SERVICE TAX
2018-TIOL-3767-CESTAT-ALL
Friends Land Developers Vs CCE & ST
ST - The assessee is engaged in providing "Construction of Residential Complex Services" and was duly discharging Service Tax on the same - However while discharging their Service Tax liability, they were not including the amount charged from their customers in respect of parking space - Revenue entertained a view that the consideration for parking space is an integral part of the residential complex constructed by assessee and the value of the same has to be included in value of services - Service Tax on construction of "Residential Complex Service" was introduced w.e.f. 16.06.2005 vide Notfn 15/2005-ST - As seen from the said definition of "Residential Complex Service", parking space specifically stands included in Serial No.(iii) of definition - If that be so, it has to be held that parking space is a part and parcel of services falling under category of "Residential Complex Services" - And inasmuch as parking place stands excluded, it has to be held that parking place falls under the said category - In fact the new definition of "Preferential Location Services" specifically excludes the parking place which means that parking services do not get covered by the new definition - As such, consideration received by assessee from their buyer on account of sale of parking space is a part and parcel of services falling under category of "Residential Complex Construction Services" and its value has to be added in the value of above services - However, demand stands raised and confirmed by invoking longer period of limitation inasmuch as SCN was issued on 24.07.2014 for the period July, 2010 to June, 2012 - Inasmuch as admittedly the parking area is a separate area from flats sold by assessee, there can be bona fide belief on the part of assessee that such parking charges are not includible in the value of the services falling under "Residential Complex Construction Services" - There is also no positive evidence indicating any mala fide on part of assessee - Accordingly, order is set aside on limitation: CESTAT
- Appeal allowed: ALLAHABAD CESTAT
2018-TIOL-3766-CESTAT-MAD
Citilights Properties Pvt Ltd Vs CGST & CE
ST - On intelligence that assessee is not paying service tax on construction services provided by them, revenue took up investigation - The projects were joint venture nature and assessee provided construction activities to land owners in lieu of relinquishment of their right over the UDS in land as per the agreement - It appeared from the nature of terms of agreement that the assessee and the land owner are service provider and service recipient respectively and consequently the assessee is liable to pay service tax for the construction activities provided to the land owner - However, though the assessee had discharged service tax in respect of construction activities to the buyers, they had not discharged service tax on landowner share of construction - The period involved is from October 2004 to March 2009 - The demand has been raised in SCN under construction of residential complex services - The contracts entered between assessee and the service recipient is a composite contract which involves both supply of materials as well as rendering of service - The Tribunal in case of Real Value Promoters Ltd. - 2018-TIOL-2867-CESTAT-MAD had occasion to analyse the issue regarding demand of service tax under construction of residential complex services, commercial or industrial construction service and construction of complex service - The Tribunal has held that prior to 1.6.2007, levy of service tax can be under the above categories only for contracts which are purely for services - That after 1.6.2007, the above categories would be applicable only if the contracts are purely services and which are not composite contracts - Further, it was held that after 1.6.2007, demand in respect of composite contracts would fall under works contract service only - Following the said decision, demand of service tax under commercial or industrial construction service (residential complex) cannot sustain after the period 1.6.2007 - The levy of service tax prior to 1.6.2007 cannot also sustain by application of the decision of Supreme Court in case of Larsen & Toubro Ltd. - 2015-TIOL-187-SC-ST - The impugned order cannot sustain and is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
CENTRAL EXCISE
2018-TIOL-3765-CESTAT-MUM
Digvijay Textiles Pvt Ltd Vs CCE & ST
CX - The assessee disputes duty liability fastened on them along with equal amount of penalty for period January 2004 to March 2004 being the CENVAT credit availed on goods supplied by M/s Natraj Textile Processors Pvt Ltd who had not discharged duty liability - The initial order of first appellate authority having been set aside and the matter remanded for fresh determination the entire proceedings in the appeal stood extinguished - The sole ground of appeal of assessee that those submissions made earlier should have been taken on record in impugned proceedings is not sustainable in law - It was the responsibility of assessee to have made appropriate plea before appellate authority in remand proceedings - Having failed in doing so, and in view of the first appellate authority having given detailed findings to uphold the order of the adjudicating authority, there is no merit in the appeal before the Tribunal: CESTAT
- Appeal dismissed: MUMBAI CESTAT
2018-TIOL-3764-CESTAT-DEL
BP Ispat Pvt Ltd Vs CCE
CX - The assessee during the period 2008-09 suppressed production and removed clandestinely MS Rod which was calculated on the basis of Dispatch Register (Private record) and other records withdrawn from assessee's factory premises - This quantity was not accounted for in their specified records by assessee and further alleged that said goods were removed clandestinely without issuing Central Excise invoices and without payment of duty - It was also alleged that assessee have contravened the rules by willful suppression of facts with ulterior motives and with intent to evade payment of duty - The demands were confirmed, along with equal amount of penalty under Section 11 AC of the Act - Further, personal penalty of Rs.5 lakhs was imposed on Director of company, Shri Sumit Agarwal - The statement recorded by revenue authority from transporters is not an admissible evidence, being in violation of provisions of Section 9D of the Act - Leading questions have been asked to the transporters - One of the transporter namely Shri Pravesh Kumar Chaturvedi, in reply to query whether the said truck as per record of assessee, whether transported M.S. Rod from assessee's premises to Baralar and also as regards the freight payment replied that his truck only transport goods of M/s Prakash Industries - It appears that the Driver may have without his knowledge done some transporting, the freight of which have not been received by him - Further, he states that he will enquire regarding this matter from his driver - The average daily production of assessee plant 30-32 MT, have not been disputed by revenue - For the disputed period under consideration from 03/01/2009 to 19th February, 2009 there are 48 working days or days multiplied by said 32 MT per day, the maximum production during the said period works out to (48x32) or 1536 MT - Thus, the calculation of revenue of production of 2214.434 during the said period is erroneous and excessive - Further, assessee will be entitled to set of, as regards shortage of raw material- M.S. Ingots from excess stock of finished goods, as on the date of inspection - Accordingly, assessee shall be liable for duty towards clandestine removal, as recalculated, as per dirdections - The penalty amount shall be worked out accordingly - The penalty imposed on Director appears to be excessive and the same is reduced to Rs.2 lakhs - Even by the rule of thumb, and the production reworked out on the basis of admitted average production, there exists element of clandestine production and removal - Accordingly, the appeals are allowed in part - The adjudicating authority is directed to work out the duty payable and penalty on the Company: CESTAT
- Appeals partly allowed: DELHI CESTAT
CUSTOMS
2018-TIOL-3768-CESTAT-DEL
Subhash Pandey Vs CCE & ST
Cus - The first appellant is a Revenue officer who served in various capacities in two ICDs - An exporter of fabrics & ready-made garments was alleged to have made such exports under dummy IECs & that had also claimed ineligible duty drawback through mis-declaration & incorrect valuation of goods - Upon investigation by the DRI, the exported consignment was recalled from port of export & samples were drawn and tested - Based on expert opinion, the Revenue alleged that the exported goods were of sub-standard quality, indicating that such goods were stock rejects - The SCN thus rejected the export value declared, raised duty demand for recovery of drawback & confiscated the goods - The Revenue further alleged that the appellants knew that the exporter was a benami exporter - It was also alleged that the appellant knew the exporter & had fraternized with him on some occasions.
Held: The sixth appellant has been penalized based on alleged telephonic conversations with the exporter, for attending some social gatherings organized by the exporter & for staying in lodgings arranged by the exporter - However there is no evidence showing that the sixth appellant was in any way involved in over-valuation of goods or exporting sub-standard goods - There is no transcript of phone calls to conclude that the transaction was in respect of fraudulent exports - Mere familiarity between the two cannot infer any illegal act by the appellant - Regarding the other appellant, there is no evidence of them having received any favors from the exporter - A few telephone calls made by the appellants to the exporter cannot infer the existence of any arrangement or understanding to cause fraudulent exports - The appellants cleared the goods as per prevailing norms - There is no evidence showing that the appellants had reason to believe that the exporter was a benami exporter & the exports were made after drawing samples & testing them - Only afterwards was drawback allowed to the exporter - The SCN does not allege that the appellants knew the exporter's activities prior to granting export benefit - Therefore, where the appellants receive no illegal gratification or advantage from the exporter, they cannot be charged with evasion of duty or abetting fraudulent exports - Hence the penalty imposed on them is set aside: CESTAT (Para 3,9)
- Assessees' appeals allowed: DELHI CESTAT
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