SERVICE TAX
2018-TIOL-3280-CESTAT-MAD
R Nagendra Rao Vs CCE & ST
ST - The assessee is registered for providing 'Interior Decorator' service - On perusal of ST-3 returns, the Department noted that the assessee paid service tax @ 2% by treating the service as 'Works Contract' service & had availed benefit of concessional rate of tax under the Rule 3(1) of the Works Contract (Compensation Scheme for Payment of Service Tax) Rules, 2007 - Duty demand was raised for recovery of differential amount of tax with interest & imposition of penalty u/s 76 - Another demand was raised for a different period with further penalty u/s 76 - Such levies were upheld by the Commr.(A).
Held: The scope of 'Interior Decorator' service involves advice, consultancy, technical assistance related to planning design and beautification of space - Any work involving beautification of space cannot by itself be brought within its fold - Hence the assessee's activities cannot be brought within 'Interior Decorator' service - Hence barring the amounts already paid to the Government, the demands for differential duty are set aside as are the accompanying demands for interest & penalties: CESTAT (Para 2,6,7)
- Assessee's appeals partly allowed: CHENNAI CESTAT
2018-TIOL-3279-CESTAT-MAD
Zak Trade Fairs And Exhibitions Pvt Ltd Vs CCE & ST
ST - The assessee company is engaged in providing services of Event Management and Business Exhibition - Upon audit, it was revealed that the assessee collected service tax during the periods in dispute - of this amount, a major part had been collected towards 'Business Exhibition' service - Duty demand with interest was raised u/s 73A(2) of FA 1994 r/w Section 11D of CEA 1944 as applicable to service tax matters, on grounds that during the period of dispute, the management of business exhibitions & other events were taxable under Event Management Service & that provisions of Section 11D were also invoked since Section 73A(2) had been intorduced only w.e.f. 18.04.2006 - Such demands were upheld by the Commr.(A).
Held: The This position was altered only by the introduction of Section 11D(1A) vide Finance Act, 2008 - Thus Section 73A of the Act was inserted only w.e.f. 18.04.2006 by Finance Act, 2006 - Thereby, the amounts collected during the period of dispute on a service which was not then a 'taxable service', cannot be recovered under the erstwhile provisions of Section 11D when the sub-section (1A) thereof was not inserted - Hence the demands be set aside: CESTAT (Para 1,5)
- Assessee's appeal allowed: CHENNAI CESTAT
2018-TIOL-3278-CESTAT-AHM
Vodafone India Services Pvt Ltd Vs CST
ST - The assessee company provided some services to M/s Vodafone India Ltd., although the consideration for such service was finalized subsequently - Duty was paid on such service with interest & was reflected in balance sheet & in returns - After negotiation with M/s Vodafone India Ltd., the final consideration was fixed at a slightly lower amount - Hence the assessee claimed refund of duty paid in excess - However, the Department rejected the refund claimed.
Held: It is unclear whether the price was originally fixed at a higher rate and then re-negotiated at a lower rate or whether the rate negotiated at first is the lower rate itself - In any case, the books of M/s Vodafone India Ltd., do not record any entry mentioning the higher value - Hence it would appear that the price was negotiated for the first time at the lower value itself - Hence matter remanded to re-determine as to when the service was completed, whether the balance sheets of the assessee & M/s Vodafone India Ltd., mentioned the amount of consideration & to determine the period to which four payments recorded by the assessee belong to: CESTAT (Para 1,4,5,6)
- Case remanded: AHMEDABAD CESTAT
CENTRAL EXCISE
2018-TIOL-3277-CESTAT-CHD
Virgo Aluminium Ltd Vs CCE
CX - The assessee company manufactured Aluminium sheets and foils - It availed area-based exemption under Notfn 50/2003-CE - Its premises were visited by the Department officials, who opined that the assessee was yet to commence commercial production - The Department noted that much of the machinery was yet to be installed - The Department claimed that many machines essential for producing the subject goods, had been received much later after the date on which the assessee claimed to have commenced commercial production - Some of the machinery was found to not be in working condition - Statements were also taken from other entities, who claimed to not have placed any orders from the assessee, but the assessee nonetheless delivered the goods under the understanding that their sale would be arranged in future - Hence the Department proposed to deny the exemption availed by the assessee - Later the Original adjudicating authority held the assessee to be eligible for exemption - However, such grant of exemption was denied by the Commr.(A).
Held: The Revenue relied on statements taken from some witnesses to the effect that commercial production after a certain date & that some machinery had in fact been imported after such date - However, the samewas not subject matter in the SCN - Hence the same cannot form subject matter before this court - Hence any evidence gathered after issuance of SCN cannot be made subject matter before the Tribunal - Moreover, when the assessee filed the declaration, the Department made no attempt to visit the factory - Hence benefit of doubt goes in the assessee's favor - Hence the order passed by the original adjudicating authority is upheld: CESTAT (Para 2,9,10,11)
- Assessee's appeal allowed: CHANDIGARH CESTAT
2018-TIOL-3276-CESTAT-MAD
Cool Cosmetics Pvt Ltd Vs CCE
CX - The assessee is engaged in manufacture of various types of petroleum jelly and skin jelly articles - They were also availing various input services like Man-power Supply Services as also Works Contract Services - In terms of the provisions of Notfn 30/2012-ST, the service recipient, in respect of the said services of Man-power Supply is required to pay 75% of the service tax and the service provider has to pay 25% of the tax liability - Similarly, in respect of Works Contract Service, the liability of the service recipient is to the extent of 50% and the balance 50% is required to be paid by the service provider - Instead of assessee depositing the partial amount, the service provider deposited the entire service tax liability of 100% - However, assessee paid the entire 100% service tax liability to the service provider by way of a cheque and availed the credit to the extent of 100% dues - Revenue raised an objection that inasmuch as assessee had not paid service tax to the extent of 75% and 50% respectively, he is not entitled to avail credit to that extent - Admittedly, the entire 100% amount stands deposited by service provider, which in turn stands recovered by him from the service recipient i.e., assessee - As such, it leads to a situation, where the assessee can be considered to have deposited the entire 100% tax, in which case, he becomes entitled to the credit of the same - The hyper technical objection raised by Revenue that the assessee should have paid the tax himself cannot be appreciated so as to deny the substantial benefit of Cenvat credit, that was available to the assessee - The actual deposit of service tax by the service provider and by recovering the same from the service recipient amounts to a situation where it can be safely concluded that the entire tax stand deposited by service recipient himself, thus not making logic to any ground for denial of credit - Said view is duly supported by precedent decision of Tribunal in case of M/s. Rucha Engineering Pvt. Ltd.- 2014-TIOL-54-CESTAT-MUM wherein in an identical circumstances, the Tribunal extended the benefit of Cenvat credit to the assessee by observing that it is immaterial that who has paid the service tax and service recipient would be entitled to the entire credit of service tax even if the same stands paid by the service provider - In view of foregoing, no justifiable reasons found for denying the credit - Accordingly, impugned order is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2018-TIOL-3275-CESTAT-MAD
Chemcrown India Ltd Vs CCE
CX - The assessee is holder of private bonded warehouse license as a 100% EOU to manufacture and export 'Polyurethane Shoe Soles' - They received various capital goods during period from April 1993 to June 1993 duty free in terms of Notfn 123/1981 - During visit, it was found that the capital goods have been removed from the premises to their sister unit namely M/s. Dyechem (I) Ltd. Puducherry - The machineries were seized on reasonable belief that they might have been removed illicitly without payment of duty - The only argument put forward by assessee is that the duty has to be assessed by considering the depreciation on such machineries - The period involved is 1993 and the SCN was issued on 27.6.2001 - It is therefore the plea of assessee that if the depreciation of the goods are reconsidered, the demand of duty would be reduced considerably - The impugned machineries were removed without obtaining permission and in violation of the terms and conditions of notification - The goods were not in the custody or possession of assessee as on the date of exit order or even on the date of visit of officers - In such case, assessee cannot claim the depreciation of goods which they do not have possession or custody - No grounds found to interfere with the order passed by Commissioner (A) and the request of assessee to reconsider the depreciation and reassess the duty is not acceptable - Impugned order is sustained: CESTAT
- Appeal dismissed: CHENNAI CESTAT
CUSTOMS
NOTIFICATION
Trade Notice 36 Caution against dealing with MSRL Group Limited, Miami, Florida, USA - regarding.
cnt88_2018
CBIC amends Sea Cargo Manifest Regulations to extend date from Nov 1, 2018 to March 1, 2019
CASELAWS
2018-TIOL-3274-CESTAT-DEL
ARC Worldwide Ltd Vs CC
Cus - The assessee filed bill of enty for clearance of DC Motors imported from China - Later, based on contemporaneous import information, the Department proposed to enhance the per piece value of the goods - The assessee was intimated of the same and was asked whether it needed opportunity of personal hearing & speaking order in this regard - The assessee replied through a letter, stating that they did not agree with the enhancement and so sought a speaking order - Thereafter, the assessee received the ICD copy wherein the bill of entry was treated as assessed - While no speaking order was passed, the assessee treated the valuation process as complete & filed appeal before the Commr.(A) - Such appeal was dismissed on grounds of limitation - Hence the present application for condonation of delay.
Held: The original assessing authority failed to pass a speaking order, which contravenes the mandate of Section 17 of the Customs Act - Hence there was in effect, no appealable order before the Commr.(A) - Thus, the order of the Commr.(A) is a nullity - Hence matter is remanded back to the original assessing authority with directions to pass a reasoned order: CESTAT (Para 2,3)
- Assessee's application allowed: DELHI CESTAT
2018-TIOL-3273-CESTAT-ALL
Amar Delhi Ply Pvt Ltd Vs CC
Cus - The assessee imported a consignment of "Ordinary Plywood with Veneer Face Grade B" & declared the value of the same at USD 200 per Cubic Meter - The quantity declared by the assessee was 268.41 CBM - On inspection of the consignment by drawing random samples, the items were found to have a different thickness at 304.41 CBM - Further investigation revealed that the assessee had imported an identical consignment of goods - Duty demands were raised & value of the previous consignment was enhanced - Penalties were imposed as well - Such levies were confirmed by the Commr.(A).
Held: The Department has not contested the transaction value & produced no evidence showing that the transaction value was wrong - It is settled principle that to reject assessable value declared by assessee, based on invoices issued by foreign supplier, Revenue must first reject the transaction value by putting forth sufficient evidence to disprove the same - The Revenue did not do so in the present case - The Alert circulars issued by the Revenue based upon meetings of Commissioners & Chief Commissioners cannot have any legal validity to be adopted for enhancing valuation - Hence the demands are set aside: CESTAT (Para 2-5,7)
- Appeals allowed: ALLAHABAD CESTAT |
