SERVICE TAX
2018-TIOL-3052-CESTAT-MAD + Case Story
Mahindra Holiday And Resorts India Ltd Vs Commissioner of LTU
ST - Club or Association Service - Interest on instalment is not includible as it cannot partake the character of consideration for the services provided -Securitization income is not liable to service tax, demand on this issue is set aside - Exchange Services are offered by the appellant for facilitating its members to avail services of RCI, activity tantamounts to an activity of service provided to a member under mutuality concept and hence, not taxable - Matters remanded in matter of Rental Income and Telephone/fax charges - Appeal partly allowed: CESTAT [para 7.2, 7.4, 8.2, 9.2, 10, 11.2]
Penalty - Revenue has placed reliance on the balance sheet of the appellant which could only lead to an irresistible conclusion that no suppression or intention to evade payment of tax could be levelled - Penalty set aside by invoking s.80 of FA, 1994: CESTAT [para 12]
- Appeal partly allowed: CHENNAI CESTAT
2018-TIOL-3051-CESTAT-DEL
Visa Engineers and Promoters Pvt Ltd Vs CST
ST - The appeal has been filed by assessee from the order of Commissioner (A), rejecting the total refund claim - The assessee is provider of Commissioner or Industrial Construction Services and during the period 2007-08 they entered into agreement with Acharya Kundkund Educational Society, Aligarh and Mangalayatan University, Baiswan, Aligarh respectively for construction of multi-stories Girls' Hostel including all development alonwith other development work - The Education Society is incorporated with social welfare object whereas the University is promoted by society, which is a charitable Society/Trust - Tribunal have gone through the letter issued by society and a letter issued by university asking the assessee to revise their bills without charging Service Tax - The assessee did not produce on record any document to show that they revised their bills or refunded them the element of service tax received by assessee during the course of rendering the taxable service - Assessee's bank statement, sale invoices or any other documentary evidence in their favour that they have not collected the element of service tax from their service recipients, have not been brought on record either before the Adjudicating Authority or before the Commissioner (A) or before this Tribunal - The CA's certificate alone cannot be relied upon in absence of any corroborative evidence to rule out the doctrine of unjust enrichment - Assessee prayed that one more opportunity be given to them to produce all the documentary evidences before Adjudicating Authority in support of their claim, which was not submitted earlier by them before Adjudicating Authority - Matter remanded to the Adjudicating Authority for denovo adjudication on all issues including the issue of limitation: CESTAT
- Matter remanded: DELHI CESTAT
2018-TIOL-3050-CESTAT-MAD
Shreyans Builders Vs CC & ST
ST - The assessee, engaged in construction of commercial building, was issued SCN raising demand under 'Commercial or Industrial Construction Service' for period between April 2007 to July 2008 - Demand for interest was raised & penalties were imposed.
Held: CBIC Circular No. 96/7/2007-ST dated 23.08.2007 clarified that if no person is engaged for the construction work & if the developer undertakes the construction work without engaging the services of any other person, then without any service provider-service recipient relationship, the activity would not attract levy of service tax - Another Circular No. 108/09-ST dated 29.01.2009 also clarified the aspect of liability to service tax in the case of Joint Development of land - The Department failed to prove that the assessee suppressed facts with intent to evade payment of duty - Considering that the issue is interpretational in nature, no penalty is imposable - Nonetheless, duty demand with penalty imposed u/s 77 is sustained: CESTAT (Para 1,6,7)
- Appeal partly allowed: CHENNAI CESTAT
2018-TIOL-3049-CESTAT-MUM
Mercedes-Benz India Pvt Ltd Vs CCE & ST
ST - Appellant raised debit notes to their supplier for recovery of royalty from the oil companies and recovered the same and booked it under the head ‘Other Income' - appellant agreed to the audit query and paid tax liability with interest but did not agree for imposition/payment of penalty - Commissioner(A) reducing penalty to 15% of tax liability determined on the ground that the appellant had ischarged the entire service tax liability with interest before issuance of SCN - appeal to CESTAT against imposition of penalty.
Held: Once service tax liability with interest has been discharged, the proceedings against the assessee would be concluded and there is no necessity to issue SCN u/s 73(3) of the FA, 1994 - impugned order to the extent it upholds the imposition of penalty u/s 78 of FA, 1994 is set aside and appeal is allowed to that extent: CESTAT [para 6 to 8]
- Appeal allowed: MUMBAI CESTAT
CENTRAL EXCISE 2018-TIOL-3048-CESTAT-MUM
Shreyas Intermediates Ltd Vs CCE
CX - Allegation is that appellants have passed on CENVAT credit by claiming to have provided services but in fact have not provided any services to the EOU as they do not have any machinery/infrastructure or workforce to provide any service - SCN issued for recovery of CENVAT credit availed on the alleged Input services and also on capital goods - demand confirmed along with penalties and interest - appeal to CESTAT.
Held: Only fact that the Proprietor of M/s Sparkon Engineering Mr. Sajan was also an employee of M/s Shreyas Intermediates Ltd. (M/s SIL), the financial assistance and management assistance, particularly financial affairs do not lead to the inevitable conclusion that M/s Sparkon was a dummy organization - Commissioner has, therefore, rightly held that the dispute of credit on capital goods in question, the same were manufactured in the factory premises of M/s SIL - EOU or DTA, that there is no question of payment of any tax in view of notification no. 67/1995-CE; however, M/s SIL-EOU is entitled to credit of duties and taxes paid on input/input services used in such manufacture of capital goods as capital goods so manufactured are used for manufacture of further goods meant for hundred percent export, therefore, M/s SILEOU is entitled to CENVAT credit attributable to inputs and input services: CESTAT [para 9]
CX - Insofar as question of CENVAT credit on Input services invoices raised by M/s Sparkon is concerned, under the facts and circumstances that Mr.Sajan was under the whole time employment of appellants, was unaware regarding such invoices reveals that the work was done under the relation of employer and employee and not services provided by a separate entity - disallowance of CENVAT credit towards input services to both M/s SIL-EOU and DTA is upheld along with interest: CESTAT [para 10]
CX - Penalties - It is evident that the appellant have made the payment for the disputed invoices of input services and then taken credit - CENVAT credit is found to be irregular only because Mr. Sajan was in the whole time employment of M/s SIL and as per the facts the work was done under employer-employee relationship and not by a separate entity providing service to M/s SIL - As appellant had paid tax and then taken the credit, in the interest of justice, penalties imposed are set aside - it is also a matter of record that appellant had reversed CENVAT credit by debiting in the PLA account on being objected to by Revenue during investigation - Appeal is allowed in part: CESTAT [para 11, 12]
- Appeal partly allowed: MUMBAI CESTAT
2018-TIOL-3047-CESTAT-MUM
Godrej and Boyce Manufacturing Company Ltd Vs CCE
CX - Transfer of credit from the Service Tax credit Register to CENVAT Credit Register was properly done under intimation to Revenue and as such the demand is hit by limitation - insofar as utilization of CENVAT credit for the purpose of payment of service tax on GTA services is concerned, the issue is covered by the Delhi High Court ruling in the case of Hero Honda Motors Ltd. - 2012-TIOL-1104-HC-DEL-ST - demands set aside and appeal allowed: CESTAT [para 6, 6.1, 7]
- Appeal allowed: MUMBAI CESTAT
2018-TIOL-3046-CESTAT-MUM
Josts Engineering Company Ltd Vs CCE
CX - Appellant closed their unit at Rabale, Navi Mumbai and shifted the same to Alandi, Pune - Refund claimed of unspent advance deposit lying as balance in PLA account - claim rejected as time barred - appeal to CESTAT.
Held: It is departmental officers who were advising the appellant throughout and finally advised them to file a formal refund claim - it cannot, therefore, be said that there was a delay on the part of the appellant - appellant's claim should be considered as having been filed as per their letter 22.11.2011 - Furthermore, it is to be kept in mind that the PLA balance is not duty for the reason that whenever challan is deposited, it is as advance deposit towards PLA and from that amount duty payable is debited, therefore, unspent balance is nothing but unutilized advance deposit made by appellant to which the limitation of one year shall not apply - refund is not time barred and is liable to be sanctioned to appellant - impugned order set aside and appeal allowed: CESTAT [para 4]
- Appeal allowed: MUMBAI CESTAT
CUSTOMS
2018-TIOL-3045-CESTAT-DEL
SMS Logistics Vs CC
Cus - The appellant company is engaged as a Customs broker - It was engaged in clearing a particular consignment of goods which had been purchased by a company on High Sea Sale basis from the exporter - Bill of entry was filed for clearance of the goods on behalf of the purchaser, who admitted to have paid appropriate customs duty using Served From India scrip - Such import was contested by the Department, pursuant to which the assessee's license was revoked under Regulation 20(7) of the CBLR 2013 for contravention of the provisions of Regulations 11(d), 11(e) & 11(m) - Further penalty was imposed under Regulation 20 r/w Regulation 23 of CBLR.
Held: It is seen that the appellant admitted its fault before the Department - In such case, it is settled law that what has been admitted need not be probed into - The appellant failed to inform about the non-availability of SIFS scrip - It failed to advise the purchaser to pay duty & did not even tell them that the scrip was not applicable to their case - Besides, the high sea sale was also in doubt as as it was made prior to the loading of consignment in the aircraft which is conceptually wrong for affecting such High Sea Sale - This anomaly is evidenced by the Masters Airway Bill and House Airway Bill issued by the representative of the airline which carried the import consignment - Hence the order revoking the license is upheld: CESTAT (Para 1,2,8,9)
- Appeal dismissed: DELHI CESTAT
2018-TIOL-3044-CESTAT-ALL
Global Impex Vs CC & CE
Cus - The assessee imported consignment of 'Nutritional Supplements' from the USA - The assessee filed in-bond bill for warehousing the goods - On examination, some of the goods were found to be in double the quantity as declared by the assessee - The Department alleged mis-declaration of quantum of goods as well as under-valuation - Duty demands were raised with imposition of penalty - The goods were confiscated with option of redemption fine.
Held: The assessee mentioned 'two bottles' in the bills of entry even though under the column quantity of each package & the extra bottles have not been specified - Nonetheless, the assessee's bona fide conduct is established - No mis-declaration can be by the assessee - The importer paid total value of goods including the extra bottles - Hence it cannot be said that the transaction value is not the correct assessable value - Revenue produced no evidence to show that any extra amount was paid for the one bottle - The total transaction value paid for the entire consignment has to be treated as the assessable value for the consignment - Without any evidence of any extra payment made by the importer, the enhancement done by the Revenue is not justifiable: CESTAT (Para 1,2,5)
- Appeal allowed: ALLAHABAD CESTAT
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