SERVICE TAX

2019-TIOL-123-CESTAT-HYD + Case Story

Prasad Media Corporations Pvt Ltd Vs CCT

ST - Sporting activity undertaken in fun factory - admission fee charged of Rs.20/- per person is exempted by notification 25/2012-ST - appellant is conducting various sporting activity within the area in his premises which would definitely fall out of the definition of "recognised sporting event" - Sl No 47 also exempts sporting event other than recognised sporting event - Both the lower authorities have missed this point in the notification - lower authorities have mis-construed Entry No. 47 to deny the appellant exemption from service tax liability on the amounts charged by him which are less than Rs 500/- as required under Notification - impugned order set aside and appeal allowed: CESTAT [para 7 to 9]

- Appeal allowed : HYDERABAD CESTAT

2019-TIOL-122-CESTAT-MAD + Case Story

Coromandel Infotech India Ltd Vs Commissioner of GST & Central Excise

ST - SCN suffers from an incurable deficiency with respect to the calculation of tax liability proposed therein - Revenue, even at the Tribunal stage, has not been able to throw any further light in the matter - This being so, Bench finds that not only the proceedings are vitiated by the said defect, but also it do not foresee any useful purpose for remanding the matter for re-consideration de novo by the adjudicating authority - Demand of service tax set aside along with the penalty and interest imposed: CESTAT [para 10 to 12, 14, 16] ST - Appellant had supplied personnel to M/s. Infosys and other clients as per requirements of the latter; that these personnel were utilized for development, enhancement, implementation and maintenance of software projects; that such development, enhancement, etc., of software is not assigned to the appellants themselves, but is done only by M/s. Infosys and the other clients; that notwithstanding the fact that the personnel so supplied may be qualified software personnel, they had to function under the overall supervision, control and management of the client and, therefore, the appellant is providing services of Manpower Supply: CESTAT [para 6, 7.1, 7,2]

ST - Limitation - Appellant were under the bona fide belief that the activity did not fall under the taxable category in view of Tribunal decision in M/s. Cognizant Tech Solutions - 2010-TIOL-698-CESTAT-MAD for which reason that they were not collecting service tax - Issue being an interpretational one, the invocation of extended period is unsustainable: CESTAT [para 8]

ST - CENVAT - Rule 2(l) of CCR, 2004 - Staff Insurance, Travels and Catering Services is admissible as Input Service since the period involved is from June 2005 to May 2008 when the definition of input services had a wide ambit as it included the words ‘activities relating to business': CESTAT [para 15, 16]

- Appeal allowed : MUMBAI CESTAT

2019-TIOL-115-CESTAT-MUM

Persistent System Ltd Vs CCT

ST - Refund - CENVAT - Rule 5 of CCR, 2004 - Commissioner(A) disallowed the refund benefit on the ground that the disputed input services were used for personal consumption of the employees of the appellant and thus fell under the exclusion clause provided in the definition of ‘Input Service' - appellant submits that the refund claim of Rs.15,68,635/- is a part of the sanctioned amount of Rs.8,92,23,680/- which was considered by the original authority and, therefore, such findings of the Commissioner(A) are beyond the scope of the adjudication order.

Held: On perusal of the adjudication order, it is seen that the amount of CENVAT credit disallowed by Commissioner(A) was part and parcel of the refund claim of Rs.8,92,23,680/- which was sanctioned by the refund sanctioning authority - therefore, there was no scope or occasion on the part of the appellant to agitate such matter before the Commissioner(A) - it, therefore, transpires that the Commissioner(A) had traveled beyond the scope of the original records in arriving at the conclusion - there is also no material evidence to show that the Revenue has contested the case of allowing the refund benefit by the original authority to the tune of Rs.15,68,635/- - Revenue cannot, at this juncture, contest the refund benefit allowed by the original authority - no merit in the impugned order, hence same is set aside and appeal is allowed: CESTAT [para 5, 6]

- Appeal allowed: MUMBAI CESTAT

2019-TIOL-114-CESTAT-MUM

Rishiroop Polymers Pvt Ltd Vs CCGST

ST - Appellant availed CENVAT credit of the service tax paid on renting of immovable property, namely premises no. 67 at Atlanta, Nariman Point, Mumbai and premises no. 65 - credit refused on the ground that premises no. 67 was an unregistered premises - appeal to CESTAT.

Held: Appellant's premises appears to be one and the same having different room numbers as through out the case records, room number and premises number are used interchangeably - in view of the judicial precedent - 2018-TIOL-3146-CESTAT-MUM , concerning subsequent period, that has held that the appellant's availment of CENVAT credit against renting of premises number 67 as admissible, impugned order is set aside and appeal is allowed: CESTAT [para 5, 6]

- Appeal allowed: MUMBAI CESTAT

2019-TIOL-113-CESTAT-MUM

Savitri Mahila Audhyogik Sahakari Sanstha Ltd Vs CCGST

ST - Appellant is a registered cooperative society and provides the services of washing and ironing of clothes of customers in its premises on agreed upon charges which are duly recorded in their books of account - upon investigation, SCN issued for payment of service tax of Rs.10,52,362/- for the period 2011-12 to 2014-15 - demand confirmed and penalties imposed - Commissioner(A) waived off the duty liability up to the implementation of negative list holding that only dry cleaning was taxable in the pre-amended period; tax liability for the period post 01.07.2012 was confirmed along with imposition of penalties - appeal before CESTAT.

Held: No irregularity in the order of the Commissioner(A) confirming tax liability w.e.f 01.07.2012 - insofar as imposition of equivalent penalty u/s 78 of FA, 1994 is concerned, mere omission to disclose would not amount to suppression of fact unless there was deliberate attempt to evade duty - no proof furnished by the department that suppression had taken place - since appellant had voluntarily started paying service tax, penalty of equivalent amount u/s 78 would be a travesty of justice - cum-tax benefit to be extended to appellant in respect of the confirmed tax liability - Appeal partly allowed: CESTAT [para 5, 7, 8]

- Appeal partly allowed: MUMBAI CESTAT

 

 

 

 

CENTRAL EXCISE

2019-TIOL-112-CESTAT-HYD

CCE & CC Vs Gulf Oil Corporation Ltd

CX - The assessee-company, engaged in manufacturing explosives, entered into a contract during the relevant AY, for supply of gunpowder - It then sought for provisional assessment of the goods as their contract had a price variation clause - In a subsequent O-i-O, the Commr. disallowed reduction in assessable on 'Guaranteed Powder Factor', holding that there was no price variation clause, but in fact a penalty - Hence the same could not be deducted from the assessable value - On appeal, the Commr.(A) held that the assessee is entitled to reduction in assessable value based on the guaranteed powder factor.

Held: It is common practice in many agreements to have clauses for variation & prices, dependent on many factors - They also have a clause related to achievement of the desired benchmarks, accompanies by a reward or penalty for over-achieving or under-achieving the benchmarks - In this case, this role is played by the guaranteed powder factor, which is evaluated once every quarter & leads to proportionate deduction upon any short-fall - Hence as has been settled in various cases, a bonus received for high performance cannot form part of assessable value - Thus the Guaranteed Powder Factor in the form of penalty cannot alter the assessable value u/s 4 of the CEA 1944: CESTAT (Para 1,5,6)

- Revenue's appeal dismissed: HYDERABAD CESTAT

2019-TIOL-111-CESTAT-MUM

CCE Vs Sai Processors

CX - Corrigendum issued dropping the demand, therefore, Revenue in appeal alleging that the same is contrary to the CBEC Circular 502/68/99-CX dated 16 December 1999 which is binding on all authorities.

Held: It is clear from the impugned order that the adjudicating authority has taken up both the SCNs for disposal and has rendered a finding that demand of short-paid duty for the period January 1999 to January 2000 cannot be upheld and also with reference to the overlapping period held that the demand for that period is sustainable - consequently, the demand of duty that has been confirmed is limited to the period 16 December to 31 st December 1998 with the remaining demand not confirmed - all that the corrigendum has done is to clarify that conclusion instead of leaving it to inference owing to a specific reference in the operative portion of the impugned order - corrigendum, therefore, was nothing more than correction of a mere clerical mistake - Revenue appeal is without merit and is dismissed: CESTAT [para 5, 6]

- Appeal dismissed: MUMBAI CESTAT

2019-TIOL-110-CESTAT-MUM

Venugopal Foods Pvt Ltd Vs CCE

CX - Appellant is a manufacturer of ‘biscuits' which are exempt from duty of excise as per notification 3/2006-CE - Duty demanded on sugar syrup as being intermediate goods used for manufacture of exempted goods - appeal to CESAT.

Held: Sugar syrup used in the manufacture of juices and concentrates are for purposes which are are not comparable with the addition of adding ‘sugar syrup' to ‘biscuits' which is an entirely different food product - finding that ‘sugar syrup' has a shelf-life and thereby becomes excisable is not founded on a proper appreciation of the impugned product - in the absence of any test report to contradict the ‘fructose' content in the ‘sugar syrup' produced by the appellant, Bench does not find sufficient reasons to consider the impugned goods to be excisable within the meaning of section 2(d) of the CEA, 1944 - impugned order set aside and appeal allowed: CESTAT [para 8, 9]

- Appeal allowed: MUMBAI CESTAT

 

 

 

 

CUSTOMS

NOTIFICATIONS

ctariff19_001

Exemption from IGST & Compensation Cess - Materials imported into India against valid Advance authorisation - pre-import condition omitted, specified deemed supplies included [Notifications 18/2015-Cus & 20/2015-Cus amended]

dgft18not053

Para 4.14 of FPT 2015-20 amended to remove pre-import condition - exemption extended to deemed supplies

PUBLICE NOTICE

dgft18pn069

Amendment in Standard Input-Output Norms (SION) at S.No. H-97

CASE LAWS

2019-TIOL-109-CESTAT-MUM

Whirlpool Of India Ltd Vs CC

Cus - ‘Pura Fresh delux' and ‘RO-6.5L Mineral Enrichment System (Reverse Osmosis Water Purifier)' is correctly classifiable under CTH 8421 21 20 as ‘Household type filters' and not under the residual category under CTH 8421 21 90 as ‘Other' - benefit of notification 6/2006-CE not available - Earlier order of Tribunal - 2013-TIOL-2245-CESTAT-MUM in the appellants own case holding as above, though appealed before the Supreme Court, no stay has been obtained - following the precedent, impugned orders upheld and appeals are dismissed: CESTAT [para 5, 6]

- Appeals dismissed: MUMBAI CESTAT

2019-TIOL-108-CESTAT-MUM

Travel Planners Ltd Vs CC

Cus - Benefit of exemption Notification 55/2003-Cus was held unavailable to the appellant on the ground that the 'export obligation discharge certificate' had been obtained by fraudulent mis-declaration of compliance to the licensing authority - appeal to CESTAT.

Held: Evolution of the scheme beyond physical exports is within the purview of the Director General of Foreign Trade and it is not open to the customs authorities to contend that sans the empowerment, powers not existing, the license itself was issued on the basis of fraudulent submissions - no reason to sustain the impugned order - same is set aside and appeal is allowed: CESTAT [para 6, 7]

- Appeal allowed: MUMBAI CESTAT