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SERVICE TAX
Kandla Port Trustt Vs CCE & ST
ST - Assessee is a major Port and holding service tax registration under two primary taxable categories i.e. Port Services and Renting of Immovable Property Service - SCN was issued demanding service tax, interest and seeking to impose penalty under Section 76 and 78 of FA, 1994 - Notice also proposed recovery of wrongly availed Cenvat credit, interest and imposition of penalties under Rule 15 of Cenvat Credit Rules read with Section 78 of FA, 1994 - Any service rendered by a Port in relation to Vessels or goods can be described as Port Service - The Entry fees and Toll fees are in relation to goods and persons attending to vessel and/ or goods only - Thus, this service can be covered under definition of Port Service - Therefore, the demand in respect of Toll charges and Entry Fees charges is upheld - The next issue relates to demand of service tax on charges collected as testing charges of bitumen - It has been pointed out that it is a duplicate demand in the sense that these charges are also included in the demand relating to miscellaneous income - The assessee not contesting demand under this head, except for appropriate adjustment in demand under the head of miscellaneous Income - The demand under the head of Royalty for containers and Income from 11th and 12th cargo berth are in respect of Revenue share received by assessee from the income of M/s. ABG Limited and CWC - The issue stands decided in favour of assessee in the similar circumstances by various decisions - Thus, the demand under head of Royalty for containers and Income from 11th and 12th cargo berth cannot be sustained and is set-aside - The next issue relates to demand of service tax of Township income, demand has been confirmed under the head of renting of immovable property services - There is no discussion on the nature of service against which this amount is received, who is the person who paid the amount and what is the arrangement between the assessee and the person paying for such amounts - In these circumstances, impugned order is not a speaking order on this issue and therefore, the same needs to be set-aside and issue needs to be remanded for determining the exact grounds and arguments on the basis of which the demand under the head of township income was confirmed - The next issue relates to denial of Cenvat credit on transportation expenses of CISF Staff who are engaged in providing security services to the assessee - It is seen that the impugned order does not dispute the said service is used for transportation of CISF Staff employed for security - The credit of service tax cannot be denied - The assessee is not contesting the demand of reversal of credit in respect of construction services where the relevant documents are not available - The assessee is also not contesting the denial of Cenvat credit on construction/ repairing work of staff colony thus the demand on the same are sustained - The assessee have contended that they are a Public Sector Unit and do not have any malafide intention to evade taxes - It is seen that most issues in dispute are either contentious or decided in favour of assessee - No merit found in invocation of extended period or in position of penalty under Section 78: CESTAT
- Appeal disposed of: AHMEDABAD CESTAT
Marwadi Shares and Finance Ltd Vs CCE & ST
ST - The assesee is engaged in providing Stock broking service and renting of immovable property service - They are registered with National Stock Exchange and Bombay Stock Exchange and are transacting purchase/ sale of shares on behalf of their customers for which they are charging brokerage from their customers - They are also registered as depository participant with the National Securities Depository India Ltd and Central Depository services Ltd. in which the customer of assessee trade in securities - The interest was charged by assessee on account of late payment of brokerage and fee towards depository services - The revenue has made assertion that interest income is arising from rendering of "banking & financial service" as per section 66D of FA, 2004 falling under negative list - It is alleged that since the same is exempted service hence the 50% of Cenvat availed on input and input services is liable to be reversed in terms of Rule 6(3B) of CCR, 2004 - First of all the SCN and impugned order has nowhere shown that income has arisen due to any service related to "Banking & Financial Service" - The assessee has not lent any money to any person - The activity of a banking and financial service concern has been well defined under RBI Act, Banking Regulation Act and section 65 (12) of FA, 1994 - The interest earned has to be from deposit, loans or advances when the activity is of "Banking & Other Financial Service" - The interest on delayed payment of consideration i.e. delay in payment of brokerage and fee would not ipso facto lead to conclusion that assessee is rendering any banking or financial activity - The assessee has rendered Stock Broking Service and it is only such services that the interest income has arisen - Classifying the receipt of interest from the late payment of the business consideration under "Banking and Other Financial Service" is far fetching on the part of revenue, hence, the demand is not sustainable on merit - The assessee during the course of proceedings before the adjudicating authority has submitted the Statutory and Tax Audit Report, client ledger showing interest charged on delay payment of outstanding dues from the client and certificate issued by Chartered Accountant - The said documents clearly define the nature of income - Hence in no circumstances the interest income can be defined as outcome of banking and other financial service - The interest arising due to late payment of dues by clients to the assessee would not fall under category of Banking & other Financial service - Said views are also based upon the judgment in case of M/s Karvy Consultants Ltd. - 2005-TIOL-203-HC-AP-ST - T he activity of assessee is not covered under the category of Banking & Financial services - In such case the demand under Rule 6 (3B) towards reversal of 50% of Cenvat Credit on input and input services is also not sustainable - The demands and penalties against assessee are not sustainable - The impugned order is thus set aside: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
CENTRAL EXCISE
2019-TIOL-1103-CESTAT-DEL
Bharat Shukla Vs CGST, CE & CC
CX - The assessee is engaged in manufacture of TMT Bars and mis-rolls which are generated during manufacture of TMT Bars - During search, the incriminating documents were ceased and the Panchnama was prepared - Resultantly, a SCN was served alleging the clandestine clearance of goods during the month of February to May 2016 and proposing the aforesaid seized stock to be confiscated under provisions of Rule 25 of CER, 2002 with the imposition of redemption fine in view of said confiscation and the penalty under Rule 25 of CER, 2002 was also proposed - Allegations of clandestine removal are serious in nature and the clandestine activities are quasi criminal hence the revenue alleging the same is required to prove it by sufficient corroborative evidences - The only contention of Revenue is that the excess stock was admitted by Shri Bharat Shukla Director of assessee, however there is nothing on record to show that the officers of revenue had done anything for weightment of the stock as arrived by them - They have not even produced any inventory to show that the stock was physically verified by them - Nor it is the case of Revenue that the alleged excess stock was not entered in RG Register deliberately and with malafide intent to remove goods clandestinely - The law stands settled as of now that the goods cannot be confiscated on the mere conclusion of non entry of the goods in the statutory documents unless there is evidence that such stock was not entered in RG-I Register either deliberately or on the malafide intention to remove the same clandestinely - Support drawn from the decision of Tribunal in case of Salasar Steel and Power Ltd. - 2017-TIOL-268-CESTAT-DEL - Finally relying upon the decision in case of Indo-German Fabs relying upon the decision of Supreme Court in case of Hindustan Steel Ltd. - 2002-TIOL-148-SC-CT-LB wherein it was held that the element of mensrea is normally required to be shown for imposition of penalty and where the Department has failed to prove the said element of mensrea no case is made out to impose penalty - The findings of adjudicating authority for the confiscation of impugned stock and the imposition of penalty upon Mr. Bharat Hula are without any basis and without any cogent and corroborative evidence, same are therefore set aside: CESTAT
- Appeals allowed: DELHI CESTAT
2019-TIOL-1102-CESTAT-ALL
JJK Zarda Pan Products Vs CCE
CX - Assessee is engaged in manufacture of 'Chewing Tobacco & Pan Chatani' - A truck was intercepted by officers outside the factory premises of said assessee and it was found that the same was carrying 20 cartons of chewing tobacco and was not accompanied by any duty paid documents - Accordingly, same was seized by officers - Simultaneous searches were made in the premises of transporter which resulted in presence of 25 cartons lying in the premises - Another 50 cartons were found loaded in truck located outside the transporter's premises - All the said goods were without the cover of any Central Excise documents evidencing payment of duty of Excise, though the 50 cartons were covered by the sale invoice of assessee's depot - There is virtually no evidence on record to show any clandestine activity on the part of assessee - The Gujarat High Court in the case of Chhajusingh S. Kanwal - 2010-TIOL-860-HC-AHM-CX has observed that even the statement of traders/brokers were not admissible evidence, as they had not been tested by cross-examination - The Court further observed that no Director or employees of assessee has admitted clandestine manufacture/removal of goods and no investigations are carried out to ascertain factors which could indicate that assessee actually manufactured large quantity of goods in its factory viz. Discrepancies in stock of raw material or final products, extra working hours of factory, electricity consumption, payment of charges and transportation Bills - The findings of clandestine removal resulting in confirmation of demand are unsustainable, same are accordingly set aside along with setting aside of penalties of identical amount on M/s Jjk Zarda Pan Products.
Further, penalty of Rs.20 lakhs stand imposed upon Shri Jai Kumar Arya, partner of the manufacturing unit, such penalty is required to be set aside - Similarly, penalty of Rs.10 lakhs imposed upon M/s Mehra Transport Company is set aside - As regards penalty of Rs.10 lakhs on M/s Prabhat Zarda International the same stand imposed on the ground that the truck intercepted outside the assessee's factory was belonging to M/s Prabhat Zarda International - Further, there is no evidence on record to show that M/s Prabhat Zarda International was aware of the fact that the said truck lended by them to the assessee would be used by them for clearances of goods without payment of duty - The Truck has already been confiscated with an option to redeem the same on payment of redemption fine and in the absence of any evidence to reflect clearance of goods without payment of duty by M/s s Prabhat Zarda International, imposition of penalty upon them is not justified, same is set aside: CESTAT
- Appeals disposed of: ALLAHABAD CESTAT
CUSTOMS
Cus - The assessee imported consignment of synthetic spinning waste from Taiwan and filed Bill of Entry through its authorised clearing agent M/s Barua and Chowdhary - The consignment was examined by Customs authority and the same was assessed provisionally under the provisions of Section 18(1) of the Act with the direction to representative of sample of goods and sent for test - The goods were allowed to be cleared at the strength of test bond and the consignment was allowed on 30.4.1999, after destuffing the same from the container and loaded the same on 32 number of trucks outside the dock gate for the despatch to assessee's place at Ludhiana - Thereafter, the officers of DRI, Amritsar enquired about the consignment of 1120 bales of synthetic spinning waste imported by assessee through Kolkata port - The assessment in these cases have been made on provisional basis, which is also not disputed by Commissioner - In fact, the Commissioner in his order has clearly and categorically ordered that the provisional assessment stand finalised - In this regard, the provisional assessment has been made as per the provisions of Section 18(1) of Customs Act and the same was not finalised till the investigation was taken up and SCN was issued - The SCN was issued under the provisions of Section 28 of Customs Act and also proposing the levy of interest, imposition of penalty under the various provisions of the Act - In SCN, there is no whisper about the consignment having been assessed provisionally and proposed to be finalised by considering the test report obtained from the CRCL - The appropriate course would have been to consider the test report and apply the same to the imported consignment with a notice to finalise the same under the provisions of the Customs Act - It is completely against the provisions of Custom Act to issue the SCN under the provisions of Section 28 of Customs Act without the assessment being finalised under Section 18(2) of the Customs Act - In such a case there is also no scope of imposing any penalty on assessee and also on the various officers of company - Revenue has not brought any other decision in support of the impugned order, that as to how without the final assessment, which at the first instance, has been made provisional the demand can be issued - This is act of Commissioner under Section 28 of Customs Act in contravention of provisions of Section 18(2) of the Act, and is not sustainable - Accordingly, the impugned order is set aside: CESTAT
- Appeals allowed; KOLKATA CESTAT
Basf Styrenics Pvt Ltd Vs CC
Cus - This appeal has been filed by assessee against rejection of declared value and re-determination of value of Styrene Monomer imported by assessee - The assessee is claiming that they had placed an order on 06.10.2008 on the foreign supplier BSEAP for supply of 2,380.969 MT of Styrene Monomer bulk at a price of USD 872.50 PMT - The said consignment as per purchase order was expected to arrive on 25.10.2008 - At the material time the price of Styrene Monomer bulk was somewhere between USD 1300 PMT and USD 1030 PMT - The assessee had placed an order at the price of USD 872.50 which was almost 30% and 40% below the prevailing price - If the price was arrived at as per the agreement entered into between the supplier and the buyer, the price would have been USD 1333 PMT - Significant force found in the arguments in impugned order, the said arguments are sufficient ground to reject the price declared by assessee - Consequently, the impugned order is upheld: CESTAT
- Appeal rejected: AHMEDABAD CESTAT |
