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SERVICE TAX
2019-TIOL-906-CESTAT-MUM
Sachin Arun Karpe Vs CCGST
ST - Full service tax demand and interest stands paid by the appellant and he has not challenged the same before the appellate authority - an assessee can plead for waiver of imposition of penalties imposed u/ss 76, 77 & 78 of the FA, 1994 if he is able to demonstrate a ‘reasonable cause' for non-payment of tax - ‘Reasonable cause' means a honest belief founded upon reasonable grounds - reason cited is ignorance of the provisions of ST liability - due to misunderstanding, appellant claims that they have neither collected any service tax from clients nor paid the same to the government - this fact clearly establishes that the appellant had no malafide intention to evade tax - being a fit case to invoke the provision of s.80 of the FA, 1994, penalties imposed cannot be sustained and hence set aside: CESTAT [para 6, 7]
- Appeal allowed: MUMBAI CESTAT
2019-TIOL-905-CESTAT-DEL
Rajasthan Housing Board Vs CCE
ST - The assessee (RHB)is a body formed under Rajasthan Housing Board Act, 1970 by Government of Rajasthan - They are engaged in development and construction of houses, roads, parks and shops - The dispute is regarding the payment of service tax - In addition to construction and allotment of residential units, assessee also constructed shops which were leased to successful bidders in auction process - Such lease was for a period of 99 years and various amounts were recovered - The Department was of the view that amounts recovered as lease charges were liable to payment of service tax under category of "Renting of Immovable Property Service" - The demand for service tax under "Construction of Complex Service" has been mainly resisted by assessee on the ground that they have undertaken construction of independent houses/ residential units and not of any complex with more than twelve such units - From a few photographs enclosed with appeal, it is noted that RHB has undertaken construction of row houses - From the findings recorded by Adjudicating Authority, it does not appear that he has examined the situation in terms of satisfying the condition specified in definition in respect of each and every cluster of houses constructed by RHB and for which demand of service tax has been made - Without such clear findings, Tribunal is unable to uphold the demand of service tax under this category - Consequently, demand for service tax under category of "Construction of Residential Complex" is set aside and matter is remanded to the Adjudicating Authority for reexamination - As regards to demand of service tax raised under category of "Renting of Immovable Property", the issue whether long term lease of 99 years will be covered within the definition of "Renting of Immovable Property" has been examined in very great detail by Tribunal in case of Greater Noida Industrial Development Authority 2014-TIOL-1741-CESTAT-DEL - The said decision of Tribunal was affirmed by Allahabad High Court - By following the said decision, it is to be held that RHB will be liable for payment of service tax on the lease amounts recovered by them from the allottee of commercial properties and shops by whatever name - But no service tax levied can be upheld in respect of such lease amounts recovered for allotment of residential units - The assessee is an instrumentality of Rajasthan Government and performing statutory functions in accordance with Rajasthan Housing Board Act and they were under the bonafide belief that the activity would not attract service tax, penalty waived in terms of Section 80 of FA, 1994: CESTAT
- Appeal disposed of: DELHI CESTAT
2019-TIOL-904-CESTAT-ALL
KG Constructions Vs CCE
ST - The assessee is engaged in providing construction of residential complex service in their various projects - They have been maintaining proper records like issuance of a receipt to the customer maintenance of accounts on tally software - All receipt from customers are shown as project receipt in Balance Sheet - There is an account called project refund which refers to receipt from various persons as refundable loan - On the basis of rough register and rough ledger, SCN was issued proposing to demand service tax and to appropriate the amount already paid by assessee - So far as the demand of Rs.12,64,097/- is concerned, such demand has been raised on the basis of some rough note books seized from the premises of assessee and the author of said note book have not been identified - Further, there is no enquiry made by Revenue regarding from the person who are named therein if they have paid such amounts to assessee - The assessee have assailed the allegations in SCN by producing their books of accounts duly audited alongwith certificate of their Chartered Accountant - There is no cogent basis for this demand - Further, against proposed demand of Rs.1,28,54,902/- in SCN, the demand confirmed in impugned order is Rs.94,57,303/- - Thus, it appears that the SCN was issued without due diligence - The assessee have before issue of SCN deposited Rs.76,88,206/- out of said amount and before adjudication have deposited the balance amount of Rs.5,05,000/- - In this view of the matter, no penalty was impossible on asssessee under Sections 70, 77 and 78 of the Act - Accordingly, all the penalties are set aside - A note of ruling of Delhi High Court in case of Suresh Kumar Bansal 2016-TIOL-1077-HC-DEL-ST wherein the Writ Petition was decided on 3rd June, 2016 with respect to taxability of construction complex intended for sale by builders in the context of Section 65(105)(zzzh) of FA, 1994 read with explanation added by FA, 2010 wherein by legal fiction the scope of taxable service was extended - The High Court held that it was levy ultra vires as there was no statutory mechanism to ascertain the value of taxable service in complex transaction - Accordingly, assessee is not liable to pay any tax over and above amount of Rs.81,92,240/- and accordingly, assessee is entitled to refund of the amount paid over and above the said amount and also refund of the amount of penalty if any deposited: CESTAT
- Appeal allowed: ALLAHABAD CESTAT
CENTRAL EXCISE
2019-TIOL-903-CESTAT-BANG
Poorna Graphics Vs CCE
CX - The assessee have manufactured excisable goods viz., ‘Printed Heat Transfers’ and classified the same under 49011020 of Schedule to CETA, 1985 and clearing the same at Nil rate of duty - On Scrutiny of ER-1 records, Revenue Officer observed that the classification claimed by assessee is incorrect and the goods are liable to be classified under 49089000 - It is useful to advert to the principles of Rules of interpretation of statutes wherein where two or more words having similar meaning are grouped together in a statute, the word having general meaning is taken to have been used in the sense of the accompanying less general word - The rule of law generally known as the ejusdem generis is applicable here - Heat Transfer requires to be placed in group of ‘Heat Transfer’ only and by no stretch of imagination under Printing material under 4901 or 4908 - The proper interpretation of law and statute demands that impugned goods are classified under 4908.90 - Coming to the issue of suppression of facts, assessee declared that they are manufacturing ‘Heat Transfers’; they have in regularly filing ER-1 returns only because the Department has verified/scrutinized the records at later date cannot be a conclusive reason for alleging suppression or fraud - The impugned goods merit classification under 4908.90; however, the demand to be restricted to normal period: CESTAT
- Appeal allowed: BANGALORE CESTAT
2019-TIOL-902-CESTAT-AHM
CCE & ST Vs Rajwani Synthetics Pvt Ltd
CX - The issue involved is the duty liability on goods removed by EOU to domestic tariff area without obtaining permission from the Development Commissioner - It is seen that the issue regarding duty liability on goods manufactured with or without importing raw materials, and cleared without permission of the Development Commissioner has been examined by Apex Court in case of M/s Sarla Performance Fibers Ltd. 2016-TIOL-82-SC-CX - In view of same, irrespective of the observations of Commissioner (A) in the impugned order, the duty liability for the period prior to the amendment of the section 3 of CEA, 1944 with effect from 11/05/2001, the duty liability on goods not specifically allowed by the Development Commissioner to be cleared to the DTA, would arise under section 3(1) of CEA, 1944 and not under the proviso to section 3(1) of CEA, 1944 - The Revenue's appeal cannot succeed and the same is dismissed: CESTAT
- Appeal dismissed: AHMEDABAD CESTAT
CUSTOMS
NOTIFICATIONS
ctariff19_011
Amend notification No. 50/2017-customs dated 30th June 2017 to postpone the implementation of increased customs duty on specified imports originating in USA from 1st April, 2019 to 2nd May, 2019 ctariffadd19_015
Seeks to impose definitive anti-dumping duty on 'Ethylene Vinyl Acetate (EVA) sheet for Solar Module', originating in or exported from China PR, Malaysia, Saudi Arabia and Thailand.
PUBLICE NOTICE
dgft18pn083
Addition of provisions under the Handbook of Procedures for implementation of the Scheme for Rebate of State and Central Taxes and Levies, as notified by the Ministry of Textiles for issuance of scrip for RoSCTL under a MEIS type mechanism
TRADE NOTICE Trade Notice 51
Online filing, processing and system based approval of MEIS applications in respect of SEZ shipping bills CASE LAW
2019-TIOL-901-CESTAT-AHM
CC Vs Divyashakti Communication
Cus - In each appeal, amount involved is less than Rs. 10 lakhs - In terms of Board's circular on Government's litigation policy instruction dated 17.12.2015, as amended, Revenue is not supposed to file appeal where the amount involved is not exceeding Rs. 10 lakhs - Accordingly, both the appeals are dismissed: CESTAT
- Appeals dismissed: AHMEDABAD CESTAT |
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