SERVICE TAX
2018-TIOL-2132-HC-DEL-ST + Case Story
South India Krishna Oil And Fats Pvt Ltd Vs CST
ST - Rule 10 of Place of Provision of Services Rules, 2012 - It is not appropriate and proper to issue notice to examine validity and vires of statutory provisions that are no longer in operation and no proceedings are pending against the petitioner - academic exercise - Petition dismissed: HC [para 3, 5]
- Petition dismissed
: DELHI HIGH COURT
2018-TIOL-3095-CESTAT-CHD
Amrit Pal Singh Sodhi Vs CCE
ST - The assessee in this matter was working as Gold Deplomat Associate of M/s eBIZ Pvt. Ltd. and selling products/packages for operation of computer systems and to motivate other associate for awareness of computer educational packages of M/s eBIZ and prospects thereto - A SCN was issued to assessee to demand service tax under category of BAS - The services provided by assessees are not in dispute which are in nature of providing service on behalf of the principle of Information Technology Service - The assesses were receiving certain commission and same is sought to be tax as BAS in terms of Section 65(19) of FA, 1994 - On going through explanation to Section 65 (19) of FA, 1994 the ‘Information Technology Service' means any service in relation to designing, developing or maintaining of computer software or computerized data processing of system networking or any other service primarily in relation to operation of computer systems - On going through the agreement between eBIZ and assessees, the activity undertaken by assessees involved the promotion or marketing of the service of eBIZ and getting commission from the eBIZ of the same as the service provided by assessees in relation to the operation of computer systems - In that circumstances, assessees are covered by the explanation to Section 65(19) of the FA, 1994, therefore, they are not liable to pay service tax - In these terms, impugned orders set aside holding that as the assessees are providing service in respect of operation of computer systems, the same is not covered under BAS, therefore, they are not liable to pay service tax - Impugned orders qua confirming demand of service tax along with interest and imposing penalty on the assessee are set aside: CESTAT
- Assessee's appeals allowed: CHANDIGARH CESTAT
2018-TIOL-3094-CESTAT-CHD
Bharat Bhushan Gupta And Company Vs CGST
ST - The assessee was awarded three works contracts by Housing Board, Haryana (HBH) for construction of flats for BPL category in Housing Board Colony, at different locations - The HBH deducted service tax from running bills of assessee on the amount of gross work executed by them after 01.07.2012 - Aggrieved by action of HBH, assessee filed writ petition before Punjab & Haryana High Court where the High Court held that as HBH is government authority and is wholly controlled by State Government, the services provided to it were exempted - Consequently, HBH refunded them the sum in January, 2017 - However, the HBH did not refund them the amount of Rs.25,60,293/- being deposit with the Service Tax Department - The assessee filed the refund claim of Rs.25,60,293/- - Same was returned with Deficiency Memo - Commissioner (A) rejected the appeal on the ground that the assessee had no locus standi to file refund claim as service tax has been paid by the Housing Board Haryana - In view of the judgment of Supreme Court in Oswal Chemicals & Fertilizers Ltd., assessee have locus standi to file refund claim in this case - The department has entertained the refund claim of another similarly placed contractor, as is evident from the O-I-A in the case of Satish Kumar Gupta, Contractor - Hence, the rejection of plea of assessee on this ground by Commissioner (A) is untenable - The second issue pertains to merits of the case where HBH has given the disclaimer certificate - Assessee have placed on record disclaimer certificate from the Housing Board Haryana in respect of their claim - The order of Commissioner (A) is dated 31.1.2018 - Admittedly, the disclaimer certificate was not produced before Commissioner (A) when the impugned order was passed - Matter remanded to the first appellate authority so that he can examine the issue afresh by taking into account the disclaimer certificate dt.30.1.2018: CESTAT
- Matter remanded: CHANDIGARH CESTAT
2018-TIOL-3093-CESTAT-BANG
Fosroc Chemicals (India) Pvt Ltd Vs CCE & ST
ST - The assessee company is engaged in manufacturing chemicals used in construction industries - It received confidential information, technical know-how and also used the patents & trademarks of its parent company located in the UK - The Department noted that the assessee received Intellectual Property Service & Management Consultancy Service from their principals in the UK & alleged that no service tax was paid on the same - Duty demands were raised with interest & penalties u/s 76, 77 & 78 were imposed - Demands & interest already paid were also sought to be appropriated.
Held - The tax liability is not disputed - However, the penalties are challenged - The assessee paid 25% of the penalty before issue of SCN & so harbored a reasonable belief that the liability of the service recipient to pay service tax under the reverse charge mechanism was in doubt - Moreover, the activity treated as management consultancy was limited to supplying boooks or operations manuals by the principal - Even regards the intellectual property service, the assessee was under reasonable belief that no patents were registered by the principals in India - The present case is about the taxability of such services received by the assessee & payment in the mode of reverse charge mechanism and the nature of services received are also not free from doubt - Hence the penalties are unjustifiably imposed: CESTAT (Para 1,5.1-5.6)
- Assessee's appeal allowed: BANGALORE CESTAT
CENTRAL EXCISE
2018-TIOL-3092-CESTAT-MUM
Voltas Ltd Vs CCE
CX - Unutilized credit of CENVAT remaining in books of accounts as on 31 st December 2013 claimed as refund - original authority rejected claim on the ground that there is no specific provision in CCR, 2004 for processing such claim and that rule 5 is a privilege that can be resorted to only in relation to goods that are exported - appeal to CESTAT.
Held: It is clear that legislative intent did not envisage the monetization of CENVAT credit in the event of impossibility of utilization - CCR, 2004 is not an exemption scheme but a contrivance to ensure that the incidence of duty or tax is borne by the ultimate purchaser of goods or service in a chain - Conversion of credit into cash would be a refund to the buyer of the tax collected under authority of law from a manufacturer-seller - Refund of such accumulated credit arising from payment of duty or tax at the stage of manufacture is tantamount to a finding that the duty or tax was collected at the preceding stage without the authority of law - appellant is not before the Tribunal with a valid claim of the tax/liability having been collected from its supplier without the authority of law - neither the CEA, 1944 nor the CCR, 2004 envisages a refund of credit in the absence of such a ground - CENVAT credit accumulated by the appellant is the sum of duties/taxes validly discharged by them, therefore, lower authorities have not erred in withholding the claim for refund of accumulated credit - Appeal dismissed: CESTAT [para 9 to 13]
- Appeal dismissed: MUMBAI CESTAT
2018-TIOL-3091-CESTAT-MUM
CCE Vs Ambai Steel Re-Rolling Mills Pvt Ltd
CX -Alleged Clandestine manufacture and removal of M.S. Bars, Angles etc. - Central Excise duty demand cannot be confirmed only on the basis of electricity consumption in absence of any other corroborative evidence - impugned orders setting aside demand of duty upheld and Revenue appeals dismissed: CESTAT [para 6.2]
- Appeals dismissed: MUMBAI CESTAT
CUSTOMS
NOTIFICATIONS
ctariff18_074
Central Government exercises emergency powers u/s 8A of CTA, 1975 to increase import duty on Base Stations and goods of heading 8517 6990, Chapter 85 to 20% ctariff18_075
Electronic goods viz. Optical Transport Equipment, VoIP equipment, VoIP phones etc. to attract concessional rate of 10% following hike in Tariff Rate - 57/2017-Cus amended ctariff18_076
Exemption under 24/2005-Cus extended to goods other than PCB Assembly of Base station, Optical Transport Equipment, VoIP equipment, VoIP phones etc. subject to conditions
CASE LAWS 2018-TIOL-2130-HC-DEL-CUS Surbir Singh Vs Customs
Narcotic Drugs and Psychotropic Substances Act, 1985 [NDPS Act] - Petitioner seeks regular bail in Sessions Case pending in the Court of Special Judge, NDPS, Dwarka Courts, New Delhi under section 20(c)/23/28 read with section 29 of the NDPS Act:
Held: The field test of one packet allegedly indicated THC+ and 9 out of 10 packets were neither tested nor sampled - the physical properties, weight of the suspected substance as recorded in the complaint panchnama, its memo are at variance with the ones recorded by the Chemical Examiner - the parcel that is booked is not booked in the name of the petitioner but in the name of one Rakesh Kumar - even the ID proof, which was submitted, was not of the petitioner but of Rakesh Kumar - there is variance even in the weight of the article, which is booked by the petitioner, and the one, which is seized - even the description of the goods 'hand-craft wooden painting' is changed to 'painting on wooden frame' - the statement under section 67 of NDPS Act, of the petitioner, relied on by the respondents, is not as incriminating as is sought to be projected - as per the petitioners, the statement was not voluntary and has been retracted immediately - there are reasonable grounds for believing that the petitioner is not guilty of the offence for which he has been charged - the requirements of section 37 NDPS Act, have been fulfilled and, therefore, it is a fit case in which the petitioner is to be released on bail - accordingly, on petitioner furnishing a bail bond in the sum of Rs.25,000/- with one surety of like amount to the satisfaction of the Trial Court, petitioner shall be released on bail, if not required in any other case - petition is disposed of in above terms : HIGH COURT [para 32, 33, 34, 35, 36, 37, 38, 40]
- Bail Application disposed of: DELHI HIGH COURT
2018-TIOL-3090-CESTAT-DEL
Eicher Tractor Vs CC
Cus - The assessee imported & cleared goods under EPCG license at concessional rate @ 5% under Notfn No 097/2004-Cus - This is subject to the condition that the license holder must fulfil export obligation - To this end, the assessee furnished a bond as well - The Department alleged that the assessee failed to fulfil the conditions prescribed in the notification and so issued SCN proposing recovery of duty - On appeal, the Commr.(A) held that an appropriate order would be passed only on issuance of EODC or receipt of an order from the DGFT - Meanwhile an order was passed in parallel proceedings on the same issue
Held - It is seen that the assessee's appeal was dismissed for want of EPCG certificate - Hence the assessee merits opportunity to present the requisite documents before the original authority - Hence the matter is remanded to such effect: CESTAT (Para 2,6)
- Case remanded: DELHI CESTAT
2018-TIOL-3089-CESTAT-BANG
Molex India Pvt Ltd Vs CC
Cus - The assessee company is engaged in manufacture of electronic connectors, parts of connectors, electronic connector harness and other IT products - It filed claims seeking refund of 4% CVD paid through DEPB, which had earlier been refunded through DEPB credit or had been rejected - The assessee's claims were rejected on grounds that 4% SAD amount paid through DEPB scripts could not be refunded by cash.
Held: The issue has been settled by the High Courts in many cases wherein it is held that CBIC circular cannot impose any additional restriction for grant of refund under a notification and such circulars are ultra vires - It was also held that Circular No.6/2008, No.10/2012 & 18/2013 denying importers & exporters the refund of the SAD paid by using DEPB scrip, were invalid - Some of the refind claims are time barred because the defect memos were issued and documents were not filed in time - However the rejection of claims in this case is unsustainable because only the defect memo was issued & the refund claims were not rejected - Hence the refund claims cannot be rejected by issuing the defect memo and the refund claims filed earlier will be considered as valid and the limitation would start from that day only when they were originally filed - Besides, Notfn No 102/2007 does not lay down any time limit for claiming refund - Hence the denial of refund claims in unsustainable: CESTAT (Para 2,6,7,8)
- Appeals allowed: BANGALORE CESTAT
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