SERVICE TAX

2019-TIOL-395-CESTAT-KOL

Academy Of Fine Arts Vs CST

ST - The assessee has an auditorium, which is rented to their clients/customers for drama and rehearsals to amateur theater groups - The auditorium was used for such cultural performances - The charges recovered by assessee for such letting out of auditorium was held by lower authorities to be liable for payment of service tax under category of "Mandap Keeper Service" - An identical issue has come up before Tribunal in case of Gadkari Rangayatan 2013-TIOL-2187-CESTAT-MUM - By following the said decision, assessee will be liable to payment of service tax - No malafide intention to evade payment of service tax can be attributed to assessee - By considering the non-payment of service tax only as an omission on the part of assessee, the demand is restricted to the normal period of limitation along with interest under Section 75 of FA, 1994 - This is a fit case for waiver of all penalties under Section 80 of FA, 1994: CESTAT

- Appeal partly allowed : KOLKATA CESTAT

2019-TIOL-394-CESTAT-MAD

AL Bucheeri General Transport Est Vs CST

ST - Assessee was engaged in processing of oily sludge to obtain clear crude oil for refineries - They undertook the said activity in their various branches located - Pursuant to investigation, it appeared that assessee had undertaken mechanical processing of sludge; that they had collected processing charges from their clients which was inclusive of service tax; that however they did not pay service tax so collected and also had not filed any ST-3 returns - The dispute is only in difference between this amount and that demanded in impugned order - The assessee have put forth various arguments to support their stand including that value of taxable service worked out in SCN is wrong and that the correct figure should be Rs.12,30,97,874/- - They have also now sought benefit of Notfn 8/2005-ST - On the quantum of tax liability, interest of justice would be best served by remanding the matter to adjudicating authority for de novo consideration, in such denovo adjudication, the adjudicating authority will take into account the submissions and contentions put forth by assessee - The assessee should be given sufficient opportunity for presenting the case including submission of additional documents, if any, in support of their arguments - It is also to be noted that assessee was processing the sludge only for Public Sector Undertakings, like IOCL, CPCL and BPCL - The elements of suppression or fraud cannot be alleged against the assessee and hence imposition of penalties under Section 78 as well as Section 77 is unjustified - The de novo adjudication ordered supra is only for the limited purpose to consider the assessee's arguments and submissions with regard to quantum of tax liability along with interest as applicable: CESTAT

- Appeal partly allowed : CHENNAI CESTAT

2019-TIOL-393-CESTAT-ALL

AL-Faheem Meatex Pvt Ltd Vs CST

ST - The assessee is engaged in the export of 'Boneless Buffalo Frozen Meat' - It appeared to the Revenue that on the freight charges shown in the balance sheet, the assessee ought to have paid service tax under GTA service, under reverse charge - Moreover, the Revenue opined that the assessee was liable to pay service tax on security charges & which the assessee had not paid in full - Besides, the Revenue also found the assessee liable to pay service tax on commission paid to a foreign agent - Duty demands were raised.

Held - It is seen that the demands raised are based on presumption that the entire expense incurred on freight was taxable - Hence the same is unsustainable - Regarding, the demand raised on account of security services, no further service tax demand can be raised, considering that the entire amount of service tax stands discharged by the service provider - Moreover, thge Revenue presumed that the commission was paid to the foreign commission agent for export - The Revenue did not examine any records or consider any information about the persons to whom the commission was paid - Hence the demands are set aside: CESTAT (Para 2,6)

- Assessee's appeal allowed : ALLAHABAD CESTAT

 

 

 

CENTRAL EXCISE

2019-TIOL-391-CESTAT-KOL

Patton International Ltd Vs CCE

CX - The assessee has procured H.R.Coils from SAIL - The orders for such Coils have been placed to take into account the requirement of DTA Unit as well as SEZ Unit - The H.R.Coils so procured are initially sent to job workers for slitting to appropriate width - Width of the sheets required in DTA Unit are different from the width required in SEZ Unit - The job workers slit the coils accordingly - The Revenue's case is that the portion of H.R.Coils which are slit to dimensions as per the requirement of their SEZ Unit are not intended for use in DTA Unit and as such will not be entitled to cenvat credit - The inputs on which cenvat credit has been claimed are H.R.Coils procured from SAIL - As per facts on record, the assessee instead of receiving the H.R.Coils in the factory and availing cenvat credit and subsequently sending them to job workers for slitting, has chosen to directly send the coils to the job workers for slitting and availed cenvat credit only after receipt of the sheets - No infirmity found in such procedure - Rule 4 (5) of CCR, 2004, provides for clearing the inputs for carrying out various processes - Rule 3(4)(b) of CCR, 2004 provides that inputs on which cenvat credit have been availed may be cleared as such subject to reversal of proportionate credit - Since slitting of coils into sheets does not amount to manufacture, for clearance of sheets received to SEZ Unit, the assessee was required to only reverse the proportionate credit - Since, there is no dispute that such reversal have been made, there is no scope for ordering payment of any other amount - The lower adjudicating authority appears to have proceeded on a completely wrong footing by considering the slit sheets as inputs for assessee - Considering H.R.Coils as input, the cenvat credit cannot be denied - The assessee will also be entitled to the credit of the service tax paid to the commission agent for procurement of the inputs: CESTAT

- Appeals allowed : KOLKATA CESTAT

2019-TIOL-390-CESTAT-MAD

Sujhan Instruments Vs CCE

CX - Assessee is engaged in manufacture of electronic devices such as Fan Speed Controller / Dimmers / TVCo-oxial Socket outlet and Computer jack - Pursuant to an audit, it emerged that they had entered into an agreement with M/s. Honeywell Electrical Devices and Systems India Ltd. - A perusal of SCN reveals that department is inclined to treat assessee as a job worker of Honeywell primarily on the grounds that supplies of raw materials that required to be approved by the latter, quality control exercised by Honeywell, 99%of the finished goods are sold to the latter and that Honeywell's brand name and MRP stickers are used on the packing - Just because the goods manufactured or produced by assessee are purchased by Honeywell on contract that should detract from acceptance of transaction between assessee and Honeywell to be one of principal to principal basis - The arrangement between assessee and Honeywell is on the lines of "contract manufacturing" as distinguished from "job worker" - The contract manufacturers are not supplied with raw material from principal manufacturers, like "job workers", but they are required to purchase them from the market, very often from vendors who are approved by the principal manufacturer for quality point of view - The principal then buys finished products from the contract margin and very often sales them to his core customer, sometimes with enhanced margin - There is no evidence put forth to indicate that apart from the value invoices by assessee to Honeywell there is an additional value component which is separately paid by the latter to the former or that there is any additional flow back of funds - This being the case, there is no reason on account of invoice value between assessee and Honeywell should not be treated as the "transaction value" under Section 4 (1) (a) of CEA, 1944 - Following the ratio already laid down by Tribunal in Coromandal Paints Ltd. 2010-TIOL-1312-CESTAT-BANG , impugned order is set aside and the said appeals are allowed in toto: CESTAT

- Appeals allowed : CHENNAI CESTAT

 

 

 

CUSTOMS

TRADE NOTICE

Trade Notice 46

Activation of ANF 3D under the E-com module for applying for MEIS for courier/postal shipments under Para 3.05 of the FTP and Para 3.02 of the HBP

CASE LAW

2019-TIOL-392-CESTAT-BANG

Rajashree Packagers Ltd Vs CC

Cus - The assessee have imported three consignments of crude palmolein and cleared them on strength of 3 DEPB licenses purchased by them in open market - The imports were during February – March 2003 - On investigation conducted by Department, it was established that the licenses were ab initio void being forged - The assessments were provisional and at the time of finalization it was brought to the light that the DEPB scrips were forged having known the fact the department cannot put the Revenue at loss due to the argument that the importer was a bona fide transferee of the scrips and was not having any knowledge of the forgery in respect of the scrips - In respect of DEPB scrips, Tribunal and Courts have been consistently holding that the forged DEPBs are ab initio non est - Calcutta High Court in case of ICI India Ltd. has held that whether there was collusion or fraud on the part of assessee in the issue of DEPB licenses/scrips becomes absolutely immaterial and irrelevant since no credit can be derived from a forged DEPB - The credit is made available on the strength of a valid DEPB - If DEPB is forged, then the same is non est and therefore, there is no valid DEPB, as such, no credit can be derived thereunder - Moreover, as the assessments were provisional as observed by this Bench, the department is in its right to recover appropriate duty of customs on the imported goods - The original authority has not imposed any penalty on the assessee in which case, assessee's contention that they are bona fide transferee would have been of some help to them - In the result, no infirmity found with the order passed by Commissioner (A) and that the appeal does not survive - The impugned order is upheld: CESTAT

- Appeal dismissed : BANGALORE CESTAT