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SERVICE TAX
2018-TIOL-3550-CESTAT-MAD
Golden Ventures Vs CCE & ST
ST - The assessee, a partnership firm engaged in construction business, procured land from the owners - It entered into two agreements, one for sale of undivided share of land & the other for construction of flats for each buyer - After construction of flats, sale deed for sale of undivided share of land were registered, after which the constructed flat was handed over to the buyer - Such sale deeds excluded value of constructed flat - During the period of dispute, the Department raised duty demand with interest & penalties on grounds that the assessee's activcities were taxable u/s 65(105)(zzzh) r/w Section 65(91a) of the Finance Act 1994 - The assessee claimed that the flats were constructed for its own use, but such contentions were brushed aside.
Held: A perusal of the provisions of Section 65(91a) clarifies that what is excluded is only a person who directly engages any other person, far from the construction of such complex, which is intended for his personal use as residence - Also that the assessee built 106 units shows that the complex is not the for assessee's personal use - Also, the same bench in CCE .Vs. M/s. Lancy Tanjore Power Co. Ltd., held that the definition u/s 65(91a) specifically excluded construction undertaken for personal use, including permitting the use of such complex as residence by another person - The court found that the activities of the assessee therein came within such exclusion & so set aside the duty demanded - Thus in the present case, there appears to be no service tax liability - The agreement for sale of undivided share of land is not a taxable event - Hence no service tax liability can be fastened onto the assessee: CESTAT (Para 1,11,12,15,16)
- Assessee's appeal allowed: CHENNAI CESTAT
2018-TIOL-3549-CESTAT-MAD
Digital Magic Visual India Ltd Vs CST
ST - Assessee is providing courses through Digital Magic Animation Academy (DMAA) in Drawing, Clay Modelling, Matte Printing, Animation and Visual Effects, Still Motion Photography and Acting - They were claiming exemption from service tax liability under Vocational Training vide Notfn 24/2004-ST - Department took the view that said activities would not amount to improving the technical skills of trainees and hence, they are not eligible for the said Notification - As per Notfn 24/2004, service tax leviable under Commercial Training and Coaching Services are exempted for Vocational Training Institute which provides vocational training or coaching that imparts skills to enable the trainee to seek employment or undertake self-employment directly after training or coaching - It is obvious that courses offered by assessee satisfied the requirements of Notfn 24/2004 - The relevant brochure has also been adduced to show that the trainees who have been provided vocational training were able to secure jobs subsequently - In any case, the requirement of the courses being those designated under The Apprentices Act, 1961 cannot be applied to the period of dispute since the concerned Notfn 03/2010 was issued subsequently - In the event, Tribunal find in favour of assessee in respect of the dispute concerning demand with interest thereon.
Coming to the issue of penalty, assessee paid up the amounts of demand towards wrong credit taken and interest on delayed payment of Rs. 1,28,241/- by cheque on 23.06.2009, the short payment of Rs. 87,905/- and the interest liability thereon of Rs. 1,19,091/- also by challan dt. 23.06.2009 - This being so, except for the demand arising out of Video Tape Production Services, the tax liability was paid up by the appellant - There are some mitigating factors in respect of these demands and it is therefore ordered that there shall be no penalties in respect of these demands confirmed.
However, coming to the demand on Video Tape Production Services, they had collected service tax from their customers - Assessee has also conceded the liability and hence, it is ordered that based on the exact quantum of tax liability, equal penalty shall be imposed pertaining to the amount arrived in the remand for re-quantification, i.e., whether Rs. 16,29,611/- or Rs. 14,60,620/- - The equal penalty under Section 78 shall be applicable in respect of the this demand - No interference is also made with respect to the penalties imposed under Section 70 and 77 of the Act: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
CENTRAL EXCISE
2018-TIOL-3548-CESTAT-MAD
Deccan Alloys Pvt Ltd Vs CCE
CX - Assessee is engaged in manufacture of Hot Rolled Steel Product on their own account and also on job work basis - They had availed cenvat credit on furnace oil which was used for reheating the ingots / billets used in manufacture of finished goods manufactured - Department took the view that assessee since manufactured both dutiable and exempted goods, either has to maintain separate accounts for common inputs or input services or pay at appropriate rates on the value of exempted goods in terms of provision of Rule 6 of Cenvat Credit Rules - The adjudicating authority has found merit with the arguments of assessee that Notfn 214/86-CE is not an exemption Notification but it is merely postponing payment of duty at the time and removal of finished goods by principal manufacturer - However, having come to this conclusion, adjudicating authority has held that there is yet another condition that input should be used by manufacturer of final products, and has held that since assessee is not manufacturer of final products, the credit availed on furnace oil used by them for job work basis cannot be allowed since the same are not used for final products of assessee - Adjudicating authorities have gone beyond the scope of SCNs - On this very ground, impugned orders will suffer from infirmity of having gone beyond the scope of SCNs and applying the ratio laid down in Ballarpur Industries Ltd. - 2007-TIOL-153-SC-CX , H.S. Nataraj Tube Products of India Ltd. and in Varsed Detective & Security Pvt. Ltd. - 2017-TIOL-3239-CESTAT-DEL, impugned orders cannot be sustained - Even on merits, matter is amply covered by Tribunal in Federal Mogul Goetze India Ltd. - 2012-TIOL-2161-CESTAT-BANG where inter alia, it was held that Notfn 214/86-CE, though issued under Section 5A of CEA, 1944, is not per se an exemption notfn - Impugned orders cannot then sustain and same are set aside: CESTAT
- Appeals allowed: CHENNAI CESTAT
2018-TIOL-3547-CESTAT-ALL
CC, CE & ST Vs Sri Jaibalaji Ispat Pvt Ltd
CX - The assessee company is engaged in manufacturing MS Ingots - Pursuant to audit the Department asked the assessee to declare its input-output ratio - Thereafter, statements were taken from the employees - Based on such material, the Department alleged that the assessee suppressed production for the periods in dispute - SCNs were issued proposing to raise duty demand - However, the adjudicating authority dropped the proposed demands on grounds that the input-output ratio could never be adopted for alleging clandestine manufacture, clearance or suppression of production, more so when other corroborative evidence was missing.
Held: The adjudicating officer correctly held that clandestine removal could not be alleged based on input-output ratio & it had to be proved using tangible evidence such as grade and purity of sponge iron, grade and purity of scrap, the metallurgical process adopted for production, the power supply conditions - Moreover the onus of producing such evidence lay on the Department, which it failed to fulfil - Hence the order in question does not warrant intervention: CESTAT (Para 1,3,5)
- Revenue's appeal dismissed: ALLAHABAD CESTAT
CUSTOMS
NOTIFICATION
dgft18pn050
Procedure for allocation of quota for import of (i) Calcined Pet Coke (0.5 Million MT per annum) for Aluminium Industry and (ii) Raw Per Coke (1.04 Million MT) for CPC Manufacturing industry - regd
CASE LAW
2018-TIOL-3551-CESTAT-ALL
CC Vs Sachin Chemical Agency
Cus - The assessee company is engaged in importing Chalk-Natural Calcium Carbonate & selling the same in India - Samples were drawn but the CRCL laboratory admitted that it lacked the facility necessary to test Natural Calcium Carbonate - The Department sent the samples to the CRCL again, but this time the laboratory reiterated its inability to test the samples - Later, the Indian Bureau of Mines too expressed its inability to test the samples due to lack of equipment - Subsequently, the samples were sent to a private laboratory, which held the samples to be Natural Uncoated Ground Calcium Carbonate - The Department again sent the samples to CRCL despite its inability to test them - Thus the assessee had no option but to get the goods cleared upon payment of higher rate of duty - The assessee then filed a writ petition seeking re-testing of goods - Thereafter on remand directed by High Court, the Tribunal held that the samples be re-tested at any laboratory other than the CRCL - Meanwhile the Department attempted to recover the bank guarantee whilst doing nothing to get the samples tested - On appeal, the Commr.(A) directed the Department to test the samples at any lab other than CRCL.
Held: The Department presented Circular No. 43/2017 Customs dated 16.11.2017 which shortlists those items whose samples cannot be tested at CRCL - Natural Calcite Powder is one amongst them - This demolishes the Department's case: CESTAT (Para 1,3,4,6)
- Revenue's appeal dismissed: ALLAHABAD CESTAT
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