Zeiss Pharmaceuticals Pvt Ltd Vs ITO

Whether exercise of revisionary powers u/s 263 is justified where the AO omits to examine veracity of assessee's claim for deduction as per mandate of Section 80IC & where the findings of the CIT are backed by binding judgments of the Apex Court - YES: ITAT

- Assessee's appeal dismissed: DELHI ITAT

2019-TIOL-427-ITAT-DEL

ST - The issue involved is that the assessee being distributor of Amway India Enterprise Pvt. Ltd. is liable to pay service tax on the gross amount of commission received by distributors - The very same issue has been considered in receipt of number of distributors by Delhi Bench in case of Charanjeet Singh Khanuja 2015-TIOL-1205-CESTAT-DEL , wherein the principle was laid down that which commission will attract the service tax and which will not, since the demand made on the consolidated amount, for the purpose of verification and re-quantification, the matter was remanded to the adjudicating authority - Following the said judgment, impugned order is set aside and matter remanded to adjudicating authority to pass a fresh order on the line of observation made in case of Charanjeet Singh Khanuja - The appeal ia allowed by way of remand to the adjudicating authority: CESTAT  

- Matter remanded : AHMEDABAD CESTAT

ST - The dispute relates to demand of service tax on total rents received by four joint owners of commercial complex located at Trichy, which is rented to various persons - In adjudication proceedings, a service tax amount was demanded jointly from all the joint owners under category of renting of immovable property for the period 1.6.2007 to 31.03.2012 with interest thereon - Penalties were also imposed on four joint owners under Section 77 & 78 of FA, 1994 - The matter is settled in case of Sarojben Khusalchand - Said ratio has been reiterated by Tribunal in Anil Saini 2017-TIOL-1234-CESTAT-CHD - This very Bench in case of Shri S.V. Janardhanam and in case of Shri Syed Ahamed & Others has taken an identical stand - Following the same ratio, Tribunal held in favour of assessee - The impugned order cannot then be sustained and is required to be set aside: CESTAT  

- Appeal allowed : CHENNAI CESTAT

ST - During audit of account of assessee, it was noticed that assessee did not pay service tax on owner's share of construction in respect of Joint Venture Projects - The department entertained a view that service tax is to be paid under commercial construction service from June 2006 onwards - SCNs were issued proposing to demand service tax along with interest on both these projects - The facts would reveal that the demand prior to 1.6.2007 cannot sustain as per the decision of Larsen & Toubro Ltd. 2015-TIOL-187-SC-ST - After 1.6.2007, assessee have discharged the service tax under works contract services under composition scheme - The department has taken the view that assessee have to discharge service tax under construction of residential complex service for Swarup Heritage and under commercial or industrial construction service in case of Jayant Tech Park - The Tribunal in case of Real Value Promoters Pvt. Ltd. 2018-TIOL-2867-CESTAT-MAD has considered the very same issue and has held that after 1.6.2007 also, in the case of composite contracts, the levy of service tax can only be under works contract service for the period disputed in this appeal - It is not disputed that the works contract executed in these projects are of composite in nature for the reason that the assessee have availed the benefit of Notfn 1/2006-ST which is not disputed by the department - The demand of service tax cannot sustain, same is set aside: CESTAT

- Appeal allowed : CHENNAI CESTAT

CX - The issue involved is that the goods manufactured and cleared by an 100% EOU, whether the valuation shall be governed by Section 4 of CEA, 1944 or Section 14 of Customs Act, 1962 - The goods were manufactured out of imported and some of indigenous raw material and cleared in DTA on payment of duty - Some of the goods were cleared to assessee's own sister unit and part of goods manufactured and cleared to independent manufacturer - The Adjudicating Authority and Commissioner (A) held the valuation of goods cleared in DTA under Section 14 of Customs Act, 1962 - Accordingly, the sale price charged to independent customers was applied in respect of clearances made to their on sister concern and to some independent buyers on principle of comparable goods price - As regards to valuation of goods manufactured by EOU and cleared in DTA, it is clear that value for purpose of DTA sale shall be determined in accordance with provisions of Customs Act, 1962 and CTA, 1974 - Therefore, there is no doubt that valuation in respect of goods manufactured by EOU shall be adopted in accordance with Customs Act, 1962 - The valuation principle adopted by Revenue by invoking the valuation provision of Customs Act, 1962 is correct and legal, therefore, the impugned orders are sustained: CESTAT

- Appeals dismissed : AHMEDABAD CESTAT

CX - The assessee is engaged in manufacture of HDPE fabrics and sacks out of HDPE tapes produced from HDPE granules - The HDPE tapes captively consumed in manufacture of HDPE fabrics fall under Chapter 39 of CETA, 1985 - They availed the exemption under Notfn 221/86-CE on the captively consumed HDPE tapes - A SCN was issued proposing to deny exemption observing that said exemption would be eligible only if finished products fall under 540690 - The description of inputs as well as final products in said notfn shows that exemption would be eligible for inputs falling under Chapter 39 even if finished products also fall under Chapter 39 - The assessee has also relied upon the decision in case of Narmada Plastics P. Ltd. in which benefit of exemption was given to the captively consumed HDPE tapes under Notfn 217/86 - Following the same as well as the decision in case of Share Medical Care 2007-TIOL-26-SC-CUS , assessee is eligible for benefit of Notfn 217/86 - The impugned order is modified to the extent of setting aside the demand for the period after 2.4.1986: CESTAT  

- Appeal partly allowed : CHENNAI CESTAT

Cus - The assessee is engaged in manufacture and export of monumental granites to foreign countries and obtained licence for duty free import of goods under DEEC scheme - They were issued a SCN on account of non-fulfillment of export obligation and non-submission of EODC certificate in proof of fulfillment of export obligation - It is not disputed that assessee has not fulfilled and has not realized the foreign exchange and has also not followed the conditions as prescribed in Notfn 43/2002 - The submission of EODC issued by JDFT is only a procedural condition and if assessee can prove by way of other corroborative evidences the factum of export and foreign exchange realization, then the benefit of notification cannot be denied to them - Since the only prayer of assessee is for dropping the interest and penalty, considering that assessee was a small time manufacturer and he has already closed down his business and has paid the demand despite the fact that he has fulfilled the export obligation and realized the foreign exchange - The demand of interest and imposition of penalty is not warranted and therefore same is set aside - The duty demand confirmed: CESTAT

- Appeals partly allowed : BANGALORE CESTAT