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SERVICE TAX
2018-TIOL-2239-CESTAT-MAD
Qube Cinema Technologies Pvt Ltd Vs GST & CCE
ST - The assessee is engaged in supply, installation and operation of digital camera equipment having Qube digital technology to various theatre owners on 'right to use' basis through an agreement entered with the parties - The theatre owners paid a non-refundable deposit and also paid 'per show fee' - In addition to this the assessee would have exclusive right of 20 mts. advertising time for every show - Further, the assessee had to install, commission and maintain all the appliances at their cost and these shall always remain the property of the assessee - The Revenue was of the view that the supply of digital camera equipment on higher basis to theatre owners would fall within the definition of service as under Section 65 B (44) of the Act, and the nature of the said service as defined under Section 66 E (f) of the Finance Act, 1994 was liable to service tax - SCN was issued and confirmed demand of service tax under the heading 'Supply of Tangible Goods' - The Commr. (A) upheld the order-in-original - Hence, the present appeal by the Revenue.
Held: The Tribunal deliberated upon the nature of the activities in assessee's own case for a previous period - Therefore, the activity undertaken by the assessee does not fall within the definition of service under the Finance Act, 1994 as amended in 2012 - Hence, the order challenged is set aside : CESTAT (Para 2, 6, 7) - Appeal Allowed : CHENNAI CESTAT
2018-TIOL-2238-CESTAT-MAD
CST Vs Hexaware Technologies Ltd
ST - Assessee is engaged in export of services and filed refund claims of service tax paid on various input services in terms of provisions of Rule 5 of CCR, 2004 - Proceedings were initiated against them for denial of cenvat credit on the ground that the services in question cannot be held to be eligible input services for the purposes of cenvat credit - Operative part of impugned order of Commissioner (A) is self-contradictory - In one para, he is allowing the appeal by setting aside the impugned orders and in the very next paragraph, he has remanded the matter to lower authority for verification of certificate of CA - Tribunal really fail to understand as to how refund can be allowed before such verification done by the lower authorities - Presuming theoretically, if CA's certificate so produced by assessee is found to be incorrect, the refund would not be admissible, in which case, that part of impugned order of Commissioner (A) allowing the refund claims would operate diagonally opposite to the result of verification - All the matters remanded to adjudicating authority to reconsider the refund claims after verification of Chartered Accountant declaration: CESTAT - Matter remanded : CHENNAI CESTAT
2018-TIOL-2237-CESTAT-CHD
Aggarni Automotives Vs CCE & ST
ST - Assessee is engaged in providing taxable services in category of "Authorized Service Station" and "BAS" - It was found that an amount was received on account of job work done, which did not involve any manufacturing activity under brand name of 'Bajaj' - Demand confirmed alongwith interest and penalty - Assessee is not contesting the demand of Service Tax and interest thereon, same is upheld - As for penalties, service tax was levied on BAS w.e.f. July 2003, therefore assessee was under bonafide belief, due to the said service being new, that job work which they got done from outside small workshops/mechanics was not liable to service tax - This is also supported by their immediately paying the service tax on being pointed out by Department and before issuance of SCN - It cannot be said that assessee had intention to evade service tax - Assessee have made a fit case for waiver of penalties invoking Section 80 of the Act - Therefore, penalties under Sections 76, 77 & 78 set aside invoking provisions of Section 80 of the Act: CESTAT - Appeal allowed : CHANDIGARH CESTAT
CENTRAL EXCISE
2018-TIOL-2245-CESTAT-MUM + Case Story
Solar Industries India Ltd Vs CCE & C
CX - CENVAT - Input Service - Rent-a-cab service - Phrase "for personal consumption" appearing in clause (C) of Rule 2(l) of CCR, 2004 is not linked to clause (A) and (B) - services sought to be denied viz. Rent-a-cab are part of limb (B) and stand excluded from the definition of Input service - While deciding the matter, the Bench in Reliance Industries Ltd. - 2016-TIOL-2392-CESTAT-MUM did not make any distinction between the services covered under clauses (B) and (C) - Such interpretation which has been done ignoring the specific provisions in law cannot be but per incuriam and hence cannot be binding precedence - since the issue involves interpretation, no penalty could be imposed u/r 15 of CCR, 2004 following the decision in J.K. Paper Mills - 2014-TIOL-3080-CESTAT-KOL - Except for the above modification in the impugned order of Commissioner(A), the appeal is dismissed: CESTAT [para 6.1, 6.2, 8, 8.1]
CX - Section 35R(4) of the CEA, 1944, specifically provides that in case where the order of Commissioner (Appeals) has not been appealed against because of the amount involved being less than the threshold limit, the same would not be binding precedent - earlier order of the Commissioner (Appeals) cannot be a ground for passing of unintended benefit that was not due as per rule and law: CESTAT [para 6] - Appeal dismissed
: MUMBAI CESTAT
2018-TIOL-2236-CESTAT-AHM
Krishna Polyster Ltd Vs CCE & ST
CX - Assessee, M/s SKPL availed Modvat credit on capital goods - Investigation was carried out alleging that said credit was irregularly availed on capital goods, claimed to have been installed in factory, but on the visit to the factory of M/s SKPL, the same were not available at the factory and the capital goods; capital goods/machines had been found in premises of second assessee M/s SKPYL - Later on completion of investigation, SCN was issued to M/s SKPL for recovery of Modvat credit with interest and proposal for penalty; for confiscation of capital goods found in the premises of M/s SKPYL; and also for Personal penalty on Shri Pravin Kr. Tayal Chairman of SKPL and Shri M.M.Gupta authorized Signatory were proposed - Explaining the reason for its non-availability, General Manager Sh. Gupta has admittedly informed the visiting officers that the same were not received nor installed in factory of M/s SKPL and the item at sr. no 6 of panchanama was installed in premises of M/s SKYPL, without any intimation to the department - In the statement of Director Shri Tayal, it has been though stated that the capital goods were removed from the factory of M/s SKPL to be installed for repairing purpose at M/s SKYPL, however, no corroborative evidence was placed to substantiate the claim by furnishing the details of repairing to be carried out and the difficulty of its repairing in premises of M/s SKPL - Therefore, plea of M/s SKPL that capital goods were cleared for repairing cannot be acceptable - No contrary evidence has been placed by assessee to rebut the finding of authorities below to establish the fact that the said capital goods were installed and used in premises of M/s SKPL.
The assessee had further claimed that demand is barred by limitation - General Manager, who was looking after both the Units categorically admitted that the capital goods detailed at Annexure-A to SCN were neither received nor installed in premises of M/s SKPL - Said Statement has not been retracted, nor the said witness was sought to be cross-examined - Accordingly, demand with interest has been rightly issued and confirmed invoking larger period of limitation against M/s SKPL - However, confiscation of capital goods mentioned on which credit availed at M/s SKPL but found in the premises of M/s SKYPL cannot be sustained as installation of duty paid capital goods without intimation to the department, cannot make the capital goods non-duty paid and offending one, inviting confiscation of the same - Also, the plant and machinery of M/s SKYPL is not liable to confiscation for availing wrong credit - However, the penalty equal to the credit wrongly availed imposed on them is justified - Penalty imposed on M/s SKYPL and Sh. Tayal, Director appears to be too harsh and is reduced to Rs.2.00 Lakhs and Rs.1.00 lakh, respectively: CESTAT - Appeals partly allowed : AHMEDABAD CESTAT
2018-TIOL-2235-CESTAT-AHM
Transpek Industry Ltd Vs CCE & ST
CX - Whether assessee is entitled to avail CENVAT Credit of Service Tax paid on Air/Rail Travel Agency Service, Banking and Financial Services, Broad Band and Internet Service, CICS, Training and Coaching Service, General Insurance Service, Hotel Accommodation Service, Management, Maintenance and Repair service and Security Agency Service - Eligibility of credit is covered by judgements of Tribunal and High Courts in Reliance Industries Ltd. 2016-TIOL-2392-CESTAT-MUM , Abacus Distribution Systems (I) Pvt Ltd 2014-TIOL-1617-CESTAT-MUM , 2013-TIOL-1186-CESTAT-DEL , Cadila Healthcare Ltd, Unique Pharmaceutical Laboratories 2017-TIOL-3856-CESTAT-AHM , Star Drugs And Research Labs Ltd 2016-TIOL-1438-CESTAT-MAD , ECOF Industries Pvt. Ltd 2011-TIOL-770-HC-KAR-ST , Parry Engg & Electronics P Ltd 2015-TIOL-3059-CESTAT-AHM-LB and Hindustan Zinc Ltd - Aforementioned services are held to be input service within the meaning and scope of definition of 'Input Service' under Rule 2 (l) of CCR, 2004 - Impugned order set aside: CESTAT - Appeal allowed : AHMEDABAD CESTAT
2018-TIOL-2234-CESTAT-KOL
Central Goods and Service Tax & Central Excise Vs Nalco Water India Ltd
CX - The assessee is engaged in manufacture of water treatment chemicals and processed chemicals - It is the case of Revenue that the assessee was found to have assessed their different finished product manufactured at their Konnagar unit at a price lower than that ought to have been determined in terms of section 4 of CEA, 1944 read with Rule 8 of CEVR, 2000 - While taking stock transfer of said goods to their another unit (at Pune) for consumption of the same in production of other articles leading to short payment of Central Excise duty - The adjudicating authority confirmed the demand along with interest and imposed equal penalty under section 11AC of the Act - On appeal, Commissioner(A) set aside the penalty imposed on the assessee - The principles as laid down in cases of Nizam Sugar Factory 2006-TIOL-56-SC-CX and ECE Industries Ltd. 2003-TIOL-89-SC-CX are squarely applicable to the facts of the present case - Since an earlier SCN was issued for the earlier period in respect of same subject matter, it cannot be said that there was any suppression - As there is no suppression, penalty under section 11AC cannot be imposed: CESTAT - Appeal dismissed : KOLKATA CESTAT
CUSTOMS
2018-TIOL-1410-HC-KOL-CUS
Sadguru Forwarders Pvt Ltd Vs CC
Cus - the petitioner company was aggrieved by an Order-in-Original - Although such order is appealable, the present writ was filed alleging contravention of the principles of natural justice - The petitioner claims to have been denied the oportunity to cross-examine witnesses - Although a date had been fixed for cross-examination, the petitioner's counsel was unable to appear.
Held - the petitioner was granted two dates for conducting cross examination - The order on the first date was set aside - On the second date, the counsel was unable to appear due to being engaged elsewhere - It is not a case where the petitioner is avoiding the proceedings & to deny such right would be harsh - Hence the petitioners be granted fresh opportunity to cross examine the witnesses: HC - Writ Petition Allowed : CALCUTTA HIGH COURT
2018-TIOL-2233-CESTAT-MAD
Hindustan Unilever Ltd Vs CC
Cus - Assessee filed three warehouse Bills of Entry for the clearance of goods declared as "Crude Palm Stearin (Non-edible industrial grade)" by classifying it under CTH 15119090 and claiming the benefit of Customs Notfn 21/2002 - In order to verify the percentage of Free Fatty Acid (FFA) and description of goods, the into Bond Bill of Entry was provisionally assessed and samples of imported goods were sent to Custom House Laboratory, Chennai - All the test reports stated that the samples contained less than 20% of FFA and did not conform to the description of Crude Palm Stearin having FFA of 20% or more which were exempted under Sl.No.30 (A) of the said notification - Undisputedly in the earlier test report, the goods were reported to be Palm Stearin by the Customs Laboratory - At that stage, the only adverse report was that the FFA content was less than 20% and therefore goods did not conform to the requirement of FFA to be eligible for exemption under Sl.No.30 (A) of Notfn 21/2002-Cus - Assessee had requested for further test and later with much delay of more than 2 years the reports were received from CRCL stating that the goods were Palm Oil and not Palm Stearin - All the documents such as purchase order show that the goods for which the they had placed order was only Palm Stearin - On coming to know that the goods did not conform to the description in the documents, assessee has requested for re-export of the goods - The redemption fine imposed for the purpose of re-export is hideously harsh and requires to be interfered, same is reduced to Rs.5,00,000/- - So also, the penalty imposed of Rs.5 lakhs is also on the higher side, same is also reduced to Rs.1,00,000/-: CESTAT - Appeal partly allowed : CHENNAI CESTAT
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