2019-TIOL-NEWS-113, Dated: Tuesday, May 14, 2019

ST - The assessee-company provided service of erection, installation, commissioning, repair and maintenance service to the State of Jammu and Kashmir - The Revenue opined that as the same was exempted service, the assessee was liable to reverse the credit availed on the inputs utilized - The quantum of the credit to be reversed was pegged at 6% of the value of exempted service - Duty demand was raised in this regard - Hence the present appeal.

Held: The authorities held that services provided in the State of J&K are not exempted service but are trading service and the demands were confirmed - In the adjudication order, it was held that the assessee engaged in trading activity only - As the SCN identified that this is the value of exempted services, therefore both authorities travelled beyond scope of SCN holding that it is trading activity - As it is held the appellant is not providing exempted service, the allegation in the SCN is not sustainable: CESTAT

ST - Assessee's application for out of turn hearing merits being allowed as the amount involved in the appeal is above Rs 2 crores: CESTAT

ST - The assessee was issued a SCN inter alia on the grounds that they provided services under category of "Insurance Auxiliary Service" - That they received an amount of Rs. 7,15,90,051/- during the period from October 2003 to June 2008 from M/s. PACL, Naya Nangal involving total service tax liability of Rs. 77,85,009/- which was allegedly not discharged by assessee - The assessee had joined the LTU w.e.f. 24.01.2008 as evident from the letter of assessee to the Commissioner in response to the SCN - The letter of LTU makes a reference to a corrigendum making the SCN answerable to Commissioner, LTU, Chennai - Be that as it may, the main planks of assessee are two - One, that the assessment was provisional with LTU, Chennai, which they had joined as a taxpayer client w.e.f. 24.01.2008 - Second, that the SCN's premises that the services provided by them were under "Insurance Auxiliary Service" whereas the assessee was providing only "General Insurance Service" - The second contention regarding provision of services only under General Insurance Service has been contended by assessee right from the reply to SCN and also in personal hearing and has also been taken note of by adjudicating authority - If assessee is only engaged in providing General Insurance Service, the SCN issued to them demanding tax under Insurance Auxiliary Services cannot sustain - However, this would be best ascertained by adjudicating authority in de novo adjudication - Accordingly, for the limited purpose of ascertaining the fact that the assessee had indeed provided only General Insurance Service and not Insurance Auxiliary Service, the matter is remanded to the adjudicating authority: CESTAT

2019-TIOL-1361-CESTAT-HYD

Rashtriya Ispat Nigam Ltd Vs CCT

CX - The issue is in respect of availment of CENVAT credit of service tax paid on services of outdoor catering service, mandap keeper service and convention services, the issue was agitated before Tribunal and Bench vide Final Order dated 28.09.2016 and the Final Order dated 18.04.2017, set aside the orders of the lower authorities and allowed the appeal of assessee herein - Since the issue stands decided in favour of assessee, no reason found to deviate from such a view already taken: CESTAT

- Appeal allowed: HYDERABAD CESTAT

2019-TIOL-1360-CESTAT-DEL

Rswm Ltd Vs CCE & ST

CX - The assessee is engaged in manufacture of 100% cotton yarn and has availed Service Tax credit on construction service - The Department observed that the said credit availed for construction service is not admissible to assessee, as these were not related to any of its manufacturing activity/input services - The definition of input service as enshrined under Rule (l) of CCR, 2004, though has been amended to exclude construction activity irrespective in relation to business, but the said amendment had come into existence post 2011 - The period in dispute is April, 2005 to October, 2006 - Hence the exclusion clause is not applicable - The issue therefore as remains to be adjudicated is as to whether the construction of staff colony is a welfare activity of assessee or is an activity in relation to its business - It is very much apparent from the reply of assessee as was given to SCN that the impugned construction has been made within the factory premises of assessee and the very object of the construction of these buildings for staff and labour in factory compound itself is to ensure the availability of labour at the spot of manufacture for maintaining continuous manufacturing process of the plant - Thus, the said construction is opined to be an activity intended to seek enhancement of productivity of the plant - No doubt, the Apex Court in Maruti Suzuki Ltd.- 2009-TIOL-94-SC-CX has held that unless the nexus is established between the services rendered and the business carried on by assessee, the benefit of cenvat credit is not allowable - The said fact on record, which has nowhere been disputed by Department is sufficient, as a reasonable nexus between the impugned construction and the impugned manufacturing activity of assessee - The High Court of Mumbai in case of Ultratech Cement has held that the definition of input services is much wider than the definition of input - Commissioner (A) has failed to appreciate the fact on record creating nexus between the impugned input service and the business activity of assessee and has wrongly held the same to be a welfare activity - The construction of houses since has been raised with the main objective of enhancement of the business, same is held as the input service - Assessee is entitled to avail the Cenvat Credit: CESTAT

- Appeal allowed: DELHI CESTAT

Cus - The assessee is in appeal against impugned Order where exported goods were allowed to be released provisionally under provisions of Section 110A of Customs Act, 1962 on furnishing of bonds alongwith the perpetual/ auto renewal bank guarantee as security - SCN has been issued to assessee on 24 September, 2018 and same is pending adjudication - In these circumstances, the Chief Commissioner Customs is directed to appoint the Adjudicating Authority within 15 days and thereafter the assessee shall appear before the Adjudicating Authority within 10 days and shall provide all the documents in their defence - Thereafter, the Adjudicating Authority shall adjudicate the SCN and shall pass an appropriate order within 45 days: CESTAT

Cus - The challenge is to imposition of penalty of Rs.2,00,000/- each imposed in terms of Section 114 & 114AA of Customs Act, 1962 upon the assessee, who is a CHA - As per the allegations and findings of Adjudicating Authority, the CHA filed the Shipping Bills, declaring the goods of Exporter as "Dog Chew" which was allegedly "Dog Food" - The export-containers were self sealed by exporter and there is no evidence that said CHA was having any knowledge of the fact of consignment being different than the one declared - It is also seen that the CHA has relied upon health certificate produced by exporter and has filed the Shipping Bills accordingly - No reasons or justification found to impose penalty upon him: CESTAT