SERVICE TAX
2019-TIOL-206-HC-MAD-ST + Case Story
Force I Guarding Services Pvt Ltd Vs CST
ST - Crucial words in Section 78(1) of FA, 1994 are 'by reason of fraud or collusion' or 'willful misstatement' or 'suppression of facts' and which are to be read in conjunction with 'the intent to evade payment of service tax' - no finding rendered in this regard by adjudicating authority - also the finding of the adjudicating authority that assessee had collected service tax from customers but not paid to the government exchequer is not supported by any material evidence - under normal circumstances, penalty could not be imposed but as there has been chronic default committed by the assessee in regular intervals by failing to pay the service tax within the time permitted under the Statute, entire penalty cannot be waived - considering the peculiar circumstances of the case and without being treated as a precedent, penalty reduced to 10% of that imposed under o-in-o- Appeal partly allowed: High Court [para 8 to 10]
- Appeal partly allowed: MADRAS HIGH COURT
2019-TIOL-294-CESTAT-BANG
RNS Motors Ltd Vs CC, CE & ST
ST - The assesee is a dealer of car manufactured by Maruthi Suzuki and is providing service of authorized service station - Further, M/s. Maruthi Udyog Ltd. are providing services of vehicle loans to the customers of assessee which resulting in boosting the business of company and recognition of said assistance rendered by assessee, the financial institution reciprocated with commission in some percentage of loan distributed through assessee and this activity is a clear case of promotion of services rendered by assessee which is specifically included in the category of BAS specified under FA, 1994 and are liable to Service Tax w.e.f. 01.07.2003 - Such promotion of business of financial help promoted the business of assessee also and does not alter the character of BAS - Tribunal in case of City Honda - 2017-TIOL-4018-CESTAT-BANG and M/s. AVG Motors Ltd. have already considered this issue in detail and has come to the conclusion that assessee is providing the services of BAS and therefore, liable to pay Service Tax - The liability of Service Tax against assessee as sustained by impugned order is upheld - As far as imposition of penalties under Section 68 and 78 of the Finance Act is concerned, all the penalties of assessee dropped - Consequently, the appeal is partly allowed: CESTAT
- Appeal partly allowed: BANGALORE CESTAT
2019-TIOL-293-CESTAT-BANG
SI Property Kerala Pvt Ltd Vs CC, CE & ST
ST - The assessee filed a refund claim claiming the amount paid by them as service tax between 27.08.2012 to 06.03.2013 - During this period they had paid this amount as taxes detected as short paid on the services rendered by them during the period January, 2008 to March 2011 - The reason for the short payment was that the assessee had not included the value of cement and steel that was supplied free of cost by their clients to arrive at the value of taxable service rendered by them during the period January 2008 to March 2011 - Consequent to audit, they had paid this amount and subsequently filed a refund claim - The order of Commissioner (A) allowing the appeal of assessee in demand proceedings against separate SCN gives a fresh cause of action to the assessee to file refund claim - As far as refund application filed on 23.10.2014 is concerned, same is time barred as the same has been filed after the expiry of period of limitation as provided under Section 11B of Central Excise Act made applicable to service tax by virtue of Section 83 of FA, 1994 - In view of the decision of Commissioner (A) in another SCN, against the present assessee, wherein he has allowed the appeal of the assessee and dropped the demand in SCN will give a fresh cause of action to the assessee to file a fresh refund claim before the original authority who will decide the refund claim in accordance with law - Appeal disposed of with liberty to the assessee to approach the original authority by filing a fresh refund application and the original authority in view of decision of Commissioner (A) will decide the refund claim of assessee in accordance with law after following principles of natural justice: CESTAT
- Appeal disposed of: BANGALORE CESTAT
2019-TIOL-292-CESTAT-HYD
Sri Venkateswara Cooperative Vs CCE, C & ST
ST - The assessee is engaged in manufacture of sugar and molasses - They availed the services of GTA for transportation of sugar cane, gunny bales, machinery parts, urea and sulphur - During verification of financial accounts of assessee, it was noticed that they have incurred towards transportation of sugar cane to the factory and have also incurred freight charges of procurement of other inputs and they had not paid service tax on GTA services under reverse charge mechanism - SCN was issued to assessee demanding service tax along with interest under section 75 - Entire discussion in this case was on whether the individual truck owner as opposed to a commercial concern is also covered under definition of GTA - The High Court of Madras has held that an individual truck owner is also covered - There is nothing on record to show that no consignment note was issued - Issue of consignment note is an essential requirement for levy of service tax on GTA services - Even in the grounds of appeal, nothing found asserting that no consignment notes were issued - Therefore, no reason found to hold that service tax on GTA services is not payable - As far as exemption notfn 34/2004 is concerned, there is nothing on record to show that assessee is entitled to the benefit of this exemption notfn - The ratio of the judgment of High Court of Madras in case of Suibramania Siva Cooperative Sugar Mills Limited applies to this case and the appeal is liable to be rejected - The impugned order is upheld: CESTAT
- Appeal rejected: HYDERABAD CESTAT
CENTRAL EXCISE
2019-TIOL-291-CESTAT-KOL
Berger Paints India Ltd Vs CCE
CX - The assessee is engaged in manufacture of paints and varnishes and is having manufacturing units at Howrah, Goa, Sikanderabad, Jammu, Pondichery and Rishra - The Head Office of assessee is situated at Kolkata - They also gets its goods manufactured by job workers and all such goods are sold through depots situated all over the country - In addition, the assessee is also engaged in trading of said goods manufactured by others - The assessee is availing Cenvat Credit on inputs and on input services - The case relates to denial of Cenvat Credit on the ground that same has been distributed by "Input Service Distributor" (ISD) prior to registration for period from 30th September, 2004 to 29th August, 2005 - The issue relating to whether invoices prior to registration by an ISD are valid duty paying document is no longer res-integra - It has been consistently held that non-registration by an ISD is merely procedural in nature and hence credit cannot be denied - The present issue is settled in favour of assessee by decision of High Court of Gujarat in case of Dashion Ltd. 2016-TIOL-111-HC-AHM-ST - The CBEC vide its Circular 1063/2/2018-CX has accepted the decision in case of Dashion Ltd. - The impugned order is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2019-TIOL-290-CESTAT-KOL
S C Johnson Products Pvt Ltd Vs CCE & ST
CX - The assessee has two units- Unit IV and Unit VI situated in Guwahati, Assam and is availing the benefit of area based exemption under Notfn 32/99-CE (as amended) - They are the manufacturers of Repellants for Insects as well as Cleaning Preparation - In terms of area based exemption notification, assessee was required to pay Central Excise duty on goods manufactured by them by making use of cenvat credit available to them but subject to value addition norms prescribed within the notification - The dispute is pertaining to the claim made by assesse for fixation of special rate for financial year 2007-2008 as well as 2008-2009 - The matter value addition is required to be re-worked out by Adjudicating Authority, after taking into account the certificate submitted by assessee, subsequent to passing of impugned orders - For this purpose, impugned orders are set aside and matter remanded to the adjudicating authority for denovo decision in the matter after extending a reasonable opportunity of hearing to the assessee to present their case - The appeals are allowed by way of remand: CESTAT
- Matter remanded: KOLKATA CESTAT
2019-TIOL-289-CESTAT-BANG
Venkateshwara Power Projects Ltd Vs CCGST
CX - The assessee is engaged in manufacture of sugar and molasses - They are also having cogeneration plant where they are generating electricity - The electricity so generated is consumed within the factory by them in or in relation to manufacture of their final product i.e. sugar and only the remaining portion of electricity after their captive consumption is sold to outside agency for a consideration - Assessee was issued SCN demanding an amount i.e. equal to 6% of sale value of electricity sold during the period from March 2015 to December 2015 under Rule 14 of CCR, 2004 r/w Section 11A(1)(a) of CEA, 1944 along with interest and penalty is also proposed under Section 11AC - The issue is no more res integra and has been settled by decision of Allahabad High Court in case of Gularia Chini Mills - 2013-TIOL-568-HC-ALL-CX which has been approved by Supreme Court in case of M/s. DSCL Sugar Ltd. - 2015-TIOL-240-SC-CX - Further, Division Bench of Tribunal in case of Jakarya Sugars Ltd. - 2018-TIOL-1845-CESTAT-MUM has also considered the same issue and after relying upon the judgment of Allahabad High Court in case of Gularia Chini Mills has held that in generation of electricity from bagasse, no other input or input service is used and therefore, the electrical energy is neither excisable under Section 2(d) of CEA, 1944 nor exempted goods and hence, Rule 6 is not applicable - By following the ratios of said decisions, the demand of 6% of value of electricity sold to various companies is not sustainable in law and therefore, same is set aside - Assessee has also relied upon the same decisions which have been relied in the other appeals - Further, assessee has contested the demand of 6% but he has also revered proportionate credit along with interest in order to settle the issue and is not claiming the refund of the same - Impugned order is set aside: CESTAT
- Appeal allowed: BANGALORE CESTAT: BANGALORE CESTAT
CUSTOMS
NOTIFICATION
ctariffadd19_005
Seeks to impose anti-dumping duty on 'Metaphenylene Diamine' originating in or exported from China PR
ctariffadd19_004
Seeks to rescind notification No. 11/2014-Customs (ADD) dated 11th March, 2014
CASE LAWS
2019-TIOL-208-HC-MAD-CUS + Case Story
Thiru Rani Logistic Pvt Ltd Vs CC
Cus - Container Freight Station - Suspension to be made by invoking Regulation 11(2) of Handling of Cargo in Customs Areas Regulations, 2009 must be on the known principle that "prevention is better than cure" - Regulation 11(2) can be invoked for suspending the license only when the Commissioner of Customs feels and comes to a conclusion that immediate action is necessary to suspend the license - Thus, the materials to be relied on for initiating and taking action under Regulation 11(1) cannot be the sole basis for taking action under Regulation 11(2) - there is a clear distinction between the nature of action taken under Regulation 11(1) & 11(2), while the former is a punitive, the later is a preventive - except extracting Regulation 11(2) and stating that an enquiry is contemplated in this case and that allowing the petitioner to continue for work will seriously jeopardize the Customs duties and security of Cargo, no other reason has been stated anywhere as to why an immediate action is required in this case - Impugned order of suspension quashed and petition allowed: High Court [para 9, 12, 13, 15]
- Petition allowed: MADRAS HIGH COURT
2019-TIOL-288-CESTAT-MAD
Sibco Overseas Pvt Ltd Vs CC
Cus - The issue is with regard to rejection of SAD on the ground that para 2(b) of Notfn 102/2007 has not been fulfilled - Assessee has furnished Chartered Accountant's certificate showing that necessary endorsements were made on the sales invoices - Further, the Larger Bench of Tribunal in case of Chowgule & Company - 2014-TIOL-1191-CESTAT-MUM-LB has observed that the said endorsement is not mandatory - Following the said decision, the rejection of refund is unjustified - The impugned order is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2019-TIOL-287-CESTAT-AHM
S R R International Vs CC
Cus - The assessee is engaged in trading activity and imported a consignment of ordinary belts (PU Belts) and filed a bill of entry - The assessable value of goods i.e. PU Belts is enhanced by the customs authorities mainly on the basis of DGOV Circular, which is not an authority to dispute the valuation of imported goods - It is necessary that if there is any doubt, an investigation has to be carried out on the basis of material available on record - Though the value was enhanced on basis of NIDB data but no bill of entry of contemporaneous import was brought on record - It is also not established that price of which goods adopted by customs is of same quality, quantity and origin - Therefore, the NIDB data is also of no basis and relevant - Even the customs authorities who are abide by DGOV Circular which categorically states that market enquiry has to be conducted - There is nothing on record that customs authorities have properly conducted a market enquiry - There is no report such as Panchanama of market enquiry on record nor was any report provided to assessee - The Revenue only relied on one Bill which is neither signed nor authenticated hence, the same cannot be relied as market survey report - There is no case of Revenue that assessee have made a payment over and above the value declared in their bills of entry/invoices - In similar case, this Tribunal time and again has taken a view that enhancement of value without proper evidence is not correct and legal - Even if price of contemporaneous import to be adopted, as per the datas, no enhancement can be made - Moreover, in assessee's own case, for the same goods, value was disputed - Matter travelled up to Commissioner (A) who allowed the appeal which was accepted by Revenue as there is no record of challenging the said order by department - The enhancement of value as held by lower authorities, is not sustainable: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
By Hiral Raja 
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