SERVICE TAX

2018-TIOL-3087-CESTAT-ALL

Arman Khan Vs CCE & ST

ST - The assessee is engaged in providing security services to banks - It provides vehicle for ferrying cash - On audit for the relevant AY, the assessee was found to have short paid some amount of duty which was subsequently paid with interest - Based on a subsequent audit, fresh demands for interest were raised which the assessee paid as well - Later on investigation of assessee's premises, the Department alleged that the assessee reflected excess figures of receipts in the bank statements, P&L a/c & balance sheets while reflecting lower figures in the ST-3 returns - Hence the Department alleged that the assessee short-paid duty on 'security service' - SCNs were issued by invoking extended limitation - Later duty demands were raised with interest & penalties along with personal penalty on the assessee.

Held: As per the agreement, the assessee is providing security service under a separate contract and also cash van to banks for transporting cash - While the cash vans also have security guards accompanying them, the dominant service is to provide cash van for transportation of cash - Considering the decision of the Tribunal in Kingfisher Airlines Ltd. v. Commissioner of Service Tax it is seen that the providing cash van service cannot be termed as security service - Hence no duty is payable under category of security service - The penalties are set aside too: CESTAT (Para 3,6,7)

- Appeals allowed: ALLAHABAD CESTAT

2018-TIOL-3086-CESTAT-KOL

CCE, C & ST Vs Askar Timbers

ST - The assessee company was served SCN for non-payment of tax on amount reimbursed for services rendered - Duty demands were raised with interest and penalties were imposed - Later the Commr.(A) held that reimbursement on account of various charges like loading/unloading, coolie, cartage, handling/portage and lorry freight charges, electricity, telephone, godown rent, salary to staff etc. did not attract service tax - It was also held that other reimbursed expenses could not be added to commission.

Held: Considering relevant findings of the Apex Court in UOI Vs. Intercontinental Consultants wherein it was held that in the valuation of taxable service, the value of tax service would be the gross amount charged by the service provider 'for such service" & the valuation of tax service cannot be anything more or less than the consideration paid as quid pro quo for rendering such a service - Following such findings, the reimbursement made by the principal to the C&F Agent on account of various expenses do not form part of amount chargeable to Service Tax: CESTAT (Para 1,5,5.1)

- Appeal dismissed: KOLKATA CESTAT

CENTRAL EXCISE

NOTIFICATION

Central Excise duty on Aviation Turbine Fuel reduced to 11%

CASE LAWS

Trishul Arecanut Granules Pvt Ltd Vs CCT

CX - The Department claimed that the assessee company had purchased a vast quantity of Cotton Canvas bags & alleged that the assessee had not paid duty on it - Duty demands were raised & later confirmed by the Tribunal - Thereafter, the High Court held that computing the quantum of evaded duty on the basis of production capacity and unaccounted purchases of packing material is a mode of best judgment assessment - Section 3A of CEA was brought on the Statute Book on 10.05.2008 just to crystallize and fortify such assessment procedure – Hence the Tribunal's order was upheld.

Held - The assessee claimed that the certain aspects were not touched upon by the High Court - It claimed that the Tribunal had directed that the matter be remanded to restrict the demand to production based on production capacity - In light of the same, the assessee is given liberty to seek review of the High Court's order - Hence present SLP dismissed as withdrawn: Supreme Court

- Assessee's SLP dismissed: SUPREME COURT OF INDIA

2018-TIOL-3085-CESTAT-MAD

Sripathi Paper and Boards Vs CCE & ST

CX - The assessee is engaged in manufacture of Kraft Paper - The assessee did not avail exemption on clearance of aggregate quantity of 3500 MTs of Kraft Paper during the relevant period, as per Notfn No 04/2006-CE - However, it paid duty for clearance of finished goods in contravention of Section 5A(1A) of the Act - The Department held the assessee to be ineligible for availing credit on inputs lying in stock, on inputs in process and inputs contained in final products lying in stock as per Rule 11(3) of CCR 2004 - Credit availed on inputs used to produce exempted goods was also denied - Duty demands were raised.

Held: The issue is no longer res integra and stands settled in the Tribunal's decision in Balakrishna Paper Mills Ltd. & Ors. Vs. CCE - Hence the demands are set aside - Consequently, the penalties are set aside as well: CESTAT (Para 2.1,2.2,6,8.1,8.2)

- Appeals allowed: CHENNAI CESTAT

Ishaan Research Laboratories Pvt Ltd Vs CCE

CX - The assessee is a manufacturer of ayurvedic medicines - On audit, it was noticed that they were manufacturing beauty products as that of cream, lotions - Thus, were the manufacturers of the products called cosmetics and toilet preparations which were chargeable to duty at the rate of 40% under Chapter 33 of CETA - However, the assessee were clearing those products as ayurvedic medicines only on the payment of duty at the rate of 10% advelorem - Differential duty demand was raised - The Tribunal held all the ayurvedic medicines and rest of the 70 products as cosmetics and toiletries preparation - The penalties were deleted and remanded back to Commr.(A) for requantification of the duty - The Revenue appealed to the Supreme Court which were dismissed - Furthermore, the benefit of extended period of limitation was also denied to the Revenue - On remand, out of the five SCN's the Commr.(A) set aside the demand on three and requantified the duty demand on two - In addition, in the order-in-appeal the interest was charged and penalty was imposed on assessee-company as well as Director-assessee - Hence, the present appeals.

Held: The only act assigned to Commr. while remand was to requantify the duty - However, it imposed interest u/s 11A, sub-section 11A(2) and imposed penalty upon all assessee's - Therefore, the Commissioner in the Order under challenge has exceeded its authority being out of the ambit of the direction of Apex court while remanding the matter - Hence, the order-in-appeal with respect to interest & penalty is set aside: CESTAT (para 2, 9, 10, 11)

- Appeal partly allowed: DELHI CESTAT

CUSTOMS

Geetanjali Woolen Pvt Ltd Vs CCE & C

Cus - The assessee company is a 100% EoU manufacturing arn, Shoddy Blends, Blends, Mutilated Rags, Process Waste and Clips - During the period of dispute, the assessee imported mixed woollens/synthetic rags and manufactured mutilated rags, clips blends and waste obtained by sorting/mutilating/cutting were cleared to DTA as per the permission granted by the Development Commissioner - The Department alleged that such goods were not excisable as the process involved in making them did not amount to manufacture & that these goods did not feature in Schedule 1 of CETA 1985 - Also that duty on DTA clearances was wrongly paid as per Notfn No 23/2003-CE whereas the provisions of Notfn No 52/2003-CE were applicable - Demand for differential duty was raised with interest - On remand by the Tribunal, the Department merely re-iterated the demands.

Held - Rags are not a new commodity - Various exemption notifications recognize rag as an excisable commodity - Merely by switching over from 6 digit to 8 digit tariff, no new commodity has been introduced under the 8 digit only existing commodities were classified in a paper manner and mentioned in the 8 digit tariff - Hence rags as excisable goods are eligible to benefit of the Notfn - Hence the duty demands are set aside: CESTAT (Para 2,5)

- Asessee's appeal allowed: AHMEDABAD CESTAT

2018-TIOL-3082-CESTAT-KOL

Janvi Impex Vs CC

Cus - The appellant imported a consignment of calculators - However, the Customs Department confiscated such consignment u/s 111(f) & 111(g) of the Customs Act on grounds that the assessee failed to file the requisite bill of entry - Penalty was imposed on the assessee u/s 112(a).

Held: The adjudicating authority failed to put forth any evidence to establish the assessee's intent to evade payment of duty or any evasion at all - The assessee is merely a declared consignne & did not make any payment for the goods or exercise rights of ownership - It is yet to self-assess its duty liability and made no declaration - Hence no attempt to evade payment of duty can be alleged - It cannot be held that the desire to ensure that the shipping documents were consistent with each other & fully reconciled with the shipping goods, could be attributed to a fraudulent intention - Such an implication makes the provisions of Section 30(3) to be redundant - Hence the penalties imposed u/s 111(f), 111(g) & 112(a) are baseless - Hence both fine & penalty are set aside: CESTAT (Para 1,5,7,8)

- Appeal allowed: KOLKATA CESTAT