SERVICE TAX
2019-TIOL-400-CESTAT-DEL
Commercial Motor Vs CCE
ST - The assessee-company received an amount of Sales incentive from M/s Tata Motors, during the relevant period - Duty demands were raised on the same with interest & penalty under BAS - Further demands were raised, alleging short payment of duty under BAS as well as under Renting of Immovable Property Service.
Held: A) Regarding the demand on the sales incentive, it stands settled in various precedent cases that demands raised on sale target incentives cannot be considered as BAS - Hence the duty demand, interest & penalty in this regard are quashed - B) Regarding the short payment of duty demanded under BAS, the matter warrants remand to determine the validity of the assessee's claim that the commission received by it as well as parking charges collected, cannot be made taxable under BAS - C) Regarding the demand raised on Renting of Immovable Property, the assessee claimed that extended limitation could not have been invoked in this case, since the taxability of renting of immovable property was subject to litigation during the relevant period - Hence the matter warrants remand for examining such claim: CESTAT
- Assessee's appeal partly allowed: DELHI CESTAT
2019-TIOL-399-CESTAT-HYD
CC, CE & ST Vs Parker Markwel Industries Pvt Ltd
ST - A search was conducted in the premises of the assessee as it had not discharged the service tax liability on the services which was received from abroad in respect of Management Consultancy Services and also on the job work undertaken by them in respect of their own export oriented unit in the form of collection of testing, inspection and extraction charges - Further, the lower authorities noted that there was an accounting adjustment between EOU and the DTA unit - On investigation, a SCN was issued upon the assessee for the demand of service tax along with interest - Thus, the Commr.(A) set aside the demands raised on job work charges but confirmed the demands raised on such services - Hence, the present appeals by both the Revenue as well as the assessee.
Held: The Court held that the demands raised against the assessee on this point are unsustainable upto 18.04.2006 on merits itself - As regards the amount of tax liability the assessee should have paid through PLA or cash and Court do find that assessee has kept the Department informed about the discharge of tax liability in their returns - It cannot be said that assessee had suppressed or misstated any information or evaded tax - Having debited the amount in CENVAT Credit, the intention of the assessee is very clear that he wanted to discharge the service tax - Thus, the Court hold that the demand of service tax liability under GTA services post 18.04.2006 is hit by limitation - The same decision was with regard to the service tax liability on Management Consultancy Services and Export Sales Commission - Thus, no service tax liability arises on the recipient of services u/s 66A were brought into statute - Thus, the demands raised on the assessee for the period is unsustainable and liable to be set aside - Therefore, there is no dispute as to the fact that the DTA unit and EOU unit are situated within the same premises and functioning under the assesssee - Thus the Commr.(A) was correct in holding in reasoned findings given by him to drop the demands raised on this account: CESTAT (Paras 2, 9, 10, 11)
- Revenue's appeal dismissed: HYDERABAD CESTAT
2019-TIOL-398-CESTAT-HYD
CCCE & ST Vs Price Waterhouse
ST - The assesse-company provides Chartered Accountants Service to its parent company in the USA & to other companies, for which it received some consideration - It charged one of its clients for the certification work to file registration statement under the United States Securities Act of 1933 & before the US Securities and Exchange Commission - The fee was paid to the parent company in the USA & UK - The assessee availed credit of the service tax paid by the a foreign client, the procedure u/r 6(3)(c) of the CCR 2004 - Duty demands were raised with interest & penalties, invoking extended limitation.
Held: A) The issue as to whether the services provided by the assessee to foreign network firms for consideration received in forex, qualifies as export of services, must be answered in favor of the assessee - The services had been performed in India in the form of inspection & audit of clients - Hence the demands must be quashed - B) Regarding the demand raised on providing certification of information to be filled in Form F-3 to be filed before the United States Security Exchange Commission, it is seen that such activities do not classify as 'accounting' since no books of accounts were written or maintained by the assessee on behalf of the client, since the assessee was only acting as statutory auditor, who cannot undertake to perform these functions - Besides, it is seen that the certificate issued is not concerned with auditing & merely states that the CA verified the books of accounts & issued certificate as per the norms laid down by Securities Exchange Commission - This is pure certification work unconnected with auditing - Such certification service is not listed in the list of taxable services in Notfn No 59/98 & so can be treated as exempted - Thus the demands raised on this count must be quashed as well - C) Regarding demand raised under RCM on services procured from CA firm based in USA & UK, it is seen that the assessee is rendering services in India & it obtained help from associated concerns abroad & paid the fees in this regard - This amounts to import of service, on which the demand raised is sustainable - If such associated concerns are engaged in rendering services in the field of chartered accountancy, the same will be covered under the definition of ‘practicing of chartered accountants’ - D) Regarding the demand confirmed for availing credit on common input services & not maintaining separate accounts for taxable & exempted services, it is seen that the adjudicating authority misinterpreted the provisions of Notfn No 59/1998-ST r/w Notfn No 25/2006-ST - Considering the provisions of Notfn No 59/1998, it is seen that the services related to accounting & auditing are not exempted - No benefit was claimed under Notfn No 25/2006-ST - Hence the demands raised in this regard are unsustainable - Regarding the issue of limitation, considering that the assessee is a tax practitioner, it should have discharged the tax liability on its own - It cannot claim the defence of bona fide belief - Hence the demands are partly sustained with interest & penalties: CESTAT (Para 2,6.1,6.2,7,7.1,8,8.3,9-12)
- Revenue's appeals partly allowed: HYDERABAD CESTAT
CENTRAL EXCISE
2019-TIOL-397-CESTAT-MAD
CGST & CE Vs Sundaram Clayton Ltd
CX - The assessee-company, engaged in manufacturing parts of motor vehicles classifiable under heading 8409 99 41, 8708 99 00 and other Articles of Aluminium falling under Chapter Heading 7616 99 00 of the Central Excise Tariff Act, 1985 and avails CENVAT Credit of duty paid on inputs, capital goods and various input services - The assessee was served SCNs seeking to recover credit wrongly availed on certain input services - Duty demands were raised with interest & penalty - On appeal, the Commr.(A) set aside the demands raised.
Held: The relevant period pertains to period before 01.04.2011, when the scope of 'input service' was much wider and included any service used by a manufacturer or in relation to the manufacture of final products & clearance of final products from the place of removal - The issues at hand stand settled in the assessee's own case for previous periods - Following the same, the order passed by the Revenue warrants no interference: CESTAT (Para 2,3,8)
- Revenue's appeal dismissed: CHENNAI CESTAT
2019-TIOL-396-CESTAT-HYD
Rashtriya Ispat Nigam Ltd Vs CC, CE & ST
CX - The assessee-company captively consumed beams, channels & angles, during the period of dispute and paid duty by arriving at assessable value as per Rule 8 of Central Excise Valuation Rules 2000 - However, the Revenue opined that valuation needs to be done as per Rule 4 of the Valuation Rules since due to factory gate sale the value of the goods captively consumed is ascertainable - Duty demands were raised with interest & penalties were imposed - On appeal, the Commr.(A) sustained the duty demand with interest, while setting aside the penalty.
Held: Indentical issues stand settled in the assessee's own case for previous periods, wherein it was held that valuation of captively consumed goods need to be done on the basis of Rule 4 of the Central Excise Valuation Rules, 2000 - Hence the O-i-A in challenge merits being sustained: CESTAT
- Assessee's appeal dismissed: HYDERABAD CESTAT
CUSTOMS
NOTIFICATION
cnt08_2019
CBIC amends CBLR, 2018 - examinations to be conducted online only by NACIN
CASE LAWS
2019-TIOL-298-HC-MAD-CUS
Crown Enterprises Vs ACC
Cus - The assessee-company imported some goods & filed bills of entry - The Revenue issued SCNs to the assessee, upon which the present writ petition was filed.
Held: It is seen that the assessee filed reply to SCN, in which case it must wait for the adjudication process to be completed - Besides, the writ court is not obliged to delve into the merits of factual contentions raised, pertaining to the validity of the contentions raised in the SCN - Hence the assessee may raise such contentions before the adjudicating authority during adjudication proceedings - No opinion expressed on merits: HC
- Assessee's writ petitition dismissed: MADRAS HIGH COURT
2019-TIOL-297-HC-AHM-CUS
Glory Chemicals Ltd Vs ACGST & CE
Cus - On assessment for the relevant AY, duty demand was raised against the assessee-company - Personal penalty was also imposed on the Director of the assessee-company - Pending adjudication of the matter, the Revenue proposed to attach some immovable property owned by the assessee - Hence the present writ was filed by the assessee.
Held: Considering the provisions of the Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995 as well as the assessee's contentions regarding the starting date for attachment of property & the fact that the value of the attached property exceeded the quantum of duty demanded, the Revenue is directed to refrain from proceeding any further on the attachment order - Notices be issued to the parties, returnable by Jan 31, 2019: HC
- Notice issued: GUJARAT HIGH COURT
2019-TIOL-405-CESTAT-MUM + Case Story
India Extrusion Vs CC
Cus - Differential duty paid under protest and refund claimed in July 1989 – Refund granted in August 2002 – Appellant entitled to interest u/s 11BB of CEA, 1944 from 27.08.1995 till date of refund: CESTAT [para 7]
- Appeal allowed: MUMBAI CESTAT
By Shailendra Kumar 
