SERVICE TAX

2018-TIOL-2474-HC-MUM-ST + Case Story

Bhushan Bal Kulkarni Vs Assistant Commissioner Service Tax

ST - VCES, 2013 - Revenue cannot recover any tax without authority of law - Once the applicant had already paid a part amount of the ‘unpaid tax dues', Assistant Commissioner ought to have considered the correct figure of tax dues - Amendment of declaration should have been allowed - that the amendment application had to be filed in a particular format is not forthcoming and even if so, the same would be a purely procedural aspect - order of Asstt. Commissioner rejecting the declaration and ordering recovery of the declared sum with interest and penalty would amount to recovering the entire amount of Rs.4,73,527/- although Rs.1,32,841/- has already been paid - impugned order set aside and the authority directed to grant the benefit of the VCES, 2013 to the petitioner - Petition disposed of: High Court [para 7 to 9]

- Petition disposed of : BOMBAY HIGH COURT

A V R Storage Tank Terminals Pvt Ltd Vs CCT

ST - The assessee is engaged in the warehousing of bulk liquid cargo - During period of dispute, it availed Cenvat credit of the service tax paid on security services for the security guards hired, lift maintenance and under reverse charge mechanism for the services of CA - The Department challenged such availment of credit on grounds that the services had been availed by two firms located in the same office complex - The Department opined that the assessee was entitled to only 1/3rd of the service tax paid on these two services - The Department also held that the services of a CA are not covered under Reverse Charge - Duty demands were raised by invoking extended limitation, for recovery of credit & demands for interest were raised as well - Penalties were also imposed.

Held: The Cenvat credit availed on service tax paid under reverse charge for sCA services availed, the same may be disallowed since there is no provision for payment of service tax under reverse charge for this service - Regarding the other two services, they had been commissioned by the assessee, who also paid the entire service tax amount - However, considering the nature of these services, other entities located in the assessee's vicinity also benefitted from them - This does not dilute the utility of these services for the assessee or the nexus with the assessee's output service - Moreover, the Revenue cannot vivisect & deny partial amount of credit on some services on grounds that somebody else also benefitted from them - Hence the credit cannot be denied - The demands are unsustainable and must be set aside: CESTAT (Para 1,5)

- Assessee's appeal allowed: HYDERABAD CESTAT

Solaris Chemtech Ltd Vs CCE & ST

ST - The assessee is engaged in manufacture of excisable goods and are availing input service credit but not providing any output service - Rule 3(4)(e) of CCR, 2004 provides that CENVAT credit can be utilized for payment of service tax on any output service - Hence, the CENVAT credit utilized by assessee for paying service tax on GTA service becomes irregular, thereby resulting in contravention of provisions of Rule 3(4)(e) of CCR - It is noticed that the actual amount utilized by assessee for discharging service tax on GTA service, education cess and Higher & Secondary Education Cess which has been paid by assessee on being pointed by departmental officers and the amounts paid by assessee is regularized - On these allegations, a SCN was issued to assessee demanding interest and penalty - Issue is no longer res integra and stands settled by Larger Bench decision of Tribunal in case of Panchmahal Steel Ltd. - 2014-TIOL-510-CESTAT-AHM-LB wherein the Larger Bench has considered decisions of various High Courts and held that credit availed for manufacturing activities could be used for payment of service tax on GTA service even if input services or capital goods were not utilized for providing taxable services inasmuch as there was no bar/restriction for such utilization of CENVAT account under Rule 3(4)(e) of the CCR - The Revenue has taken this case to the High Court of Gujarat and High Court of Gujarat has dismissed the appeal of Revenue - The impugned order is not sustainable in law and therefore, the same is set aside: CESTAT

- Appeal allowed: BANGALORE CESTAT

CENTRAL EXCISE

2018-TIOL-3580-CESTAT-MAD

Bay Forge Ltd Vs CCE

CX - Assessee is manufacturer of steel forgings, aluminium rings and end-cutting scraps - Proceedings against assessee have been initiated predominantly for the reason that their suppliers of raw materials, BHEL and L&T Ltd. have not submitted undertaking as required under job work Notfn 24/86-CE - However, assessee have otherwise complied with the requirements of said notification as applicable to them - Even impugned SCN narrates that assessee have "undertaken job work"; that raw materials had been sent by various parties under "job work challans"; that they had returned the resultant products to suppliers concerned and collected "job charges" from them - No doubt, original authority has found fault with the assessee for not having produced confirmation from L&T and BHEL with regard to receipt of goods from assessee and the further use that they had been subjected to - Assessee has however pointed out that they had already produced letter from L&T, a copy of which is found on page 37 of the paper book - The said letter confirms that goods have been received back from assessee and that the same had undergone further manufacture at their end and the final products have been cleared as per the details given in that letter - This being so, all the conditionalities and requirements of Notfn 214/86-CE have been substantively complied with both by the principal manufacturers as well as by assessee - Non-submission of undertaking by principal manufacturers should then be considered as a curable defect - In any case, such undertakings have been subsequently filed by said suppliers - T he impugned order cannot sustain and therefore set aside: CESTAT

- Appeal allowed: CHENNAI CESTAT

Surya Life Science Ltd Vs CCE

CX - The assessee company is a 100% EoU - The assessee submitted ER-II returns during the relevant AY - The Department alleged that the assessee exceeded its limit of DTA clearance - Hence duty demand was raised after invoking extended limitation - The assessee claimed that extended limitation is not invokable since all clearances to DTA & for export had been declared.

Held: The Gujarat High Court in CCE & Cus. vs. Anita Synthetics Pvt. Limited held that deemed exports cannot be clubbed for purposes of calculating clearances in DTA - From the SCN in the present case, it is seen that it is based on returns filed by the assessee - The assessee disclosed the entire clearances to the Revenue - Hence no suppression of facts or mis-declaration cannot be alleged - It is the Revenue's failure to detect the assessee's mistake - Moreover, it is settled law that extended limitation cannot be invoked where B-17 Bond has been furnished - Hence the demands & penalties are set aside: CESTAT (Para 2,3,5,6,7)

- Assessee's appeals allowed: AHMEDABAD CESTAT

Raasi Refractories Ltd Vs CC, CE & ST

CX - During verification of records and books of accounts, it was noticed that assessee has recorded some amounts as received from sale of steel scrap/miscellaneous scrap and Grog - As regards to duty liability on the clearances of scrap arising out of MS Plates, Moulds and Liners, assessee has been taking a consistent stand before Revenue Authorities that this scrap arose during maintenance and repair wornout parts of machinery and during maintenance in workshop - Apex Court in the judgment of Grasim Industries - 2011-TIOL-100-SC-CX held that such scrap is not dutiable - In view of foregoing, demand of duty liability on MS scrap that arises during the repair and maintenance, issue is squarely settled in favour of assessee - Accordingly, the demand with interest thereof and penalties imposed are unsustainable - As regards the demands raised on assessee on the clearances of Grog, confirmation of such demand is correct as assessee is not able to produce any evidence to claim that such Grog cleared by them were non-duty paid and received from open market - In the absence of any such records, assessee is not able to justify his claim that they are not required to pay duty on "Grog" - Accordingly, lower authorities were correct in confirming the demand along with interest and impose penalties: CESTAT

- Appeal partly allowed: HYDERABAD CESTAT