SERVICE TAX
2018-TIOL-2891-CESTAT-DEL
Hotel Lake View Ashok Vs CGST CE & CC
ST - The assessee entered into a joint venture with the Madhya Pradesh State Tourist Corporation wherein it started a rail coach restaurant - As per agreement, the assessee received 20% of sale proceeds through commission for providing space & other infrastructural support like electricity, water, manpower & security - On audit, the Department claimed that the assessee received amounts towards power & water charges on which no service tax was paid - Three separate duty demands were raised & penalty u/s 78 of the Finance Act was imposed - Such demands were confirmed by the Commr.(A).
Held: It must be seen whether power & water charges would be part of service as per Finance Act 1994 - The assessee charged 20% of sale proceeds as commission - It also recovered power & water charges from restaurant owner on actual basis & was deposited with the respective authorities - Thus the assessee is working as pure agent in collecting the charges with regard to supply of water and electricity and deposited the same with authorities - As per Rule 5(2) of Service Tax (Determination of Value) Rules wherever the expenditure cost incurred or received by the service provider as a pure agent, they shall be excluded from taxable value of service - Thus the charges of electricity and water cannot be included in the taxable value of the business support service provided by assessee - Hence service tax is payable on the commission charged - The O-i-A lacks merit: CESTAT (Para 1,5,6)
- Appeal allowed: DELHI CESTAT
2018-TIOL-2889-CESTAT-MAD
Indira Industrial Labour Welfare Association Vs CCE & ST
ST - The assessee company was assessed for the relevant AY - The Department claimed that the assessee provided Man Power Recruitment and Supply Service to M/s BHEL - Duty demands were raised on such contracts, with interest & penalties u/s 76, 77 & 78 of the Finance Act 1994 - On appeal, the Commr.(A) set aside the penalties imposed u/s 76 & 77 of the Act while upholding the remaining demand.
Held: From the contracts entered into by the assessee, it is seen that the assessee would only provide service of material handling & mobile crane contract - From the decision of the Tribunal in the cases of A. Malathy Vs CCE Chennai-IV and Bhagyashree Enterprises, Sonawane Industrial Vs CCE it is clear that such services cannot be classified as Man Power Recruitment and Supply Service - Hence the demands are set aside: CESTAT (Para 1,2,5.4,5.5)
- Appeal allowed: CHENNAI CESTAT
2018-TIOL-2885-CESTAT-BANG
Select Soft Ware India Pvt Ltd Vs CCT
ST - Assessee is engaged in business of marketing and reselling of various computer software packages, computer hardware and peripherals - Commissioner has not considered the detailed submissions made by assessee regarding the month wise total of service tax payable, the details of service tax paid through cash and credit, the due date for payment of service tax and the actual payment of service tax and the number of days delay and the interest for such delayed payment and also the copies of TR-6 chalan evidencing the service tax remittance date as well as proof for number of days delay - Commissioner has wrongly observed that the assessee has not explained the basis of calculation of interest - Since the Commissioner has not considered the submissions raised by assessee regarding the wrong calculation of interest, matter remanded back to the original authority to consider the details of payment of interest - Further with regard to imposition of penalty for non filing the returns, said penalty is not imposable in view of the fact that the assessee have filed the returns and this fact has been observed in the SCN itself and the stand of assessee from the very beginning is that he has filed the return in time - Therefore, penalty for not filing the ST-3 returns dropped: CESTAT
- Matter remanded: BANGALORE CESTAT
2018-TIOL-2884-CESTAT-MAD
Shv Lpg India Pvt Ltd Vs CST
ST - The period involved is from 9/2004 to 3/2009 - The SCN is dt. 09.04.2009 - The main allegation is that the assessee is not eligible for credit on common input services used for trading activity - The Original Authority has given relief by dropping the demand in respect of credit availed and attributable to services provided to BPCL - Assessee is engaged in marketing of imported Liquefied Petroleum Gas - They make bulk import of LPG and store the same in storage terminal located at Tuticorin - On the same premises, the bottling and packaging of BPCL also takes place - On the belief that bottling and branding of LPG cylinders does not amount to manufacture, they did not discharge excise duty on the LPG cylinders sold by them - Whereas, they were discharging service tax for the service of Storage and Warehousing Services as well as Packaging Services provided to BPCL - Taking note of the amendment brought forth in the definition of exempted service w.e.f. 01.04.2011, the fact cannot be denied that there was much confusion as to whether credit can be availed in respect of trading activities - The issue was mired in litigation - For this reason, extended period is not invocable - There is no evidence bringing out any positive act of suppression on the part of assessee to evade payment of duty - Demand for extended period cannot sustain and is set aside - For the very same reasons, the penalty relating to demand for the normal period cannot sustain: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
2018-TIOL-2883-CESTAT-MAD
Roots Auto Products Pvt Ltd Vs CCE
ST - The assessee leased various types of machines & received lease rents - For several periods in dispute, duty demands were raised under 'Business Support Service' - On appeal, the Commr.(A) upheld the demands for upto a certain period, and held that the activity for the remaining periods would be taxable under supply of Tangible Goods Service.
Held: It is clear that the nature of renting of the machineries caused through lease deeds is of the nature of deemed sale - Also it is the lessees & not the assessee who have effective possession and control of such machineries - Also such activities were not outsourced to the assessee - The lessee got the manufacturing done at their own convenience - Hence the requirements for classifying such activites as supply of Tangible Goods Service are not satisfied - Renting satisfies the requirements of deemed sale & so such activities will fall under neither Business Support Service nor supply of Tangible Goods Service - Considering the Tribunal's decision in CCE & ST Raipur Vs Chhattisgarh Earth Movers and GIMMCO Ltd. Vs CCE & ST Nagpur the demands merit being set aside: CESTAT (Para 2,4)
- Appeals allowed: CHENNAI CESTAT
2018-TIOL-2881-CESTAT-MUM
Venus Wire Industries Pvt Ltd Vs CCE & ST
ST - Assessee is in appeal for denial of credit of the service tax paid on professional services used/utilized for anti-dumping representational matters whereas Revenue is in appeal against allowing of CENVAT credit on Renting of Immovable property on the ground that the premises is neither registered as place of provider of taxable service or as an Input Service Distributor.
Held: US department of Commerce and European Commission had issued notices to the assessee for levying anti-dumping duty on the goods exported by it - for the purpose of effective participation before the anti-dumping authorities, appellant had engaged the Chartered Accountant firm for preparation of review petition - since such service is in the context with the goods exported by the assessee, availment of CENVAT credit on such service should be considered as Input service - credit admissible - assessee appeal allowed: CESTAT [para 3]
In the matter of the Revenue appeal, the office premises were registered with the department as Input Service Distributor and certificate was issued on 09.01.2014 - since CENVAT credit was distributed by such office in favour of the assessee on the basis of invoices issued by the service providers subsequently, credit cannot be denied - Revenue appeal dismissed: CESTAT [para 4]
- Assessee appeal allowed/Revenue appeal dismissed: MUMBAI CESTAT
CENTRAL EXCISE
2018-TIOL-1956-HC-MAD-CX
Five Cail Kcp Ltd Vs CC, CE & ST
CGST - Merely because there were some appeals pending on the file of CESTAT, Madras, on similar issues, it cannot be contended as a reason for not filing the instant CMP, for four years -Supreme Court, in the case of Singh Enterprises - 2007-TIOL-231-SC-CX has held that the Commissioner (Appeals) has no power to condone the delay beyond the stipulated period -CESTAT, Madras has not committed any error in rejecting the appeal filed beyond the period provided under Central Excise Act - even on merits there is no case -hence, CMP filed for condoning the delay of 1209 days in preferring the appeal, is dismissed : HIGH COURT [para 4, 5, 6]
- Civil Misc. Petition dismissed: MADRAS HIGH COURT
2018-TIOL-1952-HC-AHM-CX
Lonsenkiri Chemicals Industries Vs CCE, C & ST
CX - The assessee imports coal on which ordinarily countervailing duty in nature of excise duty would be payable - However, by virtue of notfns 1 of 2011 and Sr.No.67 and 128 of exemption notfn 12 of 2012, the assessee would either pay duty at the reduced rate or Nil rate of duty - In this context, question of allowing the assessee to claim CENVAT credit arose - The Revenue authorities and the Tribunal held that by virtue of proviso to rule 3(1) of CCR, 2004, in view of the benefit availed by assessee and the said exemption notifications, CENVAT credit would not be allowable - Assessee has availed of benefit of exemption notfn 1 of 2011 and also the benefits under Sr.No.67 and 128 of exemption notfn 12 of 2012 - In that view of matter, the proviso of Rules, would disentitle the assessee from claiming CENVAT credit - What the assessee has paid was countervailing duty - The same may have been computed in terms of excise duty payable on local manufacturers, nevertheless, the same cannot be treated as duty of excise perse - The term "duty of excise" cannot have different connotations for the purpose of subrule (1) of rule 3 and for the purpose of proviso to the rule 3 - Thus, if Court accept the contention of assessee that countervailing duty would not be included in expression "duty of excise" for the purpose of said rule, the assessee's very foundation of claiming benefit of CENVAT credit would disappear - Appellate Authority had noted that correct facts were suppressed by assessee from the department and the reversal of payment of duty was made only after it was pointed out by the audit, thus penalty sustains: HC
- Appeal dismissed: GUJARAT HIGH COURT
2018-TIOL-2890-CESTAT-DEL
Joginder Coal Transport Pvt Ltd Vs CCE & ST
CX - The assessee company undertook work of loading and transportation of coal in the mining area of M/s South Eastern Coal Fields Ltd. - It was engaged in loading of coal from coal face into tipper trucks and movement of the coal from the coal face to Railway siding/dumps/stock yards within the mining area - The assessee included the value of loading agreement into the value of mining agreement & paid service tax on the charges recovered under the transportation agreement - Also M/s South Eastern Coal Fields Ltd. paid service tax under RCM under GTA service - The Revenue opined that the assessee did not pay service tax as the service value of both loading agreements & transportation agreement need to be included into the mining services value & that the assessee must have paid service tax on such amounts.
Held: The issue is no longer res integra and the matters at hand stand settled by the Apex Court's decision in CCE & ST, Raipur vs. Singh Transports and by the Tribunal in H.N. Coal Transport Pvt. Ltd. and others vs. CCE & ST, Raipur - In both cases, the crux was that such acitivities could not be bunched into a single service - The demands are thus set aside: CESTAT (Para 1,2,6,7)
- Appeals allowed: DELHI CESTAT
2018-TIOL-2888-CESTAT-MAD
CCE & ST Vs Shasun Pharmaceuticals Ltd
CX - Assessee is the manufacturer of Organic Chemicals - The issue for consideration is whether the excisable goods cleared in DTA to a holder of Advance Authorization without payment of duty by availing exemption under Notfn 23/2003-CE is hit by condition contemplated under para-3 of Notfn 52/2003-Cus. and para-6 of Notfn 22/2003-CE so as to necessitate reversal of the concessions availed under these notifications for the reason that the like goods when imported under Notfn 96/2009-Cus. are attracting Nil rate of BCD/ACD - Section 3 (i) of Customs Act, and Circular 1/2004-Cus read together would make it clear that the duty payable by an EOU on its DTA clearances is in the nature of excise duty and is to be equivalent to aggregate of customs duties leviable on like goods when imported - The impugned goods Gabapentine are dutiable and cannot be said to be unconditionally exempted products - They are allowed to be cleared to DTA without payment of duty only as per Notfn 23/2003 - The goods are leviable to nil rate of duty on application of Notfn 23/2003 - The Commissioner has analysed the issue in detail and dropped the proceedings - CBEC has set the controversy to rest by their circular dated 16.09.2016, which is a Circular issued to clarify the doubts: CESTAT
- Appeals dismissed: CHENNAI CESTAT
2018-TIOL-2887-CESTAT-ALL
Simbhaoli Sugar Ltd Vs CCE & ST
CX - The issue relates to allowability of Cenvat credit for the period June, 2006 to March, 2007 on items like Iron and Steel used for making technological structure of sugar factory, iron and steel used as input in construction of godowns, sheds and yards of the sugar plant, Iron and Steel used as inputs for making staging structures to facilitate operation of various machineries - The issue herein is squarely covered in favour of assessee in view of the rulings in case of Mundra Port & Special Economic Zone Ltd. 2015-TIOL-1288-HC-AHM-ST , wherein the Larger Bench ruling of this Tribunal in Vandana Global Ltd. 2010-TIOL-624-CESTAT-DEL-LB is distinguished and also in the rulings of India Cement Ltd. 2015-TIOL-650-HC-MAD-CX , wherein also the ruling of Vandana Global Ltd. has been distinguished and it was held that manufacturer is entitled to Cenvat credit on various items of steel and cement, etc. used in manufacture or fabrication of capital goods and repair to capital goods inside the factory of production - There is no dispute on the facts that the items in question have been used by assessee manufacturer in the factory of production - Accordingly, assessee is entitled to Cenvat credit on all the items on which Cenvat credit was denied in the impugned order - So far the penalties on company and the officials, personal penalties concerned all penalties stands set aside - As regard penalty for non filing of ER-1 Returns for June, 06 and Nov. 06, it is contended by assessee that due to setting up of the factory and introducing computerize system there resulted delay in filing of return - Penalty on that count also set aside: CESTAT -
- Appeals allowed: ALLAHABAD CESTAT
2018-TIOL-2886-CESTAT-DEL
Trimula Industries Ltd Vs CCGST
CX - Assessee is engaged in manufacture of Sponge Iron and MS Billet and they are availing facility of Cenvat credit on inputs and capital goods - After an order, Department alleged that assessee has availed Cenvat Credit of Service Tax on Commercial or Industrial Construction Services and Work Contract Services, which otherwise was not available to them w.e.f. 1st March, 2011, there being an amendment in definition of input services w.e.f. 1st April, 2011 - The input services on which Cenvat Credit has been availed by assessee were received in year 2005-06 for construction of a klin and the credit was availed after payment of invoices in year 2011 - The definition of input service was amended w.e.f. 1st April, 2011 thereby excluding the construction services out of its scope - Now the moot question for consideration is whether the availment of credit post 1st April 2011 against the input services which where received prior 1st April, 2011 will be hit by amendment in input service definition w.e.f. 1st April 2011 - W.e.f. 1st April, 2011 the definition of input services has been redefined and services received in construction of a building or a civil structure or a part thereof has been specifically excluded from the category of the input service - The input services were received in year 2005 - This issue of availing Cenvat credit on various input services and utilization thereof has been decided by Mumbai Tribunal in case of Idea Cellular Ltd. 2016-TIOL-2486-CESTAT-MUM it was held therein that such Cenvat credit can always be allowed - Since the services of constructions were received much prior the said amendment of excluding construction services from the definition of Input services, relying upon same, it is held that assessee has rightly availed the credit on construction activity being done by them prior the amendment in definition of input service - Also the said amendment cannot be made applicable retrospectively - The impugned order has wrongly confirmed the demand holding the impugned service to be excluded by virtue of amendment of 1st April 2011 and by ignoring the fact that the cenvat credit as has been availed by assessee had accrued to him much prior the said date i.e. 1st April 2011: CESTAT
- Appeal allowed: DELHI CESTAT
2018-TIOL-2882-CESTAT-MAD
Sundaram Clayton Ltd Vs CCE
CX - The assessee company, engaged in manufacturing aluminium castings, availed Cenvat credit on inputs, capital goods & input services - The Department contested the availment of credit on rent-a-cab service during the relevant period - Duty demand was raised for recovery of the same with interest & penalty - Such demands were upheld by the Commr.(A).
Held: Considering the definition of 'input service' only the activity of renting of a motor vehicle relates to motor vehicle, which is not capital goods for the service provider, is excluded - If the motor vehicle is capital goods for the service provider, then it would fall within the scope of input services - Thereby, if the motor vehicle is registered in the name of the service provider & used to render services of rent-a-cab service, then such service would qualify as input service - Presently, the Department made no allegation that the motor vehicles are not registered in the assessee's name - There is no allegation that motor vehicle used was not capital goods for the assessee - Hence the disallowance of Cenvat credit in such circumstances is unsustainable: CESTAT (Para 1,6,7)
- Appeal allowed: CHENNAI CESTAT
CUSTOMS
2018-TIOL-1953-HC-DEL-CUS
CC Vs Shri Davinder Singh@Goldy
Cus - Whether Tribunal was justified in remanding the matter for adjudication to the concerned official to first decide the issue of jurisdiction after the appeal pending in Supreme Court against the reported judgment in case of Mangli Impex Limited is decided - In identical circumstances, this Court had passed an order in a batch of appeals in SAP India Pvt. Ltd. - Following the said decision, impugned order is set aside and the matter is remitted to Tribunal which shall proceed to examine and decide the merits of appeals without being influenced by decision of this Court in Mangli Impex - The Court expresses no opinion on the merits or procedure that the Tribunal should adopt and follow: HC
- Appeal partly allowed: DELHI HIGH COURT
2018-TIOL-1951-HC-MAD-CUS
L Harish Gandhi Vs CESTAT
Cus - Assessee seeks to place certain factual issues, which according to them were placed before Tribunal, which were not dealt with and also the assessee seeks to rely upon a Circular bearing No.11/2016, which is a clarification regarding "other persons" (co-noticees) used in sub-Section (2) and sub-Section (6) of Section 28 of Customs Act, 1962 - The assessee's specific case before us is that benefit of such statutory provision was brought to the notice of Tribunal and the matter was not examined by Tribunal - Civil Miscellaneous appeal is disposed of giving liberty to the assessee to file a miscellaneous application before Tribunal raising appropriate contentions and if such application is filed within a period of fifteen days', the Tribunal shall not reject the application on the ground of limitation, but entertain the same and decide the application on its own merits: HC
- Civil Miscellaneous Appeal disposed of: MADRAS HIGH COURT
2018-TIOL-1950-HC-P&H-CUS
CC Vs VRA Cotton Mills Pvt Ltd
Cus - Appeal filed against order of Tribunal in 2016-TIOL-230-CESTAT-DEL - The amount involved is Rs. 16,14,799/- - In terms of Instructions issued by CBEC dated 30.12.2016, the monetary limit fixed for filing appeals in High Court stands raised to Rs. 20 lakhs, which is applicable even in pending cases - Since the amount of tax involved is less than Rs. 20 lakhs, same may be permitted to be withdrawn: HC
- Appeal dismissed: PUNJAB AND HARYANA
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by Ashish Mittal 
by Kaza Subrahmanyam
By Poonam Harjani, Partner & Deepak Suneja 
