SERVICE TAX
2018-TIOL-2586-HC-MUM-ST + Case Story
Nirmal Seeds Pvt Ltd Vs CCE
ST - Payment made by the agent would be a liability of the principal for the purposes of service tax - All the authorities under the Act, on facts, have come to the conclusion that the arrangement arrived at between the appellant and its dealers was so as to reduce the payment of service tax obligation of the appellant - factual finding of the authorities was based on detailed scrutiny of the invoices and documents, in particular, the ledger account maintained by the appellant which shows the amount, which was reduced from the invoice is also accounted as freight reimbursement - freight paid by the dealers was for and on behalf of the appellant and, therefore, the appellant would be liable for payment of service tax in view of the definition as provided in Rule 2(1)(d)(v) of the Service Tax Rules - invocation of extended period cannot be found fault with as there was suppression of facts - Appeal dismissed: High Court [para 12, 14]
- Appeal dismissed: BOMBAY HIGH COURT
2018-TIOL-3752-CESTAT-DEL
Alps Industries Ltd Vs CCE
ST - The assessee is engaged in manufacture of 100 % cotton yarn and had filed rebate claim of Service Tax claiming the benefit of Notfn 41/2012 for the Service Tax deposited on input service procured for exporting their manufactured yarn during the period July, 2012 to September, 2012 - Adjudicating authority has rejected the application based on two reasons; one, that the rebate claim is not maintainable under Notfn 32/2011 continued upto 30th June, 2012 as the same being superseded by another Notfn 41/2012-ST - Secondly, that even Notfn 41 permits rebate only on such services as were procured beyond the place of removal, which is the port of export - Since the services procured were prior to reaching port of export the Authority has rejected the claim - In view of the Notifications as have been brought to the notice as on day and have simultaneously being conceded by Department, it is held that all these Notifications were not available to the adjudicating authorities below - The perusal of all the said amended notification makes it clear that the exporters were made entitled for rebate for procuring services by shifting their manufactured product from the factory for being exported to the port - The services admittedly are the services for said purpose - The assessee becomes entitled to claim the rebate thereof, retrospective effect being given to said amendment - Assessee is entitled to the benefit of rebate: CESTAT
- Appeal allowed: DELHI CESTAT
2018-TIOL-3751-CESTAT-ALL
GEPS Projects Vs CCE & ST
ST - The issue in this appeal is whether the SCN is maintainable for raising a demand of service tax as short paid - The assessee is a partnership firm and they are engaged in providing taxable services under the category 'erection and commissioning and installation service' and 'works contract service' - A SCN was issued invoking extended period of limitation for the period 2011 - 12 to 2014 - 15 - It is alleged that assessee have not declared the true and correct value of works contract in their ST - 3 returns thus evading and/or paying the service tax short - The SCN is wholly misconceived as the amount of gross receipts shown in balance sheet, is the adjusted amount after adjusting the opening and closing sundry creditors debtors, if any - Further, gross receipts/sales is the credit balance in accounts and Sundry Debtors in debit balance, as on the Balance sheet date - These can never be clubbed - It appears the authority issuing the SCN the Commissioner, lacks the basic concept of accounting, thus resulting into misreading of the financial statement and issuing a wholly misconceived and vague SCN - Revenue have not found any fault and/or error in the books of accounts and the financial statements which have been duly audited by a Chartered Accountant as required under the other Taxation Acts - In the case of Convergys India - 2018-TIOL-1061-CESTAT-CHD wherein under similar circumstances SCN demanded differential duty for the apparent difference in the receipts as per balance sheet as compared to the ST-3 returns this Tribunal held that the receipt declared in the balance sheet is for accounting purposes or for the purpose of Income Tax and the same cannot be considered as Revenue for levy of service tax - The book of accounts are not rejected and without rejecting the assumption of gross receipt as taxable service, is untenable, and grossly wrong - Accordingly, SCN is misconceived and vague, and also erroneous - Thus, impugned order is set aside: CESTAT
- Appeal allowed: ALLAHABAD CESTAT
2018-TIOL-3750-CESTAT-DEL
Hero Mind Mine Institute Ltd Vs CCE & ST
ST - Shri Sandeep Kohli, Proprietor of M/s Hero Mind Mine Institute, Kota, under an agreement with Hero Mind Mine Institute Ltd., Gurgaon, started coaching services - The Revenue initiated inquiry and asked for some details regarding services provided by them by its letters and in reply the assessee provided the requisite details like copy of agreement; gross receipts for the period from April 2007 to March 2011 as well as other related documents to the Department - It appeared to Revenue that the assessee is liable to pay Service Tax as they are providing Commercial Coaching & Training covered under taxable category of "Commercial Training & Coaching Services" under Section 65(105)(zzc) of FA, 1994 r/w Section 65(26) and Section 65(27) of the Act - No case for suppression and/or malafide conduct is made out against assessee - Accordingly, the demand for extended period is not sustainable and also that the assessee is not liable to pay Service Tax for the period prior to 27.02.2010 - Therefore, penalty under Section 78 of the Act is set aside - As far as penalty imposed under Section 76 is concerned, matter remanded to the adjudicating authority to recalculate the demand for the period after 27.02.2010 and also to recalculate the penalty under Section 76 - Accordingly, the penalty imposed under Section 77 is reduced to Rs. 5,000/-: CESTAT
- Appeal partly allowed: DELHI CESTAT
CENTRAL EXCISE
2018-TIOL-3756-CESTAT-MUM
Bharat Petroleum Corporation Ltd Vs CCE
CX - Revenue seeks rectification of mistake in order dated 13.04.2018 - 2018-TIOL-1517-CESTAT-MUM on the ground that although two appeals arising out of two orders-in-original are narrated in the record of proceedings, the description preceding the cause title is restricted only to one of them and inclusion of the second order-in-original in the narration immediately below the appeal number is now sought for.
Held: Bench is responsible for its orders and not for errors committed on the administrative side falling under the purview of the Registry and subordinate to the President in the discharge of its administrative responsibilities - time of the judicial side should not be tied up in flaws arising on the administrative side - solely to prevent detriment to the applicant, Bench directs the Registry to make necessary amendments that would reflect the disposal by the Bench - Application for rectification of mistake is disposed of: CESTAT [para 4]
- Application disposed of: MUMBAI CESTAT
2018-TIOL-3754-CESTAT-MUM
Indeus Life Sciences Pvt Ltd Vs CCE & ST
ST -Appellants exported services under the category of Scientific and Technical Consultancy Services to M/s Disphar International BV, Netherland against a service contract and consequently claimed refund of accumulated CENVAT credit under rule 5 of CCR, 2004 -alleging that the services provided was in the nature of performance based service in India, hence not an export service, the cash refund was held inadmissible - appeal to CESTAT.
Held: Appellant had, undisputedly, purchased/procured the goods independently on which they discharged appropriate Customs duty on its import - necessary tests were carried out on the said goods in India and after analysis, the relevant report was submitted to the overseas company - Tribunal has in their own case - 2018-TIOL-1795-CESTAT-MUM already taken a view that the aforesaid service rendered by the appellant is in the nature of export of service and hence eligible for cash refund of accumulated CENVAT credit - Except in relation to input service denied by the Commissioner (A) observing that there is no nexus betweeen the input and output service as necessary evidence in relation to Building maintenance charges were not produced and rent-a-cab service being mentioned in exclusion clause of rule 2(l) of CCR, 2004 after amendment w.e.f 01.04.2011, the matters are remanded to the adjudicating authority to calculate admissible refund amount - Appeals disposed of accordingly: CESTAT [para 8 to 10]
- Appeal disposed of: MUMBAI CESTAT
CUSTOMS
2018-TIOL-3755-CESTAT-MUM
Am Overeas Vs CC
Cus - Penalty was imposed on appellants based on the finding that they were involved in the act of misdeclaration with intent to avail the benefits of the scrips issued under the ‘Duty Entitlement Passbook scheme' of the Foreign Trade Policy - Appellant contends that they were not in any way concerned with the exports which was held against them solely on the ground that the statement of various individuals, made clear the complicity in procurement and export of cheaper goods - appeal to CESTAT.
Held: In all matters pertaining to valuatio, it is required that rejection of declared value should necessarily be followed by determination of an assessable value that has the approval of rules framed for the purpose - neither does the SCN propose nor does the impugned order consummate the valuation exercise - presumption of over invoicing has not been sustained in the impugned order - in the absence of redetermination of value, goods cannot be said to have been mis-declared warranting imposition of penalties u/s 114 on various individuals, whatever their linkage with the goods may be - impugned order does not sustain, hence set aside - appeals allowed: CESTAT [para 4, 5]
- Appeals allowed: MUMBAI CESTAT
2018-TIOL-3753-CESTAT-BANG
Konkan Storage Systems Vs CC
Cus - The issues raised in appeal are concerning the status of warehouse-keeper vis-a-vis custodian under Customs Act and applicability of Section 150 of Customs Act, 1962 to the sale proceeds to goods warehoused - Agreeably, assessee are warehouse keepers and 16020 MT of "cane molasses" imported was warehoused in storage tanks of assessee - The goods were not cleared due to dispute between the supplier and consignee in pursuant of order of District Court, the goods were auctioned by the Customs, who have appropriated duty and interest after deducting the expenses of auction and deposited the balance with the Court - The Department has taken a view that the claims of assessee are under Section 58 of Customs Act only and as such provisions of Section 150 are not applicable to them as they are not custodian in terms of the Section 48 of the Customs Act - The goods were auctioned as per the order of District Court and by issue of a notice under Section 72 - Therefore, it is to be regarded as a sale under the Customs Act and therefore, the provisions of Section 150 of Customs Act come into play - The Department has contended that assessee did not challenge the order of District Court directing the Customs to deposit the auction price after deducting the amounts due to it towards customs and other statutory claims was not challenged by assessee - The District Court did not give any direction regarding deduction of amounts except stating that customs and other statuary claims may be deducted - As the sale has occurred under Customs Act, it goes without saying that the statutory levies are governed by the provisions of Customs Act - Therefore, the apportionment of the sale proceeds is to be done in terms of Section 150 of Customs Act, 1962 - As regards to the method of calculation of customs duty, CBEC vide Circular 71/2001 has clarified that customs duty shall be determined by backward calculation, considering the sale proceeds of unclaimed/uncleared goods as cum-duty price - For calculation of duty, total sale proceeds without allowing any deduction towards sales expenses or any other charge is to be taken as cum-duty price - Therefore, the calculation made by Department was not correct - Interest on duty cannot precede the amounts due to warehouse-keeper and that the duty payable on goods auctioned be calculated in terms of Circular 71/2001 - Matter is remanded to the original authority with a direction to re-work the sale proceeds in the light of the findings and dispose of the remaining amount in terms of Section 150 of the Customs Act, 1962: CESTAT
- Matter remanded: BANGALORE CESTAT
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