SERVICE TAX

2018-TIOL-3348-CESTAT-BANG

ST - These two appeals, one by assessee and another by Department, have been filed against impugned order, whereby Commissioner (A) remanded the matter back to the lower authorities for de novo proceedings by giving certain directions - The assessee is a 100% EOU and is engaged in Business Process Outsourcing, Call Centre which are liable to service tax under BAS/BSS - For rendering the export service, assessee utilized various input services and has taken the credit of same and thereafter filed refund claim under notfn 5/2006 which was partially allowed by the sanctioning authority - Further, all the input services have been held to be input services by various case laws cited - The period involved in the present appeal is prior to 01/04/2011 where the definition of input service was very wide and exhaustive as held in various decisions - Therefore, by following the ratios of said decisions, impugned order rejecting the refund of Rs.72,26,910/- is not sustainable in law and therefore impugned order is set aside and held that the assessee is entitled to the refund of Rs.72,26,910/- along with applicable interest for the delay in grant of the refund - As far as Department's appeal is concerned, no merit found as all those input services against which the Department has filed appeal have been specifically held as input services by various decisions: CESTAT

- Assessee's appeal allowed: BANGALORE CESTAT

2018-TIOL-3347-CESTAT-BANG

ST - The assessee is seeking refund of service tax paid by them under mistake under category of health club and fitness center on the ground that they are not liable to pay service tax as the service has been rendered to its own members - It is an admitted fact by assessee that they have collected service tax from its own members and paid the same to the Government under the category of health club and fitness center - This particular service was in dispute for the earlier period and this Tribunal as well as High court of Karnataka have rejected the refund claim of the assessee - The High Court has distinguished some of the decisions relied upon by assessee in the present case - Since the assessee had not challenged the decision of High Court before the Apex court, said decision is binding on the Tribunal - The argument assessee that the decision of High court is per incuriam is not correct because the High Court has given reasons for denial of the refund - Further, refund is hit by doctrine of unjust enrichment - There is no infirmity in the impugned orders which are upheld: CESTAT

- BANGALORE CESTAT

2018-TIOL-3346-CESTAT-MAD

ST - The assessee is engaged in manufacture of sugar and molasses - The demand has been made on manpower supply service alleging that assessee have supplied manpower to the sugarcane farmers for sugarcane harvesting - The contention of department that the charges towards supply of cane harvesting labourers are recovered from the farmers at the rate accepted by the farmers and therefore the said activity would be covered within the definition of manpower recruitment or supply agency service under Section 65(68) of FA, 1994 - The assessee has replied to the SCN - It is explained by assessee that there is no employer and employee relationship between cutting labourers and the assessee - The assessee company has no say in the rate for cutting demanded by the labourers and the labourers have got every right to deny to cut for a particular sugarcane grower - The mill simply manufactures the sugar with regard to the availability of cutting labourers only - Being a Government undertaking, it can be seen that all appointments are to be made in muster roll of sugar mill - It cannot be said that the assessee have provided harvesting labourers to the sugarcane growers for harvesting the sugarcane - The Tribunal had considered the issue and held that the sugarcane growers themselves are encouraging the harvesting labourers and as a mere facilitation, the amount to be paid to these harvesters are deducted from the price of the sugarcane that is to be paid to the farmers - Commissioner (A) in a similar set of facts, in the assessee's own case, has set aside the demand - The demand cannot sustain, same is set aside: CESTAT

- Appeals allowed: CHENNAI CESTAT

CENTRAL EXCISE

2018-TIOL-3345-CESTAT-HYD

CX - The assessee manufactures Cement & paid duty at concessional rate under Notfn No 05/98-CE - Its premises were searched, stocks verified & statements were taken - The Department found some unaccounted amount of HDPE bags - Such goods were seized - The Department also noted there to be a shortage of Cement - Two files containing details of Cement manufactured & cleared were recovered - Papers containing details of bags purchased were also recovered - Scrunity of such records revealed suppression of manufacture of Cement - Duty payable was calculated - Such clandestine manufacture & removal was corroborated through recovery of slips from the residence of the assessee's MD as well as from supply of raw material by two entities - Thereafter, the MD of the assessee company was arrested - Duty demand was raised u/r 9(2) of CER 1944 r/w/s 11A of CEA 1944 with interest u/s 11AB and equivalent penalty u/s 11AC - Penalties were imposed u/r 173Q & 209A - Moreover the bags alleged to be unaccounted were confiscated -

Held - Considering the relevant findings of the Special Judge for Economic Offences, it is seen that the material relied in the judgment was the same as relied upon by the Revenue in the present case - Further, the Single Judge acquitted the MD - Thereafter, the Revenue's appeal against the acquittal was dismissed - It is seen that the law on the point of exoneration in criminal proceedings which requires standard of proof beyond all reasonable doubts, has to be considered as yardstick to come to the conclusion proceedings - In the present case, prosecution launched against the assessee & its MD was quashed - Hence the same set of evidence relied on by the Revenue cannot be accepted to sustain duty demands with interest & penalties - Hence the demands are set aside: CESTAT (Para 2-2.2,8-10)

- Assessees' appeals allowed: HYERABAD CESTAT

2018-TIOL-3344-CESTAT-CHD

CX - Assessee is engaged in activity of providing telecommunication service - For providing the service, assessee is using towers and shelters and also availing Cenvat credit on transportation of towers to the site - Revenue views that as these towers and shelters are immovable property, therefore, assessee is not entitled to avail Cenvat credit on transportation of towers to the site as well as towers and shelters - On towers and shelters, the larger bench of Tribunal in case of Tower Vision India Pvt.Ltd. 2016-TIOL-539-CESTAT-DEL-LB has held that the assessee is not entitled to avail credit on towers and shelters as it has become immovable property - Further, in the case of Vodafone Essar South Limited 2018-TIOL-2305-CESTAT-MAD , this Tribunal has entertained the view and observed that the extended period of limitation is not applicable - Therefore, the demand pertaining to the extended period of limitation is not sustainable and no penalty is imposable on assessee - With regard to the availment of Cenvat credit on transportation of towers at site as input service, similar issue has been dealt in case of Vodafone Essar South Ltd. - As it is fact on record that the assessee is providing telecommunication service and for providing the service, the input service is used for erection of towers, he has availed credit on transportation of towers to site as input service and without transportation of towers upto site, the assessee is not able to provide such service - In that circumstance, the assessee is entitled for Cenvat credit on transportation of towers as input services: CESTAT

- Appeal disposed of: CHANDIGARH CESTAT

2018-TIOL-3343-CESTAT-MAD

CX - Assessee is engaged in manufacture of plastic articles and availing the facility of CENVAT credit of service tax paid on various input services - They decided to restructure their activities of manufacturing business for which they had engaged management consultants - The Head Office of assessee which is an ISD distributed the credit to assessee units situated at Faridabad and Puducherry - Department was of the view that assessee is not eligible to avail credit on management consultancy services as these services do not have nexus with the manufacturing activity - The period involved is 2008 - The definition of input service prior to 1.4.2011 had a wide ambit as it included the words "activities relating to business" - This apart, the inclusive part of the definition itself mentions the word "financing" - The Tribunal in case of Tamilnadu Petroproducts has observed that since financing finds a mention in the list of examples given in Rule 2(l), such services definitely would fall within the definition of input services and could be eligible for credit - The assessee have availed the services of M/s. Ambit Corporate Finance Ltd. for the purposes of selling their automotive component division to raise funds - Raising funds is nothing but obtaining finance for assessee company - Such activity is definitely integrally connected to the manufacturing activity of the company - In any case, it would fall within the cover of activities relating to business of manufacture - The denial of credit is unjustified, impugned order is set aside: CESTAT

- Appeal allowed: CHENNAI CESTAT

CUSTOMS

2018-TIOL-3342-CESTAT-MAD

Cus - The issue is with regard to the refund claim filed by assessee for refund of security deposit made by them - While the adjudicating authority had imposed a penalty and also gave an option to the assessee to redeem the goods by paying redemption fine, assessee have however not opted to redeem the goods and therefore have not filed any appeal against such order - They then filed a refund claim for the balance amount after adjusting the penalty - That has been rejected by department stating that the adjudicating authority has not stated in the order as to how the balance of Rs.1,10,000/- has to be adjusted - The adjudicating authority has correctly imposed redemption fine as well as penalty - Only after passing the order, assessee can chose to redeem the goods or waive the option to redeem the goods - In such circumstances, after passing the order, assessee has chosen not to redeem the goods and filed refund claim for balance security deposit - The security deposit is not in the nature of duty or interest - It is only an amount paid by assessee as a security for the dues that may arise in case of adjudication proceedings - Since the assessee has not opted to redeem the goods, the balance amount after adjusting the penalty has to be returned to the assessee - The rejection of refund claim is unjustified: CESTAT

- Appeal allowed: CHENNAI CESTAT