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SERVICE TAX
2019-TIOL-728-CESTAT-AHM
Shree Maruti Transport Company Vs CCE & ST
ST - The demand of Rs. 1,97,700/- is in respect of debit notes issued by MPSEZ - The debit notes issued were in respect of deficiency of service provided by assessee on which on the entire value service tax was paid - Since the debit note was issued, value of output service stand reduced, in such case on the amount of debit note, the service tax is not payable, however, since the assessee have already paid the service tax in entire bill value and due to deficiency in service, the excess paid service tax is adjustable in future liability - Assessee is liable to pay interest for period from the due date of the payment of service tax till the date when assessee is eligible to adjust the excess paid service tax - However, the demand is not sustainable and the same is set aside on the ground that assessee is eligible for adjustment of excess paid service tax in terms of Rule 6(3) of STR, 1994.
As regard the demand of Cenvat Credit of Rs. 1,03,952/-, this is an amount of service tax attributed to service provided by 3rd party to MPSEZ, the said service tax supposed to be provided by assessee - Since the assessee's invoice is inclusive of service provided by 3rd party, the MPSEZ has issued a debit note, therefore, the service for which the debit note was raised which was provided by the 3rd party is a deemed input service for assessee particularly, in the fact, when the assessee has paid service tax on the entire bill value which includes the value provided by the 3rd party - Therefore, assessee is eligible for cenvat credit - Assessee is also not liable for any penalty as the demand itself is not sustainable: CESTAT
- Appeal allowed : AHMEDABAD CESTAT
2019-TIOL-727-CESTAT-DEL
Suryodaya Infratech Vs CCE & ST
ST - The assessee is a "proprietary concern" engaged in construction business - They were all along paying service tax under category of ‘Construction of Commercial and Industrial Complex Service' and availing abatement of 67% under Notfn 1/2006-ST - A SCN was issued to assessee demanding service tax alogwith interest - Penal provisions were also invoked - Amount of service tax and interest paid during investigations was proposed to be appropriated - It was the stand of Revenue all throughout that the different elements of work/ service in a composite contract can be vivisected and tax demanded under different classifications of service like CICS, ECIS and Construction of Complex - This has been the stand of Revenue as evident from ruling of Supreme Court in case of Larson & Toubro Ltd. 2015-TIOL-187-SC-ST wherein the Supreme Court has held that whenever there is a case of composite service there was lack of legislative competence on the part of Revenue, to vivisect and tax the service component prior to coming on statute of Section 65(105)(zzzza) of the Finance Act - Accordingly, no service tax could be demanded prior to 01.06.2007, where work /service is classifiable under the Works Contract Service - The SCN has been issued on 23.10.2013 which is prior to the decision of Supreme Court in case of Larson & Toubro - Accordingly, there is no deliberate act on the part of assessee to evade payment of correct service tax, nor there is any suppression, as they were registered with Service Tax Department, filing ST-3 returns and paying the tax regularly - So far as the other issue is concerned, SCN was issued by Revenue, as to classification of service under Work Contract Service instead of CICS - Accordingly, following the precedent decision of Tribunal in case of ABL Infrastructure Pvt. Ltd. 2015-TIOL-360-CESTAT-MUM the coordinate Bench of Tribunal held that in case of changed circumstances, where the activity is eligible to classification under Works Contract Service after 01.06.2007, assessee should be given an opportunity to pay tax under Rule 3 of Works Contract Rules, 2007 - Accordingly, assessee is entitled to avail the composite scheme for normal period of limitation from 01.04.2012 to 30.09.2012 and thereafter - As assessee had paid the tax under Composite Scheme alongwith interest, liberty is granted to the adjudicating authority to verify the calculation and if there can be any discrepancy to point out the same to the assessee, who shall pay the same forthwith: CESTAT
- Appeal allowed : DELHI CESTAT
CENTRAL EXCISE
2019-TIOL-108-SC-CX
CST Vs Citi Bank NA
CX - The assessee is registered under category of Banking and Financial Services provides renders custodial services to their client situated outside India - It claimed rebate of service tax paid under Exports and Service Rules, 2005 - However, the same was rejected by authorities on the ground that the custodial services are performed in India in respect of investments made in Indian Companies - Subsequently, the High Court noted that from Rule 3 of Export Service Rules that Section 105(zm) of the Act, is not specifically mentioned either as a service provided in relation to immovable property nor as the services specified as performance basis services in subclause (i) & (ii) of Rule 3 of Export of Services Rules, 2005 - Nor is it excluded from subclause (iii) which deals with providing services in relation to business or commerce to a recipient located outside India - The custodial services provided, would be clearly covered by subclause (iii) of Rule 3 of Export Services Rules, 2005 and the assessee would be entitled to its benefit - In fact, CBEC has issued a Circular No.111/2009 , clarifying that in respect of services following under category/clause (c) above i.e. Rule 3(I)(iii) of the Export of Services Rules 2005, the relevant factor is the location of the Services recipient and not the place of performance - It also clarified that the phrase used 'outside India', is to mean that the benefits of the service is to accrue outside India - This Circular which is binding on the Revenue - Thus the High Court settled the issue in favor of the assessee.
Held - Delayed condoned - Notice issued - Matter tagged with SLP(C) No. 29712 of 2014: Supreme Court
- Notice issued: SUPREME COURT OF INDIA
2019-TIOL-729-CESTAT-AHM
Navratan Specialty Chemicals Llp Vs CCE
CX - Appellant claimed Cenvat credit for input services w.r.t air travel agents, travelling expenses and other repairing steel items - Commissioner (Appeal) held disallowed the credit - also held that repairing items were used as support structure which was excluded from the definition of inputs - appeal to CESTAT.
Held: The Cenvat credit as regard the input services namely Air Travel Agent, Travelling Expenses, Forex Broker, Insurance- Gratuity, Repairs & Maintenance Expenses., Insurance Expenses, Vehicle Expenses and Motor car expenses, are used either in or relation to manufacture or overall business activities of the company - This tribunal in various judgments allowed the credit on all these services - Therefore, the appellant is entitled for Cenvat credit - As regard the steel items that is M.s. channels, plates and coil - Merely by seeing from the photographs, without physical verification, it cannot be decided that whether the steel items were used in repair maintenance or for making support structure - Since, no verification was carried out by the department as regard actual use of the said goods - The finding of the Commissioner (A) needs reconsideration - The issue of limitation is also kept open for Adjudicating Authority to reconsider - Assessee appeal partly allowed: CESTAT [para 4]
- Appeal partly allowed : AHMEDABAD CESTAT
CUSTOMS
2019-TIOL-726-CESTAT-BANG
Trichur Traders Vs CC
Cus - DRI has received an intelligence that M/s. Trichur Traders are attempting to smuggle/remove imported goods out of Cochin Port without payment of duty and without observing the customs procedures - Whereas the goods were declared as toys, the actual goods were batteries, CFL, ladies inner ware and soap - Accordingly, a SCN was issued to various assessees proposing confiscation of goods and imposition of penalty on M/s. Trichur Traders and Shri C. K. Boban and Shri A. R. Ajeesh - The present set of appeals are only on the issue of penalty - From the case records, it is seen that M/s. Trichur Traders are the importers and have filed the Bills of Entry - It is on record that discrepancies in the weight and description of the goods in the Bills of Lading and goods actually arrived in the containers is established - He has arranged for the import of consignment and paid the foreign supplier - The importer has accepted his guilt in the statements given before DRI - As such, the importer cannot hide under the reason that they have simply signed the documents given by CHA for the purpose of clearance of the cargo - Therefore, they have rendered themselves liable to pay penalty - However, penalty cannot be imposed both on the proprietor as well as the firm - Therefore, imposition of penalty on Shri C. K. Boban is valid - Penalties imposed on M/s. Trichur Traders are set aside - Looking into the fact that Shri C. K. Boban has undergone detention under COFEPOSA for some time, the penalty imposed appears to be on the higher side, same can be reduced - Coming to the role of Shri A. R. Ajeesh, it is found that he was working for the CHA - Shri A. R. Ajeesh accepted that he used to put the signature of Manager of M/s. Ramanamurthy and Sons - Therefore, incontrovertible evidence has been placed to show the role of Shri A. R. Ajeesh in the modus operandi which was also corroborated by the statements of others and photocopy of container cell permission letter recovered from the premises of CHA - Therefore, the retraction by Shri A. R. Ajeesh does not hold any water - Therefore, penalties on Shri A. R. Ajeesh are tenable in respect of both the cases - However, looking into the fact that long years have passed after occurrence of the incident, Tribunal is inclined to reduce the penalty: CESTAT
- Appeals partly allowed : BANGALORE CESTAT |
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