SERVICE TAX

2019-TIOL-215-HC-DEL-ST + Case Story

Meinhardt Singapore Pte Ltd Vs CST

ST - Penalty u/s 78 of Finance Act, 1994 - Whatever be the constraint the assessee was faced with, it was duty bound to remit amounts collected by it towards service tax, in a planned manner, and as required by law - penalty rightly imposed u/s 78 of FA, 1994 - What is evident is that the assessee/appellant withheld the amounts collected from the service recipient as tax liability - As the remitter, assessee/appellant was duty bound to comply with the terms of the Finance Act and Rules, which prescribed not only filing of returns but also periodic deposit of these amounts - The delay in deposit of these amounts spanned over a period of two and half years and, therefore, amounted to mis-reporting of true and correct facts - only mitigating circumstances whereby the penalty could be reduced might have been if the assessee had deposited the reduced amounts (of penalty) within 15 or 30 days of receipt of the Show Cause Notice as indicated in proviso 1 and 2 to Section 78 - since the reduced penalty amounts were not deposited by the assessee, which is a statutory mandate within the time stipulated by law - equivalent penalty imposed u/s 78 of FA, 1994 stands - Appeal dismissed: High Court [para 6 to 8]

- Appeal dismissed : DELHI HIGH COURT

2019-TIOL-308-CESTAT-HYD

CCE, C & ST Vs Vijay Electricals Ltd

ST - The assessee is a manufacturer of transmission line materials and has entered into two contracts with Power Grid Corporation for supply of transformers and materials and separate contract for erection of such transformers and transmission lines - Said agreement clearly indicates that assessee is required to supply the material/equipments transport the same erect and commission the transmission lines - Issue is regarding eligibility to avail CENVAT credit of service tax paid under reverse charge mechanism on goods transport agency - The demands which have been confirmed by Adjudicating Authority can be spread out into two separate periods i.e. First period prior to 01.04.2008 and second post 01.04.2008 - As regards to eligibility to avail CENVAT credit on service tax paid on goods transport agency prior to 01.04.2008, CENVAT credit availed by assessee on the service tax paid under reverse charge mechanism for transport charges for this period, is correct as held by Supreme Court - Apex Court in case of Ultra Tech Cement Ltd. 2018-TIOL-42-SC-CX has also held so - In view of the situation that the law has been now settled for the period prior to 01.04.2008, which in favour of assessee, demands confirmed against assessee are unsustainable - Consequently, the interest and penalties imposed are also set aside - As regards the confirmation of demands for the period post 01.04.2008, it is seen that the Apex Court has categorically held that CENVAT credit of the service tax paid on goods transport agency which are eligible to till 01.04.2008 and not for the subsequent period - Respectfully following the same, the appeal filed by assessee is devoid of merits and needs to be rejected - The demands confirmed along with interest are upheld and the assessee having paid so as recorded in the adjudication order, the same stands appropriated - As regards the penalty imposed in this appeal, since the issue was settled by the Apex Court in 2018, there is no reason to visit assessee with any penalty: CESTAT

- Appeal disposed of: HYDERABAD CESTAT

2019-TIOL-307-CESTAT-AHM

Saurashtra Gramin Bank Vs CCE & ST

ST - The assessee is registered under category of Banking and Financial services - They entered into an agreement with SBI Life Insurance to sell their insurance products - The assessee was working as an agent of SBI Life and receiving commission of such sells - The assessee inadvertently paid the service tax on commission received from SBI Life and availed Cenvat credit of 50% of total service tax paid - The case of department is that the Insurance Agent service provided by assessee in the capacity of service provider, such service is output service and hence, the same is not input service for assessee - Firstly, the assessee was not required to pay service tax on Insurance Agent service in terms of Notfn 20/2012-ST - However, the service recipient i.e. SBI Life is liable to pay service tax on reverse charge mechanism - As regard the Cenvat credit availed by assessee, service tax was paid on output service therefore, the credit in respect of output service cannot be taken as per Cenvat Credit Rules - Therefore, assessee is not entitled for Cenvat credit since they were not liable to pay service tax - The prayer of assessee regarding refund of service tax paid inadvertently by them can be considered - The assessee is at liberty to pursue their refund with department and department shall process the refund in accordance with the law - Since the assessee have paid service tax on 100% value and availed 50% credit, even though they were not liable to pay, no malafide intention on the part of assessee - In such a case, demand for longer period and penalties are not sustainable hence, the same are set-aside - Even though assessee has availed Cenvat credit in respect of 50% of service tax paid, they are still in loss of 50% of amount of service tax lying with the Government - Demand of service tax for extended period is set-aside - The penalties imposed by Adjudicating Authority and upheld by Commissioner (A) are set-aside: CESTAT

- Appeal partly allowed: AHMEDABAD CESTAT

 

 

 

 

 

 

 

CUSTOMS

2019-TIOL-303-CESTAT-AHM

Shamrock Chemie Pvt Ltd Vs CC

Cus - The assessee is engaged in manufacture interalia of Detergent, Soaps and Surfactants - The other assessees are Sh. Paresh D. Patel, Director of assessee-company and Sh. Shashikant Pandey, Vice President of company - In Nov 2014, assessee filed shipping bills for export of Linear Alkyl Benzene Sulphonic Acid Sodium Salt (Powder Form) (Industrial Surfactant) - The said goods were classified under ITC Heading 38170019 which covers "Mixed Alkyl Benzenes" - The adjudicating authority has decided the classification of export goods exported as not classifiable under 3817009 as declared by assessee and correctly classified under ITC Heading 25.01 - It is also observed that in SCN, there is no proposal for change of classification, therefore, in adjudication order deciding the classification is not legal and proper and beyond the SCN - Since the classification has a bearing on overall case of nature of product as well as valuation, due to the ambiguity created by adjudicating authority in deciding the classification without any proposal for the same in SCN, the entire matter needs to be re-considered - The adjudicating authority had no jurisdiction to decide the issue of classification without having any such proposal in SCN - Accordingly, the matter is remanded to the adjudicating authority for passing a fresh order: CESTAT

- Matter remanded: AHMEDABAD CESTAT

2019-TIOL-302-CESTAT-BANG

Chakrapani Vyapar Pvt Ltd Vs CC

Cus - The assessee claimed refund of SAD paid on import of Linear Low Density Polythylene granules - It filed the relevant documents in support of such claims - On verification of the description in the sales invoice, it was noted that the LLDPE granules were affixed with a rubber stamp, whereas the imported goods read 'Lineral Low Density Polythylene' as per the description - Hence the original authority denied the refund & such findings were upheld by the Commr.(A).

Held - The assessee produced a Chartered Accountant's certificate showing the co-relation between the imported goods & the goods sold - Such certificate has not been considered by the lower authorities, who then rejected the refund claim on grounds of non-compliance with conditions in the Notfn - Besides, as held by the Tribunal in Damodar Trade Links Ltd. Vs. CC, mere variation of description in invoices & Bill of Entry is not sufficient grounds for rejection of refund claims - Hence the orders denying the refund claims are set aside: CESTAT (Para 3,7)

- Assessee's appeals allowed: BANGALORE CESTAT