SERVICE TAX

2019-TIOL-696-CESTAT-MUM + Case Story

CST Vs P N Writer And Company Pvt Ltd

ST - Delay in pursuing appellate remedy cannot be attributed to introduction of new tax regime when fact is o-in-o was passed after nine months of GST implementation - It is nowhere stated that after the date of order in original and date of receipt of order by the committee of Chief Commissioners there has been organizational and structural changes in the scheme of things - It is not even stated that any file was transferred from one jurisdiction to any other jurisdiction after the said dates - whether the said changes were the cause of such delay or it was sheer negligence on the part of authorities in presenting the appeal - Not even a iota of whisper in the application or the affidavit filed explaining how such change in regime has caused the delay in pursuing the appellate remedy in present case - no sufficient cause has been shown, as required in terms of s.86(5) of the FA, 1994 - Application for condonation of delay of 67 days rejected and appeal disposed of: CESTAT [para 5.6, 5.7, 5.9, 5.10, 5.12, 6.1]

- Application dismissed : MUMBAI CESTAT

2019-TIOL-691-CESTAT-HYD

Crown Solar Power Fencing Systems Vs CCT

ST - The appellants were involved in providing solar fencing systems to their customers and rendered "erection, commissioning and installation services" for installing solar fencing systems but did not pay service tax - On assessment, the appellant was asked to pay service tax during the audit of ST-3 returns - Further, the adjudicating authority upheld the demand - Penalty was imposed u/s 78 - On appeal, the Commissioner (A) upheld the adjudication order.

Held - the appellants are liable to pay service tax under the category of "maintenance or repair services" - The appellant being a proprietary concern, immediately paid the entire liability of service tax along with interest and filed ST-3 returns, though belatedly - Thus, the appellants are not disputing their liability of service tax and have paid the entire amount of service tax along with interest which has also been appropriated in the adjudication order but are only before the Tribunal contesting the imposition of penalties - The Court also observed that the entire proceedings were initiated based on the final audit report and the ST-3 returns and hence do not find any element of suppression of facts, mis-statement with an intent to evade payment of service tax - Hence, the demand of Service Tax and interest is upheld and the penalties imposed u/s 78 and late fine imposed under Rule 7C of the S.T. Rules, 1994 are set aside and the appeal filed by the appellant is allowed : CESTAT ( paras 1, 2, 3, 6, 7 )

- Appeal allowed : HYDERADBAD CESTAT

2019-TIOL-686-CESTAT-MAD

Ascendas It Sez Chennai Pvt Ltd Vs CGST & CE

ST - The appellant a SEZ developer filed two appeals for rejection of refund claim - Whether refund of claim in respect of an amount, which was rejected for the reason that the classification of services noted by the service provider in the invoice was not an approved service by the Unit Approval Committee are eligible.

ST - Whether rejection of refund claim on the ground of being time-bared was correct - The appellant submits that: as per Notification 9/2009, the refund claim had to be filed within six months of payment of service tax; The notification also stipulates in para 2 clause (f) that the time can be extended by the Assistant / Deputy Commissioner, if necessary; Thus, the refund claim would be eligible.

Held: The service provider was appointed as property manager for the appellant as per the agreement, and the fees for the property manager was fixed under Clause 4 - The agreement itself stipulated that there was no agency relationship between the appellant and the service provider - Thus, merely because one of the services which was agreed between the parties was marketing of the immovable property, the services rendered would not exclusively fall under Real Estate Agent Service - The service provider being a property manager, provided services of operation, maintenance, management also along with marketing services - Therefore, the misclassification of services in the invoices cannot be a ground for rejection of refund claim, thus, the appellant is eligible for refund: CESTAT (Para 5).

Held: In the Notification 9/2009 the time limit of six months for filing the refund claim has been given, however, the period for extending the time has not been fixed - The appellant had complied with the time limit prescribed u/s 11B of Central Excise Act, and had filed within one year the refund claim - Thus, the authorities contention that the appellants had not furnished sufficient reasons for condonation of delay, while rejecting the refund claim was not justified - Accordingly, the appellants are eligible for refund - Hence, the order rejecting the refund claim to the extent of being time-barred is set aside, and the appeal allowed with consequential relief, if any: CESTAT ( Para 9).

- Miscellaneous application allowed : CHENNAI CESTAT

CENTRAL EXCISE

2019-TIOL-690-CESTAT-DEL

Honda Motorcycle And Scooter India Pvt Ltd Vs CCE & ST

CX - The assessee is engaged in manufacture of motorcycles and scooters - The assessee have been availing facility of Cenvat credit on inputs, capital goods and input services under CCR, 2004 - The Department had entertained a view that assessee have wrongly availed input service credit on services and a SCN demanding reversal of Cenvat credit was demanded vide SCN which has been adjudicated by Commissioner, wherein the amount of Cenvat credits have been confirmed under Rule 14 of Cenvat Credit Rules, a penalty of equal amount have also been imposed under Section 11AC (i) (c) of CEA, 1944, personal penalty has also been imposed on Shri Sunil Kumar Gupta, Manager (Taxation) and Shri Naveen Kumar, Division Head (Finance and Account) of assessee - So far as credit on services received by assessee from their authorized service stations with regard to free after sale services and repairs of warranty period, matter is no longer res-integra as Tribunal in case of Carrier Airconditioning & Refrigeration Ltd. 2015-TIOL-2998-CESTAT-DEL has already held that services provided by authorized representative/ service stations are on behalf of the manufacturer and the service tax paid on availment of such services by manufacturer, they are entitled for Cenvat credit of such input services - Since the value of free after sale services and the warranty period repairs and maintenance are already included in assessable value of two wheelers, service tax paid on availment of such input services by manufacturer from their authorized representatives the assessee is entitled for credit of such input services - Whether the assessee is entitled for Cenvat credit of service tax paid by them on renting of infrastructural facilities from M/s Honda Siel Car Pvt. Ltd. - The basic argument of assessee in this regard is that common infrastructural facilities are vital for undertaking manufacturing activity and without such infrastructural facilities, such as, road, supply of water, boundary wall for safety of the premises assessee cannot undertake the manufacturing activity and therefore they are very much entitled for the Cenvat credit of service tax paid by them on the component of the rent paid by them for availing such infrastructural facilities - The Adjudicating Authority has erred in saying that inclusion clause under Section 66E (b) of FA, 1994 makes it mandatory that work contract and construction services are not entitled for Cenvat credit, however, the type of services availed by them are covered under Section 66E (f) and not under Section 66E (b) of Finance Act - The assessee has rightly availed Cenvat credit of service tax paid on rent of infrastructural facilities - Since all the material facts have always been available with Department and assessee have been audited by Department on the regular intervals during period of demand, the necessary element for invoking extended time period of 5 years for demanding reversal of Cenvat credit are not available - Demand is also barred by period of limitation - The penalties imposed under Rule 26 of Cenvat Credit Rules on assessee who are paid employees of the main assessee is not warranted - Appeals succeed on all the counts: CESTAT

- Appeals allowed : DELHI CESTAT

2019-TIOL-689-CESTAT-KOL

Mangal Steel Enterprises Ltd Vs CGST & CE

CX - Assessee is engaged in manufacture of HDG Tension Bar, Galvanized Mild Steel and Full Threaded Rods - Being a manufacturer exporter, assessee submitted a refund claim in terms of Notfn 52/2011-ST as amended, for Service Tax paid on specified services such as terminal handling charges, fumigation service, clearing and forwarding services and such other services were used for export of excisable goods during period from July 2012 to September 2012 - The Adjudicating Authority has observed that assessee failed to establish any co-relation between bills/invoices/challans with specific export consignment, ARE- 1/Shipping Bill wise and also failed to submit essential and relevant documents and clarification pertaining to discrepancy pointed out regarding their refund claim - However, assessee drew the attention of Bench to the impugned order, wherein it is stated that they have filed the documents with reference to ARE-1/Shipping Bill along with container numbers and other related documents - Lower Authority have not considered the documents placed by assessee - The Impugned Order is set aside: CESTAT

- Matter remanded : KOLKATA CESTAT

2019-TIOL-688-CESTAT-ALL

Oriflame India Pvt Ltd Vs CC, CE & ST

CX - The issue involved is whether the assessee is admissible for Cenvat Credit of Service Tax paid on Terminal Handling Charges and Ground rent paid at the port - Assessee has relied on two Circulars issued by CBEC namely Circular 1065/4/2018 wherein in sub-para (ii) of Para 4 it has been stated that clearances for export of goods by manufacturer shall continue to be dealt in terms of Circular 999/6/2015-CX as the ruling by Supreme Court in case of Ispat Industries Ltd. 2015-TIOL-238-SC-CX did not deal with issue of export of goods and that in cases of export of goods the buyer is located outside India - Considering the said two Circulars and fact in the case that assessee remains the owner of goods till the goods are handed over to buyer at buyer's premises, the place of removal is port, ICD or CFS - Therefore, assessee was entitled for Cenvat Credit claimed by them on Terminal Handling Charges and Ground rent - The impugned order is set aside: CESTAT

- Appeal allowed : ALLAHABAD CESTAT

CUSTOMS

2019-TIOL-687-CESTAT-AHM

Rajkamal Industrial Pvt Ltd Vs CC

Cus - The assessee have imported goods namely base oil - The DRI after chemical test of product, is of the view that the goods imported is not a base oil but it is in the nature of high speed diesel oil (HSD), therefore, assessee have mis-declared the goods, accordingly the goods were seized - The assessee requested for provisional release of goods for re-export - The department has no need of goods for the purpose of adjudication - By keeping the goods under seizure it is nobody's gain - The discretion for provisional release of goods is legally provided under Section 110 of Customs Act and the same should be exercised lawfully and of course with safeguard of the Revenue's interest - If in each and every case the goods is not allowed to be released provisionally the purpose of Section 110 which is for provisional release will become redundant - The adjudicating authority has denied the provisional release only giving reason that same cannot be released before adjudication of the case - There is no criteria that the goods cannot be released provisionally before adjudication of the case - If goods required for adjudication, it may or may not be allowed to be released - However, the sample were already drawn, thereafter, the goods are not required for adjudication - As regard the safeguard of revenue, adjudicating authority can impose condition of bond and bank guarantee as deems fit in accordance with law - No reason found why the re-export of goods can be denied particularly when the same is not going to adversely affect the adjudication process of case - The provisional release of goods for re-export can be allowed subject to reasonable measures for safeguarding the Revenue - Accordingly, impugned order is set aside: CESTAT

- Appeal allowed : AHMEDABAD CESTAT