SERVICE TAX

2018-TIOL-2071-HC-MAD-ST

Ocher Studios Pvt Ltd Vs ADDL CST

ST - Though assessee made submissions and further added that somebody would have received the certified copy of order and that the same does not amount to communication / service of certified copy of the order on the assessee, court is not inclined to accept the said contention - On one hand, assessee has admitted receipt of certified copy and on the other hand, has contended that certified copy was not furnished - In typed set of papers, assessee had enclosed the speed post acknowledgment due, maintained in the Office of the Commissioner of Service Tax which figures the name of assessee in the Register, and it fortifies the contention of respondents that certified copy of O-I-O was sent - Postal acknowledgement at the typed set of papers contains the seal of M/s.Ocher Studios Pvt. Ltd. - Thus, plea of non service /communication, of the certified copy of O-I-O cannot be countenanced - Inasmuch as assessee had already received the copy of O-I-O as early as on 15.09.2011, it is made clear that limitation would commence only from 15.09.2011 and not from the date of receipt of another certified copy of the O-I-O dated 26.05.2011 - In the light of availability of an alternate remedy, O-I-O dated 26.05.2011, cannot be set aside - 2nd respondent herein is directed to issue a certified copy of O-I-O dated 26.05.2011, within a period of three weeks: HC

- Writ appeal partly allowed: MADRAS HIGH COURT

Handloom Export Promotion Council Vs CST

ST - The assessee functions under the aegis of the Ministry of Commerce & is engaged in promoting export of handloom items - It provides services to its members on receipt of fees & other charges - It also rented out part of its office - Duty demands were raised under 'Membership of Clubs or Associations Services' and 'Renting of Immovable Property services'.

Held - Considering the decision of the Jharkhand HC in Ranchi Club Ltd. Vs. CCE & ST and that of the Gujarat HC in Sports Club of Gujarat Vs. UOI it is clear that for the period up to 30.06.2012, there cannot be any service tax liability on the amounts collected by the clubs or associations from its members under various categories of members - Nonetheless, demands raised after this date will sustain - Demand with interest on Renting of Immovable Property Service will sustain as well - Also considering that the issue of taxing clubs and associations was hotly contested during the period of dispute, the assessee cannot be charged with suppression of facts with intent to evade payment of duty - Hence the penalties imposed are set aside: CESTAT (Para 2,6.1,6.2,6.3)

- Appeals partly allowed: CHENNAI CESTAT

2018-TIOL-3031-CESTAT-BANG

Hassan District Central Credit Co Operative Bank Ltd Vs CCE, C & ST  

ST - The assessee is a District Co-operative Bank engaged in providing Banking Services and have been registered under the category of 'Banking and other Financial Services' separately in respect of each of the branches - The present set of appeals cover the period April 2005 to March 2010, in respect of all the branches in District of Hassan - The basic argument advanced by assessee is that the Co-operative bank has rendered Banking and Financial Services only to its members - It has been argued that Co-operative bank registered under the Co-operative Societies Act is not liable to pay service tax under category of 'Banking and other Financial Services' but the issue stands decided by High Court of Calcutta in case of Contai Co-Operative Bank Ltd. - By following the said decision, assessee is liable to pay service tax on commissions recovered from the account holders under Banking and Financial Services - Assessee has challenged the liability of service tax in respect of certain commissions recovered - Service tax has been charged in respect of closure of inoperative account, assessee has treated inoperative account as income in their books - Since this does not amount to rendering any taxable service, no service tax can be levied on such amounts transferred to books of the amounts of the bank - As regards to the issue of recovery expenses towards loan recovery, such charges have been recovered from operators towards the cost incurred by bank on account of recovery of loan - After considering nature of amounts recovered, Tribunal views that these are in nature of Banking and Financial services and hence service tax will be liable to be paid on such amounts - The assessee has recovered 'pigmy commission' due to early closure of pigmy accounts - These commissions represent penal charges levied on pre-closure of accounts and cannot be considered as commission towards any services provided - Consequently, service tax levied on such commission set aside - As regards to limitation, it is found that the various branches of assessee have taken registration as early as 2007 - Some of the branches have also registered themselves from 2010 onwards - But the levy of service tax under Banking and Financial Services came into the statute book from 10.09.2004 - Assessee has failed to pay such service tax and even ST-3 returns which are mandatory have not been filed on time - Consequently, Revenue was justified in invoking the extended time limit for demand of service tax - Entire service tax demanded has already been paid by assessee - Keeping in view of the fact that Co-operative Banks are situated in rural areas and availability of legal advice regarding payment of service tax was difficult to get, a lenient view needs to be taken as far as levy of penalty is concerned - Hence, penalties imposed on assessee set aside: CESTAT

- Appeals partly allowed: BANGALORE CESTAT

CENTRAL EXCISE

2018-TIOL-2075-HC-MAD-CX + Case Story

Mathura Polymers Pvt Ltd Vs CESTAT

CX - Notfn. 8/1998-CE - Once option is exercised to pay normal rate of duty, same cannot be allowed to be withdrawn in the remaining part of the financial year - Strict interpretation of exemption notification - asseessee has miserably failed to prove that their case comes within the conditions stipulated in the exemption notification - lower authorities have rightly rejected the case of the assessee - High Court cannot review the factual situation, which was considered by the adjudicating authority and re-appreciated by the appellate tribunal - Appeal dismissed: High Court [para 7 to 9]

- Appeal dismissed: MADRAS HIGH COURT

2018-TIOL-3034-CESTAT-KOL

CCE, C & ST Vs OCL India Ltd Refractory Unit

CX - The assessee company is engaged in manufacturing Refractory Bricks, Refractory Mortars & Precast Bricks - The Department alleged that the assessee availed Cenvat credit on items such as M.S. Angle, M.S. Channel, M.S.Beam & M.S.Joist - Duty demand was raised with interest & equivalent penalty - Such levies were set aside by the Commr.(A).

Held - The Revenue stated that the goods were manufactured for the support of BELL KILNS equipment/machinery for manufacture of Cement Shaft Kilns and Gas Producer Plant - Therefore, the goods are only support structures to the machinery - Cenvat credit is allowable on such Iron and steel structures - Besides the cement used with the structural items for construction of capital goods & supporting structures will also be considered as inputs for which credit is be available - Besides, since the credit was reversed before being availed, no demand for interest can be raised - Hence the Revenue's appeal lacks merit: CESTAT (Para 2,6,7,8)

- Revenue's appeal dismissed: KOLKATA CESTAT

2018-TIOL-3033-CESTAT-MAD

Visaka Industries Ltd Vs CC & CE  

CX - The assessee manufactured asbestos cement wherein raw materials used were fibre, cement, fly ash and cotton pulp – It availed duty exemption under Sl.No.158 of Notification No.6/2002-CE which allowed the benefit of exemption of duty on compliance of condition that the products would contain not less than 25% by weight of fly ash or phosphor-gypsum or both – On audit, the Revenue noticed that assessee did not use 25% of fly ash in finished products and thus was not eligible for benefit – Duty demand was raised – The adjudicating authority confirmed the demand under Rule 25 & 26 of the CER – Hence, the present appeal.

Held – As regards supply of raw materials, there is MOU between four cement companies - This document evidences that these cement companies were also allotted fly ash which have been supplied to the assessee on their request – Furthermore, assessee procured fly ash from other sources in open market – Therefore, the matter requires to be remanded to the adjudicating authority who is to reconsider the whole issue after giving sufficient opportunity to furnish documents and also reasonable opportunity of hearing – Hence, the order under challenge is set aside and case remanded for de novo adjudication : CESTAT (para 1, 6,7 ,8 , 9)

- Matter Remanded: CHENNAI CESTAT

NOTIFICATIONS

ctariffadd18_050

Anti-dumping duty imposed of 'Nylon Filament Yarn' (Multi Filament) imported from Vietnam and EU

dgft18not041

Amendment of Policy Conditions of Urea under Chapter 31 of the ITC (HS) 2017, Schedule-I (Import Policy)

cuscir36-2018

Grant of reward to informers and Government servants - amendments in existing reward guidelines issued vide Circular No. 20/2015 dated 31.07.2015 and as amended vide Circular No. 29/2016 dated 23.06.2016

CASE LAWS

2018-TIOL-2073-HC-MUM-CUS

Ahuraz Shipping And Clearing Company Pvt Ltd Vs CC  

Cus -The assessee is a CHA - The impugned order of Tribunal has upheld the penalty imposed under Section 112(a) of the Act upon assessee on the basis of not complying with a public notice issued on 10th March, 2005 which required that all CHAs and Members of trade who are involved in import of livestock and its products to strictly comply with requirement of quarantine clearance and the fulfillment of Exim Policy, failing which, clearance was not allowed - The grievance of assessee before the Tribunal was that all the Bill of Entry with which assessee is concerned, were filed before 10th March, 2005 when public notice was issued - Issue is identical to the issues which were raised in two appeals filed by Atul Shipping Agency Pvt. Ltd. and Freight Express International Pvt. Ltd. in 2018-TIOL-1944-HC-MUM-CUS - Therefore, for the reasons indicated in said order, the substantial question of law is answered in affirmative - The impugned order set aside and appeal of assessee restored to the Tribunal for fresh disposal after following the principles of natural justice: HC

- Appeal disposed of: BOMBAY HIGH COURT

CC Vs Dodsal Engineering And Construction Pvt Ltd

Cus - The basic issue on merits is; whether an assessee is entitled to claim refund of duty in absence of any challenge to an assessment of a bill of entry - The Tribunal had originally passed an order on 9th May, 2006, allowing the assessee's appeal - Same was a subject matter of challenge before this Court by Revenue which was disposed of by setting aside the order passed by Tribunal and restoring the appeal to the Tribunal for denovo consideration, in accordance with law - Consequent to that order, the Tribunal has passed the impugned order without dealing with contention of parties and/or the applicability of the decision of Apex Court in Flock (India) Pvt. Ltd. 2002-TIOL-208-SC-CX - The impugned order has restored the issue to Commissioner (A) to decide the matter, after the Supreme Court takes a decision on an appeal field by the Revenue from the order of the Delhi High Court in case of Aman Medical Products Ltd. 2009-TIOL-566-HC-DEL-CUS which has been admitted by the Apex Court - The impugned order of Tribunal remanding the matter to Commissioner (A), is without considering the applicability of law laid down in case of Flock (India) Pvt. Ltd. - The order is nonspeaking order and is contrary to the direction of this Court contained in its order - Impugned order is set aside and appeal restored to the Tribunal for fresh disposal, in accordance with law: HC

- Appeal disposed of: BOMBAY HIGH COURT