SERVICE TAX

2019-TIOL-122-SC-ST

CST Vs Aban Offshore Ltd

Service Tax - The assessee company is a Floating Production Unit (FPU) engaged in drawing crude oil from subsea wells in sea and processes and transfers the processed crude oil through a buoy into a vessel called Floating Store and Offloading Unit (FSO) through which the crude is further transported to fleets - The processing of the Crude oil occurs at FPU - A foreign firm was paid certain amount for provision of operations personal, maintenance, spare parts, supplies and all other resources necessary for operation of FSO - The Revenue opined that such payment made was for storage and warehouse charges, on grounds that temporary storage of processed crude & its off-loading was provided by the foreign firm - Hence the Revenue opined that the activity of storage & warehousing was a taxable service & so raised duty demand - On appeal, the Tribunal relied on the order passed in the assessee's own case for a previous period and held that assessee is not liable to pay tax as it was recipient of service of nature not falling within scope of Section 65(105)(zza) of the Finance Act 1994 r/w Section 65(102) of the Act - Hence the present appeal.

Held - Delay condoned - Matter be tagged with Civil Appeal No.4064 of 2013: Supreme Court

- Notice issued : SUPREME COURT OF INDIA

2019-TIOL-788-CESTAT-HYD

R Balarami Reddy Vs CST

ST - The assessee is engaged in services related to site formation and construction and are registered with Service Tax Department - Dispute relates to Work Order for construction of Ash dyke at Lanco Amarkantak Thermal Power Station (300MW) and the Work Order for site grading works at 2 x 507.5 MW Nagarjuna Thermal Power Project - Whether differential service tax liability needs to be discharged by assessee without extending benefit of abatement of Notfn 01/2006 and for the subsequent period whether ash dyke constructed by assessee would fall under works contract services or site formation and clearance services - The entire contract which has been entered into by assessee with Lanco Infratech Ltd is nothing but a works contract and will remain so - If it is so, the law settled by Apex Court in case of Larsen and Tubro Ltd - 2015-TIOL-187-SC-ST in respect of such kind of works contract is that they remain works contract pre and post 01.06.2007, would cover the issue in favour of assessee - The impugned order is set aside - As regards the other demand raised in impugned orders as to taxability of services rendered by assessee, site formation activity of Nagarjuna Thermal Power Project, the reading of said contract indicates clearly that the entire contract is only for site formation and clearance, excavation and earth moving and demolition services - The tax liability which has been sought and confirmed from the assessee is in respect of the earth work for roads executed by assessee for the thermal power plant - The clarity of work in contract executed by assessee would indicate that they had not constructed any road for Nagarjuna Thermal Power Plant but had done all the earth work and the site formation - This activity of assessee will not get covered under category of construction of road as has been considered in Notfn 17/2005-ST - As regards penalty imposed on assessee on this activity, the issue of whether the activity would fall under the category of construction of road or otherwise is an issue of interpretation of Notfn 17/2005-ST - The assessee could have entertained a bona fide belief that they are eligible for benefit of said Notfn 17/2005-ST - The issue being question of interpretation, there is no reason to visit the assessee with penalties: CESTAT

- Appeal allowed: HYDERABAD CESTAT

CENTRAL EXCISE

Sri Sathuragiri Match Company Vs CCE & ST

CX - The proceedings have emanated out of the common allegation that assessee had suppressed production of match bundles in their factory, removed chemical dipped splints to various group units and other units without payment of duty, got them converted into match bundles by those units which were cleared without payment of duty, by accounting their numbers in the name of handmade match units or selling them through the trading concern - Merit found in the contentions of assessee that large quantum of documents / worksheets have not been considered by lower authorities - Tribunal do not find any detailed analysis of these documents in the impugned orders - On the other hand, while the orders of original authority in these cases are found to be more or less a reproduction of allegations contained in respective SCNs and a mechanical confirmation of proposals made therein - There is no attempt to sift, let alone apply the test of evidence or reason - Tribunal is unable to fathom why cross examination has been denied in respect of persons from whom statements had been recorded only on the grounds that they were co-noticees - While there has been some attempt made by lower authorities concerned in respect of The President Match Co. and Sri Sathuragiri Match Co. and analyse the contentions of concerned noticees and evidence put forth, which has in fact resulted in rejection of some part of duty demand, the upholding of remaining portion of duty demands by these authorities has been done without required level of analysis or reasoning - The assessee have not been given sufficient opportunity and consideration in the proceedings before both lower authorities - This being so, matter remanded to the original adjudicating authority - The request for cross examination of persons from whom statements had been recorded should be re-examined and permitted as per law and as per the decisions of higher appellate forums on the same: CESTAT

- Matter remanded: CHENNAI CESTAT

2019-TIOL-790-CESTAT-ALL

Rastogi Brothers Papers Convertor Pvt Ltd Vs CCE

CX - Assessee is engaged in manufacture of exercise books and note books which attracted duty of Excise - Based upon the scrutiny of records, demand of duty of Excise was raised for the period 01/03/2011 to 07/03/2014, which the assessee paid alongwith interest even prior to the issuance of SCN - Proceedings were initiated against them for imposition of penalty under Section 11AC - Adjudicating Authority has agreed with assessee that there was no mala fide on their part, when he observes that assessee's averment appears to be correct - However, he holds to the contrary by observing that since the assessee paid service tax on GTA and 'Renting of Immovable Property' - It cannot be held that the assessee did not discharge its Central Excise duty liability due to bona fide mistake - Tribunal really fail to understand the self-contradictory observations and findings of Adjudicating Authority - On one hand, he has concluded that the party's averment as regards nonpayment of duty of Excise on account of unintentional mistake appears to be correct and on the other hand, he proceeds ahead to observe to the contrary on the ground that the assessee was paying service tax on GTA and 'Renting of Immovable Property' - Payment of service tax has got nothing to do with the issue of nonpayment of Excise duty - Inasmuch as the entire demand was raised on the basis of records maintained by assessee, Adjudicating Authority has rightly concurred with assessee on the ground of absence of any mala fide, in which case he should not have imposed any penalty upon them - While upholding the Excise duty payment alongwith interest, imposition of penalty upon them is set aside: CESTAT

- Appeal allowed: ALLAHABAD CESTAT

2019-TIOL-789-CESTAT-AHM

Trivedi Corporation Pvt Ltd Vs CCE

CX - The issue in dispute is classification of carved articles of Marbles i.e. Column, Jali, Dome, fire places and profiled marble pieces manufactured and cleared by assessee classifying under CETH 2504.90 for the period from 01.02.2002 to 28.02.2005 whereas the lower authorities have held the classification under CETH 6802 2190 - From the proceeding, it is clear that the issue was highly debatable as adjudicating authority by analyzing the tariff entries given a detail finding and dropped the classification claim by the assessee - Subsequently, Commissioner (A) on the basis of Tribunal's decision in case of Nitco Tiles Ltd. reversed the order - These proceedings itself shows that the issue involved was not free from doubt, therefore, malafide intention cannot be alleged against the assessee - From the registration certificate in amendment/ addition made on 19.08.1997, the product in question, namely, 'Carved Marble Products' classified under 2504.90 by the Jurisdictional Superintendent Central Excise - This proved that the department itself accepted in the year 1997 that product 'Carved Marble Product' is classifiable under Chapter heading 2504.90 - Therefore, the facts regarding the claim of classification under 2504.90 and exemption there on was well within the knowledge of the department, therefore, nothing prevented the department from issuing the SCN within the normal period which department failed to do so - It is clear that the assessee had neither any malafide intention nor they have suppressed any fact from the department - Accordingly, the SCN issued after almost six years of period for which demand pertains is clearly time barred - The impugned order is set aside on the ground of limitation only without going into the merit of the case: CESTAT

- Appeals allowed: AHMEDABAD CESTAT

2019-TIOL-787-CESTAT-MAD

Sri Ranojirao Endowment Trust Vs CGST & CE

CX - Appellant, a religious trust, leased out property for rent - Revenue raised demand of service tax on rent - The original authority confirmed the demand along with interest and imposed penalties u/s 78 and u/s 77(2) of the Finance Act, 1994 - Commissioner (A) upheld the demand of interest and penalties - appeal to CESTAT.

Held: The demand of interest is correct and therefore is upheld - As regards the penalties imposed, the appellant had not collected service tax from the tenants and the matter was remanded by Commissioner (A) to requantify the service tax liability giving cum-tax benefit - It is established that the appellants were under the bonafide belief that they are not liable to pay service tax and were not collecting the service tax from the tenants - Also, no evidence to establish that appellant had suppressed facts with intention to evade payment of service tax - Thus, the penalty imposed u/s 78 cannot sustain - Penalty u/s 77(2) for non-filing of returns within the stipulated period also set aside - since the appellant is a Government wing and has later filed the returns and paid the service tax - impugned order is modified to the extent of setting aside the penalties without disturbing the remaining portion of the order and appeal allowed with consequential relief: CESTAT [para 6]

- Appeal partly allowed: CHENNAI CESTAT

CUSTOMS

NOTIFICATION

Dera Baba Nanak, Gurdaspur District, Punjab is appointed as land customs station for the purpose of clearance of baggage

CASE LAW

2019-TIOL-786-CESTAT-DEL

Shubhlaxmi Textile Vs CC

Cus - The issue involved is two-fold, first the seizure and adjudication of live consignment imported - This consignment, was detained by Customs officer without any detention memo - It is not disputed that Custom officer was in process of examination of container after opening the container - SCN has been issued on 21.01.2016, as the seizure was made under Section 110A (2) of the Act and no extension was permitted by Adjudicating Authority for issuance of SCN under proviso 2 the Section 110 of Customs Act - The assessee has declared the description of imported goods and their classification based on documents supplied by overseas supplier - The CHA, who was authorised to effect Customs clearance made available those documents, and was asked by assessee to classify imported goods as per documents considering the nature and description of goods - Therefore, it cannot be held that there was a deliberate attempt on their behalf to mis-declare the imported consignment - In fact, in past the Customs itself has cleared similar consignments as per declaration given by assessee at the strength of export invoice as per description of goods - Therefore, assessee has not deliberately mis-declared the consignments but under the bona fide belief that the goods imported by them is cotton textile fabric and not mixed with any other material so as to change the classification - Assessee has submitted another invoice to DRI officer which contained more or less identical description of goods, but more detailed one, meant for sorting of imported consignment - Therefore, assessee have not made any deliberate mis-declaration - Revenue has not been able to prove that assessee has paid any extra amount to overseas buyer other than whatever is mentioned in export invoice through banking channel - Regarding the consignment which has been imported by assessee in past, it was argued that those imports have been under section 17 of Customs Act without resorting to any provisional assessment - The COIN officer had also not made any attempt to obtain any further Report from Chinese customs so as to make information provided to be more reliable and admissible in adjudication proceeding - Mere simple reliance on those letters without giving opportunity of cross examination of concerned COIN officer who has compiled the report, more so would be in complete defiance of principle of natural justice and provisions of Sections 138 B of Customs Act - The admissibility of report received from COIN officer has been considered by Apex Court in case of East Punjab Tractors - 2002-TIOL-658-SC-CUS and subsequently followed in catena of judgments - The report received from COIN would have been the starting point of investigation but not the conclusive proof regarding alleged mis-declaration resorted by assessee and also implicating the Director of assessee company - The demand for past clearance is proposed to be made against finally assessed bills of entry, which is not permissible without the same being reviewed as held by Supreme Court in case of Flock India & Priya Blue overseas - The invocation of Section 28 of Customs Act is not attracted as mis-declaration is not proved in these cases - As far as demand pertaining to live consignment is concerned, same has been accepted, same is upheld but without any penalty as there is no deliberate mis-declaration as part of assessee - Reliance is placed on decision of System and Components Pvt. Ltd. - Interest and penalty imposed on two assessees are also set aside: CESTAT

- Appeals disposed of: DELHI CESTAT