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SERVICE TAX
2019-TIOL-594-HC-KOL-ST + Case Story
Srijan Realty Pvt Ltd Vs CST
ST - Realizing electricity consumption charges from occupants by supplying low-tension supply is a taxable service, doesn't fall in negative list: HC
ST - Petitioner is receiving high tension electric supply from the licensee and is supplying the low tension electricity to the various occupiers - The petitioner is not an electricity trader as defined in Section 2(26) of the Electricity Act, 2003 - The petitioner does not have a licence to undertake trading in electricity under Section 12 of the Electricity Act, 2003 - The petitioner also cannot be said to be engaged in the business of transmission as the petitioner does not have such a licence - The petitioner is not a person authorised to transmit, supply, distribute or undertake trading in electricity - Therefore, conversion from high tension to low tension electricity and the distribution thereof to the occupiers is a service and hence exigible to Service Tax - Any other interpretation will render the steps taken by the petitioner in receiving high-tension electric supply and making over low-tension electric supply to the occupants, violative of the provisions of the Electricity Act, 2003 and which interpretation should be avoided: High Court [para 17, 21]
ST - Petitioner cannot be said to be indulging in trading of goods or in transmission or distribution of electricity within the meaning of the Electricity Act, 2003, therefore, the activity of the petitioner cannot come within the negative list of services defined in Section 66D particularly in view of Section 66D(e) and (k): High Court [para 17, 21]
- Petition dismissed
:
CALCUTTA
HIGH COURT
2019-TIOL-779-CESTAT-MAD
Tessy Engineers And Enterprises Vs CGST & CE
ST - Assessee is engaged in providing Erection and Commissioning or Installation Services [ECIS] in India as well as abroad - For the projects that are carried outside India, they used to sent their skilled persons for attending the works outside India - Assessee took Overseas Mediclaim Insurance Policy for employees who were sent for undertaking works in their project abroad - The issue is as to whether the assessee is eligible for credit availed on insurance services - Assessee have explained that these insurance policies were availed for covering the risk of employees, who undertake works in their projects abroad - The labour legislations in India mandate that the employer covers the risk of such untoward incidents or injuries that may happen to the employees at work site - The jurisdictional High Court in case of M/s. Ganesan Builders Ltd. has analysed the very same issue with regard to definition of "input service", after 01.04.2011 and held that credit on such insurance services is eligible - Following the said decision, credit is held to be eligible - The impugned order is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2019-TIOL-778-CESTAT-HYD
Sri Ram Sir Constructions Vs CCE, C & ST
ST - The assessee was registered under category of "Construction of complex (residential) service" - After registration, they paid service tax and also filed half yearly ST-3 returns for the half year ending 31.03.2006 - On investigation, it was noticed that assessee had constructed 39 flats to service recipients and had received an amount from them and had not discharged the service tax liability on such receipts - Accordingly a SCN was issued to them demanding service tax plus Education Cess from them along with interest - Service Tax is leviable only when the service is rendered by one person to another for a consideration - If assessee had, in fact, constructed all the flats with their own money and thereafter sold these flats to their customers, then evidently no service has been rendered and no service tax is payable - On the other hand, if assessee had collected amounts from their customers in instalments for construction of flats and thereafter constructed the flats for them, then service would have been rendered to their customers and service tax liability occurs - In absence of any details, Tribunal is unable to make this determination - These facts will be evident only in records of original adjudicating authority who investigated the case - Matter is remanded back to the original adjudicating authority to consider the submission of assessee in their appeal before Tribunal that they had constructed the flats with their own money and only thereafter sold them to their customers and therefore were exempted from payment of service tax in terms of CBEC circular dated 29.01.2009: CESTAT
- Matter remanded: HYDERABAD CESTAT
CENTRAL EXCISE 2019-TIOL-593-HC-ALL-CX
CCT Vs Zee Media Corporation Ltd
CX - Revenue is in appeal against order of Tribunal in - 2018-TIOL-262-CESTAT-ALL - The assessee is engaged in news business and in the business of broadcasting other entertainment programs - A SCN was issued to assessee stating that during scrutiny of records, it was observed that the assessee was receiving various images and text material by way of retrieval from web site of foreign companies viz. M/s Reuters, ATPN under the proper agreements - Those images/text materials were used by assessee in their rendering On Line information and Data Based Access or retrieval service for receiving such material from the said foreign based companies - The assessee besides contesting the SCN on merit took the objection that SCN was barred by limitation - The Tribunal held that the SCN was bad for invoking extended period of limitation - Revenue had got all the information from the records maintained by assessee in the ordinary course of their business which was clear from the SCN itself and there was not even a single instance of any manipulation or suppression and/or misinformation which could be pointed out in SCN except for bald allegation - Thus, Tribunal allowed the appeal and set aside the order passed by Commissioner(Excise) - The Tribunal did not enter into the merit of the case - SCN itself shows that every details was maintained by assessee in their usual course of years - They had not suppressed or manipulated any fact to evade the payment of service tax or to avail Cenvat credit - When the ingredients of proviso to Section 73 (1) of the Act were not present, the invocation of extended period of limitation was not correct to issue SCN - The question of law is therefore answered in favour of assessee and against the Department: HC
- Appeal dismissed: ALLAHABAD HIGH COURT
2019-TIOL-777-CESTAT-DEL
Barmer Lignite Mining Company Ltd Vs CCE & ST
CX - The appellant company manufactures Lignite & supplied the same for use in power generation - The appellant assessed the cost of lignite extraction based on extrapolation of lowest bid submitted against the tender for its mines, with due adjustments for stripping ratio, mine depth and other parameters - The price was subject to approval of the Rajasthan Electricity Regulatory Commission (RERC) - Upon audit, the Department alleged that the appellant had short-paid duty during the relevant period, having under-valued the goods in violation of Section 4 of the CEA 1944 r/w Rules 4,6 & 8 of the CER 2002 - Duty demand was raised with interest and penalty - Hence the present appeal.
Held: The moot question is whether the transaction value of the lignite is the petitioned price as alleged by the Department or the ad hoc price portrayed by the appellant - It is admitted that the appellant annually filed petition for determining price of lignite & the RERC decided the interim prices - The appellant also submitted to the Department that the price mentioned by it was not accepted by the RERC & it also requested the Department to consider the interim price - Hence the price payable is that which is finally fixed by the RERC - Thus the adjudicating authority erroneously considered the petititioner price championed by the appellant, to be the transaction value for the lignite - Moreover, the final price in the present cases was not yet determined by the RERC for the period between 2011-2016 & such final price could be higher or lower than the ad hoc price - Hence the appellant's request for provisional assessment based on ad hoc price was appropriate - Hence the SCN issued is premature - Besides the duty is otherwise paid by the appellant on ad hoc value as final value is not yet available - Thus, there is no loss of revenue or any evasion of duty on part of the appellant - No suppression of facts with intent to evade payment of duty can be alleged - Moreover, as the entire facts were brought to the Department's notice and considering that the appellant discharged its liability on provisional basis, there is no act which warrants invoking provisions of Section 73 of the Finance Act 1994 - As it is, intent to evade payment of duty cannot be attributed to a government undertaking - Hence the duty demand is unsustainable: CESTAT (Para 2,8-11)
- Assessee's appeal allowed: DELHI CESTAT
CUSTOMS
NOTIFICATION
ctariffadd19_013
Anti-dumping duty - Saturated Fatty alcohols exported by M/s P T Energy Sejahtera Mas (Producer) Indonesia through M/s Sinarmas Cepsa Pte Ltd. (exporter/trader), Singapore and imported into India subjected to provisional assessment till review is completed
CASE LAWS
2019-TIOL-595-HC-ORISSA-CUS
Tata Steel Ltd Vs UoI
Cus - Section 14 of the Customs Act, 1962 - Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - Whether ‘demurrage' charges are included in the Assesssable Value - Petitioner has challenged the Explanation to sub-rule (2) of Rule 10 of the Customs Valuation Rules, 2007 and prayed to declare the same to be ultra vires the provisions of section 14 of the Customs Act, 1962.
Held: It is a well settled principle that while interpreting a statute, one has to go by the scope and object of the principal Act - Under the principal Act, while amending it on 10 th October 2007, proviso has included the costs and services, including commissions and brokerage, engineering, design work, royalties and licence fees, costs of transportation to the place of importation, insurance, loading, unloading and handling charges to the extent and in the manner specified in the Rules - ‘Demurrage' has not been included as a part of cost envisaged by the legislation -It is a kind of penalty, therefore, it could not have been envisaged by the legislation to be included in the definition of Section 14 of the Act - in view of the decisions of the apex court, it is made clear that demurrage cannot be included for the purpose of valuation under the Customs Act, 1962 - in that view of the matter, High Court is of the considered opinion that the contentions raised by the petitioner that the relevant provisions in the Principal Act is silent about the ‘demurrage' and thus it was beyond the legislative power to include it in the Rules is accepted - Explanation to sub-rule (2) of Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 is held to be bad and hence declared ultra vires the Constitution/provision of Section 14 of the Customs Act and is hence struck down: High Court - Petition allowed
: ORISSA
HIGH COURT
2019-TIOL-592-HC-DEL-CUS
Vikas Yadav Vs PR CC
Cus - The question of law urged by assessee is that Rs.5 lakhs imposed for contravention of Section 112(a) of Customs Act by Tribunal in the circumstances was unjustified - It was urged on behalf of assessee that the CHA concerned at the behest of one Deepak Sharma filed a bill of entry on behalf of M/s Bharat Medical Devices Pvt. Ltd. - It was later discovered that the documents were forged and the goods imported mis-declared - Ensuing proceedings resulted in forfeiture of CHA's license - The assessee had introduced the individual i.e. Deepak Sharma, to the CHA concerned - The Commissioner in an elaborate order imposed a liability on assessee as he actively facilitated the fraud, resulting in imposing of penalty to the tune of Rs.10 lakhs - The Tribunal quoted the relevant O-I-O and after analysing the statement, was of the opinion that quantum (penalty imposed) was not warranted and halved it to Rs.5 Lakhs - The assessee admitted that he did not even examine the basic record such as the existence or otherwise of authorization letter - He concededly helped the clearance of identical consignments in the past of the same party - Given these conspectuses of circumstance, the submissions made on his behalf that he was merely a facilitator and working outside the margin of law as it was, cannot be accepted - The concurrent findings of lower authorities do not call for any interference - No question of law arises: HC
- Appeal dismissed: DELHI HIGH COURT
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