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SERVICE TAX
2018-TIOL-3546-CESTAT-MAD
Thiagarajar Mills Ltd Vs CCE
ST - Assessee is engaged in manufacture and export of cotton yarn - In terms of provisions of Rule 5 of CCR, 2004, they filed the refund claim - The Revenue objected to the said refund claims on the ground that the credit relates to various Port Services, Courier Services and GTA Services, which are post removal services and for which the service tax credit cannot be allowed - Accordingly, proceedings were initiated for denial of refund claim - As is clear, the refund claim filed in terms of Rule 5 but the adjudicating authority submits that the same cannot be equated with the refunds under Rule 5 and the benefit of Notfn 41/2007-ST is required to be examined - Similarly, Commissioner (A) in his impugned order has observed that assessee filed a refund claim for such credit lying unutilized in their credit account, under Rule 5 of CCR, 2004 - It was not open to the adjudicating as also to appellate authority to go for the alternative availability of Notfn 41/2007-ST and decide the issue in terms of said notification, instead of deciding the refund claims in terms of Rule 5 under which the same were filed - Even though, assessee submits that Notfn 41/2007-ST also grants relief to the assessee, inasmuch as, the period of limitation provided in terms of the said notification for filing refund claims was subsequently extended, such refunds are otherwise admissible in terms of Rule 5 - There is no exemption applicability to Notfn 41/2007-ST - Both the appeals allowed on legal issues and remanded to original authority to examine the documentary evidences in support of the refund claims of assessee for due consideration: CESTAT
- Matter remanded: CHENNAI CESTAT
2018-TIOL-3545-CESTAT-MAD
Southern India Engineering Manufacturer's Association Vs CC, CE & ST
ST - Revenue demanded service tax from assessee on various grounds - With regard to Sale of space for Advertisement Services, it was submitted that sale of space for advertisement was meant for journal, which was published and circulated amongst assessee’s members alone and is not sold / available outside - Therefore, what was covered in taxable service definition after the amendment being only advertisement in business directories, yellow pages and trade catalogues which are primarily meant for commercial purposes and not books - Hence, the advertisement by other entities in the journal will no way alter the position that it is a book, which is excluded from the definition of taxable service - Hence, the advertisement charges collected by them during the period of dispute would not attract service tax as the same is clearly excluded from definition of taxable service - He humbly prayed that demand of service tax on Advertisement charges collected by them is set aside - With regard to Renting of Immovable Property Services, it is submitted that same issue was under serious litigation before various judicial forums and, therefore, it was too premature to say that there was any service element - The law, as amended from 01.06.2007, till the further amendment by Finance Act, 2010, saw multiple litigations, but, however, assessee submits that he is not pressing for demand at the moment while he pleads for deletion of penalty - With regard to Membership of Club or Association Service, assessee submits that Association and Members are not two different entities and, therefore, association is not liable to pay service tax since there is no service provider and service recipient; it is only on mutuality concept that the association is run - In support, assessee relies on recent decision of this Bench of Tribunal in case of Cosmopolitan Club 2018-TIOL-2739-CESTAT-MAD - Issue has been gone into depth by Bench in said decision and therefore following the ratio decidendi of decision, this ground of the appeal allowed by following the decision with consequential reliefs - With regard to Business Support Services, Convention Services and Management Consultant Services, assessee submitted that though the issue involves complexity, he does not press the demands, but only request for setting aside the penalties and interest - Undoubtedly, the issues involved intricacies, complexities and some of the issues are still being litigated elsewhere - Demand on these four items confirmed, but, however, set aside the penalties: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
2018-TIOL-3544-CESTAT-MUM
FCB Ulka Advertising Pvt Ltd Vs CCGST
ST - Appellant contending that although the tax liability had been discharged in full but owing to certain errors in computation, liability to tax had been incorrectly determined by original authority; that despite this being pointed out, the Commissioner(A) was disinclined to consider the same on the ground that he was precluded from admitting aspects not raised before adjudicating authority - appeal to CESTAT.
Held: Any gap or lack of rationale in the finding can be subjected to challenge only in appellate process - submission of counters to the findings of the adjudicating authority are not ‘fresh evidences' envisaged in Central Excise (Appeals) Rules, 2001 - as the details produced by the appellant before the lower appellate authority and before the Tribunal strike at the very root of the demand for tax which cannot but be a computation liable to be countered by an alternative computation - impugned order is set aside and matter remanded to the first appellate authority to consider factual submissions and passing of order within three months: CESTAT [para 4, 5]
- Matter remanded: MUMBAI CESTAT
CENTRAL EXCISE
2018-TIOL-2465-HC-MUM-CX + Case Story
CCGST & CE Vs Hindustan Petroleum Corporation Ltd
CX - Whether the issue of a demand being time barred is an issue relating to the assessment of goods and, therefore, an appeal under Section 35G of the Act, is not maintainable - conflict of views - Matter referred to Larger Bench: High Court [para 12, 14, 15]
- Reference to Larger Bench: BOMBAY HIGH COURT 2018-TIOL-3543-CESTAT-MAD
Technoweld Alloys India Pvt Ltd Vs CC
CX - The assessee is engaged in manufacture of engineering goods used in cement, sugar plants and thermal power stations duly registered with Central Excise authorities - They only manufacture part of goods for the main contractors who undertake design, supply erection and commission of the cement, sugar or thermal power plants - Whether the designs and drawings supplied by assessee's customers to be includible in assessable value of final products - 'Designs and drawings' are undoubtedly supplied by assessee's customers, a sample of which has been placed at appeal paper book and also another document which incorporates commercial terms and conditions - From this, only possible inference is that designs and drawings were intended not to be valued because the customer wanted it that way and perhaps without even a minor change - Admittedly, the design and drawing is not shown as a separate excisable goods in invoices and it is not the case of Revenue that with reference to its value both the drawing and final products are removed - The process undertaken by assessee is only the manufacture of sheet metal components which involve only cutting and welding of MS plates and thereafter cutting them to the required specification of its customers and as pleaded by assessee, this does not require any specialized drawings but for the dimensions of components - The drawings supplied by customers being only dimensions of components could therefore have no value - Based on submissions of assessee, that the drawings do not contain any technical details and therefore they are mere transcriptions of the dimensions of the parts of components - This view is supported by a decision of Mumbai Bench of Tribunal in Bharat Forge Ltd. and the decision of Allahabad Bench of Tribunal in Berry Auto Ancillaries Pvt. Ltd. - No justification found to hold that the cost of drawings supplied by customers is required to be included in assessable value of the final product - Tribunal do not intend to go into the quantifications of cost of drawings, which was without prejudice to his main contentions of the very includability of cost of drawings, since Tribunal have held that the same is not includable: CESTAT
- Appeal allowed: CHENNAI CESTAT
2018-TIOL-3542-CESTAT-MUM
Zinta Food And Beverages Vs CCE
CX - Appellant manufacturing packaged drinking water under their own brand name as well as of another person - SSI exemption under notification 8/2003-CE availed in respect of own branded goods whereas duty paid on branded goods of another person - During the period May 2008 to August 2008, credit availed of Rs.24,805/- in respect of service tax paid on service of testing of water/repairs and maintenance of plant and machinery and the same was utilized for payment of duty - Revenue entertained a view that since credit was availed on Input services, SSI exemption is not admissible and accordingly CE duty demanded - Appellant submitting that they have reversed the entire credit availed with interest and, therefore, it has to be held as if no credit was taken; that the exemption is available - rejecting these claims, demand confirmed by the lower authorities of Rs.3,58,256/- along with interest and equivalent penalty - appeal to CESTAT.
Held: Issue is no more res integra and stands settled by various decisions namely Hello Minerals Water (P) Ltd. - 2004-TIOL-57-HC-ALL-CX, Ashima Dyecot Ltd., - 2008-TIOL-659-HC-AHM-CX wherein it is held that reversal of MODVAT/CENVAT amounts to non-taking of credit and as such, benefit of exemption notification cannot be denied on the ground that such reversal was done at a later stage - since the issue stands decided in favour of the appellants, impugned order set aside and appeal allowed with consequential relief: CESTAT [para 5, 6]
- Appeal allowed: MUMBAI CESTAT
2018-TIOL-3541-CESTAT-MAD
Terex India Pvt Ltd Vs CGST & CE
CX - Assessee is engaged in manufacture of crushing machines and screening machines - During verification, it was noticed that they have availed CENVAT Credit of service tax paid in respect of Rent-a-Cab Services - It appeared to Department that said services are not eligible for credit as it falls within the exclusion Clause of definition of input services - SCN was issued proposing to disallow the credit and for recovery of same along with interest and for imposing penalty - After due process of law, Original Authority confirmed the demand, interest and imposed penalties - The services of Rent-a-Cab will not qualify as input service and will not be eligible for credit if motor vehicle is not a capital good for service provider - It can be seen from definition of capital goods that when the motor vehicle which is used for transporting of passengers or for renting of vehicles, is registered in name of service provider, the same would be a capital good for service provider - Thus, if the motor vehicles are capital goods for the service provider who is providing service of Rent-a-Cab / renting of cabs, then the said services would be eligible for credit - The said fact as to whether these vehicles are capital goods for the service provider requires verification - The matter, thus, remanded to the adjudicating authority: CESTAT
- Matter remanded: CHENNAI CESTAT
CUSTOMS
2018-TIOL-3540-CESTAT-BANG
George Pandicheril Vs CC
Cus - The appellants are the directors in a firm which is a unit in the Cochin Export Processing Zone - The firm was holding letter of permission - It imported two consignments & covering bills of entry were filed - The Department claimed that the unit had been incorporated to manufacture video shells and components, it did not commence operations - The Department then alleged that the firm attempted to clear such goods after expiry of letter of permission and that the firm had indulged in over-invoicing so as to derive undue benefits - The goods were confiscated and penalties were raised - The appellants filed the present applications for restoration of appeals on grounds that the notices of personal hearing had not been served to them.
Held: It is seen that the first and second appellants had resigned from the company long before the consignments were imported - Hence they cannot be said to have been in charge of affairs - There is no reason to penalize them & the only one given by the Department is that they made no attempt to obtain letter of permission extended - Hence they cannot be held responsible in any manner - Regarding the third appellant, the only reason to penalize him has been stated as being that he could not evade liability of non-performance of the unit - But there are no findings regarding his involvement in the import of the consignments - Hence penalty levied on him is unsustainable - Applications for restoration of appeals are upheld & penalties are set aside: CESTAT (Para 4,7,7.1)
- Applications allowed: BANGALORE CESTAT
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