevailing price of comparable raw material - The original authority confirmed that demand along with imposition of penalty.

Held: To comprehend the issue at hand, it is important to understand that this is not a case where the inputs were not duty paid nor there was any case made out by the Revenue that the inputs were not received in the factory - Further, inputs were used into the manufacture of final products & the assessee has availed Cenvat credit euqal to the amount stated in the duty paying documents of inputs - Therefore, the only issue raised by Revenue was about valuation aspects of inputs of the end of the receiver of inputs - In this respect, it is held that there is no need for reassessment of inputs at the end of input receiver - The assessee has not overvalued inputs used in the process of manufacture - Following the decision of Allahabad High Court in the case of CCE vs. Juhi Alloys Ltd ., the order challenged is set aside : CESTAT (Para 2, 5) - Appeals Allowed : ALLAHABAD CESTAT

2018-TIOL-2133-CESTAT-BANG

Canara Hydraulics Pvt Ltd Vs Commissioner of Central Tax

CX - Assessee is engaged in manufacture of Hydraulic Cylinders and Hydraulic Systems and availing cenvat credit on input and input services as per the provisions of CCR, 2004 - The assessee's records were taken for verification by audit team and it was noticed that they had availed cenvat credit in respect of Renting of Immovable Property Services which according to audit has no nexus with the manufacturing activity undertaken by them - Demand confirmed alongwith interest and penalty - Commissioner (A) has observed that assessee has failed to produce the documents before him justifying the claim of cenvat credit and other material facts which are disputed - Assessee submits that he has got all the records and documents to produce before the adjudicating authority - In view of this, matter remanded back to the original authority with a direction to find out the eligibility of assessee for Rs. 2,63,942/- for the period April 2007 to September 2010 with regard to the fact that whether any manufacturing or taxable activity is carried or not by the assessee prior to April 2011 and also to examine the eligibility of cenvat credit of Rs. 8,10,546/- for the period February 2012 to November 2016 as to whether the appellant is one legal entity and proportional credit towards activity of unit 1 - Therefore, the appeal is allowed by way of remand: CESTAT - Matter remanded : BANGALORE CESTAT