SERVICE TAX

2018-TIOL-3759-CESTAT-MUM

Ajanta Disha Pride Construction Vs CCE & ST

ST - Condonation of delay of 18 days - There was demise in the family of Consultant resulting into the delay - For the delay at consultant's end the assessee should not suffer - Accordingly, the delay is condoned: CESTAT

- Appeal allowed: MUMBAI CESTAT

CC, CE & ST Vs Ajay Singh

ST - The assessee is engaged by M/s Simbhaoli Sugar Ltd. for carrying out some jobs in their factory - It appeared to Revenue that the said activities were covered by "Manpower Recruitment or Supply Agency Service", therefore, assessee was issued with a SCN demanding Service Tax under said category - The Commissioner (A) has scrutinized the individual contracts and observed that the contracts were for jobs to be completed by assessee - There was no contract for supply of any fixed number of labours to M/s Simbhaoli Sugar Ltd. and that the contracts were fixed job to be performed in fix time frame - The assessee’s responsibility was to get the job completed and it was not merely supply of manpower to M/s Simbhaoli Sugar Ltd. - The finding of Commissioner (A) has not been rebutted by Revenue through grounds of appeal - The only ground of appeal raised by Revenue is that assessee was responsible to comply with all provisions of law in respect of labours engaged by them - Such condition in a contract does not indicate that such contract is for supply of labours - For carrying out any job, manpower is required and all laws related to such manpower employed are required to be implemented - No merit found in the ground raised by Revenue: CESTAT

- Revenue's appeal dismissed: ALLAHABAD CESTAT

2018-TIOL-3757-CESTAT-HYD

Anusha Enterprises Vs CC & CE

ST - Assessee is engaged in marketing of "Bata" brand footwear on commission basis - It was found that assessee was earning commission for promotion by way of marketing and selling of branded goods under brand name/trade name viz., BATA on behalf of their principals M/s Bata India Ltd. - The Department viewed the assessee ’s service as a Commission agent covered under BAS and is liable for payment of service tax - It is undisputed that assessee is getting commission on the sale of shoes from the Bata outlet, as per an agreement Revenue has sought to tax the amount received by assessee as a commission, while, it is the argument of assessee that said commission is less than threshold limit under Notfn 06/2005-ST and 33/2012 it is not taxable - It is seen from records that Revenue wants to deny the benefit of notfn to assessee based upon the proviso to said notification - It is seen from the proviso 1(i) on which reliance placed by Revenue, services rendered by assessee is to Bata India Limited and get paid for such services; assessee is not into rendering of any branded services to customers, who purchase only branded footwear from the outlet - In this situation, the argument of Revenue that services rendered by assessee being in the Bata showroom are taxable services provided by a person under a brand name or trade name it cannot be held so - Similar issue came up before the Division Bench of Tribunal in case of A.S. Financial - In that case, Revenue while invoking the same provisions wanted to tax the amount received by the respondent in that appeal - No reason found to deviate from such a view already taken - Another case law, which is similar to the issue involved, is Bakliwal Brothers - 2017-TIOL-396-CESTAT-DEL wherein, the assessee was having a shop and activity of promoting sale of "Koutons" brand of readymade garments - The bench again held that such activity is not taxable, benefit of exemption for small scale service providers is available - The impugned orders are set aside and the appeals are allowed: CESTAT

- Appeals allowed: HYDERABAD CESTAT

CENTRAL EXCISE

2018-TIOL-3762-CESTAT-AHM

Gujarat Agrochem Ltd Vs CCE & ST

CX - The assessee have received Works Contract Service from service provider and service provider discharged service tax liability of 50% and assessee, as a service recipient, have paid the 50% tax under reverse charge mechanism in terms of Notfn 30/2012-ST - The case of department is that service provided by service provider does not fall under category of Works Contract Service and therefore, assessee is not required to pay 50% of service tax on reverse charge mechanism - As regards this issue, Adjudicating Authority has categorically held that the service received by assessee is Input Service - Therefore, issue of admissibility of input service has been settled in O-I-O which has been accepted by Revenue, as no appeal has been filed against the said finding - Once it is accepted that input service received by assessee falling under definition of input service, there is no reason to deny Cenvat credit - As regard the issue that assessee was not liable to pay service tax, therefore credit is not admissible, no proceeding was initiated against service provider - If the contention of Revenue is accepted then there is short payment on the part of service provider and in such case, proceeding for demand of 50% service tax should have been initiated against the service provider - In any case, the total service tax paid by either party i.e. by the service provider or service recipient is legally payable on the said service - The actual liability of service tax was discharged though 50% by service provider and 50% by assessee - Therefore, on the service tax paid by assessee credit is legally available and it cannot be said that amount paid by assessee is not service tax and on this ground, credit cannot be denied - Moreover, by not initiating proceedings against the service provider, it has been accepted by Revenue that total service tax has been paid on the input service received by assessee - Therefore, no reason found to deny the Cenvat credit of service tax, which was legally paid and accepted by the Revenue - Impugned order is set-aside: CESTAT

- Appeal allowed: AHMEDABAD CESTAT

2018-TIOL-3761-CESTAT-ALL

CCE & ST Vs Indian Potash Ltd

CX - The assessee is engaged in manufacture of sugar and molasses - They were availing the benefit of cenvat credit of duty paid on various inputs as also capital goods - It is seen that during the period August 2005 to September, 2009 they removed brass tube scrap which was in nature of old and used brass tubes under the cover of challans to their job worker in terms of provisions Rule 4(5A) of CCR, 2004 - Revenue views that as the assessee had availed cenvat credit on said brass tubes as capital goods which was subsequently removed by them, they should have reversed the credit or paid the duty on transaction value in terms of provisions of Rule 3(5)(a) of CCR, 2005 - The Revenue has not been able to put forth any ground to show that in case of clearance of capital goods, in respect of which the credit has been availed, to the job-worker, would not attract the provisions of Rule 4(5)(a) - Further, apart from submitting that the decisions relied upon by Commissioner (A) do not apply to the facts of the present case, no reasoning has been given by the Revenue in support of their plea to show that how the ratio of Larger Bench decision is not applicable - Larger Bench decision of Tribunal dealt with the same set of facts is fully applicable to the present case - No reason found to interfere with the impugned order passed by Commissioner (A): CESTAT

- Revenue's appeal rejected: ALLAHABAD CESTAT

2018-TIOL-3760-CESTAT-CHD

Himani Alloys Ltd Vs CCE

CX - The assessee is a registered dealer of Central Excise and trades in Ferro-alloys and issues modvatable as well as non-modvatable invoices - An investigation was conducted by Directorate General of Anti-Evasion against M/s M/s HSAL on intelligence that M/s HSAL was indulging in evasion of central excise duty on SS Billets/Flats by way of clandestine removal and were procuring unaccounted raw material from various sources, one of which was assessee - The allegation was that assessee was supplying Ferro-alloys to M/s HSAL without any invoices - Invoice book was recovered from their godown, which had parallel invoice nos. and invoices from that invoice book had been used in clearance of the Ferro Alloys - The daily report were also found, which contained each and every activity taking place in godown, which confirms that various types of Ferro Alloys were dispatched to M/s HSAL without the cover of the invoices, or the billing was done but no material was dispatched, or the goods were dispatched to M/s HSAL, but the invoices were issued to some other parties - All these facts and evidences clearly show that various employees and the Director of assessee were clearly in the knowledge that the supplies were being made for goods, which were liable to confiscation - In the case of Aries Telcom (P) Ltd. - 2007-TIOL-1640-CESTAT-MAD, this Tribunal took the view that the knowledge of managing director regarding offending nature of goods would partake the character of knowledge of the company as well - The active involvement of assessee in the entire modus operandi is thus established in relation to fraudulent supply of raw material without payment of duty to M/s HSAL in a well organized manner thereby abetting evasion of duty by M/s.HSAL - While analysing the imposition of penalty under Rule 26 (1) ibid on a dealer, who had issued invoices without supplying goods, the High Court of Punjab and Haryana in case of Vee Kay Enterprises - 2011-TIOL-174-HC-P&H-CX held that the penalty was liable under Rule 26(1) - The quantum of penalty is on the higher side and, in the interest of justice, the same is reduced to Rs. 7,50,000/-: CESTAT

- Appeal partly allowed: CHANDIGARH CESTAT