ST - Amounts collected from flat owner by builder as one-time maintenance charges under the statutory obligation as per the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, would not be chargeable to tax under the category of Maintenance and Management of immovable property - Impugned order upheld and Revenue appeal dismissed: CESTAT [para 4 to 6]

- Revenue appeal dismissed: MUMBAI CESTAT

ST - Appellant is a partnership firm engaged in ‘Construction of complex services' and ‘Commercial or Industrial construction services' - period in question is from 01.07.2010 to March 2012 - When the departmenal officers visited their premises on 30.08.2012 and informed that they are liable to pay service tax which has become taxable since 01.07.2010, they immediately paid the entire Service Tax with interest and late fees for the delay in filing ST-3 returns for the said period and all this is much prior to issuance of SCN on 02.04.2013 - Appellant is, therefore, aggrieved with the imposition of penalty u/s 78 of the FA, 1994.

Held: It is not in dispute that the entire amount of service tax along with interest and late fees has been deposited by the appellant as soon as they were informed about their liability without waiting for the SCN - There is nothing on record to show that the appellant have collected the service tax from their customers and retained the same - it is, therefore, clear that there was no intention to evade service tax liability and the delay in discharge is due to the reason of interim stay being granted by the Bombay High Court in the case of MCHI and the advise of their Chartered Account in this regard - there is a reasonable cause for non-payment of service tax and accordingly the provisions of s.80 of the FA, 1994 can be applied for waiver of penalty imposable u/s 78 of the FA, 1994 - Tribunal in similar matter of Shree Anand Venkateswara Associates - 2016-TIOL-1803-CESTAT-MUM , Banas Steel Industries - 2014-TIOL-2501-CESTAT-AHM has set aside penalty - following the same, penalty is set aside and appeal is allowed: CESTAT [para 4, 6]

- Appeal allowed: MUMBAI CESTAT

ST - The assessees is engaged in servicing of motor vehicles and also trading of automobile parts to franchisees and vehicle customers who avail services at the workshop - A SCN was issued to assessee alleging that the goods sold to service recipient of franchisee services and servicing of motor vehicles is not trading of goods but is actually sale of goods in course of providing taxable service; hence value of such goods sold during the course of providing franchisee service and servicing of motor vehicles, it to be included in the gross value of taxable services under Section 67 of FA, 1994; that the assessee is liable to pay an amount of 5% of gross value of exempted services as per Explanation 1(a) to Rule 6(3) and Rule 6(3A) of CCR, 2004 r/w Rule 2(e) - As regards to department's appeal, their main grievance is that the impugned order is a non-speaking order without giving detailed findings either to support or counter the arguments of noticee but has simply confirmed demands proposed in notice and the statement of demand - The order of adjudicating authority has not addressed the allegations and concerns raised in SCN but has instead veered off into other areas which have not been alleged in notice or in the statement of demand - The adjudicating authority has not given any speaking order based on allegations and charges proposed in notice / statement of demand - Even the assessee has found fault with reasonings adopted by adjudicating authority - This being so, the impugned order not having addressed the allegations in SCN but having only confirmed the proposed demands on other grounds cannot be sustained - Tribunal is inclined to accept the prayer made by Revenue seeking remand of case for fresh adjudication based on allegations and charges made out in SCN - Coming to assessee's appeal, present appeals of assessee allowed by way of remand - Hence in denovo adjudication, the points and arguments raised by both sides will be addressed by adjudicating authority, after giving sufficient opportunity to both parties to present their case - All the appeals are allowed by way of remand: CESTAT

- Matter remanded: CHENNAI CESTAT

ST - The assessee is engaged in providing services under category of 'Management Consultant Services' and were registered with Department for payment of service tax - During audit, it appeared to Revenue that there were certain discrepancies and on the basis of said discrepancies it appeared to Revenue that there was short payment of service tax - The amount of around Rs.21.12 crores was received by assessee from Government as grant-in-aid and by following the decision of Tribunal in case of Apitco Ltd. - 2010-TIOL-1564-CESTAT-BANG as affirmed by Supreme Court, it is held that service tax is not leviable on the amount received from Government as grant-in-aid - The contribution received from non-governmental agencies was not in respect of any specific service rendered to organization from whom the money was received and the money received had no relation with the number of people to be recruited by such organization and therefore, no service provider and service receiver relationship found between the assessee and the organizations from whom contribution of Rs.2.31 crore was received by assessee - Therefore, demand of service tax alongwith interest and equal penalty is set aside - The demand of service tax of Rs.30,21,221/- is part of confirmed demand of Rs.35,82,676/- - Original Authority has confirmed said demand on the amount of consideration received for rendering services to SEZ Units - In view of Section 51 of SEZ Act, 2005, the provisions of SEZ Act have affect not withstanding anything inconsistent therewith contained in any other law for the time being in force - As per clause (e) of Sub-section (1) to Section 26 of SEZ Act, 2005, every developer and entrepreneur is entitled to exemption from service tax under Chapter V of FA, 1994 on taxable services provided to developer or units to carry on authorized operations in Special Economic Zone - Therefore, the demand is not sustainable.

Assessee has submitted that though the Original Authority has confirmed the demand of Rs.5,61,455/- on consideration of Rs.54,51,017/- received by assessee, the Original Authority has not given any reason for confirming the said demand - On going through the Order passed by Tribunal in case of Shubham Electricals - 2015-TIOL-1339-CESTAT-DEL , it is found that the Tribunal has observed that Neither the SCN nor the impugned adjudication order record any assertion/conclusion whatsoever as to which particular or specific taxable services the assessee had provided - In the absence of an allegation of having provided a specific taxable service in SCN and in view of failure in adjudication order as well, neither the SCN nor the consequent adjudication order could be sustained - Relying upon the same, demand of service tax is not sustainable, same is set aside along with interest and equal penalty.

The issue of leviability of service tax on services rendered to International Financial Corporation is no more res integra - The same has been decided by Tribunal in case of Coastal Gujarat Power Ltd. 2016-TIOL-2925-CESTAT-MUM - By following the same, service tax is not leviable on services rendered to International Financial Corporation - The demand of service tax is set aside alongwith interest and equal penalty: CESTAT

- Appeal allowed: ALLAHABAD CESTAT

CX - "Zymegold" manufactured by the respondent was classified as "fertilizers" as claimed instead of under "plant growth regulator" as alleged by the department - inasmuch as the differential duty demand confirmed was dropped by Commissioner(A), therefore, Revenue is in appeal.

Held: The test result does not dispute the presence of nitrogen and chlorine and this should suffice to characterise the product as 'fertilizer' based on the decision of Tribunal in the case of Aries Agro-vet Industries Ltd., Final order no. 88615/2018 dated 31 st May 2018 - Revenue appeal is without merit and is dismissed: CESTAT [para 4]

- Appeal dismissed: MUMBAI CESTAT

CX - CENVAT - Rule 2(l) of CCR, 2004 - Whether Manpower services availed to maintain ‘Occupational Health Centre' at the factory engaged in hazardous manufacturing process is an Input Service.

Held: From the factory licence copy and the Maharashtra Pollution Control Board consent order, it is found that recycling of hazardous waste was made obligatory for the factory; that they were also directed to comply with the industry specific standards and concur to rule 5(2) of the Hazardous Wastes (M, H & TM) Rules, 2008 - What can be inferred is that the factory is a hazardous factory - under rule 73W of the Maharashtra Factories Rules, 1963, a hazardous factory shall maintain ‘Occupational Health Centre' (OHC) - First aid and other particulars mentioned therein shall be compulsorily maintained by the factory - Maintenance of OHC is, therefore, a statutory requirement for which appellant received services from outside agency and it is also undisputed that the appellant had paid 75% of the service tax component under ‘Partial reverse charge mechanism' and availed credit - admittedly, health services are put under exclusion clause in 2012 amendment to the CCR, 2004, however, when there is a statutory requirement, it cannot be excluded from the purview of being entitled to credit as being an ‘input service' - Credit admissible - Appeal allowed: CESTAT [para 7, 8]

- Appeal allowed: MUMBAI CESTAT

CX -Appellant is a manufacturer of sugar and molasses - it has a power generation plant in the factory where electricity is generated and captively consumed within the factory for manufacture of the aforesaid final products and remaining portion of electricity is sold out to Maharashtra State Electricity Board - Applying Explanation 1 appended to rule 6(1) of CCR, 2004 w.e.f 01.03.2015, lower authorities held that such electricity being non-excisable goods cleared for a consideration from the factory by using common inputs/input services without maintenance of separate records, the apellant is required to pay 6% of the value of such electricity sold by it - appeal to CESTAT.

Held: Admittedly, electricity, though not found in tangible form, is classifiable under TI no. 2716 0000 of CETA, 1985 but it is a non-excisable goods and the process of generation of electricity though a manufacturing process is dutiable if it is generated from mineral oils, bitumen substance, mineral waxes etc. and electricity generated from bagasse is not covered under Ch. 27 like electricity generated through solar power, hydro power, wind power etc. - Therefore, as held in Gularia Chini Mills - 2013-TIOL-568-HC-ALL-CX , electricity energy is not an excisable goods nor it is exempted goods as defined in rule 2(d) of CCR, 2004 - Tribunal has in the case of Jakarya Sugars - 2018-TIOL-1845-CESTAT-MUM has held that electricity generated from bagasse which is a byproduct is neither a dutiable goods nor liable for payment of 6% in terms of apex Court decision in DSCL Sugar Ltd. - 2015-TIOL-240-SC-CX - duty demand made on such sale of surplus electricity manufactured through waste product is not sustainable in law - impugned order set aside and appeal allowed: CESTAT [para 5, 6]

- Appeal allowed: MUMBAI CESTAT

CUSTOMS

2018-TIOL-3793-CESTAT-ALL