SERVICE TAX

2019-TIOL-385-CESTAT-CHD

Nabha Power Ltd Vs CCE & ST

ST - The assessee, a wholly owned subsidiary of Larsen and Toubro Limited has set up a Thermal Power Plant in Rajpura and the power generated in plant is to be sold to the Punjab State Power Corporation Limited - To generate power, the main input required by assessee is coal and the same being transported through network of railways - So the assessee entered into an agreement for procurement of coal from South East Central Coalfields Limited, Chhattisgarh - An enquiry was conducted by Revenue with regard to various payments made to Indian Railways in relation to mandatory supervision of Railways - On the basis of details provided by assessee, the Revenue was of the view that assessee was required to pay service tax on services received from Railways for construction of siding from Sarai Banjara railway station to Thermal Power Plant - The assessee themselves have constructed siding under supervision of Railways - Therefore, they are required to make payment of mandatory departmental chares, cost of OHE work and D&G charges - It is not disputed that all these charges have been paid by assessee for various approvals and supervisions by Railways for construction of siding by assessee - The said execution of such work cannot be done without mandatory approvals and supervisions by railways - In that circumstances, in terms of CBEC Education guide 2012, TRU Circular dated 20.06.2012, the services in question cannot be termed as Support Services under Section 65B of FA, 1994 - Admittedly, the supervision services and various approvals given by Railways cannot be done by assessee - Moreover, on a specific query made to the revenue that, whether the various approvals taken by the railways and supervision done by the railways can be done by assessee or any other agency, the revenue answered in negative - It is to be seen that whether said activities are under Support service or not - Admittedly, as per Section 65B (49) of FA, 1994, the approvals and supervision done by Railways cannot be done by any other party or the assessee - As per Notfn 25/2012-ST, the services by way of construction, erection, commissioning or installation of original works pertaining to railways are exempt from payment of service tax - The term railway includes siding and yard - Therefore, the granting of approvals and supervision are in relation to Railways which is exempted from payment of service tax under said Notfn - Thus, assessee is not liable to pay service tax - As, on merits case decided in favour of assessee, therefore, not going into the issue of quantification of demand against the assessee: CESTAT

- Appeal allowed: CHANDIGARH CESTAT

2019-TIOL-384-CESTAT-MUM

State Bank Of India Vs CST

ST - Appellant, registered as provider of ‘Banking and Other Financial Services' filed a refund claim on 04.05.2011 in respect of the tax paid during the period 2007-08 to 2008-09 on the ground that they had paid excess service tax in respect of the commission amount received by them - original authority rejecting the claim on the ground that the same was not filed within one year as provided u/s 11B of the CEA, 1944 - against the o-in-a upholding such rejection, apellant before the CESTAT and relies on the Bombay High Court order in Parijat Construction - 2017-TIOL-2170-HC-MUM-ST to state that period of limitation is not applicable since tax was paid under mistaken belief.

Held: Relevant date should be considered as the date of payment of service tax - refund sanctioning authority adjudicating the refund issue under the statute has no option or scope to take a contrary view than the limitation period prescribed under the statute to decide the issue differently - when the words of section 11B are clear an unambiguous, different interpretations cannot be placed by the authorities functioning under the statute and they are bound to obey the provision contained therein - since the refund application was filed and decided u/s 11B, the time limit prescribed thereunder was strictly applicable for deciding such issue - no infirmity in the order - SC rulings in Doaba Co-operative Sugar Mills - 2002-TIOL-426-SC-CX, Anam Electrical Manufacturing - 2002-TIOL-650-SC-CUS and Miles India Ltd. - 2002-TIOL-501-SC-CUS followed - appeal dismissed: CESTAT [para 5, 6.1, 7]

- Appeal dismissed: MUMBAI CESTAT

2019-TIOL-383-CESTAT-MUM

CCE & ST Vs Swarupanand Enterprises

ST - Penalty - SCN invoked the extended period by alleging existence of ingredients that justified invoking proviso to section 73(1) and section 78 of the Finance Act, 1994 - lower appellate authority has rendered a clear finding that the ingredients for invoking larger period of limitation/penalty u/s 78 are not present and proceeded to confirm the demand for a part of that which was proposed initially - however, Commissioner(A) has imposed penalty u/s 76 for the portion of the demand pertaining to the period October 2010 to March 2011 by substituting the penalty imposed by the original authority under s.78 of FA, 1994 - jurisdiction to invoke a penal provision that was not the subject matter of appeal is beyond the competence of an appellate authority - such jurisdiction could have been assumed had the first appellate authority placed the appellant on notice of such intention - therefore, imposition of penalty u/s 76 in the absence of conformity with principles of natural justice is bad in law and liable to be set aside: CESTAT [para 4]

ST - Appellant did contract with its clients for execution of specified works - It is a settled law that activities for which consideration is lumpsum and without any bearing on the number of persons deployed cannot be taxed under ‘Manpower recruitment or supply service' - impugned order can, therefore, not be faulted for dropping the demand - Revenue appeal dismissed: CESTAT [para 5]

ST - Expenditure incurred in rendering of services - It is clear from the ‘job order' that appellant is responsible for discharge of all statutory requirements devolving on an employer - requirements enumerated in rule 5(2) of the Service Tax Valuation Rules, 2006 have not been complied with as noted in the order of Commissioner(A) - expenditure addable in the value of taxable service: CESTAT [para 8, 9]

ST - Concessions given of extension of cum-tax benefits and of notification 6/2005-ST for computation of tax is justified: CESTAT [para 9]

- Revenue appeal dismissed/Assessee appeal partly allowed: MUMBAI CESTAT

 

 

 

CENTRAL EXCISE

2019-TIOL-382-CESTAT-ALL

Maiden Paper Tubes Pvt Ltd Vs CCE

CX - The assessee-company, engaged in manufacturing paper tubes, paper core, containers & reel core, availed SSI exemption as well as Modvat/Cenvat credit, during the relevant period - Inspection of physical stock during the relevant period, revealed shortage of HDPE Laminated Circular fabric and Polythene Rolls - The Revenue alleged that some of the firms to which the assessee allegedly supplied goods, were in fact non existent - While some amount of duty was reversed by the assessee, the present appeal arose on another amount which was found to be payable - The assessee claimed to have carried out job work for such period and so was not liable to pay any duty - However, the Revenue claimed that the transactions in question were dutiable & in contravention of the provisions of the CER 2002 - Hence duty demand was raised with penalty.

Held: There is sufficient evidence showing there to be no mala fide intent on part of the assessee & that the transactions in question were job work in nature - The same is proven through receipt of goods on invoices, which mention job work - Later, upon conversion of the goods returned by challans, such activity is marked as job work - However, there is failure on part of the assessee to follow the procedure laid down under Notfn No 214/86-CE, due to which they become disentitled from receiving exemption - Hence the duty demands are sustained - However, due to there being no mala fide or contumacious conduct on part of the assessee, the penalty u/s 11AC is unsustainable - The personal penalties imposed on the directors are set aside too: CESTAT (Para 1,2,6)

- Assessees' appeals partly allowed: ALLAHABAD CESTAT

2019-TIOL-381-CESTAT-HYD

CCT Vs Saraca Laboratories Ltd

CX - The issue is regarding refund of an amount - The Adjudicating Authority has rejected the refund claim and the First Appellate Authority has allowed the same - The Revenue is challenging the O-I-A only on the ground of unjust enrichment having not been considered by First Appellate Authority in it is correct prospective, and the First Appellate Authority allowed the appeal only on limitation in favour of assessee - It is not so, in order to appreciate the findings of First Appellate Authority on the ground of unjust enrichment - It can be seen that the First Appellate Authority has come to a correct conclusion as to satisfaction of unjust enrichment by assessee - The Chartered Accountant has categorically stated that the assessee has been carrying on an amount of Rs. 6,80,974/- in the balance sheet under the "excise duty receivable" - The First Appellate Authority was correct in holding that assessee has satisfied the condition that there is no unjust enrichment - Accordingly, the impugned order is correct and legal and does not suffer from any infirmity: CESTAT

- Appeal rejected: HYDERABAD CESTAT

 

 

 

CUSTOMS

NOTIFICATION

dgft18pn072

Claiming MEIS benefits - DGFT amends Format, ANF 3D, changed

CASE LAW

2019-TIOL-380-CESTAT-AHM

Sumit Enterprises Vs CC

Cus - The assessee is engaged in import and trading of ordinary belts (PU Belts) - Case of department is that assessee has undervalued the said imported goods - The goods in all the appeals are identical - The facts such as, reliance on contemporaneous imports, market survey, DGOV Circular, identical products were relied upon in all the cases - It is also observed that the price of goods declared by all the parties are more or less same even though minor variation is there - Supplier in all the cases is also the same party i.e. M/s. Wenzhou Yuanqiao Leather Goods Company Limited, China - Identical issue was dealt with in the case of SRR International and the appeal of said party was allowed - The goods in present two appeals as well as in the appeal disposed by the said order, are absolutely identical - Therefore, there is no need to give the findings again on identical facts - Thus, following the ratio of decision in case of M/s. SRR International, enhancement of value of imported goods and consequential differential duty demand is not legal and correct - Accordingly, the impugned orders are set-aside: CESTAT

- Appeals allowed: AHMEDABAD CESTAT