SERVICE TAX

2018-TIOL-3380-CESTAT-MAD

ST - The common dispute in all these appeals concern taxability on amounts received by assessee towards renting of immovable properties such as commercial complex, shops and lands to various parties - The lower authorities have confirmed the demands of service tax with interest on such amounts under the head Renting of Immovable Property and have also imposed penalties under various provisions of Finance Act, 1994 - The ratio laid down by High Court of Delhi in Home Solutions Retails India Ltd. 2011-TIOL-610-HC-DEL-ST-LB has been consistently followed by this Bench in all recent decisions - Nonetheless, it cannot be ignored that in a subsequent development, vide their order dated 5.4.2018 in the matter relating to UTV News Ltd. 2018-TIOL-124-SC-ST , the Supreme Court has gone into the question whether levy of service tax under section 65(105)(zzzz) ibid is within the legislative competence of Parliament or otherwise - Discernibly, Supreme Court has found it proper to defer decisions in these matters awaiting the judgment of nine Judge Bench in Mineral Area Development Authority and Others - Viewed in this light, in the interests of justice, all these appeals should be kept in abeyance pending the decision of Supreme Court in all the three cases, since the final outcome therein will have a translational impact and affect the decision in all such matters as covered in these appeals: CESTAT

- Appeals disposed of: CHENNAI CESTAT

2018-TIOL-3379-CESTAT-MAD

ST - The issue at hand pertains to duty demands raised on the assessee for renting of immovable properties such as commercial complex, shops & land to various properties - Demands for interest were raised as well & penalties were imposed.

Held - The decisions of the Delhi High Court in Home Solutions Retails India Ltd. Vs. Union of India and in Ritika Pvt. Ltd. are applicable to the present case - These judgments have been admitted by the Apex Court - However the operation of these decisions was not stayed - However, in Union of India Vs. UTV News Ltd. the Apex Court delved into whether or not service tax levied u/s 65(105)(zzzz) is within the legislative competence of Parliament - The Apex Court thought fit to defer these judgments, considering that the decision of the nine-judge bench was pending in the case of Mineral Area Development Authority and Others Vs. Steel Authority of India Ltd. - Hence it is fit to keep the present appeals in abeyance till the Apex Court renders its decisions in the three cases: CESTAT (Para 1,5.1-6)

- Case remanded: CHENNAI CESTAT

CENTRAL EXCISE

2018-TIOL-3382-CESTAT-HYD

CX - Assessee is manufacturer of wafers with a cream layer made out of cocoa powder, sugar, flavour, emulsifiers and hydrogenated vegetable fats and they sell the same as choco-dipped wafer layers and wafer covered with delicious chocolate layer - According to assessee, these goods are classifiable under CETH 1905-32-19, while the Department wants to classify it under tariff heading 1905-32-11 - The department sought to classify the wafers as wafers coated or containing chocolate in view of explanatory notes to the HSN in chapter heading 18.06 which says, "chocolate is composed essentially of cocoa paste and sugar or other sweetening matter, usually with the addition of flavouring and cocoa butter; in some cases, cocoa powder and vegetable oil may be substituted for cocoa paste - The first issue is, whether the classification can be based on Statutory definition in another law viz., Prevention of Food Adulteration Act, 1954 which describes standards for a product to be sold as chocolate - This issue is no longer res integra in view of decision in case of Connaught Plaza Restaurant (P) Ltd. 2012-TIOL-114-SC-CX - As far as the classification of material in question is concerned, Chapter 19 does not deal with the definition of chocolate although it refers to wafers containing chocolate and other wafers - Neither it mandates to have cocobutter in the mixture for it to be chocolate nor is there any prohibition on the use of vegetable fat other than coco-butter in the mixture for the material to be classified as chocolate - Thus, the material in question is classifiable as chocolate - The next question is whether the wafers can be said to be containing chocolate if chocolate is only present between the two thin layers and not integrated into the wafer itself - It is not necessary that a wafer to be called so, has to consist of only one layer - What the assessee is selling and what is sought to be classified is a wafer containing more than one layer - It is never in dispute that what they are selling are wafers and that they contain cocoa and other ingredients - There is nothing in the Central Excise Tariff or in the HSN which mandates the chocolate to be incorporated in the batter of the wafer or into any particular layer - Thus, no force found in the argument that for the wafer to contain chocolate it has to be integrated into any specific layer of the wafer - The products manufactured by assessee are classifiable under 1905-32-11: CESTAT

- Appeals dismissed: HYDERABAD CESTAT

2018-TIOL-3381-CESTAT-MUM

CX - Dispute relates to whether the furniture manufactured by the appellant would attract Central Excise duty or not - appellant was not paying CE duty by treating the same as ‘handicraft' - in denovo proceedings, Commissioner has again upheld the demand by invoking the extended period of limitation - Tribunal has granted relief to the appellant on the limitation aspect, as reported at - 2015-TIOL-2785-CESTAT-MUM - inasmuch as the appellants have already been held to be entertaining a bonafide belief in their other matters involving different periods, Bench is not inclined to take a different view in the present case - by holding the demand as barred by limitation, impugned order set aside and appeal allowed with consequential relief: CESTAT [para 4, 5]

- Appeal allowed: MUMBAI CESTAT

CUSTOMS

2018-TIOL-3378-CESTAT-MAD

Sri Krishna Logistics Vs CC

Cus - The assessee, a holder of Customs Broker licence was permitted to operate in Chennai as well as in Coimbatore - A complaint was filed by M/s. Niti Traders, Mumbai regarding misuse of their IE Code by third parties in Chennai Customs without their consent or knowledge - Upon such complaint, SCN was issued to assessee stating that one of the Bills of Entry was filed by them - Thereafter, Prohibition Order was issued prohibiting the assessee from working in any sections of Chennai Customs station under the jurisdiction of Chennai Customs Zone - The foremost contention put forward by assessee is that the prohibition order cannot sustain for the reason that even in SCN, it is stated that assessee has obtained authorization letter given by M/s. Niti Traders - It is also his contention that after issuance of prohibition order till date no SCN has been issued under Regulation 20 so as to initiate proceedings for revocation of licence - Thus, the prohibition order has been continued for a long time without giving a specific period of prohibition - The assessee is thus prevented from functioning as a customs broker interminably which is equal to issuing a revocation of licence - The prohibition order issued without mentioning any specific period cannot sustain and is set aside - However, the department is at liberty to initiate proceedings under Regulation 20 of CBLR as per the provisions therein: CESTAT

- Appeal allowed: CHENNAI CESTAT