2019-TIOL-1402-CESTAT-MAD

Spic Ltd Vs CGST & CE

ST - The issue in this case is whether assessee is eligible for credit on service tax paid on services availed for sale of shares - Undisputedly, the assessee is engaged in manufacturing activity as well as providing output service - One of the allegations of department is that credit cannot be availed on the service tax paid as the services availed for sale of shares since the products manufactured by assessee are exempted - The second allegation is that the input services used for raising capital has no nexus with the output service and therefore is not eligible for credit - Though the assessee is engaged in manufacturing activity as well as providing output service, it can be seen that services of sale of shares was consumed by assessee for raising the capital - The definition of input services includes the services of 'financing' - Thus, the services consumed for financing or availment of loan will be input service for an assessee who is providing output service or engaged in manufacture of dutiable final product - Further, the period of dispute is prior to 1.4.2011 - The Tribunal in case of Hinduja Global Solutions Ltd. - 2016-TIOL-728-CESTAT-BANG has categorically held that the activity of raising capital by the disinvestment is directly connected with output service and has correlation with the business activity of assessee - It is needless to elaborate that raising capital or finding funds is an absolute necessity for any person engaged in business or commerce - The assessee was providing taxable output service and therefore the credit availed on the services cannot be considered solely applicable to manufacturing activity alone as argued by revenue - Further the SCN alleges that credit is not admissible as there is no nexus with manufacturing activity or output services provided - The impugned order requires to be set aside: CESTAT

- Appeals allowed: CHENNAI CESTAT

2019-TIOL-1401-CESTAT-MAD

Sundaram Finance Ltd Vs CST & CE

ST - The assessee is engaged in financing purchase of commercial vehicles, cars and houses and were registered under the category of Banking & Other Financial Services, BAS and Business Support Service - It appeared to Department that the assessee while calculating the proportionate credit attributable to exempted services had not adopted the correct value of taxable service "hypothecation and loan activity" in the numerator and denominator in the formula prescribed under Rule 6(3A) of CCR, 2004 - The dispute in this case is with regard to the exemption given by Notfn 04/2006 wherein 90% of the amount of interest received in granting loans and financing services is exempted - By such Notfn, service tax is required to be paid on a value equal to 10% of total amount representing interest; balance 90% thus enjoys exemption from payment of service tax - The SCN has been issued alleging that assessee has to consider the 90% which enjoys exemption from payment of service tax as exempted services and include this value for arriving at the amount that has to be reversed - There is no dispute that the assessee should get the benefit of Notfn which exempts 90% as held in the earlier Order of this Bench - Assessing officer is directed to follow the directions contained in above Order to this extent - The next question is on the taxability or otherwise of the balance 10% - When the Notification grants exemption to the extent of 90%, the only obvious conclusion is that the balance 10% should suffer tax and accordingly, tax liability is required to be requantified: CESTAT

- Appeal allowed: CHENNAI CESTAT

2019-TIOL-1400-CESTAT-BANG

Telematics 4U Services Pvt Ltd Vs CCT

ST - The assessee is registered under Service Tax for providing Online Information and Data Retrieval Service, Business Auxiliary Service, Business Support Service and Information Technology Software Service and availing CENVAT credit on input services - During audit, it was noticed that assessee was also engaged in 'trading' of goods which is an exempted service in terms of provisions of CCR, 2004 - They had availed CENVAT credit on purchase of devices vi., "CR-200B device" - The only issue involved is whether CR-200B devices submitted to their clients on hire/test basis by assessee amounts to trading activity or not and further the assessee is entitled to CENVAT credit or not - Further, the arguments of assessee that the devices were transferred to customers on hire/free of cost is not tenable in law because they have issued the invoice on which they have paid VAT under Karataka VAT Act - Assessee has not maintained proper record of inventory used and inventory traded - The Commissioner (A) has come to the conclusion that assessee has not been able to provide documentary evidence to show CR-200B devices in question have been used to provide output service to their clients - Further, Commissioner (A) has observed that the assessee has raised separate invoices for subscription charges and has also discussed about few invoices brought on record - In view of the reasons given by Commissioner (A), no infirmity found in impugned order wherein it has been held that assessee is not eligible to avail CENVAT credit on such devices as far as imposition of penalty under Section 78 is concerned, there was ambiguity in issue and it relates to interpretation of law - The assessee have provided all the information to the audit party and the matter came to light during the audit only from the records submitted by assessee wherein they have disclosed the availment of CENVAT credit - Therefore, the imposition of penalty under Section 78(1) of Finance Act is not warranted - Accordingly, the appeal is partly allowed: CESTAT

- Appeal partly allowed: BANGALORE CESTAT

2019-TIOL-1406-CESTAT-MUM

CC Vs Navyuga Engineering Company Ltd

Cus - Notification 21/2002-Cus - It is evident from paragraph 6 of the Order-in-appeal that the Commissioner(A) has not allowed the benefit of the exemption to any paver which is not laying pavements of 7 mtrs and above - Revenue appeal, therefore, has been filed by way of erroneous reading of the said paragraph - Issue has also been settled by the Larger Bench of the Tribunal in the case of Ramky Infrastructure Ltd. - 2014-TIOL-1020-CESTAT-MUM-LB together with the decision in Gammon India Ltd. - 2013-TIOL-471-CESTAT-MUM - There is, therefore, no merit in the grounds raised by the respondent importers in their cross objection filed in this regard - Both, Revenue Appeal as well as cross-objections by respondent are dismissed: CESTAT [para 5.3, 5.4, 5.5, 6.1]

- Appeal/Cross-objections dismissed: MUMBAI CESTAT

2019-TIOL-1405-CESTAT-AHM

Flora Marmo Industries Pvt Ltd Vs CC

Cus - There are two issues to be decided - One is that whether the service of less charge demand notice was made properly in accordance with law to the assessee and if not, then whether the demand is time-barred and second, whether the assessee imported goods i.e. Polished Marble Slabs under CTH 68022190 is eligible for exemption Notfn 4/2006-CE - As regards the issue of service of less charge demand notice, as per undisputed fact that the notices were not served on assessee but the same were served to CHA of assessee - As per Section 28, the notice to be given to the person who is liable to pay the duty - Assessee is the only person who is liable to pay duty and notice should have been served on assessee - Unless otherwise, the other person, in this case the CHA, is specifically authorized for the purpose of receiving the less charge demand notice - Nothing is on record to show that assessee has specifically given authorization to the CHA for receiving the less charge demand notice - The goods were imported and cleared in the month of May 2007 to July 2007 - With these clearance, the job of CHA was over - Thereafter, the less charge demand notices were issued mentioning date 0/9/2007 - Therefore, at the time of issuing the less charge demand notice, the CHAs job of clearance of goods was clearly completed - Moreover, the CHA has not been authorized to receive the less charge demand notices - In that case, the service of less charge demand notice served on CHA is not valid service of notice to the assessee - The assessee received the less charge demand notices from their CHA M/s. Shakti Enterprises Pvt. Limited only on 23.08.2008 i.e. much after the lapse of six months time provided under Section 28 of the Customs Act, 1962 - Therefore, all the less charge demand notices are time-barred - Accordingly, impugned orders are set-aside and appeals are allowed on limitation without going into merit of the case: CESTAT

- Appeals allowed: AHMEDABAD CESTAT