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SERVICE TAX
2018-TIOL-2650-CESTAT-MUM + Case Story SAS Developers And Engineers Vs CCE
ST - Renting includes not mere renting but any similar arrangements in respect of immovable property for use in furtherance of business or commerce - Agreements entered into by appellant with M/s Pantaloon & M/s Trent for undertaking the business of selling garments cannot be considered as profit sharing agreements - appellants have provided the space to the said companies for conducting of business - They are receiving certain “Fees”, the said “Fees” cannot be anything other than as charges for provision of the space, hence is in nature of rent - entire amounts received in terms of these agreements are nothing but rent for providing space for conducting the said retail business - participation of the appellant in business activity is limited to provision of the space - demand of service tax upheld along with interest and penalties - suppression proved as agreements not disclosed to the department - appeal dismissed: CESTAT [para 7.1, 8.1, 9, 9.1, 9.7, 10, 11, 12]
- Appeal dismissed: MUMBAI CESTAT
2018-TIOL-2649-CESTAT-ALL
AL Saquib Exports Pvt Ltd Vs CCE & ST
ST - Assessee is a mechanized slaughter house, duly registered with Department for manufacturing of Tallow - They are also engaged in exporting of frozen boneless buffalo meat - It appeared to revenue that they were not paying service tax on GTA service under reverse charge mechanism - So far the appeal of assessee is concerned, assessee have made payment of substantial taxes, as raised in the common bill raised by service providers including GTA service - It is also apparent that there is error in computing the tax, as certain services on which tax has already been paid, have also been included, relating to inflation of the impugned demand - Accordingly, appeal of assessee is allowed by way of remand to the adjudicating authority, with a direction to hear the assessee with respect to the three services namely GTA Service, Manpower Supply Agency Service, slaughtering charges and to determine the tax liability in accordance with law.
So far the appeal of revenue is concerned, the Commissioner have rightly allowed the benefit of VCES application, as admittedly there is no SCN issued under Section 111 of the Service Tax VCES, 2013 - Further, Commissioner observed that final certificate being VCES–3 have been issued by revenue by its competent officers, as prescribed under the scheme - Accordingly, Commissioner have rightly deleted the demand in respect to GTA service up to the period 31/12/2012.
So far extended period of limitation is concerned, same is invocable, as admittedly the assessee failed to disclose service tax payable under the head of 'Manpower Supply Agency Service' and also renting of 'Immovable Property Service': CESTAT
- Revenue's appeal dismissed: ALLAHABAD CESTAT
2018-TIOL-2648-CESTAT-BANG
Yespi Arts Vs CCE, C & ST
ST - Assessees engaged in business of hiring hoardings and painting on walls of houses and huts, fabrication of hoardings and fixing of flex or vinyl stickers and also engaged in writing banners and name boards - The Department has issued two SCNs separately to both assessees - It is essential to see whether the activities undertaken by assessee such as conceptualization, visualization and creating an advertisement or they are simply complying with directions of their clients - It is to be seen whether such services could by any stretch of imagination be said to be services in relation to advertising services - The assessees have also submitted that the adjudicator has not appreciated that as per the terms of work order/purchase order of M/s. Associated Cements were inclusive of all taxes and levies and amounts attributable towards the tax and levies have also been included while computing the demand of service tax; even though they have submitted a list of invoice-wise amounts collected towards various activities - While on this issue, this Bench is of the opinion that for a proper valuation of case vis-à-vis records, the case must go back to the adjudicator - Considering the fact that the assessees are small entities doing the work for their clients and also keeping in view the fact that they have remitted service tax wherever the clients were insisting on, there appears to be reasons to believe that they have a bona fide belief that they were not liable to pay service tax - Thus, penalties set aside - The claim of assessee to evaluate the evidence in form of purchase bills, sale invoices and purchase orders with records of case is acceptable - Therefore, matter remanded to original adjudicating authority for proper analysis of same and to redetermine the service tax liability of assessee: CESTAT
- Matter remanded: BANGALORE CESTAT
CENTRAL EXCISE
2018-TIOL-2644-CESTAT-ALL
Bhushan Steel Ltd Vs CCE
CX - Whether the assessee is entitled to Cenvat credit on U.V. Sheets falling under CETH 39206190 of CETA, 1985 - Courts below have committed an error of fact by recording that Rule 2(k) of CCR, 2004 upon amendment w.e.f. first April, 2011 shall not include cement, angles and channels used for construction of factory shed or laying of foundation stone, building or making of structures for support of capital goods - It is evident from audit report itself that the sheets have not been used by way of factory shed, but have been used by way of machine shed and covering the particular machines and its moving parts in order to ensure better quality of finished goods - The ruling of Tribunal in case of M/s Mukund Ltd. is squarely applicable in the facts of present case wherein it was held that assessee is entitled to Cenvat credit, as the sheets so utilised partake nature of accessories of capital goods and as such are capital goods as defined in Rule 2(a)A(iii) of CCR, 2004 - Accordingly, impugned order is set aside: CESTAT
- Appeal allowed: ALLAHABAD CESTAT
2018-TIOL-2643-CESTAT-AHM
Chemiesynth Ltd Vs CCE & ST
CX - Whether the assessee is entitled to re-credit of duty and refund paid as interest on account of various issues/ objections raised by audit - Assessee had received input materials against Invalidation letter issued by DGFT as per Notfn 44/2001-CE(NT), however the condition laid down under clause-(ii) and (xii) of said Notfn had not been complied with - Non-fulfilment of these conditions cannot be construed and considered as procedural in nature, in view of the principle of law laid down by Supreme Court in Harichand Shri Gopal & Ors. 2010-TIOL-95-SC-CX-CB - In said case, Supreme Court has held that the benefit of relevant Rule cannot be extended for not following Chapter-X Procedure prescribed under the erstwhile CER, 1944 - Consequently, assessee is not eligible to avail the benefit of said Notfn and consequently the re-credit is irregular and interest paid on said irregular credit is also recoverable - On the issue of admissibility of credit on triplicate copy of invoice, same is covered by decision of this Tribunal in case of Steelco Gujarat Ltd. and also the admissibility of cenvat credit on input service used commonly for manufactured goods as well as job work activity is covered by judgment of Tribunal in case of Polychem industries - In the result, impugned order is modified: CESTAT
- Appeal disposed of: AHMEDABAD CESTAT
2018-TIOL-2642-CESTAT-BANG
Deccan Structural Systems Pvt Ltd Vs CCE
CX - The assessee is engaged in Steel Doors and windows, UPVC windows, UPVC scrap – On audit it was observed that assessee was engaged in manufacturing as well as trading activity – The Revenue took a view that Cenvat credit availed in relation to services utilized for trading activity was ineligible – Duty demand was raised – The adjudicating authority in order-in-original considered the entire turnover and confirmed the demand equal to 8% or 6% or 5% of the value of the exempted services as applicable for the relevant period in terms of Rule 6(3)(i), along with interest under the provisions of Rule 14 of CCR Rules, 2004 and u/s 11A & 11B of CEA, 1944 for contravention of the Rules – On appeal, the Commr. (A) rejected the appeal of the assessee.
Held: With respect to invocation of extended period of limitation, it is justified following the decision of Ruchika Global Interlinks & FL Smidth Pvt Ltd vs. CCE on grounds that assessee has not disclosed the availment of input service credit in respect of trading activities - the Revenue cannot demand CENVAT credit on entire turnover of trading and has to follow the procedure for determining the value of the trading goods for the purpose of Rule 6 of CCR – Furthermore, the case of Bosch Ltd vs, CCE& ST is distinguishable in the facts and circumstances of the present case as in that case the Department was fully aware that assessee was undertaking trading activity and despite that, failed to issue SCN - Hence, the order under challenge is upheld to the extent of quantification of Cenvat credit to be disallowed on the basis of the formula prescribed under Rule 6(3), after that, interest and penalty should be quantified & remaining is set aside: CESTAT (para 2, 9, 10)
- Appeal Partly Allowed: BANGALORE CESTAT
CUSTOMS
DGFT CIRCULAR
dgft17cir012
Policy Circular 5(2013)/2009-14 dated 14.08.2013 regarding norms for Spices under Advance Authorization- validity thereof
CASE LAWS
2018-TIOL-1734-HC-DEL-CUS
Dish TV India Ltd Vs UoI
Cus - Interest on delayed refund - The period of limitation sought to be imposed upon refunds claimed and a restriction on the claim for interest, especially brought in by way of so called clarification by CBEC Circular 6/2008-Cus (para 4.3), could not have override the law - The substantive law nowhere limits the claim for refund, which would otherwise ensure to the benefit of assessee - Following the judgments in RISO India Private Limited 2015-TIOL-2384-HC-DEL-CUS and Micromax Informatics Limited , it is held that this petition has to succeed - Same is accordingly allowed and the process for amount claimed by petitioner towards interest for the concerned period, i.e. three months from the date of the refund claimed till actual date of payment of such refund order shall be completed within four weeks: HC
- Writ Petition allowed
: DELHI HIGH COURT
2018-TIOL-2647-CESTAT-BANG + Case Story
Datex Ohmeda India Pvt Ltd Vs CC
Cus - In case of ambiguity alone the benefit of interpretation should go to the Revenue - since in respect of the very same appellants for previous imports, without finding any ambiguity in the notification, and by relying upon the earlier order passed by the Delhi Tribunal - 2009-TIOL-2232-CESTAT-DEL, the benefit of notification has been extended by the CESTAT and the said order having attained finality, concessional rate of duty under notification [21/2002-Cus Sl. No. 363 (A), List 37 & Item no. 3 notfn. 6/2006-CE] cannot be denied in respect of Anesthesia Ventilatory System imported by the appellant - technological advancement should not become an impediment to the availment of benefit under the notification - Appeal allowed: CESTAT [para 5.5, 5.6]
- Appeal allowed: BANGALORE CESTAT
2018-TIOL-2646-CESTAT-MAD
Madras Fertilizers Ltd Vs CCE
Cus - The assessee is a PSU engaged in the manufacture of urea and NPK complex fertilizers - Under the erstwhile Central Excise & Salt Act fertilizers attracted duty @15% but there was no provision for interest - However, by way of Central Excise Notification No. 25/70 entire duty was exempted - The assessee filed for claiming benefit under the notification - SCN was issued and in the order-in-original the adjudicating authority denied the benefit of notification - Both the assessee and Revenue filed writs before the HC and thereafter, a civil appeal was filed before the SC - The SC in 1994 (69) ELT 625 (SC) held that the assessee was not eligible to avail benefit of the notification - The issue regarding eligibility attained finality - Following SC’s decision the Department issued notice to assessee to pay an amount as balance due as interest u/s 11A and the demand was made u/s 11AA - On appeal, the Commr. (A) held that assessee was liable to pay the amount due & applied both sections 11AA as well as 11AB to uphold the demand of interest.
Held: Section 11AA provides for charging of interest where a person chargeable with duty determined under sub-section (2) of section 11A fails to pay such duty within three months from the date of such determination.In the order-in-original there was no determination of duty demand or interest - The order only talks about classification issue and eligibility of the assessee to avail exemption - Therefore, in absence of such demand under sub-section (2) of section 11A, the provisions of section 11AA is not attracted - Various judgments such as Archana Spinners Ltd vs. Deputy Comm. Of Central Excise reiterates that no determination of duty under the Central Excise Act, 1944 does not make the assessee liable to pay interest amount - Furthermore, a letter was issued by the Ministry of Finance in 1996, the demand of interest is raised by issuing letter dated 22.1.2007 - There is considerable delay in demanding the interest which is contrary to the legal proposition laid in the case of Collector vs. Whirlpool India Ltd - Hence, the duty demand as well as order in challenge is set aside : CESTAT (para 1, 7,8,9,10)
- Appeal Allowed: CHENNAI CESTAT
2018-TIOL-2645-CESTAT-MAD
Chettinadu Cement Corporation Ltd Vs CC
Cus - The issue is with regard to classification of coal imported by assessee - Whether same would be classified as steam coal under CTH 2701 1290 attracting nil rate of duty or the bituminous coal falling under CTH 2701 1200 attracting 5% duty as per Notfn 12/2012-Cus. - Regarding the issue of classification of coal, different Benches of CESTAT rendered conflicting decisions - In view of conflicting decisions, the matter was referred to Larger Bench and vide order dated 16.1.2017, the issue was taken up for consideration by Larger Bench - On such date, taking note of the fact that the decision rendered by Bangalore Bench in case of M/s. Maruti Ispat and Energy Pvt. Ltd. was appealed before the Apex Court and the Larger Bench directed that the matter being subjudice before Apex Court, the assessee was granted opportunity to come again before the Tribunal after the verdict from Apex Court - The department has not filed any appeal against the Larger Bench decision - Pursuant to Larger Bench, which has given liberty to assessee to await the outcome of Apex Court's decision, various Benches of CESTAT have already disposed the appeals applying the Larger Bench decision - Matter remanded to the adjudicating authority for denovo consideration basing upon the outcome of decision of Apex Court in Maruti Ispat and Energy Pvt. Ltd. as laid down by the Larger Bench of the Tribunal: CESTAT
- Matter remanded: CHENNAI CESTAT
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