2018-TIOL-2635-HC-MAD-IT

Whether a trust factually found to have been established with the object of philanthropic purposes, should not be denied exemption u/s 80G by construing it as a religious trust - YES: HC

- Revenue's appeal dismissed : MADRAS HIGH COURT

2018-TIOL-2634-HC-ALL-IT

Whether reimbursement made by University to its affiliated colleges for conducting examination, cannot be construed as rendering of any technical service, so as to attract TDS liability u/s 194J - YES: HC

- Revenue's appeal dismissed : ALLAHABAD HIGH COURT

2018-TIOL-2633-HC-MUM-IT

Whether Provisions of Section 13(2)(c) can be invoked for denying exemption benefits u/s 11 to a charitable trust, if there is no violation of Section 13(3)(e) as regards excessive payment to related person - NO: HC

- Revenue's appeal dismissed : BOMBAY HIGH COURT

2018-TIOL-2447-ITAT-KOL + Case Story

ST - Interest - Refund claim cannot be treated as filed till it is filed along with all the supporting documents - since the relevant invoices and documents were submitted only on 15.02.2011 by the Appellant in the office of Commissioner (Appeal) evidencing the payment of excess amount of service tax, refund if not granted within three months from this date would only attract interest u/s 11BB of the CEA, 1944 - Commissioner(A) had, therefore, rightly held that refund since granted on 19.08.2011 carries interest from 15.05.2011 till the date of refund - No infirmity in this order of Commissioner(A), hence appeal by assessee rejected: CESTAT [para 8 to 10]

ST - Interest - Submission of Revenue that they had sanctioned refund within three months of the receipt of the order-in-appeal and hence no interest is payable is without any legal basis - moreso, section 11BB does not provide to count three months from the date of order of Commissioner (Appeal) or the date of receipt of order of the Appellate Authority by the jurisdictional Assistant Commissioner for the purpose of computing the interest payable - Revenue Appeal dismissed as being devoid of merits: CESTAT [para 12]

ST - Contention of the Revenue that since documents for claiming refund were only filed on 15.02.2011, therefore, the claim filed on 27.09.2006 seeking refund of excess service tax paid during October 2005 to December 2005 is time barred, cannot be entertained since the order of Commissioner(A) dated 29.04.2011 has not been appealed against/challenged by the Revenue and hence it attains finality - Revenue appeal is rejected: CESTAT [para 13]

- Assessee & Revenue appeal rejected: MUMBAI CESTAT

ST - Assessee argues that they are Chartered Accountant - The certain services provided by Chartered Accountant were exempted under notfn 59/1993-ST - The demand is for period August, 2002 to March, 2006 - The said exemption notfn was withdrawn in year 2006 -The services provided by assessee have been described by assessee themselves as preparation of project feasibility report including financial feasibility and profile of the concern - It is seen that the description does not fall under category described in clarification of Ministry dated 20/08/1999 - Preparation of project report would squarely fall under description 'relating to conceptualizing devising of any working system of any organization' and thus would squarely fall under the definition of Management of Consultancy firm - The services provided by assessee are indeed covered under the definition of Management Consultancy Services - In so far as issue of limitation is concerned, even if assessee believed that the said services were exempted or non-taxable, it was necessary for him to declare the same in ST-3 returns which they have failed to - Moreover, Chartered Accountants are experts in the field of Service Tax and the issue involved in the instant case is not one wherein anybody can have any doubt - In these circumstances, invocation of extended period of limitation is also upheld: CESTAT

- Appeal dismissed: AHMEDABAD CESTAT

ST - The assessee is a PSU and engaged in manufacture and overhaul of various kinds of electronic items, which are used in manufacture of aircraft, aircraft engine and its parts - They are registered under taxable category of Management Maintenance or Repair Service with the Service Department - The assessee entered into an agreement with Federal-State Unitary Enterprise Rosoboronexport, Moscow, Russia in conformity with Inter-governmental agreement between Government of India and the Government of Russian Federation on organisation of SU- 30 MKI aircraft licence production in India - SCN was issued alleging that assessee was liable to discharge service tax in terms of Section 66 A of FA, 1994 under the classification "Consulting Engineering Services" for payment made for transfer of technology and technical assistance fees - The payment made by assessee company is for transfer of technology under intergovernmental agreement and not for receipt of any services in India in relation to business or commerce - Under Section 65 (105)(g) "taxable service" under "consulting engineers service" means provided or to be provided to a client by consulting engineer in relation to advise consultancy or technical assistance in any manner in one or more disciplines of engineering - There is no relation of any Consulting Engineering Service with any client or assessee - Thus Service Tax is not attracted under the head "Consulting Engineer Services" on reverse charge basis - Accordingly, impugned order is set aside: CESTAT

- Appeal allowed: ALLAHABAD CESTAT

ST - The assessee is engaged in transportation of goods through Air - They are providing service mainly to their associate company, M/s. BDL for ferrying cargo and documents to different parts of the country - They acquired on lease, aircraft from foreign company for transportation of cargo - The aircraft is operated by assessee with their own crew - Maintenance and repair of aircrafts is also done by assessee - The department took the view that foreign lessor has supplied tangible goods to assessee on lease; that lessor therefore rendered "Supply of Tangible Goods Service" as per section 65 (105) (zzzzj) of FA, 1994; hence assessee as recipient of service are liable to pay service tax on reverse charge basis - The adjudicating authority has found that aircraft is not owned by lessor that originally belongs to Boeing Capital Corporation (BCC) who as the head lessor has given operational control and possession of aircraft under a separate lease agreement to European Air Transport (EAT) for further use - Hence the ownership and title of aircraft vests with said BCC and not with the foreign lessor who have now leased their aircraft to assessee - Tribunal have perused the lease agreement between BCC and EAT- One used Boeing Model 757-236 Aircraft - No doubt, as per Article 5 (a), EAT shall not sublease, assign or otherwise transfer or relinquish possession or control without prior consent of BCC - At the same time, it is also provided that if EAT seeks consent from BCC for such a provision, such consent should not unreasonably be withheld or delayed provided that such sublease shall be expressly made subject and subordinate to the lease between BCC and EAT - Further, BCC have also been permitted to "wet lease" the aircraft in ordinary course of EAT's business - Obviously, EAT was fully permitted and well within their rights to further lease the aircrafts to assessee - Operating Lease agreement between EAT and the assessee is for same Boeing Model 756-236 Aircraft - In fact, the very same conditions that were agreed upon between BCC and EAT have been reiterated in Article 5 of agreement between EAT and assessee - The lease agreement between EAT and assessee is one wherein the right of possession and control of aircraft has been bestowed on assessee and not retained with the lessor - This being so, the ingredients of "Supply of Tangible Goods Service" requiring exigibility to service tax by FA, 1994 are not present in this transaction - In consequence, the monetary consideration paid by assessee to EAT cannot be considered as value of "Supply of Tangible Goods Service" and tax demanded on same as has been done in impugned orders - Following the ratio laid down in the case of Power Mak Industries - 2018-TIOL-1352-CESTAT-HYD the demand of service tax under 'Supply of Tangible Goods Service' in impugned orders cannot sustain - The further two disputes relate to imposition of penalties in respect of non-inclusion of TDS amount in taxable value and wrong availment of cenvat credit on motor vehicles - The assessee have been crying hoarse even at the stage of adjudication proceedings that these infractions have occurred only due to bonafide belief that TDS was not required to be added in assessable value and that credit availed on trucks and haulers, as opposed to motor vehicles, was in order - There is no malafide in these inadvertencies by assessee - Hence while not interfering with these tax demands, imposition of penalties in all these tax demands are therefore an overkill and requires to be set aside: CESTAT

- Appeals allowed: CHENNAI CESTAT

CX - The assessee is engaged in manufacture of spirally welded steel pipes for Water Supply Projects and Gas Projects - They availed CENVAT Credit on inputs/input services and capital goods - They also availed exemption under Notfn 06/2006-CE for supply of such pipes to most of the water projects - A SCN was issued to assessee, inter alia proposing recovery/demand of disputed CENVAT Credit/Central Excise Duty with interest thereon as also imposition of penalty under various provisions of law - On the issue concerning demand on alleged under-valuation of pipes manufactured on job work basis, the issue is fully covered by decision of Tribunal in M/s. Bhavani Enterprises and Ors. - 2018-TIOL-2532-CESTAT-MAD - Said ratio is applicable on all fours to the facts on hand - Hence, the demand with interest cannot be sustained and is therefore, set aside - Coming to the issue on ineligible credit availed on HR Coils, the HR Coils were used only in manufacture of water pipes which were not in exempted or non-dutiable category - In fact, from the SCN, it is evident that assessee was being supplied HR Coils with size 10 X 1250 MM by M/s. Koya Ltd. along with duty paid invoices and they also themselves procured HR Coils with sizes 11 X 1147 MM and 14.2 X 1553.4 MM - All these HR Coils were exclusively used in manufacture of exempted pipes and were not used in any other duty paid pipes - The net takeaway is that when it is known ab initio that the inputs would be used only in dutiable final products, there is then no need for assessee to travel beyond Sub-rule (1) of Rule 6 ibid - Hence, the assessee cannot then avail credit of inputs used exclusively for exempted final products - Ergo, the assessee should not have availed the credit ab initio - The action on the part of assessee to first avail the credit in respect of HR Coils and then adopt the procedure under Sub-rule (3) of Rule 6 ibid, which, in any case, was not available to them, is definitely a contravention of Rule 6 of Rules - The assessee would very well be required to reverse the amount of CENVAT Credit availed in respect of such HR Coils - With regard to the issues which the assessee is not contesting on merits, assessee advanced arguments on the ground of limitation - The credit availed was disclosed in ER-1 returns - They happen to take the credit only on the bona fide belief that they are eligible for credit - It cannot be said that they had suppressed any facts with intent to evade payment of duty - Further, in respect of credit availed on HR Coils, they have reversed 5% credit which has been disclosed to Department in their ER-1 returns - The demand for extended period is set aside as being time barred - The assessee is liable to pay duty demand falling under the normal period - For the same reasons, the penalties imposed are also set aside -For the limited purpose of re-quantification, matter remanded to the adjudicating authority: CESTAT

- Appeal partly allowed: CHENNAI CESTAT

CX - The assessee company is a partnership firm engaged in manufacture of 'Ply Wire' - The Department received information that the assessee cleared excisable goods to related parties & that duty had not been paid on proper value - Upon investigation, the Department held that the valuation had to be made u/r 10 r/w Rule 8 of the Central Excise Valuation Rules 2000 - On appeal, such findings were set aside by the Commr.(A) on grounds that no evidence was put forth to show that goods had been cleared to related entities, such as flow back & suppression of value with reference to normal transaction value.

Held: The assessee sold its produce to six buyers - Four of these are partnership firms, whose partners have blood relations with each other as well as the partners in the assessee firm - Two other buyers are private limited companies & they cannot be held to be related to the assessee - The original authority omitted to examine overreaching control, mutuality of interest & financial control by way of share holding pattern to prove existence of some relation - Apparently both these companies have directors who are related to the assessee company's director, which led the original authority to hold the two private limited firms to be related entities as well - Also, the value of sale is based on commercial consideration & these are normal transaction value as per market conditions - Hence they cannot be rejected since there is no value reduction by any extraneous situation - Thus aspect was not examined by the original authority - Hence the O-i-A warrants no interference: CESTAT (Para 2,5,6)

- Revenue's appeals dismissed: CHENNAI CESTAT

CX - The assesssee is manufacturer of Ordinary Portland Cement (OPC) and Portland Pozzolana Cement (PPC) - They received fly ash from their sister unit at Vishnupuram, Andhra Pradesh and the freight for the said transportation was paid along with the service tax by the Vishnupuram unit, for which the assessee has availed credit - SCN was issued to assessee proposing to deny CENVAT Credit on service tax paid on the grounds that input service with regard to transportation of consignment had not been received by assessee unit and that the input credit documents were in the name of the sister unit - The assessee vide their reply stated that there was no dispute as to the receipt of goods and payment of service tax towards GTA service rendered in transportation of fly ash - The issue is no more res integra and the ratio of said Order needs to be followed - The same view has in fact been upheld by High Court of Punjab and Haryana in case of Amritsar Beverage Ltd. wherein an identical issue has been decided thereby dismissing the Revenue's appeal - Going therefore by the ratio of said cases, the impugned Order is not sustainable in law: CESTAT

- Appeal allowed: CHENNAI CESTAT

CUSTOMS

2018-TIOL-3807-CESTAT-CHD