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SERVICE TAX
2019-TIOL-573-CESTAT-HYD
Exhibition Society Vs CST
ST - The appellant is a charitable society which is engaged in organizing industrial exhibitions - It deposited service tax under Business Exhibition Services - During the period of dispute, it was issued SCNs proposing to tax the value of entry tickets sold to the general public inder the heading Business Exhibition Service - Demands were also raised on the sale or transmission of power during the exhibition, publicity income which they received for sale of space or time for advertisement under advertisement service, short payment of service tax paid by the appellant on the Business Exhibition and Mandap keeper services, interest on delayed payment of service tax on stall rentals received in advance & renting of immovable property service - These SCNs culminated into several adjudication orders raising duty demands - Hence the present appeals.
ST - Regarding demand raised under Business Exhibition Service on value of entry tickets sold to general public, it is seen that the tickets sold to general public for entering the exhibition cannot be treated as service rendered to exhibitor - The service here is rendered to the visitor to enable enjoyment of facilities in the premises - Before 01.07.2012, the tickets sold to visitors was not taxable as BES - Post 01.07.2012, such services are mentioned in the Negative List u/s 66D - The presence of amusement facilities in the exhibition premises does not characterize the latter as the former - Exclusion of amusement facility u/s 65B(9) clarifies that amusement facility does not include a place within such facility where other services are provided - Hence appellant is liable to pay service tax post 01.07.2012 on value of tickets sold to general public: CESTAT (Para 4)
ST - Sale of electricity - The Department sought to raise demand for the same u/r 5(1) of the Service Tax (determination value of service) Rules, 2006 - This provisions was held to be ultra vires by the Delhi High Court's judgment in Intercontinental Consultants & Technocrats Pvt. Ltd., Vs. UOI - This judgment was upheld by the Apex Court - Hence the demand raised in this regard warrants being quashed - The demand on publicity income is not disputed - The issues of penalty u/s 78 will be looked into later: CESTAT (Para 5)
ST - Mandap keeper service - Business Exhibition Service - Matter warrants remand, as there is dispute regarding method of calculation of demand raised - Regarding interest on delayed payment of tax on stall rentals, it is undisputed that the rentals were received in advance - This does not qualify as an advance since there is undeniable link between allotment of stall and the collection of the amount in advance - Merely because some applicant was not allotted a stall & their amounts were refunded, no service tax can be demanded - Interest & penalty are sustained since there was delay in payment of tax: CESTAT (Para 6)
ST - Renting of Immovable Property Service - The appellant only contests rent pertaining to period between April & May 2007, on grounds that RIPS became a taxable service w.e.f. 01.06.2007 - Such arguments have merit - Hence demand raised on this count warrants being quashed: CESTAT (Para 7)
ST - Penalty - The appellant is a charitable society engaged in organizing industrial exhibition - No mala fide intent to evade service tax with intent to defraud the Government, can be attributed - Penalty cannot be imposed merely because appellant's understanding of law differs from the understanding of law as per the Revenue: CESTAT (Para 8)
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Assessee's appeals partly allowed
: HYDERABAD CESTAT
2019-TIOL-572-CESTAT-ALL
Jubilant Chemsys Ltd Vs CCE & ST
ST - The assessee is registered for payment of service tax of services provided by them and also services received by them under Reverse Charge Mechanism - They are also availing facility of Cenvat credit - Further, assessees are claiming refund of accumulated Cenvat credit under Rule 5 of CCR, 2004 - Through the impugned orders, service tax of around Rs.1.43 crores and around Rs.95 lakhs were confirmed against the assessee and penalties were imposed under Section 76 & 77 of FA, 1994 - The assessee was supplying small quantities of organic compounds manufactured outside India to Eli Lilly and Company, Endo Pharmaceuticals and other drug manufacturing companies located abroad in collaboration with group companies such as M/s JBL, Bangalore and M/s JLL - It appeared to revenue that assessee was providing taxable services to M/s Jubilant Biosys Ltd. and such services were classified by revenue under category of Scientific or Technical Consultancy Services - Both the issues are already decided by Final Orders dated 02.05.2017 & 11.04.2018 in respect of same assessee for earlier period in favour of assessee - The impugned orders are set aside: CESTAT
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Appeal allowed
: ALLAHABAD CESTAT
2019-TIOL-571-CESTAT-DEL
Asiana Airlines Vs CST
ST - The assessee is engaged in business of operating airlines services and providing the service of "Transport of passengers embarked in India for domestic journey or international journey by air services" to their clients - They are registered with service tax department under category of GTA service, BAS and Transport of passenger by air service - The department was of the view that assessee was not paying service tax on gross amount received by them from their customers under category of transport of passenger by air service - The matter is no longer res integra as the issue has already been decided by Tribunal in case of M/s. Royal Jordanian Airlines and others 2017-TIOL-4578-CESTAT-DEL - The O-I-A is devoid of merit and is set aside: CESTAT
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Appeal allowed
: DELHI CESTAT
CENTRAL EXCISE
2019-TIOL-570-CESTAT-DEL
Naveen Rastogi Vs CGST
CX - Appellant did not pay Central Excise duty on their final product - it was under the bonafide belief that slitting/cutting jumbo rolls of papers into smaller sizes does not amount to manufacture following decision in Commissioner of Central Excise vs. S.R. Tissues Pvt. Ltd. = 2005-TIOL-101-SC-CX - raw materials & final products were seized by the Revenue by holding that manufacturing activity was undertaken as much as the appellant's final product is distinct from the jumbo paper rolls - penalty imposed - orders confirmed by Commissioner (Appeals) - appeal to CESTAT.
Held: The issue of 'manufacture' is no longer res-integra , having been decided against the assessee, in their own case - The issue as to whether the Revenue was justified in confiscating the goods and imposing the penalties upon both the appellants is required to be examined - Admittedly, there was Supreme Court decision in Commissioner of Central Excise vs. S.R. Tissues Pvt. Ltd. , which held that cutting, slitting activities of jumbo rolls into smaller pieces does not amount to manufacture - The subsequent decision, which stands relied upon by the Tribunal in the assessees own case was passed on in 2015 - whereas the seizure relates to July, 2014 - As such, while upholding that the seized and confiscated goods are required to be cleared on payment of duty- no justification for confiscation or for imposition of penalty upon the appellant - Assessee's appeal allowed: CESTAT [para 6]
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Appeal allowed
: DELHI CESTAT
2019-TIOL-569-CESTAT-BANG
KK Plastics Vs CC, CE & ST
CX - During the relevant period, the Revenue alleged that the appellant-company indulged in clandestine removal of plastic moulded chairs - Duty demands were raised, penalties were imposed and some seized goods were confiscated - Personal penalties were also imposed on certain persons in the appellant company - The Revenue based its case on certain documents seized from the premises of persons connected with the appellant-company, as well as from the contents of certain pen drives recovered - The appellant contested the manner of collecting evidence as well as recording of statements - It also contested the admissibility of such evidence.
Held: The Department could prove to a reasonable extent that the appellants indulged in clandestine removal - The same has been discussed in the O-i-O, giving reference to various evidences such as documents recovered and statements recorded - The appellant's contention regarding the manner of search & seizure are relevant in criminal proceedings, but are not relevant in quasi-judicial proceedings - Understandably, the Revenue cannot prove everything with arithmetical precision - It is only required to prove the allegation with reasonable amount of evidence, which could logically be extended to the entire activity - The appellant claimed that the Department did not prove with cogent evidence that the clandestinely cleared goods were manufactured by it - Amongst the data in the pen drive, there were estimates, sales register (month-wise), purchased register of chemicals, purchased register of RP and cash book - Evidence was available regarding purchase of chemicals from certain entities - It was established that the appellants purchased recycled plastic from their sister units & other entities - This was confirmed by the office assistant in the appellant company - The adjudicating authority gave clear findings of clandestine manufacture, as evidenced from production slips, purchase of raw materials & power consumption - The Department also looked into the costing of the materials which showed suppression of value - Thus it cannot be said that it did not establish clandestine manufacture - It cannot be expected that all evidence will be contained in the seized records, considering the probability that records are likely to be destroyed in cases of clandestine manufacture & removal - Moreover, sale & recovery of additional consideration was also established through evidence gathered from print outs taken from pen drives, statements of employees and other persons - Hence the O-i-O is upheld: CESTAT (Para 1,5,6,7)
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Assessee's appeal dismissed
: BANGALORE CESTAT
2019-TIOL-568-CESTAT-AHM
NR Agarwal Industries Ltd Vs CCE & ST
CX - Revenue conducted investigation on the appellant - it was found that there was excess stock of finished goods which was cleared without payment of duty - Demad of excise duty was raised - the Commissioner (A) confirmed the demand on the basis of the investigation - appeal to CESTAT.
Held: The entire case is based on the investigation conducted by the Income Tax Authority wherein some excess stock as compared to the book stock was pointed out - The Central Excise Officers have neither carried out any stock verification nor any further investigation to establish that goods have been found in excess was cleared clandestinely - When Central Excise department has not carried out any independent investigation - merely on the basis of material and investigation of other agency, the case under Central Excise Act will not sustain - impugned order is set aside and appeals are allowed: CESTAT [para 4, 5]
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Appeal Allowed
: AHMEDABAD CESTAT
CUSTOMS
2019-TIOL-459-HC-AHM-CUS + Story
Messrs Maxim Tubes Company Pvt Ltd Vs
Union Of India
Cus - "Pre-import condition" inserted by Notf. 79/2017-Cus renders Advance Authorisation scheme nugatory, hence is ultra vires : High Court
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Petitions allowed
: GUJRAT HIGH COURT 2019-TIOL-574-CESTAT-DEL
Container Corporation Of India Ltd Vs CC
Cus - The assessee has been appointed as custodian of ICD subject to conditions laid therein - The issue involved is regarding confirmation of cost recovery charge against assessee vide the impugned order - The Adjudicating authority has confirmed the demand under provision raised by SCN - The SCN has invoked the provisions of Regulation 5(2) and 6(1)(o) of HCCAR - However, the Commissioner has confirmed the demand without invoking any of those regulation - A perusal of regulation 5(2), 6(1)(o) and 12 of HCCAR reveals that the same is intended for levying of cost recovery charge and payment thereof - Therefore, Regulation 6(1)(o) of Regulation (6) is not meant for recovery of default payment but only it says that the CCSP will have to bear the cost of officer deployed at their premises - Similarly, Regulation (12) of CCAR does not prescribe for the recovery of defaulted cost recovery charge - But only states that the same is procedure for suspension or revocation of approval and imposition of penalty - In fact, SCN has invoked the provisions of Regulation 12 of HCCAR which does not provide for the realisation of the cost recovery charge but only revocation of the licence granted to CCSP on account of various breaches as contained therein - This regulation has no provisions for recovery of unpaid cost recovery charge on account of non-fulfilment of criteria as laid down in the CBEC circular - Thus, the order passed by Adjudicating authority is beyond the scope of the provisions of HCCAR, 2009 more so when he has decided not to cancel the licence of assessee and only imposed penalty - The CBEC which is part of Ministry of Finance has waived the cost recovery charge of assessee vide its letter stating that it has been decided to cost recovery charge in respect of assessee - The previous decision of Tribunal for earlier period is without examining the depth the relevant legal provisions at the time of disposal of appeal - It is not having the binding precedent on Tribunal of principle of per incurium and sub silento - The provisions of Regulation 5(2) of HCCAR is clear and unambiguous that the cost recovery charge is not required to be paid when the same is specifically exempted by order of Government of India and Ministry of Finance - It is on record that in case of assessee Ministry has exempted cost recovery charge vide letter dated 23.5.2006 and 18.2.2009 - Thus, assessee is duly entitled for benefit of cost recovery charge for subsequent years in terms of new regulation also under provisions of HCCAR, 2009: CESTAT
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Appeal allowed
: DELHI CESTAT |
