2019-TIOL-45-HC-MAD-VAT

GPK And Company Vs ACST

Whether the personal hearing in the very notice of proposal itself without specifying the date of hearing after the reply, is not the proper compliance of the personal hearing - YES: HC

- Case remanded: MADRAS HIGH COURT

SERVICE TAX

2019-TIOL-67-CESTAT-MUM + Case Story

CST Vs Reliance Life Insurance Company Ltd

ST - Service rendered by 'lead generator' is not that of an 'insurance agent' - commission paid by respondent to such entities is not liable to tax in terms of rule 2(1)(d)(iii) of STR, 1994: CESTAT

ST - Regularization of a policy serviced by a person who was not licenced under the Insurance Act, 1938 through levy of penalty would not permit department to apply the logic backwardly to bring canvassers, not designated as agents, of regular policies within the meaning of 'agent': CESTAT [para 7]

ST - Sample agreement entered into between the respondent and the 'lead generator' makes it amply clear that their function is limited to marketing of the product whereas an 'insurance agent' acts in place of the insurance company insofar as the policyholder is concerned: CESTAT [para 8]

ST - Transfer of burden of discharge to the service recipient within section 68 of Finance Act, 1994 is specific and limited without scope for extending beyond the few transactions listed in rule 2(d)(i) of Service Tax Rules, 1994: CESTAT [para 9]

ST - Service rendered by 'lead generator' is not that of an 'insurance agent' and, consequently, the commission paid by respondent to such entities are not liable to be included in the assessable value of the respondent for discharge of tax liability under Finance Act, 1994 - Revenue appeal dismissed: CESTAT [para 10, 11]

- Revenue appeal dismissed : MUMBAI CESTAT

2019-TIOL-61-CESTAT-CHD

Akzo Nobal India Ltd Vs CCE & ST

ST - The assessee is manufacturer of paints and availed cenvat credit of service tax paid on account of Repair and Maintenance of Automatic Dispensing Machines used to mix colour and white paint to obtain specific colour of the paint - The case of Revenue is that these machines have been installed beyond the place of removal, therefore, assessee is not entitled to avail cenvat credit on Repair and Maintenance of Automatic Dispensing Machines of paints in terms of Rule 2 (l) of CCR, 2004 - It is an admitted position that until the activity undertaken by Automatic Dispensing Machines to desired mix colour, the goods are manufactured by assessee are not marketable - Unless until the goods are not marketable, they are not excisable - Therefore, any activity/services availed by assessee till the product become excisable is entitled for input services credit in terms of Rule 2 (l) of CCR, 2004 - As the said rule provides that any service directly or indirectly availed in relation to manufacture of final product is an input service - Accordingly, the service availed by assessee before the stage the paint becomes marketable, assessee is entitled to avail cenvat credit on Repair & Maintenance Service of Automatic Dispensing Machines which enables their product marketable consequently excisable - No merit found in the impugned order, same is set-aside: CESTAT

- Appeal allowed: CHANDIGARH CESTAT

2019-TIOL-60-CESTAT-HYD

Sulabh International Social Service Organisation Vs CCE, C & ST

ST - The Order-in-Revision which is passed without authority of law as the O-I-A has already been passed against the impugned O-I-O passed by the lower authority - Therefore, their appeal is allowed and the impugned order is set aside on this ground alone without going into the merits of the case - As far as appeal No.ST/531/2008 is concerned, assessee is an organisation engaged in providing services relating to setting up and maintaining public toilets for various customers including government and private buildings and complexes - A SCN was issued to assessee demanding service tax on cleaning services provided by them to various authorities - The cleaning services were clearly provided within the commercial premises of Singareni Collieries Limited and hence they are not excluded from definition of cleaning services and are liable to pay service tax - However, the calculation of amount of service tax to be paid by assessee is not clear as neither the O-I-O nor the O-I-A indicate whether the amount of service tax has been calculated on the total constructed value or on the amount paid towards cleaning of the toilets on a monthly basis - If the service tax is calculated on total contract value, it would be incorrect as the contract value was towards construction of toilet complexes and not for cleaning services - On the other hand, service tax can be charged on the amount of Rs. 3,000/- per month per complex to be paid by the client to the assessee for providing cleaning services only - This is a fit case to be remanded back to the original authority for the sole purpose of re-calculation of the correct tax on the amounts received by assessee from Singareni Collieries Limited for cleaning activity: CESTAT

- Appeals partly allowed: HYDERABAD CESTAT

 

 

 

CENTRAL EXCISE

2019-TIOL-59-CESTAT-KOL

CCE Vs Tata Steel Ltd

CX - The issue involved is regarding availment of Cenvat Credit which was recoverable under Section 57A to 57U of erstwhile CER, 1994 read with provision to Section 11 A(I) of CEA, 1944 - M/s Tisco has later produced the certificate which was discharged under supplementary invoice - Had the certificate been issued prior to 31.03.2000, the credit on such certificate would have been available - However, there was no valid document issued as per the relevant provision of erstwhile Central Excise Rules for purpose of availing credit - While passing the order, Addl. Commissioner has failed to appreciate that the Board vide Circular No. 441/7/99-CX has clearly instructed the concerned Central Excise Authorities not to issue any SCN for any procedural or Technical lapses without first verifying wherever ail the substantive conditions of Cenvat Credit Scheme has been fulfilled and that the SCN had been issued in clear derogation of said Circular which was binding upon the Addl. Commissioner after examination of the order - The Commissioner (A) has found this case to be purely Technical and Procedural in nature - Further, the Commissioner (A) also relied upon the CBEC Circular No. 766/82/2003-CX , wherein it is observed that the reversal proceedings cannot be resorted against the consignee where it is a bona fide transaction - In case of Jagan Nath Dalip Singh, it has been held that supplementary invoice issued due to cost escalation, valid duty paying document for taking credit on 23.01.2001 i.e. amended to Notification No. 51/2000-CE(NT) , Rule 57 AE of CER, 1944 Rules, Rule 9 of CCR, 2004 - In this case, also the supplementary invoice was made valid duty paying and appeal was dismissed - Similar view was taken in Ispat industries Ltd. - The credit is available and there is no scope of raising demand under provision of Section 11 A of Central Excise Act - Thus, Commissioner (A) allowed the appeal of party - As long as the receipt of input is subsisted in the factory of production, there is no scope of denial of Cenvat Credit merely on procedural and technical lapses as has been found in this case - Impugned order is correct and legal and hence not required to be interfered with: CESTAT

- Appeal dismissed: KOLKATA CESTAT

2019-TIOL-58-CESTAT-MAD

Sundaram Fasteners Ltd Vs Commissioner of GST & CE

CX - Appeals are filed by assessee against impugned order whereby it was held that the services involved were not eligible input services for availment of CENVAT Credit - With regard to the Manpower Supply Service, the gist of observation of various Benches is that the provision of said services being related to labour welfare legislation, the denial of credit is held unjustified - The denial in impugned Order is unsustainable for which reason, same is set aside - The other ground agitated by assessee is denial of CENVAT Credit on Testing Charges at the place of assessee's sub-contractor, the only reason given by Revenue is that the service was rendered at the sub-contractor's end - It is not the case of Revenue that the same is not an eligible input service or that the service was hit by amended Rule 2(l) of CCR, 2004 - This observation found relevant - This ground of appeal is therefore allowed - The other grievance of assessee is denial of input service credit in respect of Repair Charges for Canteen - When running of canteen itself is held to be an allowable input service; maintaining is also a necessary service with timely repair work and hence, denial by lower authorities is not in order for which reason same is set aside - The last grievance of assessee is penalty confirmed by Commissioner (A ) - No mala fides found attributed in respect of disputed CENVAT Credits - Moreover, these are all interpretational issues settled by courts at various levels - Therefore, the penalty imposed deserves to be set aside - The credit in respect of Rent paid for storage of materials at TVS Logistics godown and Air Travel Agent Services is upheld and the input service credit availed in respect of Manpower Supply PF/ESI, Testing Charges at sub-contractor's place, Repair Charges for Canteen are allowed - Penalty also directed to be deleted: CESTAT

- Appeals partly allowed: CHENNAI CESTAT

2019-TIOL-57-CESTAT-MAD

Texmo Industries Vs CC, CE & ST

CX - The assessee is engaged in manufacture of Electric Motors and power driven pumps - On scrutiny of documents of assessee, certain discrepancies were noticed - Statements were recorded from the employees of assessee as well as from certain buyers, who purchased scrap - The allegation raised against assessee is that they have under-valued the scrap cleared by them and that they have cleared parts of the motor pumps without payment of duty - The demand with regard to under-valuation as well as clearance of parts without payment of duty is mainly based on the statements recorded - No documentary evidence put forward by department to establish the under-valuation of scrap and clearance of parts without payment of duty - It is very much clear that though the assessee requested for cross-examination of said persons, the original authority or Commissioner (A) has not acceded to the request - The denial of cross-examination tantamount to violation of natural justice - The demand has wholly been raised on the basis of statements recorded - In such cases, denial of cross-examination is fatal to the proceedings - According to the assessee, service station was engaged only for a short period - The quantification of demand on the basis of the statements of such persons for a period prior to 1997 indeed cannot sustain - The department has failed to establish the allegations raised in SCN - The demand, therefore, cannot sustain: CESTAT

- Appeal allowed: CHENNAI CESTAT

 

 

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