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SERVICE TAX
2019-TIOL-733-CESTAT-DEL
Ambience Hospitality Pvt Ltd Vs CCE
ST - The assessee vide Agreement of Sale/Purchase with Ansal Properties & Ind. Ltd. acquired possession of club building with the land apartment thereto for the purpose of developing and running a club - On 10.03.2004, the assessee entered in "Agreement of Joint Venture" with another company (AMPL), for running the club on "Revenue-Sharing Basis' - During period, June 2007 to March, 2009, assessee paid service tax considering the said leasing activity as Renting of Immovable Property Services - Thereafter, they filed a refund claim claiming refund of tax so paid on the ground that lease of club (a business) does not fall in the meaning of word 'immovable property' under Section 65 (105)(zzzz) of FA, 1994 - Same was rejected - The said club is fully furnished including plant & machinery, furniture, furnishings and other operating equipments - On the issue of limitation, the assessee have claimed that it had paid the so called taxes under mistake of law and it is fully entitled to refund of same - The assessee has been running the club by way of Joint Venture with AMPL, on principle to principle basis - This is evident from first Joint Venture Agreement entered into between the parties dated 10.03.2004 - In this agreement from Revenue Sharing Formula and the mutual covenants as agreed between the parties, it is crystal clear that the assessee and AMPL intended to do the business of running of club on principle to principle basis - The subsequent modification of Revenue Sharing Clause between the parties does not change the colour and reduce the arrangement between he parties as that of landlord and tenant - In principle, assessee has not delivered the possession of club to AMPL by way of tenancy but has only given the right to manage and operate the club for their mutual benefit on principle to principle basis - Accordingly, the provisions of Service Tax are not attracted - There is no application of Section 11 B of CEA, 1944 in grant of refund following the precedent ruling in case of ITC Ltd. - A tax wrongly realized or paid on in excess of what is permissible in law, is a realization made outside the provisions of the Act - Such amount cannot be retained by Revenue, being in conflict with Article 265 of Constitution - Thus, the impugned order is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
CENTRAL EXCISE
2019-TIOL-736-CESTAT-MAD
Chemplast Sanmar Ltd Vs CGST & CE
CX - The assessee is aggrieved by impugned order wherein the authorities below have appropriated the rebate sanctioned against the demand that was confirmed disallowing the Credit - Since the said issue of disallowing the Credit has attained finality on account of the decisions passed by Tribunal in Final Order dated 30.05.2018 , the appropriation of sanctioned rebate cannot sustain - The impugned Order is set aside: CESTAT
- Appeals allowed: CHENNAI CESTAT
2019-TIOL-735-CESTAT-DEL
Birla Corporation Ltd Vs CGST , C & CE
CX - The challenge in present appeal is only to penalty imposed under Section 11AC of Central Excise Act - There is no interest liability against assessee, as upheld by lower authorities - The credit wrongly availed by them stands reversed by them before the issuance of SCN - In such a scenario, the authorities should have concluded the proceedings without issuance of SCN as provided under the Act itself - Otherwise also, assessee as also their sister concern was availing the credit in respect of coal procured from the same coal supplier and as per the assessee, availment of credit was a mistake on their part - By appreciating the fact that said mistake has occurred on account of interchange of the documents, penalty imposed upon assessee is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2019-TIOL-734-CESTAT-DEL
Focus Energy Ltd And Others Vs CCE
CX - The issue involved in this case is about the imposition of oil cess and National Calamity Contingent Duty (NCCD), education cess(EC), secondary and higher secondary education cess(SHE) on the "Condensate" which emerges out during the processing of natural gas in their gas plant - The product so obtained is classifiable under heading 2709 00 00 and is being cleared under invoice without paying aforesaid taxes - This fact of non payment of duty came to light during scrutiny of ER-1 return filed by assessee and therefore, a SCN was issued against assessee - Under the Oil Industries(Development) Act (OIDA), 1974 there are only two entries on which crude oil cess is imposed such as crude oil and natural gas - It is pertinent to mention that "condensate" so obtained from natural gas processing plant is obtained while processing the natural gas as a by-product and not formed at the stage of production or separation of wellhead - These "condensate" generally emerge from the gas, while processing the gas wellhead surface production facilities away from the oil head - The assessee has clearly given the distinction between the chemical characteristic of crude oil and that of "condensate" in their reply - In view of different and physical and chemical parameters of two products, it was necessary on the part of Department to get the expert opinion so as to find the exact chemical nature of "condensate" and as to whether the same could qualify to called as crude oil - It is on record that sample has been drawn but test report was not made available to assessee, which is violation of principal of natural justice - Having not done so, Adjudicating Authority has wrongly arrived at the conclusion that "condensate" is nothing but crude oil - The tax cannot be imposed by way of implication or presumption as has been done by Adjudicating Authority in this case - The charging section has to be construed strictly - If a person is not been within the ambit of charging section by clear as he cannot be taxed by way of implication at all - For this, reliance placed on Ellis Bridge Gymkhana 2002-TIOL-784-SC-WT - Assessee has made the plea of limitation as SCNs had been issued by Department on 25/3/2015 and the same was received by assessee on 15/5/2015 - The ER-1 returns for the month March, 2015, ER has been filed on 10/4/2014, thus the demand which is for the period March, 2014 to October, 2014, is time barred as no extended the period has been invoked in SCNs - The SCN invoked the provisions of Section 11 A(1) of CEA, 1944 r/w Section 15 of OIDA - Therefore, demand is also time barred - Therefore, oil cess is not leviable on "condensate" and under OIDA either on merits or also on limitation - Accordingly, impugned demand is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
CUSTOMS
NOTIFICATION
dgft18pn078
One-time condonation under EPCG Scheme - Date extended up to Sept, 2019 CASE LAW 2019-TIOL-732-CESTAT-BANG
Mbk Logistix Pvt Ltd Vs CC
Cus - The appellant was granted registration as Steamer Agent, Console Agent and Shipping Line Agent - Such registration was subsequently cancelled, on grounds of contravention of the provisions of the Customs Act 1962 - It was alleged that the appellants forged the signatures of the jurisdictional Superintendent of Customs as well as those of the jurisdictional Inspector of Customs - It was also alleged that the appellants forged the seals of the Preventive Department, on the documents submitted by the appellants for the sign-on a particular vessel - Penalty u/s 117 of the Customs Act was imposed on the appellant company - No personal penalty was imposed on the Managing Partner & Managing Director of the appellant company - However, penalty was imposed on two of its employees u/s 117 of the Customs Act - The appellant then filed writ petition, whereupon the High Court directed the Tribunal to hear the matter.
Held - There is no merit in the averments made against the appellant in respect of the various contraventions - Though the Department claims that certain documents based on which the crew had been cleared, were manipulated at the initiation stage - But such documents were presented to the Customs officers for clearance of crew - The crew were cleared based on such documents, after proper & physical examination - Moreover, upon cross examination, the officers had admitted that no person boarded or de-boarded the vessel and that no cargo was loaded or unloaded without actual physical verification & explicit approval from the Customs Department - Nonetheless, it is a fact that certain documents were forged using seals stolen from the Customs Department - The Department also alleged that such forgery would have repurcussions on the economy & security of the nation - However, such submission does not have much force if it is not pointed out how the economy & security of the nation has been compromised - It is also not the Department's case that through the forgery done by the appellants, the crew was found carrying goods beyond their entitled baggage allowance or that any prohibited or restricted goods were found on their person - Thus, the drastic action of cancelling registration to operate in port is disproportionate to the offence alleged - It is settled principle of law that procedures prescribed for performance of duties are to be followed & any manipulation of provisions is punishable - However, the punishment must be proportionate to the offence committed - Moreover, it is seen that the appellants were not responsible for forging the documents, but are vicariously responsible for the acts of their employees - The appellant did not attempt to contravene the provisions of the Customs Act leading to confiscation of any prohibited or restricted goods - Hence cancellation of registration is quashed - However, the penalty imposed u/s 117 is sustained so as to act as deterrence against such conduct in future: CESTAT (Para 1,2.1,2.2,4.13-4.15,4.18,4.19,4.21,4.26,4.27)
- Assessees' appeal partly allowed: BANGALORE CESTAT
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