ST - During disputed period, assessee constructed the retail Mall at Amritsar, (Punjab) and availed Cenvat credit in respect of service tax paid on various input services used in construction of such Mall - Taking of Cenvat credit was disputed by department on the ground that as per definition of input service contained in Rule 2(l) of CCR, 2004, the disputed services should not be considered as input service - Rule 3 of Rules, 2004 is the enabling provision, which entitles a service provider to take Cenvat credit of service tax paid on input services for providing output service - The fact is not under dispute that taking of Cenvat credit on disputed services was not in conformity with provisions of Rule 3 ibid - Since taking of Cenvat credit has not been specifically disputed by department, its utilisation after 01.04.2011 cannot be questioned or disputed by Department, in view of the fact that taking of Cenvat credit decides its utilisation, according to the convenience of assessee - Said fact is evident from sub-rule (1) read with sub-rule (4) of Rule 3 of Rules, 2004 wherein, assessee has been given the option to utilise credit so availed for payment of Central Excise duty or service tax for providing output service - Since, assessee has taken the credit prior to 1.4.2011 and the Mall was also completed before 2011, denial of Cenvat benefit cannot be sustained - Tribunal in case of Navratna S.G. Highway Prop. Pvt. Ltd. 2012-TIOL-1245-CESTAT-AHM has held that the goods and services used for construction of warehouse, which is further used for providing the output service should be available for the Cenvat benefit - No merits found in the impugned order: CESTAT - Appeal allowed : DELHI CESTAT

ST - Assessees are co-owners of a property and have given the said property to M/s ICICI Bank Ltd. on monthly rent basis - The tenant bank is making payment of rent individually to all the four owners of property by issuing separate cheques/demand drafts in their individual names - The Department views that registration of property in four individual names and execution of rent lease agreement with M/s ICICI Bank in separate names is only to evade the payment of service tax by availing the threshold limit of Rs. 10 lakhs under SSI exemption Notfn 8/2008 - As per Income Tax Act, all the four assessees who are recipient of rent proceeds have to show their income in individual name and has to pay rent under Income Tax Act, 1962 accordingly - It has also been held by Supreme Court in case of Shiv Sagar Estate that lease rent from property purchased jointly with specific shares is separately assessable in hands of individual co-owner and not in the hands of association of persons - It has also been held in several orders of Tribunal that for considering SSI benefit under Notfn 8/2008, the receipt of service provider need to be considered individually and only after they have crossed the threshold limit of Rs. 10 lakhs the service tax will be leviable - SSI exemption Notfn 8/2008 shall be available for individual owner of property for considering the taxable value of service received by individual owners - Thus, clubbing of value of service of all the four individual co-owners of property is legally not sustainable and therefore, O-I-As are not good in law and accordingly same is set aside: CESTAT - Appeals allowed : DELHI CESTAT

ST - Assessee is registered as a service receiver under category of "Consulting Engineering Service" and made payments to M/s Mitsubishi heavy industries - There was a delay in payment of service tax in respect of 4 invoices and same was paid on these invoices by assessee on their own ascertainment with a delay of 6 months to 3 years - It is found that the interest due thereon had not been discharged by assesse, at the behest of department, assessee later on paid full interest liability on 18.06.2016 - A SCN was issued to assessee on 02.01.2017 demanding Service tax and interest already paid by assesse and proposing penalty on them under Section 78 of FA, 1994 - From the spirit of Board Instructions dated 08.07.2016, the intention was to encourage voluntary compliance and introduce the consultation process for evading issuance of SCN - The ingredients of Section 78 like suppression or malafide intent to evade duty do not emerge from the facts of case - In a similar scenario, Tribunal in case of Arcgate 2017-TIOL-2025-CESTAT-DEL had held that penalty was not justified and set is aside - The same view has been taken by Tribunal in case of Kalbhor Construction Co. and Gujrat Borosil - Situation in present case is Revenue neutral as the duty was paid under reverse charge mechanism and Cenvat credit would only be availed by assessee himself - In such a situation, Tribunal has held in case of Modern Woolens that penalty was not justified - Imposition of penalty under Section 78 is not justified and the same is accordingly set aside while upholding the service tax and interest as not challenged: CESTAT - Appeal allowed : AHMEDABAD CESTAT

CENTRAL EXCISE

CC & ST Vs Shri Nakoda Ispat Ltd

CX - the assessee was aggrieved by certain orders passed by the Tribunal - It raises issues as to whether the term 'capital goods' excludes structures embedded in the earth - Also whether goods like angles, joists, beams, bars & plates which go into fabrication of such structures are not to be treated as 'input' used in relation to their final products as inputs for capital goods, or none of the above - Lastly, another issue is also whether the amendment to the CCR 2004 as per Rule 2 of the CENVAT (Amendment) Rules 2009 retrospective in nature considering is it clarificatory & to be applied to all matters arising prior to July 07, 2009 being the date of commencement of the CENVAT (Amendment) Rules 2009 - Later, the High Court held that though Section 37 gave power to make rules including power to give retrospective effect, while doing so the provision under consideration is neither made retrospective nor could it be treated as one - The issues were settled in favor of the assessee - Hence the Revenue's SLP.

Held - Delay condoned - Application for exemption from filing Certified Copy of the judgment is allowed - There is no legal & valaid ground for interference: SC - Revenue's SLP Dismissed: SUPREME COURT OF INDIA

CX - Assessee had availed Cenvat Credit on the strength of ISD invoices issued by their Head Office - Alleging that distribution of credit by Head Office, registered as ISD under Rule 7(d) of Cenvat Credit Rules is not correct, SCN was issued to them for recovery of credit with interest and penalty - From the very beginning, assessee has vehemently argued that in arriving at the total sales turnover of Company, the turnover of a subsidiary unit, situated outside India has been wrongly considered resulting into the alleged demand of excess distribution of credit - The assessee's argument is supported by CA's certificate - To recompute the amount of credit allowable to assessee after deducting the sales turnover of unit situated abroad, matter is remanded to the Adjudicating Authority: CESTAT - Matter remanded : AHMEDABAD CESTAT

CX- The assessee is manufacturer of weighing machines and conveyors - These goods were sold to a public sector unit for setting up a Bio Gas Combustion Co- Generation Power Project - It claimed exemption under Notification No. 6/2002-CE, list no. 9 under serial no. 16 of the notification -However, the Revenue took a view that they were not entitled to the benefit on grounds that the exemption is available only if the parts are captively consumed - Duty demand was raised and exemption was disallowed - The Commr. (A) deleted the penalty, hence the present appeal by Revenue - Held - On the basis of certificate issued by NCEDCAP, claim is for exemption under Sl.No.16 of List 9 of the said notification - Whereas, the Revenue denied exemption under item No.21 of List 9 - In the order-in-appeal the matter has been examined with reference to Item No.21 of list No.9 of the notification - Therefore, the SCN is not valid - Further, the issue at hand is whether weighing machines and conveyors are integral part of Bio-gas combustion co-generation power project - The answer to this question is in affirmative - The questionable items are to be treated as non-conventional energy device in terms of item No.16 of list 9 of Sl.No.237 of Notification No.6/2002-CE - Following the ratio laid down in the case of Rachitech Engineers Pvt. Ltd. wherein, the Tribunal decided that the chimneys manufactured by the assessee are meant for bio-mass burning boiler & is device in the context of Notification No.6/2002-CE - Hence, the order challenged is set aside : CESTAT (Para 1, 5, 6, 7) - Appeal Allowed : CHANDIGARH CESTAT

CUSTOMS

NOTIFICATION

dgft17cir010

Accountability of inputs where Advance Authorisations are issued on net to net basis for parts/ components

CASE LAW