SERVICE TAX
2018-TIOL-3722-CESTAT-MUM + Case Story
Pallonji And Company Pvt Ltd Vs CGST & CX
ST – Excess payment of service tax consequent upon reduction in rate of contract and issuance of credit notes therefor – refund claim rejected on the ground of time bar – however, assessee was entitled to avail CENVAT credit of the excess tax paid in terms of rule 6(3) of STR, 1994 – Commissioner (A) ought to have acted like an adjudicating authority and not confined his findings to the order appealed - when there is no express provision made to meet such a contingency which is not contemplated in the procedure prescribed for such adjudication of tax disputes, spirit of provision of civil procedure may be brought into service for effective adjudication - it would not be irrational to invoke order 7 rule 7 of the Civil Procedure Code, which empowers a court to grant such other relief which may always be given, as a court may think just, to the same extent as if it has been asked for - appeal is allowed in part entitling the appellant to avail CENVAT credit for the refused refund claim of Rs.28,18,361/- - Order of Commissioner(A) is accordingly modified: CESTAT [para 5 to 8]
- Appeal partly allowed : MUMBAI CESTAT 2018-TIOL-3715-CESTAT-MAD
Mahindra Holiday And Resorts India Ltd Vs CGST & CE
ST - The assessee is engaged in providing Club or Association service - Pursuant to audit, it appeared to department that the assessee had received certain services such as Management Consultancy Service from various persons located outside India - It further appeared that expenses shown as "Branch Office Expense" in foreign currency were in relation to providing holiday facilities to their members - Rule 3 of Taxation of Service Rules, 2006 lays down the situations where taxable services provided from outside India and received in India will be treated as performed in India and value thereof will become exigible to service tax - The impugned services provided outside India will fall within the ambit of Rule 3(ii) - Para 4.2.8 of the Board Circular dated 19.4.2006 has clarified that to attract service tax levy, such services will be required to be physically performed partly or wholly in India - Even as per the SCN, it is alleged that the services provided in Thailand and other places are leviable to service tax since it is intended for members in India - Thus, department does not have a case that the impugned services are physically performed in India - All the services listed therein are such that they have not been physically performed in India, even partly, and have been so performed only outside the country, hence service tax liability thereon will not arise - In respect of branch expenses, the case law of Tech Mahindra Ltd. and 3i Infotech Ltd. relied upon by assessee will support their case - In the event, impugned order to the contrary cannot sustain and will therefore have to be set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2018-TIOL-3714-CESTAT-DEL
Mccann Erickson India Ltd Vs CST
ST - The controversy is regarding disallowance of appeal filed by assessee on the question of payment of Service Tax, by making use of Cenvat Credit account in respect of tax which became payable under Section 66A - It has been argued at length that Final Order has been passed without consideration of statutory provisions in proper perspective and without considering the various case laws on the subject - The final order is a detailed speaking order and has been passed only after taking note of all the written and oral arguments raised - It will not be proper to take the view that it has been passed summarily without considering the statutory provisions - The Tribunal has taken a view as reflected in Final Order only after cumulatively considering the statutory provisions, the findings of Adjudicating Authority as well as the arguments placed - It is not required to discuss at length each and every argument advanced - In any case it is to be recorded that the appeal was argued by a different counsel at the time of hearing of appeal and the arguments in precise form and detail along with case laws presently advanced were never made before the Bench - When the present Miscellaneous Applications are considered in the light of the ratio laid down in Stock Exchange Ltd, it cannot be said that there is an error apparent on the face of record - No doubt two views are possible on any dispute and it will be improper for the present Bench to reopen the matter already decided by a different Bench as has been held by Supreme Court in the case of Vikramjit Singh - Assessee through ROM has attempted the review of the Final Order already passed which is not permissible in the guise of rectification of mistake - No merit found in the ROM application and the same is dismissed: CESTAT
- Appeal dismissed: DELHI CESTAT
2018-TIOL-3713-CESTAT-MAD
Mitsuba Sical India Ltd Vs CST
ST - The assessee is manufacturer of wiper motor, link assembly and windshield washer pump assembly, starter motor and AC Generator Assembly - They are registered with Service Tax Department for GTA services and Intellectual Property Services - The department was of the view that after amendment dt.10/5/2008 brought forth in Section 67 of FA, 1994, the assessee is liable to pay service tax on book adjustments made with regard to associate enterprises - The period is from 1/1/2007 to 31/12/2007, the explanation (c) to Section 67 of FA, 1994 provided that in respect of associate enterprises, service tax is required to be paid by the person liable to pay service tax on book adjustments also - However, the said amendment is applicable only from 10/5/2008 prospectively - The issue stands covered by decision in case of Sify Technologies Ltd. - 2011-TIOL-123-CESTAT-MAD - Following the same, demand of service tax in respect of royalty / technical know-how fees cannot sustain - In respect of demand of service tax under Consulting Engineering Service, assessee has paid the entire service tax before the issuance of SCN - The assessee is not contesting the liability to pay service tax on this issue and is confining the challenge only on the penalty imposed - In respect of consulting engineering service, assessee has submitted that the entire liability was discharged much before the issuance of SCN - In such circumstances, penalty imposed is unwarranted in terms of sub-section (3) of Section 73 of FA, 1994 - The penalty imposed on this count is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
CENTRAL EXCISE
2018-TIOL-2563-HC-KAR-CX
CST Vs Trianz Holdings Pvt Ltd
CX - The present appeal is not maintainable now due to the tax effect involved in present case being less than the prescribed monetary limit of Rs.50,00,000/- and that the present case does not fall under exception category of Notfn dated 17.08.2011 of the Instructions dated 11.7.2018 - Therefore, present appeal may permitted to be dismissed as withdrawn/ not pressed: HC
- Appeal dismissed : KARNATAKA HIGH COURT
2018-TIOL-2561-HC-AHM-CX
Sheelpa Enterprises Pvt Ltd Vs UoI
CX - Pre SCN came to be issued to petitioner on 05.09.2018 calling upon the petitioner to remain present in person or through authorized representative on 06.09.2018 or on 07.09.2018 before the Joint Commissioner - In response to the said notice, petitioner addressed a communication on 06.09.2018 informing the respondents that the intimation to attend the meeting of pre SCN was received on 05.09.2018 evening and requesting for another convenient date as their Directors were in New Delhi and their Excise Lawyer was also travelling - Thereafter, without any response to the same, the impugned SCN came to be issued on 07.09.2018 and was served upon the petitioner - It was submitted that the Final Audit Report, which is required to be served prior to the pre SCN stage, came to be served to petitioner on 03.10.2018 - It was contended that therefore, provisions of Central Excise and Service Tax Audit Manual, 2015 and the Circular dated 10.03.2017 have been observed only in breach - Petitioner submitted that the impugned SCN under provisions of CEA, 1944 has been issued by Joint Commissioner, CGST, Audit, Ahmedabad despite the fact that under Central Goods and Services Tax Act, 2017 , Joint Commissioner has no power to issue SCN under the provisions of CEA, 1944, therefore the SCN is without any authority of law - Having regard to the submissions advanced by petitioner, issue Notice, returnable on 26th December 2018: HC
- Petition disposed of : GUJARAT HIGH COURT
2018-TIOL-3712-CESTAT-HYD
Vivimed Labs Ltd Vs CCCE & ST
CX - The assessee company manufactures & clears medicines on payment of duty - It also supplies some sample medicines to doctors, free of charge - Duty is paid on such samples on cost construction basis by taking the value as 115% of cost of production, on grounds that there is no sale - The Revenue raised duty demand, by considering the price of similar products as per Rule 4 of Central Excise Valuation Rules, along with penalty u/s 11AC & interest u/s 11AB - Further penalty u/r 25 of CER 2002 was imposed - Such demands were confirmed by the Commr.(A).
Held: The settled position is that the physician samples must be valued at samerate at which similar goods are sold in the market, even if the packing size is different - Hence the demand is sustainable on merits - Regarding extended limitation, it is seen that the different position taken by two Board Circulars, namely No. 643/34/2002-CEx dated 01.07.2002 and No. 813/10/2005-C.Ex dated 25.04.2005, caused sufficient confusion - Besides, the Board initially held the position that valuation had to be done on cost construction basis - Hence the assessee cannot be faulted for adopting such a practice, even though it was later found invalid - There was reasonable cause behind mistaken valuation on cost construction basis instead of valuation u/r 4 - Hence extended limitation cannot be invoked as there is no mala fide intent attributed to the assessee - Hence the penalties must be set aside too - Only duty within normal period is upheld with interest: CESTAT (Para 2,4)
- Assessee's appeal partly allowed: HYDERABAD CESTAT
2018-TIOL-3711-CESTAT-BANG
Tungabhadra Special Products Vs CC CE & ST
CX - The assessee, a 100% EOU is engaged in activity of mining of Iron ore and processing of various products from Iron ore - They have obtained LOP from Cochin Special Economic Zone (CSEZ) for effecting DTA clearance of Iron ore products - A SCN was isuued alleging that assessee being EOU have not paid duties of excise under proviso to Section 3(1) of CEA, 1944 on DTA clearances made by them during period from April 2003 to June 2006 - It is not denied by assessee that they have obtained a license for EOU claiming that they are manufacturers of Iron ore; it is not also denied that they have obtained license from manufacturing bond in terms of Customs Act, 1962 - Assessee cannot take the plea that their goods are not manufactured, non-excisable and therefore, they are not liable to pay the duty - The assessee failed to distinguish between a DTA unit and an EOU unit - It is not correct for the assessee to take recourse under only on the fact that such goods if cleared by a DTA unit are not liable to pay any duty - The goods cleared by them into DTA ought to be treated as imported goods and duty shall be levied accordingly - Tribunal in case of Sarla Performance Fibers Ltd. - 2010-TIOL-408-CESTAT-AHM while deciding the leviability of Education Cess on clearances by EOU have categorically held that "goods cleared in DTA cannot be treated as goods actually manufactured in India" measures of excise duty leviable on goods manufactured in EOU worked out in the same manner as applicable to the imported goods - In view of this, assessee's contentions are misplaced irrespective of fact that whether the process undertaken by assessee amounted to manufacture or otherwise, they are liable to pay duty in terms of clause (ii) proviso to Section 3(i)(b) of CEA, 1944 - The goods cleared by assessee i.e. Iron ore fall under CTH 26011110 - It is also found that assessee have contravened the provisions of Rules 8, 17 of CER, 2002 by way of non-maintenance of account relating to production, description and removal of goods into DTA and have also not filed ER-2 Returns for the months from April 2003 to June 2006 and therefore, extended period is correctly invoked; however, exemption available under Notfn 23/2003-C.Ex. cannot be denied to assessee if they are otherwise eligible for the same - Penalty in terms of Section ll(AC) was however be equivalent to such duty are re-determined - The assessee is required to show to the satisfaction of the original authority that they have fulfilled all the conditions required for granting of benefit under Notfn 23/2003-C.Ex - Matter remanded to the original authority to quantify the duty liability on clearances made by assessee into DTA after extending the benefit of Notfn 23/2.003-C.Ex: CESTAT
- Matter remanded: BANGALORE CESTAT
2018-TIOL-3710-CESTAT-BANG
Toyota Kirloskar Motors Pvt Ltd Vs CCT
CX - The assessee is engaged in manufacture of motor vehicles viz. passenger cars/excisable goods and is a duly registered LTU - They are availing cenvat credit of duty paid on input services, inputs and capital goods under CCR, 2004 - During audit, it was noticed that they were dispatching parts of Motor Vehicles through Courier to their Dealers and have availed cenvat credit on Outward Courier Bills for the period from April 2009 to March 2012 - It appeared that Outward Courier Service is not covered by definition of "input service" as per Rule 2(l) of CCR, as the definition allows credit only on Outward Transportation upto the place of removal - The subject auto-parts are cleared under MRP Valuation under Section 4A of CEA, 1944 - Commissioner (A) has relied upon decision of Tribunal in case of Hero Motocorp Ltd. - 2014-TIOL-1472-CESTAT-DEL - Since the Division Bench of Tribunal has held that in case of MRP clearance of the product as per Section 4A of the Central Excise Act, place of removal would be the factory gate and the credit of service tax paid on courier service beyond the factory gate is not available under Rule 3 of the Cenvat Credit Rules, therefore by following the ratio of said decision, no infirmity found in the impugned order - The period of dispute is from 2009-10 up to 2011-12 and the SCN was issued on 04.03.2014 which is beyond the normal time period of one year from the relevant date i.e. 10.04.2012 - Therefore, by relying upon the ratio of Hero Motocorp, entire demand is barred by limitation and Department cannot allege malafide against assessee particularly when the issue was not free from doubt and relates to one of statutory interpretation - Further, Supreme Court in case of SNS (Minerals) Ltd. has held that if there was a bonafide doubt then the extended period of limitation is not applicable - On merit, assessee is not entitled to cenvat credit on courier service whereas on limitation he succeeds in view of the Division Bench decision of Tribunal in case of Hero Motocorp - Consequently, entire demand is barred by limitation - Accordingly, the impugned order is set aside: CESTAT
- Appeal allowed: BANGALORE CESTAT
CUSTOMS
2018-TIOL-3709-CESTAT-DEL
CC Vs Bharat Foils Ltd
Cus - The assessee had filed a refund claim under special refund mechanism as provided for under the exemption Notfn 102/2007-Cus - The claim is with respect to special additional duty of Customs (SAD) leviable under sub-section 5 of Section 3 of Custom Tariff Act, 1975 - This Notification exempts the goods falling within the first schedule to the Customs Tariff Act, 1975 when imported into India for subsequent sale, from the whole of the additional duty of Customs leviable thereupon in accordance of the above mentioned Section 3(5) of Customs Tariff Act - This Notification stands amended vide Notfn 93/2008 vide which a time period of one year from the date of payment for filing of refund claims by an importer under the aforesaid Notification was introduced - Commissioner (A) has held that the amendment since introduced for the first time by a Notification but without a statutory amendment, the same cannot prevail - No doubt, the said Notification is silent about any time period for filing the said claim - But the Notification exempts the goods in first schedule of Customs Tariff Act from being leviable to the additional duty of Customs - However, the Notification itself mandates the deposit of the said additional duty at the time of importation of the goods and thereafter to get the refund - From this perusal, one thing becomes abundantly clear that the importer has the knowledge of his entitlement to file the refund of additional duty of Customs at the time of the payment of said duty itself i.e. at the time, the product being in first schedule is imported - Resultantly, for claiming the refund of additional duty nothing else has to happen or to be done by the asseesse after the payment of said additional duty of Customs - The refund claim of additional duty due to the exemption flowing out of Notfn 102/2007 has to be filed within one year in view of subsequent Notfn 93/2008-Cus which still holds good and also in view of Section 27 of Customs Act, 1962 - The Commissioner (A) has committed an error while giving an expanded interpretation qua limitation to favour assessee: CESTAT
- Appeal allowed: DELHI CESTAT
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