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SERVICE TAX
2019-TIOL-848-CESTAT-DEL
Compucom Software Ltd Vs CCE & ST
ST - The dispute relates to service tax liability under category of 'Supply of Tangible Goods' service with reference to leasing by way of supply, installation, commissioning and maintenance of new computer system, peripherals and provision of one IT Assistant and consumables in 568 units under Department of Education, Government of NCT, Delhi - Plain reading of agreement makes it clear that the assessee is supplying computers to client in which absolute possession over the computers is with the Lessee - The exclusion in the tax entry shall operate as the Lessee enjoyed full control on method, manner and time of using the computers - No restriction in respect of any of these factors was ever placed by the assessee - Immediate impression of any third party was that the computers belonged to schools where these had been installed by assessee - During lease period, assessee never used these computers for their own official or personal work/use with respect to taking outputs or providing any inputs except the standard software tools required to operate the computers - These computers were exclusively used by schools and Department of Education, Government of Delhi and not by assessee - In fact, assessee had no control over the manner or duration of such usage of computers by schools or Director of Education - Possession and ownership need not go together always - Delivery of physical possession of computers is a sine qua non for executing contract and to qualify for transfer of right to use computers, such transfer was exclusively made to the Lessee - This way, assessee was dissuaded from transferring this right to others - Neither the definition given under Section 65(105)(zzzzj) nor the clarification issued by CBEC vide Circular DOF no. 334/1/2008-TRU specifies or mandates that for not being covered under the service of 'Supply of Tangible Goods', the service provider must have paid VAT or Sales Tax on the amount received as consideration for hiring out and transferring the equipment such as computers - The language of Section ibid makes it abundantly clear that for transfer of right to use the goods, ownership is not mandatorily or necessarily required to be, as provided under the provisions of Income tax law - Section 65(105)(zzzzj) of the Act is clear and admits of no ambiguity - Demand of tax and penalty are not sustainable and are set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2019-TIOL-847-CESTAT-AHM
Adani Enterprises Ltd Vs CST
ST - The appellant company claimed refund of service tax paid on various services utilized in the course of export - The same was denied by the Revenue - On appeal, the Commr.(A) remanded most of the issues back to the Adjudicating authority, while rejecting refund in respect of two services, where in respect of the services invoices, the registration number was not mentioned - Hence the present appeal - The appellant admitted to there being such default, but the registration certificate of the service provider had been produced - Hence, it was claimed that credit ought to have been allowed.
Held: In the instant case, the appellant must establish that duty has been discharged on services availed by them & that said services have been used for purpose of export - It is seen that the certificate of registration submitted by the appellant does not cure the defect in the invoice, namely that the Service Tax registration number is not mentioned - The invoice has been accepted by Revenue as proof of fact that the service tax has been discharged by failing to produce the proper evidence - Hence the appellant failed to discharge this burden - If the appellants wanted to discharge the burden, then they should have got the requisite verification done from the supplier of service or from the jurisdictional officer - However, as the same was not done by the appellant, the refund is justly denied - The other issue pertains to denial of refund on service of storage warehousing on grounds that the appellant did not establish that the service was used entirely for export - It is unclear as to whether such storage & warehousing facility was also used for domestic clearance - No evidence was produced to support the claim - Hence the refund on this count is correctly denied: CESTAT (Para 2,4.1,4.2)
- Assessee's appeal dismissed: AHMEDABAD CESTAT
2019-TIOL-845-CESTAT-ALL
Sona Foods India Vs CC, CE & ST
ST - The assessee is manufacturer of ‘Rice Milling Machinery’ along with belt conveyors and Bucket Elevator and various other parts of Rice Mills Machinery - Revenue views that as the assessee is manufacturing conveyors and elevators which are more appropriately classifiable under Chapter Heading 8428, therefore, they cannot be classified under Chapter Heading 8437 of CETA, 1985 as machinery using in milling - The said issue stands settled by Tribunal in case of Alpsco Graintech Pvt Ltd - In view of said decision, the belt conveyors and bucket elevators specifically manufactured as the part of rice milling machinery along with other machinery of rice mill by assessee merit classification under chapter heading 8437 of CETA, 1985 - Therefore, impugned order deserves no merit, hence set-aside - Consequently, the demand of duty against assessee along with interest is not sustainable - Consequently, no penalty is imposable on assessee - In result, the impugned order is set-aside: CESTAT
- Appeals allowed: ALLAHABAD CESTAT
CENTRAL EXCISE
2019-TIOL-846-CESTAT-MAD
Rane Brake Lining Ltd Vs CGST & CE
CX - Appellants engaged in the manufacture of asbestos brake linings claimed CENVAT credit on security services - Revenue disallowed the credit and raised demand - the original authority confirmed the demand, interest and imposed penalty - Commissioner(A) upheld the demand as well as the penalties - appeal to CESTAT.
Held: The appellants were compelled to remove and store the hazardous waste outside the factory and to engage security for providing protection for the hazardous waste - The security services are related to manufacturing activity - the denial of input tax credit is, therefore, unjustified - impugned order to the extent of disallowing credit on security services is set aside and appeal allowed with consequential relief: CESTAT[para 6]
- Appeal partly allowed: CHENNAI CESTAT
2019-TIOL-844-CESTAT-ALL
Tirupati Structurals Ltd Vs CCE & ST
CX - The assessee is engaged in manufacture of various items including LLDPE/HDPE Plain Lateral Pipe & Tubes and HDPE coupled Sprinkler Pipes and Drip Irrigation Emitting Pipes - As per audit objection, it was observed that certain inputs like LDPE and LLDPE are being used exclusively by assessee in the manufacture of exempted goods and as such they should not have availed any credit in respect of the same inasmuch as CCR, 2004 do not allow availing of credit of duty on inputs exclusively used in manufacture of exempted goods - Admittedly the Plain Lateral Pipes and Tubes were being cleared by assessee on payment of duty by treating the same as classifiable under chapter 39 - As such irrespective of the fact as to whether the said pipes were classifiable under chapter 39 or chapter 84, the credit so availed by assessee and utilized for payment of duty on the said goods cannot be disallowed to them - The assessee have strongly contended that the duty paid by them on the said pipes was much more than the credit availed by them - Their customers were also not availing the benefit of Cenvat credit of duty paid by assessee - Admittedly the said duty stands paid by them by utilizing the credit, which gets reversed at the time of payment of duty - In such circumstances the further reversal of credit cannot be sought by the Revenue - If Revenue was of the view that the said Pipes and Tubes were also exempted, and the assessee is not entitled to avail the credit, then the duty paid by assessee on their final product was required to be refunded to them or to be adjusted or neutralized against the demand of credit being made - As such entire situation is revenue neutral - The order of Commissioner (A) upholding demand is not justified and warranted - There is no dispute about the fact that the wrongly availed credit was not being used by assessee inasmuch as there was sufficient balance in their credit account at the time of reversal of the excess availed credit - In view of decision of Karnataka High Court in Bill Forge (P) Ltd. - 2011-TIOL-799-HC-KAR-CX, no reasons found to uphold the confirmation of interest - The demand also stands raised by invoking the longer period of limitation - However, as the assessee is not disputing the said payment by them by reversing the credit, while upholding the said demand, penalty imposed upon assessee is set aside: CESTAT
- Appeal disposed of: ALLAHABAD CESTAT
CUSTOMS
2019-TIOL-843-CESTAT-MUM
Vishnu Agarwal Vs CC
Cus - Differential Customs duty held payable on the ground that the appellant importer had attempted to pass off ‘secondary/defective cold rolled grain oriented steel sheet coils' as ‘prime cold rolled grain oriented steel sheet coils' and thus claim ineligible concessional rate of import duty prescribed in notification 21/2002-Cus - appeal to CESTAT.
Held: Claim of the importer for testing to validate the visual examination by amateurs appears to have been studiously avoided and instead, the provision of the Customs Act, 1962 pertaining to relevancy of statements and presumptions in relation to documents in section 138B and section 139 have been overly relied upon - the distinction between prime and secondary is not defined in the notification and it would be the common trade parlance that should enable distinguishment - neither the SCN nor the adjudication order have even glanced in this direction - Bench is deprived of the expert opinion - necessity of a test report is the pith of the instruction contained in Standing Order no. 62/2009 - Visual examination and photographic display will not suffice as acceptable substitutes - no case has been made by Revenue that the goods were underinvoiced against the bench mark of prices of prime steel sheet coils so as to warrant a suspicion of such upgraded declaration - declared value is appropriate to the prime goods - there is no material evidence to sustain the allegation of misdeclaration and statements, in the absence of facts and circumstances, fail the test of law - impugned order is not sustainable, hence set aside - appeal allowed: CESTAT [para 6, 7, 8, 9, 10, 12, 13]
- Appeal allowed: MUMBAI CESTAT |
