SERVICE TAX

2018-TIOL-2100-HC-AP-ST + Case Story

NRI Academy Vs UoI

ST - Commercial Coaching Service - As the issue of limitation had been raised which would go to the root of the matter, Court admits the Writ Petition filed against the order-in-original passed by the CCE - Notification No.33/2011-ST dated 25.04.2011 has no application to a case where commercial coaching or training did not result in grant of a certificate/diploma/degree or educational qualification recognized by law - In terms of Notification No.10/2003-Service Tax dated 20.06.2003, the exemption thereunder is not applicable in the event the person undergoing the course or curriculum paid for the commercial training or coaching services directly to the commercial training or coaching centre - argument that the authorities could not dissect the coaching imparted by the petitioner academy for Intermediate curriculum and the entrance examinations, as the matrix was interlocked due to the fact that the content was the same, cannot be accepted - Mere factum of filing a - nil- return, followed by cancellation of the registration, speaks more of the premeditated acts of the petitioner academy and do not disclose any bonafides on its part - convoluted scheme in the form of the MoU dated 01.04.2009 adopted by the petitioner academy and the society, two separate legal entities, manned by one single individual, essentially seems to have been directed at avoiding tax liability but in effect, it amounted to evasion of tax, which is per se illegal - As regards the alleged inclusion of non-includables in the taxable services, the same is beyond the purview of a writ petition involving factual verification which this Court cannot undertake - Challenge to the Order-in-Original dated 29.11.2016, therefore, fails - Writ Petition dismissed: High Court [para 16, 18, 19, 20, 24, 25, 29 to 32]

- Petition dismissed: ANDHRA PRADESH HIGH COURT

2018-TIOL-3041-CESTAT-DEL

CCE & ST Vs Pinnacle Infotech Solutions

ST - Dispute is regarding the grant of refund in terms of Notfn 12/2013 - Said notfn provides for exemption in form of refund, of any service tax paid by SEZ unit in respect of service used by them for their authorized operations - The service tax has been paid for lease of the land on which assessee unit is situated within SEZ - Since, the operation is approved by LOA, the main condition of Notfn stands satisfies - The lower authority has allowed refund by holding that long term lease for more than 90 years would also fall within the scope of Renting of Immovable Property Services - It is further noted that the Bond also has been executed and accepted by competent authority - Even though the lease agreement has been entered prior to such date, it is seen that the refund claim for same in terms of Notfn 12/2013 has been preferred only after the execution of Bond - Hence, there is no infirmity in order passed by lower authority: CESTAT

- Appeal rejected: DELHI CESTAT

2018-TIOL-3040-CESTAT-AHM

Prithvi Hotels Guj Pvt Ltd Vs CCT & ST

ST - The assessee company is engaged in providing services of mandap keeping, restaurant & hotel accommodation - On verification of ST-3 returns and books of accounts, the Department alleged that the assessee suppressed certain value in returns and did not properly discharge tax liability - Duty demand was raised with penalties being imposed u/s 77 & 78 - As the duty and interest stood paid prior to passing of O-i-O, the assessee sought waiver of penalties.

Held - Relief from penalty can only be granted after proving that the tax liability calculated by the authorities was on the higher side - The assessee did not produce any reconciliation before the lower authorities - Hence, correct service tax liability must be established before determining quantum of penalty - Hence the matter warrants remand to the adjudicating authority for the limited purpose of determining penalty u/s 77 & 78: CESTAT

- Case remanded: AHMEDABAD CESTAT

CENTRAL EXCISE

2018-TIOL-3039-CESTAT-MUM

Varun Pressings Pvt Ltd Vs CCT

CX - CENVAT - Rule 10 of CCR, 2004 - Transfer of credit from the predecessor unit namely M/s Varun Enterprises to appellant - Credit denied and penalty imposed on the ground that when the Range Officer visited the unit he was unable to verify the stock for reason that the goods were lying haphazardly on the shop floor and that certain more goods were received during the period intervening the date of transfer of unit and date of stock verification - appeal to CESTAT.

Held: It is not even the case of the department that the goods as declared vide letter dated 02.08.2013 were not available - if the Range officer would have made efforts, he could have physically verified the stock which he failed to do so - For failure of the Range officer to perform his duty, credit due cannot be denied to the appellant - it is not stated that the goods were found short and if found short to what extent - one more opportunity granted to the department to cause verification of documents and to disallow credit to the extent of shortages on the basis of documents - as matter is quite old, exercise to be completed within one month - Matter remanded: CESTAT [para 8]

- Matter remanded: MUMBAI CESTAT

2018-TIOL-3038-CESTAT-AHM

Ratnamai Metals And Tubes Ltd Vs CCE & ST

CX - Whether the assessee is entitled for interest on refund of amount of duty paid during investigation of case from the date of deposit or after 3 month from the date of filling appeal in the event when the demand was dropped by Tribunal order - Whatever payment made it is towards the probable Excise duty liability for which the investigation is undergoing, therefore, it cannot be said that any deposit made during the investigation so made by the assessee is not a duty but only a deposit - Once the adjudication authority confirms the demand the said amount stands confirmed as duty only, the same being the duty stands appropriate against the demand confirmed in adjudication order - For this reason also the amount even though that paid during the investigation, shall be considered as payment of duty - When this be so the refund of such duty amount is clearly governed by Section 11B of CEA, 1944 - In case of refund under Section 11B provision, of interest is available Under Section 11BB - In terms of such section, of interest is payable only from the date after completion of 3 months from the date of filling the refund application - Therefore, the interest in any case is not payable from the date of deposit of the amount during the investigation - In view of decision in case of Ranbaxy Laboratories Ltd 2011-TIOL-105-SC-CX there is no ambiguity or doubt that from which the date interest is payable in case of refund of duty - Impugned order is upheld: CESTAT

- Appeal dismissed: AHMEDABAD CESTAT

CC Vs Freight Field Madras Pvt Ltd

Cus - The respondent is engaged as a CHA - It filed shipping bills on behalf of an exporter, declaring goods as 'SS Grinder' & spare parts - DRI investigation revealed some other goods, namely 'Ketamine hydrochloride' which is an item prohibited for export - The goods were confiscated & proceedings were initiated under CHALR, whereupon the adjudicating authority directed forfeiture of security deposit submitted by the respondent - The Revenue claimed that the respondent had seriously infringed the provision of the CHALR which was punishable only by revocation of licence & that mere forfeiture of security deposit was a lenient decision.

Held - The order in challenge culminated from proceedings initiated under the CHALR 2004 & after following due process, the revocation of the respondent's license was found to be too severe a punishment - Besides in the case of Commissioner of Customs, New Delhi Vs. M/s. Falcon India the Tribunal held that the Revenue does not enjoy right of appeal under the CHALR - Hence the present appeal filed by the Revenue is dismissed: CESTAT (Para 2,7.1,7.2)

- Appeal dismissed: CHENNAI CESTAT

2018-TIOL-3042-CESTAT-AHM

Karsan Naran Keshwala Vs CC

Cus - the first appellant arrived at the Ahmedabad airport from Sharjah - Seach of his baggage revealed some amount of rough diamonds hidden in a cavity of a vacuum cleaner which the assessee brought as personal baggage - As such diamonds had not been declared, the quantity of diamonds could not be considered as bona fide baggage of the passenger - He was also found to not have the Kimberly process Certificate as required for import of rough diamonds - Hence the diamonds were seized & on valuation by an expert, their value was determined - Statements of both the appellants & other persons were taken - Thereafter, the diamonds were confiscated & penalty was imposed u/s 112(b) of the Customs Act - Held - Based on such statements, the Commr. deduced the existence of a smuggling racket whose mastermind was the second appellant & where the first appellant acted as a carrier - Besides such oral statements were not challenged or retracted, hence they would have valid evidentiary value - In light of their complicity in such smuggling, the penalties are upheld - However, in interests of justice, the quantum of the penalties imposed is reduced: CESTAT (Para 2,6)

- Appeals Partly Allowed: AHMEDABAD CESTAT