SERVICE TAX
2018-TIOL-1580-HC-DEL-ST
Radico Khaitan Ltd Vs Principal Commissioner of GST and Central
ST - Appellant's grievance is that the final order of the CESTAT remanding the matter for fresh adjudication by the Commissioner is erroneous, inasmuch as, the Tribunal failed to discharge its obligations to consider the record.
HELD: It is evident from the consideration of the record that the Commissioner rendered elaborate findings on both the genuineness of the document (agreement dated 30.6.2006) as well as on its interpretation - given these facts, if the Tribunal was in doubt as to whether the document was genuine, the least that it could have done was to limit the findings on remand while retaining Revenue's appeal on the file – impugned order set aside – Tribunal directed to render specific findings on the issue after taking into account the submissions of the parties and calling for a limited remand findings on the issue of genuineness of the document alone – appeal stands allowed in the above terms : HIGH COURT [para 10, 11]
- Appeal allowed : DELHI HIGH COURT
2018-TIOL-2493-CESTAT-BANG
Classic Promoters and Developers Vs CCE & ST
ST - The assessee is engaged in activity of developing of land and getting constructed thereon residential/commercial buildings for individual buyers - After completion of buildings, they are sold to individual buyers - Agreements are entered into for sale of undivided interest in land and apartment - The assessee has been alleged to have evaded service tax on construction of complex services, falling under sub-clause (91a) of clause 65 of FA, 1994, rendered to their customers during period 16.6.2005 to 30.6.2006 - The assessee contended that it has been repeatedly confirmed in O-I-O that their work comes under composite contracts - Even in cases the assessee have taken advances from the prospective buyers of flats or complexes, the work undertaken by them is composite in nature as is borne by such agreements - The assessee enter into contracts with individual buyers for sale of undivided interest in land and apartment, such prospective buyers do not enter into individual itemized contracts with assessee or others for work of construction, labour or material; the value of such individual items are not mentioned in agreements - Under these circumstances, it would be fair to consider such contracts as composite work contacts - Services rendered by assessee in the course of construction is a service but to themselves - Therefore, either way no tax can be levied on such activity - Same Commissioner (A) in respect of an O-I-A passed in their own case has held that no service tax is leviable during period 1.7.2006 to 31.3.2007 - Commissioner (A) has relied upon CBEC Circular 108/02/2009 - The Circular further directs that all pending issues may be disposed of accordingly - Assessee's case is squarely covered by clarification - Therefore, nothing survives in the case - Assessee's case is covered by Supreme Court's decision in case of Larsen & Toubro 2015-TIOL-187-SC-ST : CESTAT
- Appeals allowed : BENGALORE CESTAT
ST - Assessee is engaged in providing maintenance and repair service - They are availing benefit of exemption in respect of goods and materials sold to recipients of service under Notfn 12/2003 ST - The exemption was claimed by availing 75% abatement on gross value of service and they were paying service tax on remaining 25% - It was alleged that benefit of Notfn was subject to documentary proof indicating the value of said goods and material sold - It was also alleged that the assessee availed CENVAT credit in excess of 20% of tax payable in contravention of Rule 6 of CCR, 2004 - Said Notfn inter alia, exempts so much of the value of all taxable services, as is equal to the value of the goods and materials sold by service provider to the recipient of service; hence, the service tax is leviable thereon under Section 66 of said Act, subject to the condition that there is documentary proof specifically indicating the value of the said goods and materials - While upholding that there is no requirement to indicate value separately in each invoice, this Bench would not be in a position to decide on the issue of whether or not any documentary evidence is in existence to show the value of goods and articles supplied by assessee in course of rendering service to their clients - It is a matter of fact and therefore, the case remanded to the original authority to verify the documentary evidence to be produced by assessee to arrive at the value of goods and articles used by them - Therefore, appeal filed by Revenue is allowed by way of remand: CESTAT
- Matter remanded : BENGALORE CESTAT
ST - During audit, it was noticed that the assessee had short paid service tax on the national roaming charges received by them - During impugned period, instead of paying service tax on the entire gross amount received by them for services provided, assessee had paid service tax only on differential value, ie. difference in value between invoices raised on other mobile telecom operators by assessee and invoices raised by other mobile operators on assessee - There is nothing brought out from records that the assessee has falsified any records or availed wrongful credit by any act of fraud - There is nothing brought forth by department to show that assessee is not eligible for credit of service tax paid on services received by them from other mobile phone operators - When they are eligible for credit, entire situation is revenue neutral one - It is clear that it was an error in accounting pattern - In SCN as well as OIO it is stated that assessee would be eligible for credit - The Commissioner (A) has disallowed the plea of revenue neutral situation stating that it is a new plea put forward by assessee which is incorrect - The assessee has put forward such plea even in reply to the SCN and therefore the plea is not a new one raised before the first appellate authority - In SCN, it is alleged that the assessee can very well take credit on service tax paid by them for services received by them - Assessee being eligible to credit, the situation is revenue neutral one - Short payment of service tax was only due to an error in accounting pattern for impugned period - Even if assessee had paid service tax, they would be eligible for credit and the whole situation would be of no revenue loss - Thus, demand cannot sustain, same is therefore set aside: CESTAT
- Appeal allowed : CHENNAI CESTAT
CENTRAL EXCISE
2018-TIOL-01-REVISIONARY + Case Story
Gupta H C Overseas Pvt Ltd
CX - Drawback - Conflating procurement of inputs against form 'H' with procurement of inputs u/r 19 (2) of CER, 2002 clearly amounts to re-writing of condition of Notification for which Commissioner (Appeals) is not a competent authority - No power is conferred upon any field officer under the Drawback Rules, 1995, or Notifications to examine the duty paid character of each input before sanctioning the Drawback of duty at All Industries Rate - examination at the field officer level will lead to utter chaos and will defeat the very purpose of fixing All Industry Rates on the basis of which drawback is granted even on the exported goods procured from open market in respect of which duty paid character of inputs is not known and cannot be verified: GOI Revisionary authority [para 4]
CX - Drawback - Drawback at All Industry Rates is payable in respect of the exported goods to the exporter without examining the duty paid character of each input: GOI Revisionary authority [para 4]
CX- Drawback - First proviso to Rule 3 of Drawback Rules, 1995 does not designate any field officer as proper officer to reduce the rates of drawback by considering the unpaid character of one or few inputs: GOI Revisionary authority [para 4]
CX - Drawback - One of the conditions is that the exported goods should not have been manufactured or exported by availing the rebate of duty on material used in the manufacture of such commodity or manufactured or exported in terms of sub rule (2) of Rule 19 of CER, 2002 - procurement of inputs duty free against the form 'H' etc. is not made a disqualification anywhere under the Drawback Rules or Notifications: GOI Revisionary Authority [para 4]
CX - Drawback - Error of denying the drawback in the above situation seems to have been realised by the respondent itself subsequently inasmuch as no such action was initiated against any of such exporters after show cause notice was issued in this case - O-in-A set aside and appeal allowed: GOI Revisionary authority [para 4, 6]
- Appeal allowed : REVISIONARY
CX - Assessee entered into an agreement with M/s I.M.C. Ltd. with regard to Oil Pipeline Supply Management Services termed as 'Pipeline utilisation charges' to oil tanks - As per agreement, assessee paid the penalty to the service provider for shortfall and the credit of service tax on such payment has been availed by assessee - According to Revenue, assessee has availed credit of service tax for such services which were not rendered by service provider and were basically in nature of penalty and therefore, they are not entitled to avail cenvat credit - The service provider paid the tax which cannot be denied and therefore, the availment of cenvat credit by recipient unit cannot be denied - It is noticed that the department has not disputed the payment of service tax by service provider - Therefore, denial of cenvat credit is not justified - Accordingly, impugned order is set aside: CESTAT
- Appeal allowed : KOLKATA CESTAT
CX - Assessee has manufacturing units located at Pune, Hooghly and Bangalore - They had their depot in Taratala, Kolkata which was subsequently shifted to Dankuni, Hooghly - During scrutiny of records and documents for year 2011-2012, it was observed that assessee had received cenvatable invoices of their Bangalore/Pune unit on stock transfer basis which were addressed to their Taratala Depot, but the goods were actually received in their Dankuni Unit - SCN was issued proposing imposition of penalty under Rule 26 for abetting the receipt of excisable goods against invalid documents and passing on irregular cenvat credit to their customers - It is not in dispute that the goods covered by invoices were received at Dankuni depot - Only some of the goods that were addressed to Taratala depot were received at Dankuni depot due to the transition of depot operation of assessee - It is clear that the invoice should bear the name of consignee, which has been recorded correctly and the same has not been disputed by department - Assessee had not issued invoices without delivery of goods or that such invoices had enabled their customers to avail any inadmissible credit of duty - Therefore, Rules 11(2) and 26(2) of Rules are not applicable - No reason found to interfere with order of Commissioner (A): CESTAT
- Appeal dismissed : KOLKATA CESTAT
CX - Assessee is engaged in manufacture and clearance of malted milk food (Horlics and its various variants) and avails benefit of self-credit of excise duty refundable under Notfn 20/2007-CE for goods manufactured and cleared from the unit - SCN was issued for alleged violation of provisions of said Notfn as amended and provisions of Rule 3(4) of CCR, 2004 for taking benefit of exemption amounting by way of self-credit of duty paid on samples and also by wrongly availing and utilizing of Cenvat Credit on inputs used in manufacture of control samples - The control samples were manufactured in unit located in Assam - The adjudicating authority has confirmed the duty demand on the ground that the control samples were not physically removed from factory premises - The question that merits consideration is whether control samples have been cleared for purpose of Notfn 20/2007-CE - The manufacturing unit in state of Assam is eligible for exemption under said Notfn - Rule 4 of Excise Rules provides for payment of excise duty upon removal of goods from factory premises therefore the clearance of excisable goods from factory premises forms the points of taxation on which the liability to pay duty arises - It is pertinent to note that explanation II to Rule 4(3) of Central Excise Rules states that putting the manufactured goods for any use within the factory of production for manufacture of any other commodity i.e. captive consumption, amounts to deemed removal of goods - Accordingly, the liability of excise duty arises even where the goods manufactured are used within the factory of production - Thus, the finding in impugned order that Rule 3(4) of CCR, 2004 has been violated is incorrect and the impugned order is set aside: CESTAT
- Appeal allowed : KOLKATA CESTAT
2018-TIOL-1579-HC-MUM-CUS
Athena Multitrade Pvt Ltd Vs UoI
Cus - the assessee company imported some goods and filed bills of entry for the same - The Department seized the goods on grounds of there being doubts regarding the country of origin - When the assessee sought release of the goods, it was directed to furnish bank guarantee equivalent to 100% of the assessable value of the goods - Hence the present writ seeking directions to permit clearance of goods on provisional basis and without imposing any conditions.
Held: as investigations into the imports are undeyway, they should not be interfered with - The imported consignments have been dubbed as not being of Sri Lankan origin & the same forms subject of the investigation - The assessee claims to have documents certifying the goods as being of Lankan origin - The goods lying in port invite several charges, including detention charges - Besides, the investigation would take some more time as the investigators must first seek clearance from several ministries - This entails fulfilment of several procedural formalities - Hence further detention of goods serves no purpose where samples are already taken - Thereby, the detained goods be released upon execution of bond equivalent to 100% of the value of the goods & upon furnishment of bank guarantee: HC (Para 1,6,7,9)
- Writ petition partly allowed : BOMBAY HIGH COURT
2018-TIOL-1578-HC-MAD-CUS
K A Reclaim Vs CC
Cus – Petitioner seeking direction to the respondents to release the cargo covered under five bills of entry, which have been stuffed in 36 containers, which were imported by the petitioner – petitioner claiming that they have paid the entire customs duty and penalty:
HELD: It is not in dispute that the goods were not cleared within the 30 days period and no attempts were made by the petitioner to clear the goods for over one and half years - therefore, the respondents were fully justified in invoking section 48 of the Customs Act - no finality has reached in the proceedings insofar as the Customs Department is concerned - writ petition is disposed of by permitting the petitioner to approach the first respondent Department and request to grant permission to pay the highest bid amount as realised in the auction, which was conducted and also pay all charges and levies payable to the second respondent and any other Department or Organization - the petitioner should effect payment of the customs duty and all other charges and levies for all the 36 containers in one lot and the clearance shall also be done in a similar fashion - Petition disposed of: HIGH COURT [para 21, 26, 27]
- Writ Petition disposed of : MADRAS HIGH COURT
2018-TIOL-1577-HC-MAD-CUS
Premier Mills Pvt Ltd Vs Chairman
Drawback - The writ petitioners, involved in manufacturing of cotton yarn, have their Export Oriented Units [EOUs] located at Coimbatore – the grievance of the petitioners is that Duty Drawback claim provided under Foreign Trade Policy has not been extended to them in respect of procurement of Wind Electrical Generators [WEGs] for generation of electricity and its consumption.
HELD: The impugned orders passed appear to be not on the basis of sound legal consideration and appreciation of the relevant factual materials which formed the basis for claim of the petitioners for Duty Drawback – the location of the Wind Mills is always on the basis of the constant availability of wind resources in all seasons - it cannot be gainsaid that the location of Wind Mills outside the territorial jurisdiction can be an adverse factor for denying the benefit of Duty Drawback – the order as such passed by the first respondent without disclosing any reasons for not considering the claim of the petitioners on the basis of the facts presented before the authority is per se unsustainable in law - the letters/communications impugned in the respective writ petitions are hereby set aside - the matter is remanded back to the first respondent for fresh consideration - the first respondent shall also take into consideration the decision of the Supreme Court in Vikram Cement - 2006-TIOL-150-SC-CX particularly the ratio as laid down therein in paragraph 5 - accordingly, these Writ Petitions are disposed of : HIGH COURT [para 11, 12, 13] .
- Writ Petitions disposed of : MADRAS HIGH COURT
2018-TIOL-2501-CESTAT-MUM + Case Story
Pioneer (Customs Broker) Vs CC
Cus - CBLR, 2018 - Regulation 15 of Customs Broker Licensing Regulations, 2018 is silent on the redressal available - If section 146(2), the parent provision, is perceived as restricting appeals to the specified detriments of suspension or revocation of licence, surely the insinuation of the third detriment, as it undoubtedly is, of prohibition, should conversely not have found a place in the Regulations without specific enablement in law - If the lack of remedy were to be upheld, Tribunal would be abetting in perpetuation of unbundled executive power without any accountability and it goes against Tribunal's grain to be accomplices in such a transgression of the principles of natural justice - If it is claimed that the generality of section 146 (2) of Customs Act, 1962 condones the presence of the third detriment, the existence of remedy cannot, for similar reasons, be denied: CESTAT [para 9, 10]
Cus - CBLR, 2018 - Regulation 15 - Prohibition cannot extend to an entire zone but has to be restricted to that section (or sections) of the Customs station - clear example of lack of application of mind to the circumstances of alleged non-fulfillment but also a clear demonstration of overreach beyond the limits of empowerment - order of prohibition set aside: CESTAT [para 15, 16]
- Appeal allowed
: MUMBAI CESTAT
|
