I-T - Exemption u/s 10(23C)(iv) can be claimed only to the extent of actual income and not for accumulated income: ITAT

SERVICE TAX

2018-TIOL-1638-HC-KAR-ST + Case Story

CST Vs Lakshminarayana Mining Company

ST - GTA Service - Tribunal order does not give proper and detailed findings of facts, nor does it discuss the various amendments of law in this regard and their applicability, of the same to the facts and circumstances of the case - Tribunal has essentially relied upon the speech of the Finance Minister delivered in the Parliament in the year 2004, only for holding that the present appellant/assessee was not liable to pay service tax for the aforesaid period, without discussing the relevant provisions of law and the notifications - Matter remanded to Tribunal for decision afresh within a period of six months: High Court [para 9 to 11]

- Matter remanded : KARNATAKA HIGH COURT

2018-TIOL-2555-CESTAT-DEL

CGST C & CE Vs Tarun Fabricators

ST - The Department noticed while auditing the records of M/s Alpha Services that the assessee had been engaged by M/s Alpha for in house fabrication work for which consideration was received by assessee - The Department views that the assessee was liable to pay Service Tax under category of 'Manpower Recruitment and Supply Agency Service' - In the absence of any written contract between M/s Alpha Services and assessee, Tribunal have perused the Certificate of Work issued by service receiver i.e. M/s Alpha Services - It has been certified that assessee was engaged for manufacture of cranes and their sub-assemblies - Further, it has been certified that M/s Alpha is paying excise duty on such goods manufactured in their premises by assessee as a job worker - Further, from perusal of some of the payment bills, it is seen that payment to the assessee is on the basis of weight of finished goods - It is observed that the employees of assessee are required to work as per the directions of M/s Alpha who supply the required drawing, raw materials and machines - These employees are carrying out fabrication work in premises of M/s Alpha and are paid for such work on the basis of quantum of goods fabricated - In case of Shivashakti Enterprises 2015-TIOL-2589-CESTAT-MUM Tribunal had occasion to consider the identical issue - By following the said decision of Tribunal, no reason found to interfere with impugned order which is sustained: CESTAT

- Appeal rejected : DELHI CESTAT

2018-TIOL-2554-CESTAT-DEL

Surender Kumar Bansal Vs CCE & ST

ST - The assessee is engaged in providing Commercial or Industrial Construction Service falling under Section 65 (25b) r/w Section 65 (105 (zzq) of FA, 1994 - The Department, while scrutinizing the records of assessee noticed that they have failed to pay Service Tax in respect of construction of EWS quarters for Urban Improvement Trust, Sriganganagar and Construction of milk chilling plant for Rajasthan Co-operative Dairy Milk Federation Ltd. - As regards to construction of EWS quarters, since the nature of construction activity involves both supplying of goods as well as service, the same is falling within the category of Works Contract Service and by following the decision of Supreme Court in case of L&T 2015-TIOL-187-SC-ST, Service Tax demand cannot be sustained since the activity was carried out prior to introduction of WCS - Hence demand on this ground is set aside.

The second part of demand pertains to the activity carried out for Rajasthan Cooperative Dairy Milk Federation Ltd. - Even though the said Society has been formed for activities of procurement, processing and marketing of milk and milk products, it cannot be denied that it is a Limited company with authorized share capital and with the objective of carrying out business to earn a profit - Hence, the Cooperative society is commercial concern and hence the construction activity carryout for such an organization is liable to be considered as falling within Commercial or Industrial Construction Service - Since there is no dispute about the fact that such a construction activity have been rendered and consideration received, Tribunal is inclined to uphold the Service Tax levy on this part: CESTAT

- Appeal partly allowed : DELHI CESTAT

CENTRAL EXCISE

2018-TIOL-2553-CESTAT-HYD

Umadhuli People's Wire Pvt Ltd Vs CCE

CX - The assessee were manufacturers of steel wire - It availed Cenvat credit on goods received after being returned by their customers under rule 16(1) of the CER read with Rule 9 of CCR - After March 2012, the assessee stopped production and there were no clearances - However, on physical verification it was seen that the closing balance of goods do not match - Duty demand was raised for recovery - The original authority confirmed the demand and interest and levied penalties under Section 11AC read with Rule 15, Rule 25 and Rule 27 of the Central Excise Rules - On appeal, the Commr. (A) upheld the order-in-original & dismissed the appeal - Hence the present appeal.

Held - With respect to Cenvat credit on goods returned for re-processing the assessee have maintained a separate register of the returned goods and have taken credit of Cenvat under Rule 16 - Instead of following the requirement of entering the details in RG 23A Part-I, they have entered the details of the credit in RG 23 A Part-II - It is a well settled principle that the substantive benefit of Cenvat cannot be denied for procedural lapses - Therefore, the claim of duty paid on the returned goods under Rule 16 is allowable - The Commr. (A) imposed penalty u/s 11AC on the ground that there was allegation of fraud, collusion, wilful misstatement - However, in the SCN there is also an allegation of evasion of duty of excise due to the above-mentioned reasons - Therefore, the penalty is deleted - With respect to Cenvat credit taken on inputs falling short wherein the Revenue contested that whatever stock of raw-material was shown in the register by the assessee was not found in stock when physically verified - When the Department checked the stock and found that a certain quantity of raw-material was not available physically but was available in their RG23A Part-I register - Therefore, the assessee is liable to reverse the credit or pay duty equivalent to this amount - Hence, the order-in-appeal is partly allowed with respect to allowing the credit on goods returned for reconditioning even though they were not entered in RG 23A Part-I - For the rest the order challenged is upheld: CESTAT (Para 1,4)

- Appeal partly allowed : HYDERABAD CESTAT

2018-TIOL-2552-CESTAT-MAD

Suryaans Paper Vs CCE

CX - Assessee is manufacturer of Kraft Paper and availing Cenvat Credit of duty paid on inputs and Capital Goods used in factory for manufacture of dutiable goods - The items on which the assessee availed Cenvat credit of duty paid are falling under Chapter 72 - Adjudicating authority has denied the benefit for the reasons assigned in his order and has also relied on the judgment of Supreme Court in Saraswati Sugar Mills 2011-TIOL-73-SC-CX case - The Commissioner (A) has upheld the findings of Adjudicating Authority that the credit sought to be availed were the goods used only for civil constructions, staircase, hand railings, platform, and beams for support purposes and not connected with the functioning of capital goods - This, according to Commissioner (A), are only items of general structural use falling under Chapter 72 specifically not figuring in definition of capital goods - It is clear that assessee had availed 50% of Cenvat credit on certain items like Beam, MS Angles, MS Channels, Joint and MS Bars claiming to be capital goods - Considering the factual matrix vis-à-vis the judgment of Madras High Court in 2017-TIOL-1357-HC-MAD-CX , the ratio laid down would squarely apply to this case also and therefore, the assessee should succeed: CESTAT

- Appeal allowed : CHENNAI CESTAT