2019-TIOL-NEWS-069, Dated: Saturday, March 23, 2019

ST - A SCN was issued covering the periods October, 2014 to March, 2016 alleging interalia that the commission received by assessee from their service recipients located outside India was liable to service tax as per the amended Rule 2 (f) of Places of Provisions of Services Rules, 2012 (POPS) w.e.f. 01.10.2014 - It is not the case of Revenue that the assessee arranges or facilitates other services as well, in addition to the above, to its 'Principals' nor is the case of Revenue that the assessee had suppressed the provision of any other service - The Revenue has also nowhere disputed the service rendered by assessee, ie., procuring/obtaining orders for its Principals located outside the taxable territory, for which the commission is paid by its Principals as also the fact of that obtaining orders from the Indian customers is the main and the only service rendered by assessee - Said service is a taxable service but for the fact that it is an export of service and the same stood exempted for all the preceding years - This fact is also vouched by granting of refund by the Revenue for an earlier period vide OIO dated 07.08.2013 - The facts of the case as analysed elsewhere in this order make it clear that obtaining/procuring order for its foreign Principals is the main service rendered by assessee and consequently, rigors Rule 9 vis-à-vis Rule 2 (f) are not applicable - Rule 3 of POPS Rules would only apply and therefore the assessee cannot be fastened with tax liability - The impugned order is not sustainable and consequently, the same are set aside: CESTAT

ST - The issue is regarding demand of service tax on an amount collected by assessee as out of pocket expenses - During period 2004-05 and 2005-06, assessee being service provider of various services had collected an amount as out of pocket expenses from various clients for rendering the services - According to assessee, these expenses were on Boarding and Lodging - During audit, it was noticed that this amount was not included for discharging of service tax liability - A SCN was issued which invoked the extended period on tax liability with interest and imposition of penalties - Revenue authorities were aware of the fact through their correspondence dated 23.06.2008 and the explanation given by assessee was not accepted and SCN should have been issued within the period of limitation - The entire demand needs to be set aside on limitation - The impugned order is set aside: CESTAT

ST - The assessees are engaged primarily in rendering services of development of residential and commercial buildings and also render real estate services - The Department has issued a SCN to the assessee alleging that they did not discharge their Service Tax liability on various services - On going through the agreement between assessees as a real estate developer and prospective buyers, the contract found on a principal to principal basis - The amounts received by assessees in respect of 3 activities undertaken by them i.e. ‘assignment transfer income’, assessment and bifurcation fees, ‘Khata transfer fees’ and ‘forfeiture’ amounts find their origin in agreement with prospect to buyers in which the assessees are developers only and are not workings as real estate agents - Therefore, there is considerable force in agreement that activity undertaken by them is not in capacity of a real estate agent but undertaken as real estate developers - Moreover, the Villas constructed by assessees were leviable to Sales Tax which was paid by assessees - Coming to the management of construction of projects, it is seen that assessees have been supervising the construction projects of M/s. Mckino & M/s. Axa Business Services - The assessees contended that their role was to supervise the construction and if the contractor fails to meet the expectations of their principals to undertake the construction themselves therefore, it is not a mere advice ‘consultancy or technical assistance’ in respect of ‘management of real estate’ - Therefore, no Service Tax can be demanded from assessee on this count under the head ‘Real Estate Agent Service’ - The impugned order is confirmed to the extent of demand of Service Tax in respect of consultancy in real estate services and the demands pertaining to other services are set aside along with interest and penalties: CESTAT

2019-TIOL-833-CESTAT-KOL

Neo Metaliks Ltd Vs CCE & ST

CX - The appellant company manufactures & sells Pig Iron, classifiable under Chapter 72 of the First Schedule to the CETA, 1985 - During the relevant period, the factory & office premises of the appellant were searched - Statements of various executives were recorded and various other documents and records were seized - Cellphones of some of the executives were seized upon the date of search, so as to retrieve the SMS data - Thereafter, SCN was issued for the relevant period, alleging that the appellant recorded lower quantity of finished goods in the Daily Stock Account & that the final products were clandestinely removed without payment of duty - On adjudication, duty demands were sustained along with interest & equivalent penalty being imposed on the appellant - Personal penalties were also imposed on the directors & office bearers in the appellant company - Hence the present appeals.

CX - The entire case of the Revenue is built upon the alleged SMS exchanged between the executives of the appellant-company - While the cellphones of these executives were seized during search proceedings, after several months, the Revenue on its own efforts produced listing of the purported SMS and its contents, based on which clandestine production & removal were alleged - Moreover, the Revenue approached the cellphone service provider to retrieve SMS data but the same was refused on grounds that no backup data was available - It is also seen that the contents of the SMS were discretely ascertained - Hence it appears that the entire SMS listing is unverified & does not bear the authentication or signature of the competent authority - The same is also not verified by the appellant company's executives: CESTAT (Para 6)

CX - The actual production figures are recorded in the case-wise register, Daily Stock Account of the appellant - No discrepancy is noted in the stock of finished goods or in procurement in the factory - Entire production is recorded against serially numbered casting slips with supporting weighment slips - It is well-settled principle that to establish clandestine removal, tangible, strict, positive, concrete, direct, circumstantial and corroborative evidences are required which must form a complete chain to rule out any preponderance of probabilities and lead to inescapable conclusion - In the present case, the demands are based on tentative private records - Besides, statements taken from the appellant's customers do not reveal any information incriminating the appellant: CESTAT (Para 7)

CX - The Revenue apparently adopted dual standards - The DGCEI officials rejected the case-wise register on the pretext of it being a private records - However the Department relied upon private and personal data of certain employees to allege clandestine removal: CESTAT (Para 12)

- Assessee's appeals allowed: KOLKATA CESTAT

Procedure for allocation of quota for import of (i) Calcined Pet Coke (0.5 Million MT per annum) for Aluminum Industry and (ii) Raw Pet Coke (1.4 Million MT) for CPC manufacturing industry

Cus - In the earlier order passed by this court in the petitioner's case, it was held that "Pre-import condition" inserted by Notf. 79/2017-Cus renders Advance Authorisation scheme nugatory, hence is ultra vires - The petitioner filed the present writ, claiming that the judgment erroneously added the term "inserted vide" have erroneously been added - It was also claimed that the term "inserted" is missing after the reference to Notfn No 18/2015-Cus and that a "Comma" after the date 13.10.2017 was missing - Hence the petitioner sought that the changes be made accordingly.

Held: The submissions made by the petitioner are correct - The changes suggested shall be made: HC