SERVICE TAX
2018-TIOL-3325-CESTAT-MUM + Case Story
CST Vs Sriram Security And Consultancy Services
ST - Court Receiver appointed by the High Court for guarding the suit properties cannot be considered as 'client' of the appellant in order to fall under the category of Security Agency Service - Service receiver is the Court Receiver who performs the judicial functions as per the High Court - Activity undertaken by the appellant can be considered as sovereign function of the State inasmuch as the High Court performs according to the mandate of the Constitution of India - Appellants were engaged by the Court Receiver for providing Security service and in no way were connected with the banks/financial institution who ultimately reimbursed the expenses to the Court Receiver as per the applicable rules and instructions of the High Court - Order passed by the Commissioner(A) cannot be interfered with - Revenue appeals dismissed: CESTAT [para 4, 5]
- Appeals dismissed
: MUMBAI CESTAT
2018-TIOL-3318-CESTAT-HYD
CCCE & ST Vs Vasanth Financial Links
ST - The assessee provides certain services to M/s ICICI Ltd./ICICI Home Finance Ltd./ICICI Bank Ltd. by acting as sourcing agent for marketing their products & sourcing customers for their products - The Department opined that such activity was taxable as Business Auxiliary Service - The assessee was not registered & hitherto was not paying service tax - The commission/fee received by assessee be treated as cum-tax - Duty demand was raised with demand for Education Cess, interest & penalties - On appeal, the Commr.(A) held that the activities in question were taxable as Business Support Service - As the demands pertained to periods prior to date of introduction of BSS, they were dropped.
Held - In the O-i-O, the adjudicating authority made a mistake when recording the period of dispute - Also the agreements relied upon the adjudicating authority & the Commr.(A) only appoint the assessee as sourcing agent - The assessee is only engaged in marketing or sourcing customers, and is not evaluating any prospective customer - Hence the Commr.(A) adopted the wrong premises to hold that the assessee's activities classify as Business Support Service - As the period of dispute originally pertains to before the introduction of BAS, the Commr.(A) set aside the demand raised under this heading - Hence the matter warrants remand for re-consideration of the agreements between the assessee & the other parties & then determine the appropriate classification between BAS and BSS - Appeal allowed by way of remand: CESTAT (Para 1,4,5)
- Revenue's appeal allowed : AHMEDABAD CESTAT
2018-TIOL-3317-CESTAT-AHM
Zydus Bsv Pharma Pvt Ltd Vs CST
ST - The assessee company claimed refund of service tax paid on input service received in SEZ unit under Notfn No 15/09-ST - Such refund was denied by the adjudicating authority as well as the appellate authority, on grounds that many services were consumed wholly within the SEZ - For some services, the difference was noted with respect to refund claim & payment made by assessee - The Department also claimed that the assessee contravened the provisions of Notfn No 9/09-ST.
Held - The Tribunal adjudicated similar issues in Sears IT & Management Service P. Ltd. and Intas Pharma Ltd. - In both cases, the assessee was allowed to avail Cenvat credit in identical circumstances - Following relevant findings laid down to such effect, the denial of credit in the present case is wholly unjustified: CESTAT (Para 1,5)
- Assessee's appeal allowed : AHMEDABAD CESTAT
CENTRAL EXCISE
2018-TIOL-2319-HC-MAD-CX
CCE Vs Kores India Ltd
CX - It may not be necessary for this Court to examine the correctness of decision of Tribunal or to answer the Substantial Questions of Law, in the light of the low tax effect in this appeal - The Central Board of Direct Taxes, vide Circular No.3 of 2018, has directed that appeals shall not be filed before this Court, where the tax effect does not exceed the monetary limit of Rs.50 lakhs - In the light of the Circular, Revenue cannot pursue this appeal - The appeal filed by Revenue, is dismissed on the ground of low tax effect and the Substantial Questions of Law framed for consideration are left open: HC
- Appeal dismissed : MADRAS HIGH COURT
2018-TIOL-2317-HC-MUM-CX
Impact Solution Vs UoI
CX - The Assistant Commissioner by an order 1st November, 2017 had confirmed a duty demand of Rs. 88 lakhs - According to the Respondents as no Appeal had been filed by the Petitioner within the stipulated time, they proceeded to attach bank accounts as well as residential flat of the Petitioner - According to the Petitioner the original order was received only in May 2018 and appeal was filed immediately thereafter - In Appeal, by an order dated 22nd October, 2018, the Commissioner (A) has come to a finding that the appeal filed by Petitioner is time barred and dismissed the appeal - Thus, there is an amount of Rs.88 lakhs due and payable by the Petitioner to the Revenue and the same needs to be secured - Therefore, court do not interfere with the order of the Respondents attaching the Petitioner's residential flat till such time as the Tribunal takes a final view on the Appeal filed by the Petitioner - However, the attachment of the bank account in these facts is not justified, particularly in view of the decision of the Kerala High Court in case of Sherin Hi Fabs 2016-TIOL-2110-HC-KERALA-ST - The Respondents have already vacated attachment of the bank accounts - Thus, no further directions on the above account is called for - The Petition is disposed of without disturbing the attachment of the residential flat till the final disposal of the appeal by the Tribunal: HC
- Petition disposed of : BOMBAY HIGH COURT
2018-TIOL-3316-CESTAT-ALL
Denso India Ltd Vs CCE
CX - Assessee is manufacturer of Automobile parts and procuring inputs on payment of duty - After manufacturing the goods, same have been cleared on payment of duty - On the basis of investigation, certain discrepancies were found and on the basis of discrepancies, SCN was issued to deny the Cenvat Credit - As regards to denial of Cenvat Credit on moulds and dies cleared to job workers without reversal of Cenvat Credit, if assessee had reversed the Cenvat Credit, said job worker was entitled to take Cenvat Credit and the said Cenvat Credit would have been used by job workers for payment of duty of job worked goods on which assessee has paid duty - Therefore, whole exercise is Revenue neutral and the assessee is not required to reverse the Cenvat Credit on moulds and dies cleared to the job worker.
As regards to Cenvat Credit excess availed by assessee on subsequent reduction in price of inputs by supplier by issuance of debit notes, in terms of Rule 3 of CCR, 2004, the assessee is entitled to take Cenvat Credit of duty paid on inputs - Therefore, in terms of CBEC Circular No. 877/15/2008-CX , assessee is not required to reverse the Cenvat Credit - As regards to denial of Cenvat Credit on old capital goods which were cleared after use on payment of duty, the capital goods in question has been put to use by assessee and after use of the capital goods, the said capital goods has been cleared by them on payment of duty on transaction value - Therefore, as held by High Court of Bombay in case of Cummins India Ltd. 2008-TIOL-681-HC-MUM-CX the assessee is required to pay duty on capital goods on transaction value, which the assessee has already paid - Therefore, the reversal of Cenvat Credit is not required - With regard to denial of Cenvat Credit on inputs which has been scraped, case of Revenue is that said inputs were not used by assessee, therefore, they are required to reverse Cenvat Credit on said inputs - The said inputs are not usable by assessee, therefore the same has been cleared as scrap on which assessee had paid duty - In that circumstances, assessee is not required to reverse the Cenvat Credit - No penalty is imposable on assessee: CESTAT
- Appeal partly allowed : ALLAHABAD CESTAT
2018-TIOL-3315-CESTAT-DEL
Diamond Cements Vs CCE
CX - The assessee company is engaged in manufacturing Clinker - The assessee availed Cenvat credit based on supplementary invoices issued by M/s South Eastern Coal Fields Ltd. - The Department denied credit to the assessee in terms of Rule 9(1)(b) of the CCR 2004 - Duty demand was raised for recovery of credit & such demand was upheld by the Commr.(A).
Held - The main issue at hand is whether the assessee can avail credit based on invoices raised by a coal company - It may be noted that the decision in the case of M/s South Eastern Coal Field Ltd. are pending disposal before the Apex Court - Thus the issue is already sub-judiced owing to which the possibility of confusion cannot be ruled out - Suppression is contradictory to confusion and the same is inapplicable without there being any act of the assessee which amounts to suppression of facts - Mere failure to ascertain exclusion part of Rule 9(1)(b) is not an act of suppression or collusion by the assessee - Moreover, since the supplementary invoice is issued by the coal companies which are Govt undertakings, no suppression or collusion can be presumed - Hence the denial of credit is not justified: CESTAT (Para 1,5,6,7)
- Assessee's appeal allowed : DELHI CESTAT
CUSTOMS
2018-TIOL-2316-HC-MUM-CUS
Lanvin Synthetics Pvt Ltd Vs UoI
Cus - This Petition has been filed, seeking directions to Customs i.e. Respondent No.2 to hand over all the documents pertaining to 41 Advance Licenses along with certificate that same are lost or misplaced - This, as the Office of Jt. Director of Foreign Trade-Respondent No.3 has called for the same, so as to re-validate the 41 Advance License - Besides, the Petitioner seeks a certificate of the duty-foregone on the aforesaid 41 Advance License - When this Petition was being heard by court, Respondent No.3 filed an affidavit in reply of Mr. Jai Pal, Dy. Director General of Foreign Trade - The affidavit of Mr. Jai Pal, inter alia, refers to the fact that out of these 41 Advance Licenses which are subject matter of this Petition, 29 licenses had been cancelled by Dy. Director General of Foreign Trade on 24th February, 1997/9th April, 1997 - The affidavit also refers to the fact that the order dated 24th February, 1997/9th April, 1997 have been challenged and an appeal by the Petitioner before the Additional Director General of Foreign Trade is pending - Thus, the re-validation of the 29 Advance Licenses which are a part of 41 misplaced licenses would primary depend upon the result of the appeal filed by the Petitioner - Only then the question of the Licenses being produced would arise - Needless to state that if the hearing of the appeal is being held in New Delhi, than the reasonable time would be given to enable the Petitioner to present itself before the Appellate Authority at New Delhi - The Appellate Authority will decide the above Appeal from the order dated 24th February, 1997/9th April, 1997 on its own merits without being influenced by any averments made in the affidavit of Mr. Jain Pal, dated 23rd October, 2018 or any observations by this Court in this order: HC
- Petition allowed : BOMBAY HIGH COURT
2018-TIOL-2315-HC-MUM-CUS
Tara International Vs UoI
FTDR - The grievance of petitioner is that the impugned order dated 20th December, 2017 is in breach of the principles of natural justice - This is for the reason that submissions raised and case law relied upon by petitioner in support of its case have not been considered by Appellate authority while dismissing the appeal - Thus a non speaking order - The petitioner in its written submission have besides making submission on merits made an alternative submission that even if there has been a breach, the same was a merely procedural lapse and penalty in such facts would not be justified - It is evident that submissions of petitioner made in support of its case have not been considered while disposing of the appeal - Thus, leading to a flaw in the decision making process - Thus, the impugned order is quashed and set aside - The petitioner's appeal to the Additional DGFT is restored to his file for disposal in accordance with law after following the principles of natural justice: HC
- Petition disposed of : BOMBAY HIGH COURT 2018-TIOL-3314-CESTAT-DEL
Techno Export Vs CC
Cus - The assessee imported a consignment of 'cooling pads' classifiable under CTH 4823 - Upon examination, the goods were found to be as declared - However, the Department alleged that the value of the consignment had been mis-declared - The Department based such belief on the fact that similar goods imported during the same period had a considerably higher value - Hence the Department enhanced the value declared by the assessee - Such valuation was accepted by the assessee - Demand for additional amount of duty was raised with penalty u/s 112(a)(ii) of the Customs Act - Such findings were upheld by the Commr.(A).
Held - The Department rightly applied Rule 5 of the Customs Valuation Rules since substantial evidence was on record to show that the consignment was misdeclared & also considering that the assessee agreed to enhancement of import price - However, the Department ought to have considered the lower range of the contemporaneous import price, when enhancing the import value - Considering such circumstances as well as the decision of the Apex Court in Paul Industries (India) Ltd. vs. Union of India the matter warrants remand for re-calculation of duty after considering the lower range: CESTAT (Para 1,5,6,7)
- Assessee's appeal partly allowed : DELHI CESTAT
2018-TIOL-3313-CESTAT-MAD
Minera Steel and Power Pvt Ltd Vs CC
Cus - The assessee exported some quantity of iron ore lumps - Upon payment of export duty, the goods were cleared for export u/s 50 of the Customs Act 1962 - On the same date, Notfn No 79/2008-Cus was issued whereby the rate of export duty was raised to 15% ad valorem per MT - Duty demand was raised for differential amount & was upheld by the Commr.(A).
Held - Considered provisions of Section 25(4) of the Act - As per information sourced under the RTI Act, the notification was sent to the Department after two weeks from the date of export - Hence the notification cannot be deemed to have come into effect two weeks earlier - Such an issue has been settled by the Apex Court in Union of India Vs. Param Industries Ltd. - Following such decision, it is held that the notifcation was not in force on the date of export - Hence the assessee cannot be compelled to pay the differential duty: CESTAT (Para 1,6,7,9)
- Assessee's appeal allowed : CHENNAI CESTAT |
