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SERVICE TAX
2018-TIOL-2641-CESTAT-MUM + Case Story
Board of Control for Cricket in India Vs CST
ST - Producing live feed of cricket matches being played in India for telecast on various TV channels against payment of commercial consideration - as service is provided by non-resident service providers, appellant, being the recipient is required to pay service tax on reverse charge basis under the category of ‘Programme Producer's service' - earlier demand upheld by CESTAT has been affirmed by Supreme Court - if argument of revenue neutrality is accepted as permissible defense in the present case, entire scheme of payment of taxes on reverse charge basis will become otiose and no business liable to pay service tax would be required to pay service tax in respect of services received by them from non-resident service providers, for the reason that the tax so paid will be available as credit to them - penalty is imposable for the delay in payment of tax - impugned order upheld and appeal dismissed: CESTAT [para 5, 6, 6.4, 7, 9]
- Appeal dismissed
: MUMBAI CESTAT
ST - The assessee was engaged in providing membership of "Club or Association Service" as per the agreement entered into with the members enrolled in the club - From 16.06.2005 Club or Association Services became taxable - However, the assessee collected lump sum amount towards subscription from their members under various categories of membership like life membership, short-term membership, corporate membership - They were not discharging service tax on the amounts so collected - Duty demand was raised - The original authority confirmed the demand of tax, interest and also imposed penalty under section 76 of the FA, 1994 - On appeal, the Commr (A) reversed the order and set aside the demand - Hence, the present appeal by Revenue.
Held: The club is formed on the principle of mutuality and, therefore, any transaction of the club with its members is not a transaction between two parties - Therefore, not subject to levy of service tax - This issue was deliberated upon in the case of M/s Ranchi Club Ltd. Vs Chief Commissioner of Central Excise and Service tax - In this case the decision of HC of Jharkhand was relied on in the case of Commercial Tax Officer Vs the Yong Men's Indian Association - Furthermore, the issue had been decided in favour of the assessee in M/s. Saturday Club Ltd. Vs Assistant Commissioner, Service Tax Cell - Hence, the order under challenge is upheld: CESTAT (para 2, 5, 6)
- Revenue's Appeal Dismissed : CHENNAI CESTAT
ST - The assesssee is engaged in shipping & port services - It received commissions from container liners for providing services to them, which according to the Revenue, falls under BAS w.e.f. 09.07.2004 - They were neither registered to provide services under this head nor paid service tax on such commissions - Duty demand was raised - The Adjudicating Authority confirmed the demands - However, on appeal the Commr. (A) held that commissions received by the assessee and the services provided by them fall under the definition of "Steamer Agent" as they are in the nature of services "to book, advertise or canvass for cargo for or on behalf of a shipping line" - Hence, the present appeal by the Revenue.
Held: In common parlance of international containers shipping, the container lines are different from shipping lines which runs the ships - The statutory definition of “Steamer Agent Services” under the Service Tax Act, the services rendered to container lines do not fall under this category - It falls correctly under BAS - Hence, the order under challenge is set aside - In respect of demand under challenge is under threshold set by CBEC, it is held that CBEC instruction dated 17 August, 2011 specifically excludes classification issued and not applicable here : CESTAT (para 1, 2, 6)
- Appeal Allowed : HYDERABAD CESTAT
CENTRAL EXCISE
CX - The petitioner herein was earlier engaged as a partner in a firm and had since retired from there - Thereafter, the Revenue imposed an amount of penalty u/s 209A of the CER 1944 - Such penalty was imposed in the petitioner's capacity as erstwhile partner - Also, no SCN was issued in his capacity as partner and no adjudication order was passed - Hence the petitioner was denied option of appeal - Thereafter to recover the penalty amount, the Revenue attached his bank account - Hence the present writ seeking to lift such attachment.
Held - A partnership firm does not exist independently of its partner - Such partner is liable only till retirement or resignation - Also the adjudication order passed against the firm was later set aside by the Tribunal - Consequently, the personal penalty does not survive as well - Hence the Revenue exceeded its brief by attaching the petitioner's bank account - All that the petitioner is required to pay is the balance amount of duty demand that had been raised in another case pertaining to the firm - Hence the petitioner is directed to pay such balance amount within three months & upon confirmation of which the attachment would be lifted: HC (Para 2-7)
- Writ petition partly allowed : BOMBAY HIGH COURT
CX - Date of invocation should be considered as deemed date of invoice in respect of all previous documents/invoices available with the manufacturing and supplying agency to avail such cenvat credit: CESTAT [para 5]
CX - Notification 21/2014-CX(NT) dated 11.07.2014 prohibiting a manufacturer from taking CENVAT credit after six months from the date of issue of invoice does not apply to invoices issued prior to date of notification - Tribunal decision in Voss Exotech Automotive Pvt. Ltd. - 2018-TIOL-985-CESTAT-MUM followed: CESTAT [para 5]
- Appeal allowed : MUMABI CESTAT
CX - Assessee, a partnership firm is engaged in manufacture and sale of pharmaceutical drugs - Based on intelligence gathered by Departmental officer, it was Observed that assessee had availed SSI Exemption as per Notfn 08/2003 CE and concurrently collected Central Excise Duty from their customers but not deposited with Dept during the period from 05/2008 to 02/2009 and hence contravened the provisions of CEA, 1944 - Therefore, adjudicating authority issued a SCN demanding central excise duty along with interest and proposing to impose penalty under Rule 25 and 26 of CER, 2002 - Admittedly, the assessee was working as a SSI unit during material period and he was availing the SSI exemption - It is also a fact that assessee has not charged Excise duty from buyer and he has not shown the Excise duty in invoices because as per the agreement between the assessee and his buyer, the price is inclusive of Excise duty - Since the assessee has not collected Excise duty from buyer during the time when he was availing SSI exemption, there is no question of demanding duty from assessee under Section 11D - Impugned order is not sustainable in law: CESTAT
- Appeal allowed : BANGALORE CESTAT
CX - Assessee is manufacturer of excisable goods viz. construction machinery like concrete mixers and are availing CENVAT credit facility under CCR, 2004 - During audit, it was felt by department that the assessee had availed ineligible input service credit on the services viz. repairs and maintenance, professional charges (RTO registration), services related to incineration of waste, renting of furniture and advertising - Denial of credit availed on invoices issued by Bosch Rexroth and Siskon Engineering is not justified - Vide impugned order, the credit was denied essentially by holding that no evidences have been furnished to show that the repairs and maintenance charges are included in transaction value and as part of the sales warranty being a after sales activity - Assessee has given the detailed information in form of tabulated statement which have been enclosed with appeal papers along with sample invoices for both the input service and output taxes paid but both the authorities have not examined these documents in order to decide whether the credit availed is right or wrong - Secondly with regard to denial of credit on invoices issued by Ajax Engineering Pvt. Ltd., assessee has annexed with his reply to the SCN along with sample invoices which have been ignored - Further, assessee has produced on record the copy of said agreement which has been renewed and valid up to 01/04/2014 but the same has not been considered by authorities below and have wrongly come to the conclusion that the said agreement has lapsed after 01/04/2009 - Therefore, credit has wrongly been denied on the invoices issued by Ajax Engineering Pvt. Ltd.
With regard to denial of credit availed on invoices issued by Jayalakshmi Enterprises, CENVAT Credit has wrongly been denied on the ground that the temporary registration is issued in name of the buyer and not in the name of assessee and the said activity has been wrongly considered as having no relation to manufacturing activity and thus would fall outside the purview of definition of input service - Without obtaining temporary registration from RTO, it is not possible for assessee to effect any clearance in view of requirement of Motor Vehicles Acts and Rules - Since the assessee has only one factory and the credit was availed on registered office and not at the factory is only technical lapse and the cenvat credit cannot be denied for technical infractions - Therefore, assessee is entitled to credit under this head - CENVAT credit availed on invoices issued by M/s. Gomti Incinco and M/s. Saleh Ahmed, amounting to Rs.33,305/- with interest of Rs.9,242/-which have already been reversed / paid before issue of SCN, the imposition of penalty is not warranted: CESTAT
- Appeals allowed : BANGALORE CESTAT
CX - The assessee and and Ramco Cements Ltd. are engaged in manufacture of cement - They were also clearing certain other products under names "Ramco Super Fine", "Ramco-Tile Fix" and "Ramco Super Plaster - Plastering Compound", classifying these products under Chapter Heading 3824.90 upto 27.2.2015 and 3824.90.90 thereafter of CETA, 1985 - Department took the view that the product "Ramco Super Fine" is wall based putty and appears to be more correctly classifiable under CETA 3214.00 upto 27.02.2015 and 3214.9090 thereafter; that the product Ramco-Tile Fix appears to be classifiable under 3506.00 of CETA upto 27.02.2005 and 3506.9999 thereafter; that the product Ramco Super Plaster - Plastering Compound is classifiable under CETA 25232990 - As regards to product "Ramco Super Fine", assessee claimed classification under CETA heading SH 3824 on the ground that impugned product is a non-refractory mortar - However, on perusal of HSN heading description for 3824, it is evident that, the heading covers "prepared binders for foundry moulds or cores"; chemical products and preparations of the chemical or allied industries not elsewhere specified or included and residual products of the chemical or allied industries not elsewhere specified or included - The product "Ramco Super Fine" is known and sold as a cement based putty only - No reason found to interfere with the decision of adjudicating authority reclassifying the product 'Ramco Super Fine' under CETA SH 3214.00 upto 27-02-2005 and 32149090 thereafter and also holding that the said product is required to be assessed to duty under Section 4A of CEA, 1944.
As regards to product "Ramco-Tile Fix", the product appears to be a cement-based mastic having addition of polymers to lend adhesive properties which would possibly bring it within the ambit of CETA SH 32.14 - However, since there is no such proposal made in SCN and since the attempt of department to classify it under CETA SH 35.06 has not found favour, that part of impugned order set aside which has ordered classification of "Ramco Tile Fix" under CETA SH 3506.00 upto 27.02.2005 and 3506.99.99 from 28.2.2005.
As regards to product "Ramco Super Plaster - Plastering Compound" - Evidently, not only is Ramco Super Plaster predominantly consisting of cement upto around 75%, but also, the product is projected as a superior substitute to cement for all plaster and mortar applications - No doubt the product may have better qualities than plain cement - Nonetheless there is no gainsaying that it is still predominantly cement only upto almost 75% - Further even the literature states that it "is used the same way cement is used" Tribunal is then not able to find any infirmity with conclusions of adjudicating authority that 'Ramco Super Plaster' is nothing but a "value added cement" meriting classification as "Other Cement" in CETA sub heading 2523 2990 - Hence that part of the impugned order confirming classification of "Ramco Super Plaster - Plastering Compound" under CETA sub heading 2523 2990.
Coming to the penalty, there is no gainsaying that the entire dispute has arisen out of a difference in interpretation vis-a-vis the classification of new products brought out by assessee for specific usages - This being the case, there cannot be any allegation that assessee have evaded duty by way of fraud or mis-interpretation or misstatement or suppression of facts - No penalty can be imposable under Section 11AC - Accordingly, that part of impugned orders imposing penalty under Section 11AC of CEA, 1944 cannot sustain and is therefore set aside: CESTAT
- Appeals partly allowed : CHENNAI CESTAT
CUSTOMS
Cus - The assessee, a 100% EoU, had been granted Letter of Permission for processing & export of Buffalo meat & Tapioca - Such permission was granted for three years and without payment of duty based on the terms and conditions - Besides, the assessee imported certain capital goods which were eligible for exemption should the assessee fulfil its export obligation - As the assessee failed to fulfil such obligation, duty demand was raised - Hence the present writ.
Held: The duty is covered by a bank guarantee provided by the assessee but which was not renewed - Hence the appeal was unsuccessful as it was filed after expiry of limitation - Hence the assessee cannot seek to resurrect before the writ court those grounds which could have been canvassed before the appellate authority - However, the assessee is permitted to discharge such liability in 12 instalments: HC (Para 2-5)
- Writ petition dismissed : KERALA HIGH COURT
Cus - Assessee imported Aluminium Scrap and filed Bill of Entry claiming classification under Customs Tariff Sub-heading No.77602010 under which goods were freely importable under FTP for period from 2004 to 2009 - It appeared to revenue that description stated in Bill of Entry was "Aluminum Scrap", whereas the goods imported contained blocks, plates and slips of Prime Aluminum and the said goods were not scrap - Submissions made by importer is that the description of goods declared in Bill of Entry were as per documents received from foreign supplier and that due to said reason there was no mis-declaration - There was no intention of assessee to mis-declare the goods - Said goods were described as scrap in Country from where they were exported and therefore, classification of goods claimed by importer in Bill of Entry is correct classification for the entire consignment - The finding of change in classification and mis-declaration held by Original Authority, does not sustain - Issue of valuation is settled through the decision of Tribunal in case of M/s Sanjivani Non Ferrous Trading Pvt. Ltd. 2017-TIOL-3396-CESTAT-ALL , and that in present case, the transaction value was not rejected by original authority, therefore, the value as claimed by importer in the Bill of Entry is restored: CESTAT
- Assessee's appeal allowed : ALLAHABAD CESTAT
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