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SERVICE TAX
2018-TIOL-2398-CESTAT-MUM
My Car Pune Pvt Ltd Vs CCE & ST
ST - Appellants are inter alia engaged in providing services falling under the category of ‘Servicing of Motor Vehicles' and ‘Business Auxiliary Service' - they were also providing services relating to registration of cars to their buyers for which they were charging lump sum amount from customers - It is alleged by Revenue that such services are classifiable under the category of "Business Support Service" - demands confirmed and appeals filed before Commissioner(A) were dismissed on the ground of non-compliance with the order of pre-deposit made by the appellate authority - in remand proceedings, demand upheld by the Commissioner(A), therefore, appeal before CESTAT in the second round.
Held: Appellant has informed that in a similar case of the appellant covering the period February 2007 to December 2009, the Commissioner(A) had by his order dated 5 th October 2017 held that the handling charges collected by the appellant for RTO registration which includes smart card fees and vehicle registration fees are not for any support by the appellant to individual person who is not in a business or commerce, hence does not qualify the criteria to be called as BSS - in the case of Wonder Cars Pvt. Ltd. - 2016-TIOL-190-CESTAT-MUM it is held that the definition of ‘BSS' will not cover the services rendered by the appellant even in the residual category of ‘other transaction processing' - following the said ratio, impugned order is set aside and appeal is allowed: CESTAT [para 8, 8.1] - Appeal allowed: MUMBAI CESTAT
2018-TIOL-2397-CESTAT-MAD
Bureau of Indian Standards Vs CST
ST - Assessee is registered with rendering of services under category of "Technical Testing and Analysis Services" - It emerged that assessee was having an amount in their suspense account - It appeared to department that the amounts have been received by assessee from the customers which are in the nature of advances and assessee is liable to pay service tax on the same - The notice also proposed demand of service tax towards royalty charges collected from assayers for Hallmarking - Whenever any amount is received at the first instance from any client, assessee discharges the tax liability on that amount on cum tax basis - There is no allegation that higher amount than what is charged to customer in respect of marking charges has been collected - This is only an accounting convenience that has been adopted by assessee and that raising of credit notes by them on the customer who has made excess payment will not have the effect of nullifying the service tax already paid by them to the Government on the total amount received earlier - The issue of credit notes is therefore only an accounting transaction to recognize the liability of assessee towards their customer to know the excess payment lying with them - It has to be kept in mind that BIS is set by the Government of India with the Governing Council and Members consisting of Ministers and Members of Parliament and Secretaries of concerned Departments - There is also no allegation that BIS have not discharged tax liability on the initial amount received by clients - Demand on this score set aside.
Coming to the dispute on concerning demand on tax in respect of royalty charges, the matter has already been decided by this Bench in respect of the very same assessee - Ratio of said decision will be applicable on all fours in respect of royalty charges collected by the very same assessee in respect of the very same activity - Demand on this score also will not sustain: CESTAT - Appeal allowed: CHENNAI CESTAT
2018-TIOL-2396-CESTAT-BANG
Aradhya Steel Pvt Ltd Vs Commissioner of Central Tax
ST - During audit of records of assessee, it was noticed that assessee have incurred expenses on receipt of 'Man Power Supply services and security services' from the service providers who are Proprietors and Partnership firms and were required to pay Service Tax and Cesses thereon under reverse charge mechanism in terms of Section 68(2) of FA, 1994 read with Notfn 30/2012-ST - Demand confirmed alongwith interest and penalty - When the assessee has paid service tax along with interest before the issue of SCN, the authority should not have issued SCN - Case of assessee is covered by provisions of Section 73(3) of Finance Act - Therefore by following the ratio of decision in case of Adecco Flexione Workforce Solutions Ltd. 2011-TIOL-635-HC-KAR-ST , it is held that impugned order is not sustainable in law: CESTAT - Appeal allowed: BANGALORE CESTAT
CENTRAL EXCISE
2018-TIOL-2395-CESTAT-DEL Parasrampuria International Vs CCE
CX - Assessee, a 100% EOU engaged in manufacture of Polyester Cotton yarn and Polyester blended yarn - The assessee, in addition to clearing finished products, 'spun yarn' for export, were also making DTA clearances of cotton waste - It is alleged that value and quantity of DTA clearances had been under-declared and on this basis, a SCN was issued to assessee - After issue of SCN dated 04.09.2006, assessee approached the Settlement Commission which settled the dispute - Accordingly, assessee paid differential duty along with simple interest @ 10% - After order of Settlement Commission, Revenue proceeded to re-determine the eligibility of assessee for the concession rate of duty in respect of DTA clearances - The Revenue added the quantum of under-valuation of cotton yarn, as settled by Settlement Commission, to the value of clearances already made during disputed period and noticed that over the ceiling of 50% of FOB value was already breached - For the value of clearances in excess of ceiling, Revenue demanded the differential duty without the benefit of concession under Notfn 23/2003 - Towards this, SCN dated 01.12.2006 was issued which covered the same period of dispute settled by Settlement Commission.
Assessee argued that the second SCN dated 01.12.2006 covering the same period of dispute as the initial SCN dated 04.09.2006 cannot be held valid for the extended period of limitation since the allegation of under-valuation was already known to Revenue - Revenue was already in a position to re-compute the overall ceiling of DTA clearances by adding the quantum of under-valuation detected, but Revenue failed to do so - For such re-computing and raising the revised demand, a further SCN dated 01.12.2006 has been issued in which the allegation of suppression has been made once again - Decision of Supreme Court in M/s Nizam Sugar Factory 2006-TIOL-56-SC-CX will be applicable and Revenue will be precluded from raising the allegation of suppression in the SCN dated 01.12.2006 - Consequently, the demand of duty raised in SCN dated 01.12.2006 is required to be restricted to that falling within the normal period of limitation - The mandatory penalty equal to the duty demanded also will not be liable to paid - However, demand for interest on the re-computed demand as well as penalties imposed on Director as well as Asstt. General Manager are upheld: CESTAT - Assessee's appeal partly allowed: DELHI CESTAT
2018-TIOL-2394-CESTAT-AHM
Colour Flex Laminates Ltd Vs CCE & ST
CX - Assessee is engaged in printing and lamination of flexible packing materials - During investigation, it was noticed that assessee had not included designing charges of cylinders and the cost of copper engraved printing cylinders in assessable value of goods produced by assessee - It was also found that assessee had recovered these charges in form of debit notes/commercial invoices, accordingly, a SCN was issued - Issue of amortization of cost of dies/moulds/tools which is the basis of demand was under dispute which was lingering on as there were conflicting judgments on the includability of cost of moulds supplied free of costs by the buyers in value of finished goods manufactured using such dies/tooling/moulds - The dispute was finally resolved by Larger Bench judgment rendered in case of Mutual Industries Ltd 2002-TIOL-543-CESTAT-DEL-LB - Tribunal in similar set of facts has taken the view that the extended period is not invocable - Following the principle of law laid down in judgment of Tribunal in ITW Signode (India) Ltd 2004-TIOL-799-CESTAT-BANG , extended period of limitation is not invocable - Accordingly, the appeals are remanded back to the Adjudicating Authority to pass a fresh order by applying the normal period of limitation: CESTAT - Matter remanded: AHMEDABAD CESTAT
2018-TIOL-2393-CESTAT-AHM
Bio Tech Opthalmics Pvt Ltd Vs CCE & ST
CX - Assessee had availed CENVAT Credit by carrying forward the accumulated credit balance available at end of Financial Year 2009-10 in their CENVAT Credit records, in subsequent Financial Year 2010-11, as their opening Balance - Also, they have availed credit during Financial Year 2010-11, even though they were availing benefit of SSI exemption under Notfn 08/2003-CE - Alleging that credit amount is inadmissible, SCN was issued for recovery of the same and on adjudication, it was confirmed with interest and penalty - Assessee manufacture excisable goods and avail benefit of SSI exemption under Notfn 08/2003CE for the first aggregate clearance - Also, they have manufactured excisable goods affixing the brand name of others for which said exemption Notfn was not availed and duty was paid by them - Also, it is not in dispute that they availed credit on common inputs used in manufacture of their own goods on which they claim SSI Exemption and also on branded goods cleared on payment of duty - As assessee had been availing benefit of exemption Notfn, which was value based, accordingly, credit of Rs. 5,30,300/-, lying as on 31.3.2010 would lapse and is inadmissible to the assessee in year 2010-11 - Also, it is not contested by assessee that in Financial Year 2010-11, they had availed SSI exemption for clearance of their own goods up to the aggregate clearance of Rs. 150.00 lakhs and also availed credit on inputs used in manufacture of said exempted goods - Department while denying the said credit adjusted the amount paid under Rule 6(3) of CENVAT Credit Rules - Thus, assessee is not entitled to CENVAT Credit both the amounts i.e. Rs.5,30,300/- and also 5,74,902/- - However, demand is barred by limitation inasmuch as assessee have been discharging 5% of value of goods manufactured and cleared the goods availing benefit of SSI exemption under Notfn 08/2003-CE - Also, the closing balance of credit as on 31/03/2010 has been reflected as opening balance on 01/04/2010 - The department is fully aware of the fact that the assessee is availing benefit of SSI exemption Notfn for clearance of goods manufactured on their behalf and also manufacturing branded goods for others - All these facts are reflected in their monthly Returns filed from time to time - Therefore, SCN issued for recovery of excess credit inadmissible availed in 2010-11, is barred by limitation: CESTAT - Appeal allowed: AHMEDABAD CESTAT
2018-TIOL-2392-CESTAT-MAD
Basheer Ahmed Vs CC
Cus - the appellant was detained at the airport upon returning from Singapore - Search of personal baggage revealed certain number of RAM drives & Micro SD cards - The Revenue arrived at the value of the goods on the basis of NIDB data and on reasonable belief took a view that the subject goods were imported in commercial quantity without declaring - They were liable for confiscation & seizure - Duty demand was raised and the original authority ordered absolute confiscation of electronic goods along with penalty - Hence, the present appeal by the assessee.
Held - 1100 numbers of 1 GB RAMs, 201 numbers of 2GB RAMs, 50,227 numbers of Kingston 2 GB SD Micro Memory cards and 7097 numbers of PQ1 2 GB SD memory cards was found in the baggage of the assessee - These goods are listed in the notified goods for the purpose of section 123 of the Act - Hence they would take on the colour of prohibited goods - Hence, the order challenged and penalty imposed is upheld: CESTAT (Para 1, 5, 6) - Appeal Dismissed: CHENNAI CESTAT
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