2019-TIOL-NEWS-020 Part 2, Dated: Wednesday, January 23, 2019

SERVICE TAX

2019-TIOL-286-CESTAT-BANG

Dell International Services India Pvt Ltd Vs CCT

ST - In the matter of appeal filed, Registry objected that the appellant had not paid/submitted proof of 7.5%/10% of the duty/tax paid while filing the appeal u/s 35F of the CEA, 1944 - Appellant informed that they had already reversed 7.5% of duty demanded through CGST credit /electronic credit ledger and indicated the same in column 4B(2) of GSTR-3B filed for the month of August 2018; that such payment is permissible in view of Board Circulars Circular No. 58/32/2018-GST dated 04.09.2018 and also Circular No. 42/16/2018-GST dated 13.04.2018; that, therefore, the objection raised by Registry is untenable.

Held: AR accepts the legal position that mandatory pre-deposit can be made through CGST credit - since appellant has reversed 7.5% of the duty demand through the electronic credit ledger, Registry directed to admit appeal and list the same for final disposal: CESTAT [para 2]

- Appeal admitted : BANGALORE CESTAT

2019-TIOL-268-CESTAT-AHM

Agarwal Associates Vs CST

ST - The assessee is engaged in providing Erection, Commission and Installation Services and claiming exemption notfn 19/2003-ST as amended and 01/2006-ST - The case of department in SCN is that the assessee is not entitled for this exemption as they have contravened the condition of notification inasmuch as they have availed CENVAT credit on some inputs and also the value of some consumables was not included in gross value of the service - It is clear that assessee have raised the bill for their installation charges @ of Rs. 54 per meter - However as per the purchase order, the value of material purchase, Roofing sheet and other material was not included, therefore, they have clearly violated the condition of Notification 1/2006-ST - On violation of this condition itself, the Notfn 1/2006-ST is not admissible to assessee, therefore, without going into the issue of Cenvat, assessee is really not entitle for exemption Notfn 1/2006-ST - Accordingly, the impugned order is upheld: CESTAT

- Appeal dismissed: AHMEDABAD CESTAT

2019-TIOL-267-CESTAT-DEL

Resonance Eduventures Pvt Ltd Vs CCE

ST - The assessee is conducting commercial coaching or training for various competitive examinations for entrance into the courses, such as, IIT, NIT and Medical College admissions - For the purpose of attracting maximum number of students, they are advertising their courses and for promoting their business, they have devised certain innovative schemes - There is a programme of scholarship to the meritorious students - This scholarship is provided by way of percentage concession in course fee which is otherwise normally fixed and charged from all the candidates in the normal courses of business - The scholarship which is nothing but a concession in the fee charged by assessee in the normal course of their business - The department has entertained a view that the amount of concession in the name of scholarship given by assessee to its various students is in a way a non-monetary consideration and as per Section 67 of FA, 1994 read with Rule 3 of Service Tax Valuation Rules, 2006, assessee should have paid Service Tax on the normal fee charged by them from the other students who are not holding any scholarship that is to say that even for students who has got scholarship concession from the normal fee, the normal fee should have been taken as value of service for payment of service tax - The matter is no longer res integra and it has already been decided by Tribunal in its Final Order dated 03.11.2017 - The O-I-O is devoid of any merits and same is set-aside: CESTAT

- Appeal allowed: DELHI CESTAT

2019-TIOL-266-CESTAT-MAD

RRR Associates Vs CC & ST

ST - The assessee was issued SCN demanding service tax along with interest and also proposing to impose penalty on the ground that assessee had not discharged service tax on gross amount received by them as commission and had discharged service tax only on the net amount - The original authority confirmed the demand along with interest and imposed penalty and dropped the balance demand - Provisos contained in Section 84 shows that if any issue is pending in appeal, the Commissioner (A) cannot exercise the revisional jurisdiction - The appeal was filed before Commissioner (A) and the same was disposed of - Therefore, the O-in-O which was sought to be revised by Commissioner was not in existence at the time when the SCN was issued - The O-in-O confirmed demand of Rs.2,18,039/- out of total demand of Rs. 10,54,875/- and dropped the rest of the demand as well as penal proceedings - In SCN issued under Section 84 it is stated that the O-in-O dated 15.12.2008 needs to be revised - By doctrine of merger the O-in-O dated 15.12.2008 has merged with O-in-A No. 76/2010 - The SCN is therefore against the provisions of law - Moreover, against the OIA No. 76/2010 which dropped part of the demand, the department had already filed appeal before the Tribunal, which was pending consideration during the relevant time - Taking these aspects into consideration, the demand cannot sustain: CESTAT

- Appeal allowed: CHENNAI CESTAT

CENTRAL EXCISE

2019-TIOL-271-CESTAT-DEL

Jain Irrigation System Ltd Vs CC

CX - ROM - Assessee states that they had taken the ground before this Tribunal of limitation - In the operative part of order, there is no discussion on applicability of extended period, neither there is any categorical rejection of such ground - There is an error on the part of this Tribunal in not deciding the issue of limitation - The issue involved, as held by this Tribunal in Final Order is simply of classification and/or interpretation - Accordingly, extended period of limitation is not available to revenue and thus, the demand shall be limited to normal period of limitation only - There is no discussion with regard to penalty imposed on assessee-company - No penalty is imposable on company under Section 11AC of CEA, 1944 - So far the other two assessees are concerned namely, Vijay Singhvi and D.I. Desarda who were the employees of company and have been visited with penalty as noticed by Tribunal in Final Order - However, in the aforementioned final order, neither there is any discussion with respect to their appeals nor there is any express rejection of their appeals - Thus, appeals of two individuals need to be considered and decided - There is no finding of any contumacious conduct against the said employees/applicants - Final Order recalled with respect to these two assessees and further allow their appeals, setting aside the penalties imposed on them - Accordingly, assessees are entitled to consequential benefits with reference to Board Circular No. 984/08/2014-CX dated 16.09.2014: CESTAT

- Applications allowed: DELHI CSTAT

2019-TIOL-270-CESTAT-BANG

Essilor India Pvt Ltd Vs CCT

CX - This appeal filed by assessee relates to availment of cenvat credit on some of goods which are found by adjudicating authority, to be the parts/components or accessories of machines used for various manufacturing processes by assessee - A SCN was issued alleging that assessee had availed 100% cenvat credit on said goods and that they fall within the meaning of ‘capital goods' in terms of Rule 2(a) of Cenvat Credit Rules - S CN proceeds on the basis that the amount need not be recovered from noticee which only indicates that the impact is revenue-neutral - In this context, Tribunal is persuaded by observations of Supreme Court in case of M/s.Nirlon Ltd. - 2015-TIOL-96-SC-CX - It is clear that when situation is revenue-neutral, then no malafide intention could be discerned - In addition, undoubtedly, it is a case where extended period has been invoked by Revenue and therefore, burden of proving malafide/suppression is on the Revenue, since, it is the cardinal principle of law that burden of proof lies on the shoulder of person alleging it - Moreover, a mechanical reproduction of language used in the statute would not per se justify the malafide intentions nor the invocation of extended period of limitation - Further, the SCN points out that internal audit was conducted during August 2014 and September 2014 whereas the SCN was issued on 01.06.2016, after a wide gap - The findings of Supreme Court in case of UniworthTextiles Ltd. - 2013-TIOL-13-SC-CUS assumes relevancy - The impugned order is set aside - Even on merits, admittedly, the goods are covered under CTH 82, 84, 85 and 90 and just for this reason alone the Revenue has sought it to be classified as ‘capital goods' - These facts coupled with decision of this Bench in case of M/s. Pattabi Enterprises would irresistibly point out that because of their characteristic of not having any perpetual/enduring benefit, they cannot be classified as ‘capital goods' and therefore, they are entitled for availment of CENVAT Credit - For this reason also, assessee should succeed even on merits: CESTAT

- Assessee's appeal allowed: BANGALORE CESTAT

2019-TIOL-269-CESTAT-AHM

Isotax Corporation Vs CCE

CX - The assessee is engaged in manufacture of Thermic Fluid Heater/ Boiler and parts thereof and were clearing the goods namely boiler as non-conventional energy device without payment of duty by availing exemption under Notfn 6/2006-CE - They are also clearing the goods on payment of duty - Case of department is that the assessee is availing credit on common input which are used in manufacture of dutiable and exempted goods, accordingly demand notice for an amount equal to 10% of value of exempted goods was proposed under Rule 6 (3) of CCR, 2004 - It is clear that adjudicating authority dropped the demand on basis of verification of factual position and came to the finding that separate account are being maintained and no modvat credit is being availed in respect of input used in manufacture of final product - Commissioner (A) reversed the same on his own analysis - It is also a fact that only one incidence of availing CENVAT credit on 30HP motor was relied upon - The assessee admittedly reversed credit on said motor - No evidence was brought on record that assessee have availed CENVAT credit in respect of any other inputs used in manufacture of exempted goods - This has also been recorded in Tribunal order - The demand under Rule 6 can be raised only if it is established that assessee have availed CENVAT credit in respect of inputs which have gone into the manufacture of exempted goods - Without establishing this, the demand under rule 6, merely on the basis that assessee has not maintained the separate account, cannot be confirmed - Assessee have maintained 2 separate accounts one for cenvatable input in RG-23A/C part-I register and for non cenvatable inputs record is maintained in Form-IV register - It is observed that closing balance of any of the input was not shown as minus balance therefore, in respect of total 8 dutiable boiler, the quantity of inputs were sufficient in manufacture of such 8 boiler - This shows that no cenvatable input was used in manufacture of exempted boiler - Since there is no evidence on record that assessee have used inputs for manufacture of exempted boiler on which credit was availed, demand under Rule 6 is not legal and correct - Commissioner (A) has gone only on the valuation basis, cost of raw material and finished goods, this alone cannot establish that the CENVAT credit was availed on inputs used in exempted goods - Therefore, the order of Commissioner (A) seriously lacking of evidence - The impugned order is not sustainable, hence the same is set aside: CESTAT

- Appeal allowed: AHMEDABAD CESTAT

CUSTOMS

2019-TIOL-265-CESTAT-KOL

Bally Jute Company Ltd Vs CC

Cus - The assessee has imported two consignments of Raw Jute Cutting from Bangladesh and they filed two Bills of Entry for home consumption - They sought clearance of goods so imported i.e. Raw Jute claiming the classification of goods under Tariff subheading 530310.10 of CTA '75 being Raw Jute @5% under Notfn 21/2002 Cus, 50% off on production of SAPTA Certificate in terms of Notfn No. 105/99-Cus - Subsequent to clearance of goods, a SCN was issued proposing to classify the raw jute cutting under sub heading No. 5303.9010 of Customs Tariff Act, 1975 and to recover duty under Section 28 (2) of the Customs Act, 1962 - The present issue is no more res-integra in view of the order passed by Tribunal in case of Naffar Chandra Jute Mills Ltd. - 2014-TIOL-3241-CESTAT-KOL - The assessee has appropriately classified the imported goods i.e. raw jute cutting grade under Tariff Heading 53039010 of the Customs Tariff Act, 1975 and has rightly claimed the benefit of Notfns 21/2002-Cus and 105/99-Cus: CESTAT

- Appeal allowed: KOLKATA CESTAT