2019-TIOL-1033-CESTAT-DEL

ST - The assessee is auctioning various water bodies for fishing rights to various persons for purpose of aquaculture - By auctioning these water bodies, certain amounts are collected by Fisheries Department of Government of Rajasthan on annual basis - It has been the contention of department that leasing out of water bodies for purpose of aquaculture and fishing rights amounts to renting of immovable property as defined under Section 65 (90a) of FA, 1994 - A SCN demanding service tax was issued - For the pre-negative era of Service tax i.e. demand period from April, 2008 to 30.6.2012, the activity of aquaculture was specifically excluded from scope of 'renting of immovable property' service and auctioning of water bodies by Department of Fisheries was primarily only for developing the aquaculture and for fishing - The view of Department that aquaculture and leasing of water bodies are two separate activities and, therefore, leasing of water bodies is not exempted from levy of service tax is certainly not tenable as water bodies can only exists on vacant land and for undertaking aquaculture, the presence of water bodies is absolutely essential and pre-requisite - Adjudicating authority has applied the exclusion explanation to the definition of 'renting of immovable property" in a very narrow way - Leasing of water bodies for fishing purposes is same as leasing of vacant land for aquaculture and therefore same is fully covered under the exclusion clause of Section 65 of FA, 1994 and hence not leviable to Service tax - As regards to the period between 1.7.2012 to August, 2013, same provisions have continued in slightly modified way wherein the activity of agriculture has been included in the negative list of items under section 66 D of FA, 1994 and agriculture as defined in clause (3) of the Section 65 B, as the cultivation of plants and rearing of all life-forms of animals, except the rearing of horses, for food, fiber, fuel, raw material or other similar products - Thus, fishing/ aquaculture is part of broader definition of agriculture and thus exempted from levy of service tax - Agriculture being in negative list of items under Section 66D of FA, 1994 is not leviable to service tax and thus for this period also the service tax is not leviable on leasing of water bodies - The impugned order is set aside: CESTAT

2019-TIOL-1032-CESTAT-DEL

ST - The assessee is a partnership firm and is engaged in providing services of packing and loading/unloading of cement into wagons and trucks for the clients - It appeared to Revenue that during the period prior to 16.06.2005, assessee had provided services to various cement plants for loading/unloading of cement (cargo) at the sites and had received payments for services which were appropriately covered under category 'cargo handling services', made taxable with effect from 16.08.2002 - It was noticed that they have entered into agreement with various cement plants and one of them is Prism Cements Ltd. - Terms & condition of contract mentioned in final order No. dated 21.01.2011, passed by Commissioner (A), Mangalore, is similar to the SCN issued to assessee - The activity of packing, loading/ unloading of cement bags cannot be taxed under category of 'Cargo Handling Service', especially when w.e.f. 16.06.2005, the Department accepted the classification of said services under 'Manpower Supply Services' - Case of the assessee is covered by O-I-A in their own case & order of Tribunal in case of J&J Enterprises - 2005-TIOL-520-CESTAT-DEL - Therefore, the impugned order is not maintainable and the same is set aside: CESTAT

2019-TIOL-1031-CESTAT-ALL

CX - Assessee is having a sugar factory where in sugar and molasses is manufactured - It also has a distillery division where in DS & SDS (dutiable) is manufactured - They have been transferring molasses from sugar division to distillery division after payment of central excise duty at the prescribed rate and have been availing its credit in distillery division - Assessee have also been availing credit on molasses received from other sugar factories - Molasses so received is the main raw material in distillery division - SCNs had been issued proposing to disallow credit/demand duty - This included disallowance of credit on inputs/input services; disallowance of credit on molasses and RS lost during storage; demand of duty on shortage of VP Sugar - From perusal of excise invoice, commercial invoice and customer ledger available in appeal paper book, amount reversed under Rule 6 has never been charged or collected from the customer - In the excise invoice it was shown separately to comply the provisions of Rule 6 of CCR, 2004 - There is no dispute that amount has already been reversed by assessee in their credit account - This issue stands settled by decision of Larger Bench of Tribunal in case of Unison Metals Ltd. - 2006-TIOL-1337-CESTAT-DEL-LB - The board circular dated 16.05.2008 while accepting the said decision clarifies that as long as the amount of 8% or 10% is paid to the Government in terms of erstwhile rule 57CC of CER, 1944 or rule 6 of Cenvat Credit Rules, the provisions of section 11D shall not apply even if the amount is recovered from the buyers - However, it may be noted that the Cenvat credit of said amount of 8% or 10% cannot be taken by buyer since such payment is not a payment of duty in terms of Rule 3 (1) of CCR, 2004 - Therefore, the said 10% amount should be shown in invoice as "10% amount paid under Rule 6 of CCR, 2004 - The demand is set aside confirmed under Section 11 D of CEA, 1944 - There is no dispute that molasses received in distillery division had been utilized for manufacture of final products which were dutiable as well as exempted - In terms of Rule 3 of CCR, 2004, assessee was eligible for taking credit of Central Excise duty paid on molasses so received in distillery division - This issue stands settled in assessee's own case vide Final Order dated 12.01.2017 - Assessee is eligible for Cenvat credit of Central Excise duty paid on molasses received in the distillery division.

The assessee was eligible to take credit of other inputs like Sulphuric Acid, boiler chemicals and lubricant - For the same reasons, assessee is also eligible for Cenvat credit of input services like Erection Commissioning Services, Goods Transport Services and Security Services - Assessee have contended that they have reversed various amounts under Rule 6 (3) from time to time on sale of rectified spirit/ENA or its captive consumption for manufacture of country liquor/IMFL - Adjudicating authority is directed to determine the amount reversible in terms of this order - The adjudicating authority has imposed various penalties under Section 11AC and Rule 25 of CER, 2002 - Entire dispute is relating to interpretation of provisions of Rule 6 of Cenvat Credit Rules and there appears to be no case of contumacious conduct or intentional evasion of Central Excise duty - Therefore all the penalties are set aside: CESTAT

2019-TIOL-1030-CESTAT-BANG

CX - The assessee is engaged in manufacture of sponge iron - On scrutiny of ER-1 returns for various months, it was noticed that assessee have taken CENVAT credit wrongly on HR plates, MS sheets, MS plates, MS channels, joists, flats, squares and beams used for fabrication and erection of support structure for kiln plants for manufacture of sponge iron and demineralization plant to meet the requirement of water for power plant and manufacture of sponge iron - On these allegations, SCNs were issued proposing to deny CENVAT credit on all these impugned goods on the ground that they are embedded to earth and thereby becoming immovable property and fall outside the scope of 'Capital Goods' under Rule 2(a) of CCR, 2004 - The usage of goods have been mentioned in SCN itself and after noting the usage, the CENVAT credit is sought to be denied on the ground that impugned goods have been used for fabrication and erection of support structures, which are embedded to earth and is not an input or a capital goods - Once usage is admitted in SCN itself, assessee is not required to prove the same by any documentary evidence - Further, this issue has consistently been considered by various Benches of Tribunal and the High Court and it has been held that the MS plates, MS angles, channels, HR sheets used as inputs for fabrication/manufacture of supporting structures to various machines like kiln, conveyor system, demineralization plants are eligible for CENVAT credit - The assessee is entitled to CENVAT credit on the impugned goods and denial of the same is not sustainable in law: CESTAT