SERVICE TAX
2018-TIOL-2228-CESTAT-MAD
P Vinod Vs CST
ST - The assessee, an individual was providing taxable service under the category of "Renting of Immovable Property" - For the period in dispute it received rental income &on which service tax was discharged by the assessee & acknowledged by the Revenue - However, SCN was issued but no reply was sent by the assessee - The Revenue confirmed the duty demand along with interest & penalties.
Held - The interest quantification is set aside, with directions to the adjudicating authority to verify the computation given by the assessee - Furthermore, the Revenue did not suspect the bonafides of the assessee in not remitting the service tax - In addition, the assessee paid nearly 80% of the tax amount before the issuance of SCN - Therefore, the assessee's is a fit case to invoke the provisions of Section 80 considering that the assessee did not contest the service tax liability and interest - The penalties imposed on the assessee are set aside - Hence the present appeal stands disposed of : CESTAT (Para 2, 4, 5, 6, 7) - Appeal disposed of: CHENNAI CESTAT
2018-TIOL-2227-CESTAT-DEL
CCE Vs PHG Hotels New Delhi Pvt Ltd
ST- The assessee is providing consultancy services under the description of Promotion, Marketing, Organizing or assisting in organizing games of chance including lottery - It applied for refund of Cenvat credit paid on input services under Rule 5 of CCR - While rejecting the claim, Revenue noticed that the refund was claimed against unutilized Cenvat credit of input services during period in dispute - However, the Commr. (A) allowed the refund claims partly two invoices but rejected against one invoice of 31.10.2015 - This application was filed beyond one year - The refunds were related to Cenvat credit of retainership fee, Chartered Accountant fee and provisional fee.
Held - The negative list of services do not mention the services provided by assessee - These services are taxable - Moreover, these services qualify the criteria of being called as input services as defined under Section 2(l) of CCR - The rejection of refund in order challenged is upheld - With respect to receiving payment for export services in convertible currency - It is held that Indian Rupees received against export of services through foreign bank is convertible foreign exchange - Following the ratio laid down in the decision of Sun – Area Real Estate Pvt. Ltd. vs. Commissioner of Service Tax, in the present case, the Indian rupees were received through the account of Deutsche Bank which is situated in foreign country - Therefore, in terms of Regulation 3 under Section 47 of the FEMA Act, 1999 the foreign remittance in Indian rupees through Deutsche Bank is the receipt of payment in convertible foreign exchange - Hence, the order challenged is upheld : CESTAT (Para 2, 8, 9, 10, 11, 12) - Revenue's appeal dismissed: DELHI CESTAT
2018-TIOL-2226-CESTAT-DEL
Pee Cee Cosma Sope Ltd Vs CCE & CGST
ST - The assessee is engaged in the manufacture of excisable goods - It availed Cenvat credit on inputs, capital goods and input services - On audit, it was noticed that assessee availed Cenvat credit on outward freight paid beyond the place of removal of input services - In other words, the assessee availed indmissible Cenvat credit on goods transport agencies for transport of goods from place of removal to buyer's premises - The Revenue invoked section 78 of the FA Act and imposed penalties - Hence, the present appeal by the assessee.
Held - The issue with regard to admissibility of Cenvat credit on GTA service availed for transport of goods from the place of removal to the buyer's premises, treating the service as the input service as defined under Rule 2(l) of CCR - After analysing the definition of input service it can be concluded that the order under challenge is correct - Therefore, Cenvat credit on GTA availed for transport of goods from place of removal to buyer's premises is inadmissible - In other respect i.e SCN barred by limitation, the assessee did not bring to the notice of the Revenue the issue of availment of credit on outward freight services - Therefore, it can be concluded that assessee has supressed material facts for the intention to evade payment of duty - This warrants invocation of extended period of limitation & penalty u/s 78 - Hence, the order challenged is upheld : CESTAT (Para 1, 5, 6, 7) - Appeal dismissed: DELHI CESTAT
CENTRAL EXCISE
2018-TIOL-2232-CESTAT-MAD + Case Story
Lenovo India Pvt Ltd Vs CCE
CX - Issue arises for consideration is whether the CENVAT credit wrongly availed and reversed subsequently without actually using it would attract interest or not - The said issue has been decided by jurisdictional High Court in case of Strategic Engineering 2014-TIOL-466-HC-MAD-CX wherein the High Court has observed that mere taking itself would not compel the assessee to pay interest as well as penalty - Respectfully following the said decision, assessee is not liable to pay interest or penalty: CESTAT - Appeal allowed: CHENNAI CESTAT
2018-TIOL-2231-CESTAT-DEL
Rampuri Steel Pvt Ltd Vs CCE & ST
CX- The assessee bought large quantities of MS Ingots from a seller who cleared them without payment of CE duty - The Department conducted audit at the presmises of the seller & took a view that assessee manufcatured less quantity of MS Ingots than received from the seller and the rest was scrap - It cleared the rest of the goods without payment of CE duty - Duty demand was raised & confirmed by the lower authorities - In the instant case, SCN was issued and the demand was confirmed merely on the basis of the ledger account retrieved from the pen drive for the period in dispute, seized from the premises of seller.
Held - The Revenue could not produce any corroborative evidence to show the movement of 150.040 MT of MS Ingots from the premises of the seller to the assessee - In addition, there was no evidence to prove that such unaccounted figure has actually been received by the assessee and thereafter, sold to buyers - Further, there is no record as to who is buyers of 144.038 MT of MS Angles/ channels and 3.008 MT of Waste and Scrap sold by assessee - the findings of clandestine removal cannot be upheld based upon the third party documents unless there is clinching evidence of clandestine manufacture and removal of the goods - Therefore, in absence of sufficient evidence to prove there is clandestine removal of good - The demand is not legitimate - Hence, the order challenged is set aside : CESTAT (Para 2, 7, 8, 9, 10) - Appeal allowed: DELHI CESTAT
2018-TIOL-2230-CESTAT-MAD
CCE Vs P And C Constructions Pvt Ltd
CX - The assessee is engaged in manufacture of PSC pipes for use in water supply scheme - Such water pipes supplied to water treatment plants were eligible for exemption for payment of duty in terms of Notification No. 06/2006-CE, conditional upon a certificate issued by the District Collector was to be produced to the Excise authority concerned - During the period of dispute, the assessee paid duty on clearance without availing the benefit of notification - Once the necessary certificate was obtained by the assessee, it applied for refund of amount of duty so paid - However, the Revenue denied the claim for refund on the ground of time bar as also on grounds of unjust enrichment - On appeal, the Commr. (A) held in favour of assessee & hence the present appeal by Revenue.
Held - On the point of claim being time barred, the notification does not specify that certificate should be available with the assessee at the time of clearance itself - Therefore, even in the case of subsequent production of certificate the benefit of notification has to be extended to the assessee - In support there are numerous decisions of Tribunal like CCE Vs. Dynaspede Integrated Systems Ltd. as well as the SC in the case of CC (Imports), Mumbai Vs. Tullow India Operations Ltd. - Moreover, the assessee wrote a protest letter indicting that they are entitled to the exemption and are awaiting issuance of the certificate - In addition, they requested the Revenue for refund of the excise duty so paid by them - Therefore, it is concluded that duty was paid under protest - Next, w.r.t. unjust enrichment the rate collected deemed to be inclusive of all the taxes that the contractor has to pay for performance of the contract - Therefore, the assessee did not charge and collect separately the excise duty element from their buyer - Therefore, the duty element has not been included in the tender rate and the same was not collected from the State Government - Hence, the order challenged is upheld: CESTAT (Para 3, 8, 9, 10,11) - Revenue's appeal dismissed: CHENNAI CESTAT
2018-TIOL-2229-CESTAT-MAD
Real Talent Engineering Ltd Vs CC & ST
CX- In the present case, the raw materials were supplied by the principal manufacturer further sent them to job worker and then to assessee - After carrying out the manufacturing activity, the goods were cleared back to principal manufacturer who used such goods for further manufacture at their end - The issue relates to determination of valuation with reference to the excisable goods manufactured and supplied by the assessee to supplier of the raw material.
Held - With respect to applicability of Rule 10 (i) and (ii) of the Central Excise Rules, the intermediate products manufactured by the assessee has not been consumed by the principal manufacturer or the job worker - Since this is not a case of the principal manufacturer immediately selling the goods manufactured by the assessee - Therefore, this rule is not applicable - The lower authorities have added a notional amount @ 1.4% of the cost of raw material for assessable value - This was done on the basis of decision of SC that the duty payable on intermediate goods was discharged on the basis of cost of the raw materials plus processing charges in the case of Ujahar Prints Ltd. - In respect of this issue, it is held that the the correct landed cost of the raw materials will need to be worked out with the support of the certificate of the authorized/qualified Cost Accountant - Therefore, the matter is remanded for de novo adjudication - In addition, the demand by invoking extended period of limitation is set aside - Therefore, the demand is limited to the normal time period & penalty is deleted - Hence, the order challenged is set aside : CESTAT (Para 1,4,5,6) - Appeal dismissed: CHENNAI CESTAT
CUSTOMS
2018-TIOL-2225-CESTAT-MUM
Bentee Organoclays Pvt Ltd Vs CC
Cus - Appellant had imported Bentonite Clay and classified the same under CTH 250810 and which was allowed by the department - later, SCN was issued alleging that the said goods are "Toncil Optimum 210FF" and as per Board Circular 32/2002-Cus are classifiable under CTH 3802 9019 as ‘Activated Bentonite clay' attracting higher rate of duty.
Held: Tribunal has in the case of Komal Trading Co. - 2013-TIOL-2380-CESTAT-MUM held that goods are correctly classifiable under CTH 3802 for the period subsequent to 01.01.2007 and, therefore, demand for the said period covered by the SCN is upheld - since the issue was not free from doubt and was the subject matter of litigation before the Tribunal, no malafide can be attributed - otherwise also goods were cleared by Customs authorities after examination, so appellant cannot be held guilty of any suppression -demand raised for the period April 2003 to September 2007 by SCN dated 12.11.2008 - entire demand gets time barrred - appeal allowed with consequential relief: CESTAT [para 3, 4, 5] - Appeal allowed: MUMBAI CESTAT
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