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SERVICE TAX
2019-TIOL-824-CESTAT-MUM + Case Story
CST Vs Reliance Life Insurance Co Ltd
ST - Tribunal has not discussed the applicability of the provisions of sub-clause (zx) of clause (105) of section 65 of the Finance Act, 1994 as proposed in the SCN, but only discussed sub-clause (zzzzf) hence there is a mistake apparent on record, which calls for rectification - Appeal listed for final hearing on 28.03.2019: CESTAT [para 2, 3]
- Application allowed
: MUMBAI CESTAT
2019-TIOL-823-CESTAT-MUM + Case Story
International Combustion India Ltd Vs CCE
ST - In the absence of any consideration, service tax cannot be charged: CESTAT
ST - Appellant receiving machines from buyers for repair and refurbishing during the warranty period and beyond - no service charge is recovered but charges are collected only for the cost of replaced/damaged parts and CE duty is paid on the parts used in the repairs - no evidence produced by the Department to the effect that the Appellants had received remuneration for such repair or maintenance service - no service tax is payable, hence demands do not survive - appeals allowed with consequential relief: CESTAT [para 4, 5] -
Appeals allowed
: MUMBAI CESTAT 2019-TIOL-820-CESTAT-DEL
Sahiba Ditta Enterprises Vs CCE
ST - The assessee is working as C&F Agent and had taken registration under service tax for consignment and forwarding agent service - It is a matter of fact that assessee have been receiving commission from their consignor and have been paying service tax on the same - The Department was of view that expenses which the assessee has got reimbursement from service recipient were in the nature of freight, cartage, CFA, LOC, packing material, refreshment charges, drug licence charges, electric bills and telephone charges - They are primarily his own expenses for providing service which have been reimbursed by service recipient - It has, therefore, been alleged that taxable value of service of C&F agent have been suppressed to that extent - On perusal of the type of expenditures which have been reimbursed to assessee in certain items like drug licence charges, telephone charges incurred on behalf of service recipient it appears that assessee have got reimbursement of actual expenditure incurred by him on behalf of his principle (consignor) and here he has only worked as a facilitator and a pure agent on behalf of his principle and therefore assessee has a strong case to claim non-inclusion of such reimbursed amount from the taxable income - The details of relevance of these expenditures and their necessity in the providing the service by assessee is not available on the record of appeal and in impugned O-I-O - Therefore, matter is remanded to the Original Adjudicating Authority: CESTAT
- Matter remanded : DELHI CESTAT
2019-TIOL-819-CESTAT-DEL
Shiv Shakti Electricals Vs CCE & ST
ST - The appellant is engaged as a contractor providing services pertaining to supply & construction of bore well with water reservoir, as well as related installation and commissioning - Such services were provided at various offices of the State Government of Rajasthan - The Revenue opined that such activity was taxable as 'Works Contract Service' - The appellant was also engaged in operation & maintenance of 'Electro Chlorinator' plant for water purification - Such purified water was then supplied to the citizens - The Revenue sought to tax this activity under 'Management, Maintenance & Repair service' - Duty demands were raised along with penalties being imposed u/s 76, 77(2) & 78 of the Finance Act 1994, citing failure to respond to summons - Hence the present appeal.
Held: The activity of supplying & construction of bore well and related installation and commissioning, is not in the nature of commerce or industry - Hence it is exempted from levy of service tax under CICS as well as WCS - This follows from the decision of the Larger Bench of the Tribunal in Lanco Infratech Ltd. Vs. CC, CE & ST, Hyderabad - Regarding the taxability of operation & maintenance of chlorination plant, the primary activity of the appellant is the operation of chlorination plant - Maintenance of this plant is incidental and linked to the main activity of operating the Chlorination plant - Hence such activity of maintenance cannot be taxed under 'maintenance management and repair service' or under 'Business Auxiliary Service' as the activity is not related by business or commerce - Hence the demands merit being quashed: CESTAT (Para 3-6)
- Assessee's appeal allowed : DELHI CESTAT
CENTRAL EXCISE
2019-TIOL-818-CESTAT-DEL
Honda Motorcycle and Scooter India Pvt Ltd Vs CE & CGST
CX - The only issue to be adjudicated in present appeal is as to whether the articles as that of angles, channels, HR plates, MS rounds, joist, sections, wire rope and wire mesh are the inputs/capital goods enabling the assessee to avail cenvat credit - The Adjudicating Authority below has rejected the claim relying upon the decision of Larger Bench in Vandana Global - 2010-TIOL-624-CESTAT-DEL-LB but the said decision stands over ruled by the decision of High Court of Chhattisgarh in Vandana Global Ltd. - 2017-TIOL-2853-HC-CHATTISGARH-CX as is impressed upon on behalf of assessee - Perusal of the decision reflects that the structures as were denied to be the capital goods in the decision of Vandana Globa are held to be the capital goods - The Supreme Court has earlier dealt with the issue in case of Rajasthan Spinning and Weaving Mills Ltd. - 2010-TIOL-51-SC-CX wherein the Apex Court has considered an identical issue of steel plates and MS channels used in fabrication of chimney for diesel generating set - The credit stands allowed in the light of Rule 57Q of the erstwhile CER, 1944 - In said judgement, the Apex Court has referred to the "User Test Principle" as was evolved by Apex Court in case of Jawahar Mills Ltd. - 2002-TIOL-87-SC-CX which was held to be required to find out whether or not particular goods could be said to be capital goods - When the "User Test Principle" applied to the case in hand, it is found that the structural steel items have been used for fabrication of support structures for capital goods - The assessee have argued that various capital goods, such as kiln, material handling conveyor system and furnace cannot be suspended in mid-air - They will need to be suitably supported to facilitate smooth functioning of such machines - It is obvious that the structural items have been suitably worked upon for this purpose - The goods fabricated, using such structural, will have to be considered as parts of relevant machines - The definition of 'Capital Goods' includes, components, spares and accessories of such capital goods - Accordingly, applying the "User Test", Tribunal have no hesitation in holding that the structural items used in fabrication of support structures would fall within the ambit of 'Capital Goods' as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to Cenvat credit: CESTAT
- Appeal allowed : DELHI CESTAT
2019-TIOL-817-CESTAT-AHM
Meghmani Organics Ltd Vs CCE & ST
CX - The Appellant, a 100% EOU, installed a boiler to produce steam for one of its two units - It wheeled a portion of steam to the second unit located on the same plot for captive consumption- the Appellant then availed CENVAT credit on furnace oil used in steam generation in Unit I - the Revenue disagreeing with the appellant's claim, alleged that the furnace oil transferred to Unit II was ineligible for credit - demand notice was issued for such amount along with interest & penalty - the demand was then confirmed- in appeal, the Commissioner (Appeals) rejected it - then the appellant approached the Tribunal.
Held: The Tribunal following the ratio laid down in case of Sintax Industries held that the appellant is not eligible to proportionate credit availed on furnace oil, attributable to generation of steam, wheeled out to their unit-II, instead of being captively consumed in Unit-I- Also, the Tribunal following the case of Meghmani Dyes & Intermediates Ltd affirmed that extended period of limitation cannot be invoked as there are conflicting views available on the subject and also all the facts have been disclosed by the appellant to the department through their ER-2 Returns filed with the department.
- Appeal partly allowed : AHMEDABAD CESTAT
2019-TIOL-816-CESTAT-HYD
CC, CE & ST Vs Penna Cement Industries Ltd
CX - The issue is regarding refund of amounts of Central Excise duty paid on "Portland Cement" - The assessee had paid the duty liability holding that they are not eligible for exemption Notfn 04/2006-CE as amended for time to time - Holding that the assessee is eligible for such exemption Notfn by Final Order dated 30.01.2018 by this Bench has allowed appeal of Penna Cements - The First Appellate Authority in this case has followed the law which has been laid down by various decisions of Tribunal - No reason found to deviate from such a view already taken by in assessee's own case and other cases on the self same issue - Accordingly, no reason found to interfere in impugned order: CESTAT
- Appeal rejected : HYDERABAD CESTAT
CUSTOMS
INSTRUCTION cus_instruction01_2019 Stepping up of preventive vigilance mechanism by CBIC field formations during the 17th Lok Sabha election process CASE LAW
2019-TIOL-632-HC-MAD-CUS
TSMT Technology India Pvt Ltd Vs CC
Cus - Petition filed seeking quashing of seizure memo and consequently directing the respondent SIIB to release the goods imported.
Held: Provisional release of goods in question are liable to be granted u/s 110A of Customs Act, 1962 upon the asseseee providing sufficient security to the Department - dispute raised relates to mis-declaration of goods inasmuch as whereas petitioner contends that the goods are exempt from the levy of BCD, revenue contends that the goods imported do not attract the benefit of Notification No.57 of 2017 and are thus not eligible to Duty exemption - Revenue impact is contained to 10% of the Duty along with such interest and penalty as the authorities may see fit to levy/impose, after adjudication, therefore, petitioner to remit 50% of the differential duty and execute a personal bond for the balance 50% - upon proof thereof, the goods to be released forthwith - Petition disposed of: HC [para 10, 12, 14]
- Petition disposed of : MADRAS HIGH COURT |
