SERVICE TAX
2018-TIOL-2832-CESTAT-DEL
VK Aggarwal And Company Vs CST
ST - The assessee is engaged in providing construction services in respect of commercial or industrial building and civil structures, work contract services and architects services - The Department alleged that the assessee did not pay service tax on activities of industrial and commercial construction or file ST-3 returns - It was also claimed that the assessee did not pay tax on the material supplied free of charge and that the assessee also received mobilization advance and rental income - Duty demands were raised by invoking extended limitation under best of judgment assessment u/s 72 of the Finance Act 1994 - The quantum of duty demanded was increased by adding 20% notional increase without allowing benefit of abatement - Duty already paid was appropriated & penalties u/s 76 & 77 were imposed.
Held: The Commissioner correctly granted the benefit of rebate to the assessee for the material component - The assessee too is guilty of improperly classifying the work done by it - Also considering that the assessee suffered huge losses due to bad debts and that non-compliance with tax obligations was due to several employees leaving, the assessee merits receiving benefit u/s 80 - Hence the penalty u/s 76 is set aside - Nonetheless, the assessee must pay interest demanded on the principal duty amount: CESTAT (Para 2,3,7,8)
- Assessee's appeal partly allowed: DELHI CESTAT
2018-TIOL-2831-CESTAT-MUM
Seth Construction Vs CCGST
ST - Whether upon reversal of CENVAT credit on the exempted service along with interest, can the department proceed further for recovery of amount as contemplated under rule 6 of the CCR and impose penalties on the appellant.
Held: Issue is no longer res integra in view of order no. A/85944-85946/2018 dated 02.04.2018 passed by the Tribunal in the case of Ahmednagar Zilla Prathamik Shikshak Sahakari Bank Ltd. and where it is held that the option available to the assessee to reverse proportionate CENVAT credit, once exercised, the demand cannot be confirmed for recovery of value of exempted service provided by the assessee - impugned order cannot be sustained, hence set aside and appeal is allowed with consequential relief: CESTAT [para 3, 4]
- Appeal allowed: MUMBAI CESTAT
2018-TIOL-2830-CESTAT-MUM
Ruchi Soya Industries Ltd Vs CCE & ST
ST - In respect of the tax liability for the period July 2012 to December 2012, appellant sought coverage under the VCES, 2013 but failed to deposit half of the declared amount within the stipulated deadline of 31 st December 2013; however, they deposited the declared amount in entirety on 6 th March 2014 well before the deadline stipulated for payment of the second instalment - since conditions of section 107 of FA, 2013 were not complied, proceedings were initiated - penalty of Rs.2,31,463/- was imposed and the adjudicating authority accorded the appellant the privilege of paying penalty of 25% if paid within one month - as order upheld by Commissioner(A), appeal before CESTAT.
Held: Though plea of lack of knowledge and financial difficulty has been cited for late payment of first installment, escapement from penal provisions is not available - declaration under scheme is an admission of having suppressed relevant material from tax authorities bringing it within the scope of section 78 of FA, 1994 - penalty upheld - appeal dismissed: CESTAT [para 3, 4]
- Appeal dismissed: MUMBAI CESTAT
CENTRAL EXCISE
2018-TIOL-1919-HC-MUM-CX + Case Story
PR CIT Vs JCB India Ltd
CX - Third Schedule, Finance Act, 2011, Section 4A, Section 11A, Section 11AB of the CEA, 1944 - In case of retrospective levy, whether interest for period before enactment of provision can be demanded - Revenue appeal admitted: High Court [para 8, 9]
- Appeal admitted: BOMBAY HIGH COURT
2018-TIOL-1918-HC-MUM-CX
CST Vs Greenwich Meridian Logistics India Pvt Ltd
CX - The assessee is providing taxable service viz. BAS and paying service tax thereon - Assessee in the course of its business enters into contracts with Shipping Lines for carriage of Cargo by sea on aforesaid services tax was being paid under head BAs - Assessee is also booking cargo space on ships and earning income on that count under the head "Ocean Freight" - Whether the amounts received on purchase and sale of cargo space on ships is an activity which is a part of booking cargo space on ships for its clients / exporters - The issue which arise for consideration is valuation of services rendered by assessee in booking cargo on commission basis under the head BAS - Thus, the issue is of valuation and the remedy in terms of Section 83 of FA, 1994 r/w Section 35G(1) and 35L(1)(b) of the Act would not be maintainable before this Court - The appeal in respect of the same would be to the Supreme Court as it is an issue dealing with the valuation of services: HC
- Appeal disposed of: BOMABY HIGH COURT
2018-TIOL-1917-HC-P&H-CX
PR CIT Vs Perfect Dyeing And Finishing Industries
CX - The assessee has challenged the order passed by Tribunal in 2016-TIOL-3147-CESTAT-CHD - Assessee submitted that the amount involved is Rs. 46,54,000/- - As the amount involved is less than the limit prescribed in Instructions issued by the Central Board of Indirect Taxes & Customs dated 11.07.2018, the present appeal be dismissed as not maintainable - However, it is made clear that dismissal of appeal will not be taken as upholding the order passed by Tribunal: HC
- Appeal dismissed: PUNJAB AND HARYANA HIGH COURT
2018-TIOL-2829-CESTAT-MUM
Sharda Motor Industries Ltd Vs CC
CX - CENVAT - Input Service - Rule 2(l) of CCR, 2004 - Authorities have denied CENVAT credit by holding that in view of exclusion clause provided in the definition w.e.f 01.04.2011, such service should not be considered as input service when the same is used by the employees of the assessee - appeal to CESTAT.
Held: Due of divergent views on the subject issue by the different benches of the Tribunal, in the case of Wipro Ltd. vide Interim Order no. 19/2017 dated 24.04.2017, Bangalore Bench has referred the matter to the President for constitution of Larger Bench for resolving the conflict - as present appeals involve identical issue, the same is to be tagged with the case of WIPRO for deciding the issue by Larger Bench - registry directed to transfer files: CESTAT
- Matter tagged for LB decision: MUMBAI CESTAT
CUSTOMS
NOTIFICATION
cnt79_2018
Customs Tariff Determination of Origin of Goods under the Comprehensive Economic Cooperation Agreement between the Republic of India and Republic of Singapore Rules, 2005 further amended
CASE LAWS
2018-TIOL-2828-CESTAT-MAD
Eid Parry India Ltd Vs CC
Cus - Assessee had imported Raw Sugar without payment of Customs Duty under Advance Licence - They manufactured White Crystal Sugar out of said raw material which was exported thereafter - A quantity of White Crystal Sugar was sold to M/s.Cargill India Pvt. Ltd. on payment of appropriate Central Excise duty - Subsequently Cargill exported the same quantity of white crystal sugar - Cargill filed rebate claim being the duty paid on said quantity of white crystal sugar and PP woven sacks purchased from assessee availing benefit of Notfn 21/2004-CE(NT) as amended - The original authority sanctioned amount of Rs.52,55,894/- to Cargill - However, it appeared to department that sugar cess of Rs.9,61,898/- is not eligible for sanction as rebate in terms of the meaning of 'duty‛ explained in said Notfn, hence SCN was issued to Cargill - Department took the view that as evidenced in shipping bills, assessee had exported white crystal sugar through merchant exporter, Cargill, who in turn availed rebate under Rule 18 & 19 of Central Excise Rules - As the goods had already been cleared by assessee to Cargill on payment of duty, it appeared that rebate has been availed in violation of condition No.(v) of the notification and that assessee had availed both benefits of duty free import and benefits of duty free import and rebate - SCN was issued to assessee proposing recovery of demand of duty forgone amounts of Rs.25,84,93,386/- and Rs.17,17,17,924/- in respect of the two advance licenses with interest thereon, confiscation of imported goods which were released and imposition of penalty under Section 112 (a), 114A of the Customs Act, 1962 - In adjudication, the Commissioner confirmed the proposal for demand of duty forgone with interest, as proposed in SCN, however dropped penal proceedings invoked - In view of CBEC circular dt. 22.1.2007, the impugned order cannot sustain and is therefore set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2018-TIOL-2827-CESTAT-MAD
Gmmco Ltd Vs CC
Cus - Interest on delayed refund - Assessee is engaged in business of sales and services of heavy earthmoving equipments, power transmission equipments, generator sets which are necessary for industrial and infrastructure projects - The main contention of assessee is that there has been inordinate delay in finalizing the assessment and granting refund which resulted in withholding of legitimate amount causing monetary loss and hardships to the assessee which has to be compensated by way of paying interest on the sanctioned refund - It is argued by assessee that when there was a clear direction by Tribunal vide its Final Order directing the department to finalize the assessment within the time frame of four months, the department had to comply with the same - The department filed appeal before Supreme Court against this order which was dismissed - It may be correct that there was repeated direction from the Tribunal to finalize the assessment without loading 20% of invoiced value - The fact remained that the assessment was not finalized - It was only on 10.10.2015, that the assessments got finalized - The refund was granted within three months of assessment - Thus, according to department, the refund having been granted within time prescribed as under sub-section (4) of Section 18, there is no liability to pay interest - Till the date of finalization of assessment, the matter was under litigation - Whether such litigation was fruitful is not the concern of this Tribunal - On facts, it is brought out that the refund has been sanctioned within three months from the date of finalization of provisional assessment - The said provision does not require to pay interest when refund has been sanctioned within a period of three months from the date of finalization - When the statute does not provide to pay interest, the Tribunal which is a creature of the statute cannot grant any amount in the nature of compensation - The Tribunal in a similar issue in case of Hindustan Photo Films Mgf. Co. Ltd., considered the decisions of Apex Court in Sandvik Asia Ltd. 2006-TIOL-07-SC-IT as well as Gujarat Fluoro Chemicals 2013-TIOL-47-SC-IT-LB and held that Tribunal cannot grant compensation not provided in the statute - Thus, following the same, claim of assessee for interest on delayed refund cannot sustain: CESTAT
- Appeal dismissed: CHENNAI CESTAT
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