2019-TIOL-439-CESTAT-HYD

ST - The assessee is engaged in straightening, cutting and bending of iron & steel articles received from Visakhapatnam Steel Plant in their yard premises - They also arrange for transport of materials from plant to the yard of assessee and thereafter they do the said processes and reload the material into trailers and trucks for despatch to the customers - Apart from this process, the assessee also undertake loading and unloading of material for which separate charges are received - Revenue felt that the amounts received towards loading and unloading and transport fall under category of "Cargo Handling Services" and accordingly a demand has been raised on these services - As far as service tax on straightening and cutting of TMT bars is concerned, the department themselves were of the view that these activities amount to manufacture and had agitated the matter before the Tribunal and Supreme Court - It has been finally settled by Supreme Court that the process of cutting and bending is not a process of manufacture and no Excise Duty is payable on these activities - Therefore, the services rendered by assessee by processing the goods manufactured by RINL are exigible to service tax - However, as far as the intention to evade payment of service tax is concerned, this allegation does not sustain - Payment of service tax and interest within the normal period is confirmed and the demand for the extended period is set aside along with penalty.

As far as the service tax on Cargo Handling Service is concerned, cargo handling undertaken by assessee in the form of loading and unloading are a separate service for which separate amount was paid by their client and transportation service rendered by assessee was a separate service for which a separate amount was paid by their client - Therefore, the cargo handling services are chargeable to service tax at the hands of assessee - The amounts received for transportation need to be deducted for purpose of calculation of service tax chargeable on cargo handling service and interest thereon is also liable to be paid - The penalty imposed under Section 78 stands reduced - The penalties under Section 76 and 77 are set aside: CESTAT

- Appeal partly allowed : HYDERABAD CESTAT 

2019-TIOL-438-CESTAT-DEL

ST - Assessee, the proprietor of M/s ACE Institute for Education & Language, Jaipur under an agreement with M/s ACE Institute for Education & Language, started coaching services - It appeared to Revenue that assessee is liable to pay Service Tax under the taxable category of "Commercial Training & Coaching Services" under Section 65(105)(zzc) of FA, 1994 r/w Section 65(26) and Section 65(27) of the Act - Accordingly, SCN invoking extended period of limitation was issued - No case for suppression and/or malafide conduct is made out against the assessee - Accordingly, demand for the extended period is not sustainable and also that the assessee is not liable to pay Service Tax for the period prior to 27.02.2010 - Therefore, the penalty under Section 78 of the Act is set aside - As far as penalty imposed under Section 76 is concerned, matter remanded to the adjudicating authority to recalculate the demand for the period after 27.02.2010 and also to recalculate the penalty under Section 76 - Further, the penalty imposed under Section 77 is reduced to Rs. 5,000/-: CESTAT

- Appeal partly allowed : DELHI CESTAT 

2019-TIOL-437-CESTAT-MAD

ST - The assessee is provider of building and infrastructure construction services like residential complex service, works contract cervices (WCS) & commercial or industrial construction service (CICS)- The Revenue took the view that with respect to various construction projects undertaken, the assessee should have discharged ST obligations under the provisons of sections 65 (25b), (30a), (36a) & (105) (zzzza) - The work of repair & renewal of electrical installations and insatallations of fire fighting system in double level basement parking was also considered to be exigible to ST liability by the Revenue - Hence, ST demand was raised - Six SCNs were issued proposing demand of ST liabilities with interest and imposition of penalties under various provisions of the Finance Act,1994 - The Adjudicating Authorities confirmed the proposals raised in six SCNs while setting aside the proposal of penalty in one SCN.

Held: The assessee have provided services only to Government bodies like Housing Boards, Slum Clearance Boards, CMDA & BDA - The definition of 'dredging' u/s 65 (36a) would also requires in addition to the essentials, the use of a boat or ships equipped with a dredger or dredging apparatus - The activities undertaken by the assessee on concerend water channels/drains will not fit into the nomenclature of a 'river, 'port', 'harbour, 'backwater' or 'estuary' for the purpose of sSection 65 (36a) - Even thouugh the assessee has performed the works of deepening, widening and construction of flood protection walls, there are no attendant contracts to "dredge' - Thus, no ST could be levied - On demand of ST in respect of construction of residential complex, they were related to construction of training institute hostels for BDA and KHB which are government authorities - Even after the negative list regime w.e.f. 1.7.2012, higher appellate forums have consistently held that services provided by contractors to Housing Boards, Local Development Authority under JNNRUM, there could be no ST liability since such houses were meant for residential purpose - Hence, they are within the exemption under Notification No.25/2012-ST - The constructions spans from 2005 to 2015 - Demands on this score prior to 1.6.2007 is liable to be set aside in view of the decision of the Apex Court in CCE & CC Kerala Vs Larsen & Toubro Ltd. - Thus, no ST could be levied - On demand of ST on CICS & MMR services, the construction has culminated in construction of a shopping complex - It appears that the municipality would lease out the shops so constructed - The shops in such complex are leased out at some level of pricing - Hence the scope and purpose of the complex would only be commercial in nature - Hence, no ST could be levied - Revenue's appeal in respect of ST liability for services in relation to construction of Administrative Training Hostel cannot be made exigible to ST levy for the same reason that they have been provided in relation to a hostel of the Government institute - The matter also stands clarified by Board's circular No. 80/10/2004-ST dt. 17.09.2004 - Projects undertaken for KHB and TNSCB for an amount are not exigible to service tax - Thus, demands are set aside - There was also some amount of confusion on the taxability of such activities - Thus, penalties imposed in all the appeals are set aside: CSETAT (Para 9.6, 9.10, 10.1, 10.5, 11.1, 11.3, 11.12, 12.1.2, 13)

- Assessee's Appeals Partly Allowed : CHENNAI CESTAT

CX - Only because audit party had found some credit availed as inadmissible, suppression of fact cannot be made out unless malafide intention is established: CESTAT [para 5 to 7]

-Appeal allowed : MUMBAI CESTAT 

2019-TIOL-436-CESTAT-MAD

C Sukumaran Vs CGST & CE

CX - During the period of dispute, the Department noted that the assessee-company availed credit based on fictitious documents issued by a second-stage dealer - It was alleged that the credit earned on purchase of items such as MS Wires & Coils had been passed on to the assessee for the sale of scrap - Inspection of relevant documents revealed that the value at which the assessee purchased the scrap from the second-stage dealer was lower than the value at which the second stage dealer itself purchased the scrap - The Department suspected the bona fide nature of the transactions & found no explanations coming from the assessee - Hence duty demands were raised, seeking recovery of ineligible credit, with interest & imposition of penalties - Personal penalty was also imposed on the MD of the assessee-company - On appeal, the Commr.(A) sustained such findings.

Held - It is seen that the bona fides of the assessee have not been disproved - The statements taken from various employees of the assessee, confirm that the inputs received by the assessee were MS Scrap - It is also seen that the deponents were not questioned about the allegedly bogus invoices raised by the second-stage dealer, bearing the description of MS Wires/Coils - The statement of the chief chemist also mentions that samples were drawn after receipt of scraps - Thus the Department failed to sufficiently prove its allegations - There is no documentary evidence to support the same - Hence the demands are unsustainable: CESTAT (Para 1,3,13,14)

2019-TIOL-435-CESTAT-HYD

CX - On audit for the relevant AY, the Revenue noted that the assessee availed some amount of inadmissible Cenvat credit on services availed when setting up of its plant - SCN was issued raising duty demand for reversal of such credit - Later, the O-i-O dropped the proceedings in respect of part of the amount while upholding the remaining demand - The demands for interest & penalties imposed were sustained too - The assessee's appeal was rejected by the Commr.(A) - Hence the present appeal.

Held - The issue pertains to eligibility for credit of service tax paid on labor charges incurred for fixing & erection of equipments, buffing work, fixation & erection of equipment work, insulation work - Considering the definition of Rule 2(l) of CCR 2004, the Revenue apparently denied Cenvat credit to the assessee on grounds that the input services in question were covered under the exclusion clause A(b), which pertains to the laying of foundation or making of structure for support of capital goods - However, considering the definition, it is seen that the services were rendered in respect of capital goods & not for laying foundation or making supporting structures for capital goods - It is also seen that the assessee manufactures bulk drugs, which requires various plant & machinery to be installed to this end - As the law clearly states that credit can be availed on inputs used directly or indirectly in relation to manufacture, the foundation or making structures for support in respect of capital goods, are eligible for credit: CESTAT (Para 3,7,8)