SERVICE TAX
2019-TIOL-49-CESTAT-MUM + Case Story
Board of Control for Cricket in India Vs CST
ST - Appellant granted media rights to selected party on exclusive basis and who are designated in terms of the agreement as "Official Broadcaster" - it is quite evident that the appellants have granted representational rights to the licensee, in relation to the telecast/broadcast of the IPL matches - services provided by the appellant in terms of media rights agreement to the licensee fall within the category of Franchise Services - Category of "Commercial Use or Exploitation of Event" refers to the services being in relation to the Commercial Use or Exploitation of the Event for "one time" and is not in relation to grant of representational rights to perform a particular function over period of time - demand of Service Tax upheld - since the appellants had not been declaring the income from media right agreements in the ST-3 return filed by them, extended period of limitation has been rightly invoked - Therefore, penalties u/ss 76, 77 and 78 rightly imposed along with interest - appellant entitled to the benefit of CENVAT credit on Input services - cum-tax benefit rightly extended by adjudicating authority - Except for the above modification, appeal dismissed of assessee and also Revenue: CESTAT [para 6.6, 6.8, 6.9, 6.10, 6.12, 7.1, 7.3, 7.4, 8.3, 9.2, 9.3, 10.1, 11.1, 12.1, 14.1]
ST - Export of Services Rules, 2005 - Since the service feed has been provided by the appellant to the person holding media rights in India, the service has been provided in India and all the activities in relation to the consumption of the said feed for broadcast of the match have been performed in India, the claim for the appellants in respect of the said feed as export of Service cannot be agreed to - benefit under Export of Services Rules, 2005 cannot be extended to the appellant for the period prior to 27.02.2010: CESTAT [para 7.5, 7.7, 7.8, 7.9, 7.10]
- Assessee appeal dismissed/Revenue appeal dismissed: BOMBAY HIGH COURT
2019-TIOL-35-CESTAT-MAD
Futura Interiors Vs CGST & CE
ST - In the SCN, it is alleged that assessee bifurcated the value of purchase order into charges for materials and labour charges and they paid service tax only on labour charges - Thus department has demanded service tax on the value of materials under category of commercial or industrial construction service denying them the exemption under Notfn 15/2004-ST as amended by Notfn 1/2006-ST - Thus, department has proceeded to demand service tax treating the work as a composite contract involving both service and supply of materials - The abatement under Notfn 1/2006 has been denied to assessee by the department stating that the materials involved are consumables and therefore the abatement is not applicable - In SCN, the demand is made under commercial or industrial construction service whereas the Commissioner has confirmed the demand classifying the activity under the category of works contract from 16.6.2005 to 31.3.2008 - Needless to say that the works contract has come into effect only after 1.6.2007 - The decision in case of Larsen & Toubro Ltd. - 2015-TIOL-187-SC-ST would apply to the period prior to 1.6.2007 wherein it was held that levy under works contract service prior to 1.6.2007 cannot sustain - For the period after 1.6.2007, it is seen that though the SCN raises the demand under commercial or industrial construction service, the Commissioner has confirmed the demand under works contract service - The Commissioner has thus travelled beyond the SCN and the demand after 1.6.2007, for this reason alone, cannot sustain - The confirmation of service tax being beyond the demand and allegations raised in SCN, the same cannot sustain - The impugned order is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2019-TIOL-34-CESTAT-DEL
International Metro Civil Contractors Vs CST
ST - The assessee is a joint venture company of five different companies - The said joint venture has been constituted for a special purpose of execution of Metro Corridor Contract "Design and Construct Contract MC1B" for metro corridor between ISBT Station and Central Secretariat Station - They were awarded a contract from DMRC for design of rail based mass rapid transport system by procuring the design, execution and completion and remedying any defects in the works of civil engineering contraction, mechanical and electrical installation of the station (including tunnel ventilation and station area conditioning and ventilation) and tunnel infrastructure and buildings - Department alleged that the assessee was involved in evasion of service tax in relation to the said contracts with DMRC by not discharging their liability for providing services as that of erection, commissioning and installation - The services provided by assessee is the construction of rapid rail corridor which stands excluded otherwise from the tax ambit even of the works contract service - Though it is the case of the Department that the exemption is for railways and the metro corridor do not classify to be called as railways for it being a commercial concern - But this ground has already been adjudicated by Apex Court in case of Jagjeet Cotton Textile Mills wherein the Apex Court has held that Delhi Metro Rail is a Government railway as defined in Indian Railway Act - Since Railway also is meant to run on commercial basis, DMRC cannot be distinguished from being called as railways merely on the ground that it involves a commercial angle - This Tribunal in the case M/s IRCON International Ltd. - 2017-TIOL-1650-CESTAT-DEL has held a composite work contracts irrespective include the category of service of erection, commissioning and installation irrespective that the said service is taxable since 01.07.2003 but since the services rendered is classified as works contract and the work contract in respect of railways is excluded from the tax liability as per the statutory definition itself, no question of levy of any service tax on such contract arises - It was also clarified that it is a well settled legal position that metro work is nothing but railways work - As regards to the final aspect of SCN being barred by time, it is observed that the period in hand is w.e.f. April 2004 to September 2005 - The SCN was issued on 23.10.2009 - The same is beyond the normal period of one year as mentioned in Section 73 of the Act - The Order under challenge is absolutely silent about any positive act on part of assessee which may entitle the Department to invoke extended period of limitation - Resultantly, the SCN in this case is otherwise barred by limitation - Impugned order is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
CENTRAL EXCISE
2019-TIOL-33-CESTAT-MAD
Chettinad Cement Corporation Ltd Vs CGST & CE
CX - The assessee being a manufacturer of cement and clinker, has its Head Office at Chennai and Depots/Branches in various places - Both the Head Office as well as Depots at various places avail services that attract service tax - For the period August, 2006 to August, 2007, Revenue issued a SCN alleging inter alia that assessee had contravened Rule 9(1) of CCR, 2004 read with Rule 4A of Service Tax Rules; that they had wrongly utilized CENVAT Credit on service tax paid on input services at their Head Office and Depots; that the documents based on which CENVAT Credit was availed and utilized did not contain the name and address of assessee and therefore, the credit availed wrongly and utilized was required to be recovered with interest - The issue with regard to non-registration for availing benefit of CENVAT Credit has been laid to rest by decision of High Court of Madras in case of CESTAT, Chennai & Anor. following the decisions of High Court of Karnataka in cases of mPortal India Wireless Solutions (P) Ltd. - 2011-TIOL-928-HC-KAR-ST, Tavant Technologies India Pvt. Ltd. - 2016-TIOL-441-HC-KAR-ST and the decision of Allahabad High Court in case of Atrenta India Pvt. Ltd. - Following therefore the binding ratio decidendi of the jurisdictional High Court, appeal allowed with consequential benefits, if any; and since the appeal is allowed on merits, Tribunal do not propose to go into the other arguments of assessee on invoking the extended period of limitation: CESTAT
- Appeal allowed: CHENNAI CESTAT
2019-TIOL-32-CESTAT-HYD
Deepak Galvanising And Engineering Vs CCE
CX - Assessee is manufacturer of excisable goods like structures of electric and telecom towers and the parts thereof and are also undertaking erection of same under turnkey projects - It is noticed by authorities that these items are supplied on separate commercial invoices after adding some profit margin - It is the case of Revenue that raising of commercial invoices by adding a separate profit margin would amount to trading activity - It is seen from the contract entered by assessee with APTRANSCO that it is a turnkey project which include supply of materials, erection and testing of the same - On perusal of Schedule-A, it is found that it contains the quantity of items that is required for executing such turnkey projects and all the items mentioned in paragraph No. 2 are recorded as supplies to be made for execution of such turnkey projects - On the face of such a clear evidence to show that the items were in fact nothing but part of the turnkey project executed by assessee, lower authorities were in error in coming to a conclusion that the amounts billed by assessee separately in a commercial invoice of these items is a trading activity - The assessee has in pursuance of such a contract had procured said items from the market and used them in executing works contract which included the supply operation also to the extent of manufacturing by assessee as well as procurement from open market - It is now settled law in case of L&T Ltd - 2015-TIOL-187-SC-ST by the Apex Court that the works contract remains works contract and cannot be vivisected for taxing various activities under different services - Impugned order is unsustainable and is set aside: CESTAT
- Appeal allowed: HYDERABAD CESTAT
CUSTOMS
NOTIFICATIONS
cnt02_2019
CBIC notifies Customs exchange rates w.e.f January 04, 2019
csnt01-2019
Inclusion of Land Customs Station (LCS), Barhni in the list of LCSs from which export under claim of Duty Drawback can be made to Nepal
dgft18pn066
Rationalization of procedures in handling redemption requests under Advance/EPCG Authorizations
dgft19not048
Export of Red sanders wood by Government of Karnataka - Extension of time regarding
CASE LAWS
2019-TIOL-31-CESTAT-MAD
Krishna Sales Corporation Vs CC
Cus - The assessee who is a partnership firm is engaged in business of importing Viscose Filament Yarn for supply to the local market - The allegation is that assessee have misdeclared the Viscose Filament Yarn imported by them and also undervalued the said goods and evaded Customs Duty - It is seen that for the two containers for which the Bill of Entry was filed, there was no misdeclaration with respect to description of goods - Since from the previous imports it is seen that the goods were imported for higher value, there is no requirement for interfering with the enhancement of value - Thus, the differential duty demand in respect of Bill of Entry is sustained and therefore, the conclusion that the goods in these two containers are liable for confiscation does not require interference - The enhancement of value being only marginal, redemption fine can be reduced to Rs. 30,000/- - The penalty imposed under Section 112(a) in respect of the Bill of Entry also appears to be on the higher side and is reduced to Rs. 15,000/- - The assessee have produced the Master as well as House Bill of Lading to prove that there is no discrepancy with respect to Bills of Entry for import pertaining to the earlier period, which has been recorded by Commissioner (A) of the impugned Order - Merely because there was discrepancy with regard to 2 Bills of Entry for the earlier period, the Department has extended the same to the other 10 Bills of Entry by relying upon the statement of Shri. Krishna Gopal S. Soni - Therefore, the differential duty demand as well as the penalty imposed in respect of 10 Bills of Entry cannot sustain and is set aside - However, the demand in respect of 2 Bills of Entry with regard to under-invoicing and misdeclaration, requires re-quantification - For the limited purpose of re-quantification of differential duty demand in respect of these two Bills of Entry and for the penalty thereon, if any, matter remanded to the adjudicating authority - The differential duty demand in respect of 10 Bills of Entry for the earlier period is set aside - However, the differential duty demand along with penalty in respect of the 2 Bills of Entry is upheld - The matter is remanded to the adjudicating authority for requantification of the differential duty and for revision of penalty: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
2019-TIOL-30-CESTAT-ALL
Logix Soft Tel Pvt Ltd Vs CC, CE & ST
Cus - Assessee was granted approval by Ministry of Commerce & Industry, for setting up an Industrial Park, in terms of scheme notified under Section 80IA (4) (iii) of Income Tax Act, 1962 - In terms of approval, assessee was entitled to use 90% of allocable area for industrial use and 10% of the allocable area for commercial use - They had used 10% of floor space for establishing the business facility called incubation centre which was used for commercial purpose and it was not solely used for purpose of export - There are no allegations against the assessee that there was no export done by them - The Notfn 1/95-CE provides for exemption of Central Excise duty if goods are brought in for specified purposes solely for export - There are no established facts that the goods which were brought in by availing benefit of said Notfn were not used for export - Tribunal did not find through the proceedings that it has been established that the said goods were not brought in connection with activities related to export - Assessee was eligible for benefit of Notfn 22/2003-CE - In view of said finding, that part of impugned order through which Central Excise duty was demanded along with interest and penalty by denying benefit of Notfn 22/2003 is set aside - The proceedings have held that the said imported goods were not used only for purpose of export of software, but they were also used for purposes other than of export - The impugned order sustainable to the extent of Customs duty confirmed by denying benefit of Notfn 153/93-CUS along with interest and equal penalty - Since the entire issue was related to interpretation of Notfns, personal penalty on the other assessees to be not sustainable - In result, appeal succeeds in respect of exemption under Notfn 1/95-CE and exemption Notfn 22/2003-CE and personal penalty on other assessee - The appeal is rejected in respect of demand of Customs duty along with interest and equal penalty in respect of Customs duty confirmed by denying benefit of Notfn 15/93-CUS: CESTAT
- Appeals partly allowed: ALLAHABAD CESTAT
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