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SERVICE TAX
2019-TIOL-1601-CESTAT-BANG
TPL Developers Vs CCT
ST - Investigation revealed that the appellant had undertaken the construction of only one residential project called 'SEPIA' consisting of five floors, with one flat on each floor - appellant has received the Occupancy Certificate ('Completion Certificate' or 'OC') by which date two apartments had been sold - Verification of the ST-3 Returns revealed that the appellant was availing input credit and utilizing the same to pay the Service Tax - The third flat was sold after the receipt of the OC and the entire consideration for this flat was also received after the receipt of the OC - It was found that only two flats out of five flats were sold before obtaining the completion certificate on 28.10.2014 from B.B.M.P. and, therefore, only these two flats were liable to Service Tax - However, the assessee availed CENVAT credit from 01.10.2013 to 2015 for all the five flats which also include construction of three flats for which no taxable service was provided - Department viewed that since appellant had sold only two flats prior to receiving the OC on 28.10.2014, the advances/amounts received towards the sale of these two flats are, therefore, subject to Service Tax - Further any consideration received towards the construction and sale of residential apartments after issuance of the Completion Certificate/Occupancy Certificate by the competent authority will not be treated as being received for rendering of a service by a builder to a buyer, but will be treated as consideration received towards sale of immovable property - Since the appellant was availing input credit and utilizing the same for payment of Service Tax from time-to-time, it appeared that the appellant is not eligible to avail & utilize the entire CENVAT credit since three flats remained unsold as on the date of the receipt of the Occupancy Certificate - On the allegations that the appellant had taken the CENVAT credit wrongly and is required to reverse the same, a SCN was issued to the appellant demanding CENVAT credit of Rs.12,00,849/- availed during the period from 01.10.2013 to 12.08.2014 and further CENVAT credit amounting to Rs.2,83,861/- availed after the receipt of Occupancy Certificate i.e. for the period from 01.11.2014 to 31.03.2016 - Original Authority confirmed the demand of Rs.11,67,222/- and the amount already paid by the appellant under protest was appropriated, penalty was also imposed - as no relief was obtained in appeal, the assessee is before the CESTAT.
Held: When the appellant availed CENVAT credit on input services, he was entitled to take the same and there was no provision in the CCR to reverse the same prior to 01.04.2016 - in the present case, the period covered is prior to the amendment, by notification 13/2016-CE(NT) dated 01.03.2016, in Rule 6(1) of CCR, 2004 - Further, services provided up to the date of obtaining the OC would not qualify as exempted services and, therefore, the provisions of Rule 6 will not be applicable - Issue is squarely covered in favour of the appellant by the decision of Division Bench, CESTAT, Ahmedabad in the case of M/s. Alembic - 2019-TIOL-358-CESTAT-AHM - following the same, impugned order is set aside - in respect of the amount paid under protest, protest is vacated - appeal allowed: CESTAT [para 6, 6.1]
- Appeal allowed: BANGALORE CESTAT
2019-TIOL-1600-CESTAT-MAD
TVS Interconnect Systems Ltd Vs CCE
ST - Appellant had discharged service tax liability by availing benefit of Notification No.1/2006-ST dt. 1.3.2006 after availing 67% abatement on the value of taxable services under the category of Erection, Installation or Commissioning services - It was noted by department that the machinery and equipment were supplied by service recipient - From perusal of purchase orders and agreements between the appellants and the service recipient, it appeared that in all the invoices issued to the customer, it had been declared by appellants as "service charge" only - Department was of the view that to avail the benefit of notification, the plant, machinery, equipment and other material should be supplied by the service provider and not for simple supply of any other material for providing service - SCNs were issued denying the benefit of notification No.1/2006-ST and proposing to demand service tax along with interest for various periods and proposing imposition of penalties - demands confirmed and penalties imposed, hence appeal to CESTAT.
Held: Necessary facts as to whether the appellants had actually supplied material also for the works executed by them is not forthcoming more so since the purchase order says "for services only" - Matter requires to be remanded to the adjudicating authority to relook into the question as to whether the works executed are service simplicitor or composite involving both supply of materials and provision of services - Needless to say, if the works are in the nature of composite contract involving both materials and service, the demand of service tax cannot sustain for the period prior to 1.6.2007 as per the decision laid in Larsen & Toubro Ltd. - 2015-TIOL-187-SC-ST - For the period after 1.6.2007 also, the demand cannot sustain under ECIS, if the contracts are composite as held by the Tribunal in the case of Real Value Promoters Ltd. - 2018-TIOL-2867-CESTAT-MAD - impugned orders are set aside and matter remanded for denovo adjudication by the adjudicating authority: CESTAT [para 5.6, 6]
- Matter remanded: CHENNAI CESTAT
2019-TIOL-1588-CESTAT-DEL
South Eastern Coalfields Ltd Vs CCE & ST
ST - The issue involved in this appeal is; whether the electricity charges recovered by appellant/ coal company from its tenants can be aggregated with the rent receipt for levy of Service Tax under "Renting of immovable property Services" - The appellant has rented out premises for commercial purpose and claimed reimbursement of electricity charges on actual basis for units of electricity consumed by their tenants - Further, they had also produced the copy of CERA audit which has raised objection for Service Tax paid on account of Renting of Immovable Property for an amount of Rs. 41,025/- during the period from June, 2007 to March,2010 which amount was paid by appellant by chalan dated 21st July 2011 and intimated the Revenue by their letter dated 22nd August 2011 - The SCN dated 18th October, 2012, appears to be issued on account of change of opinion on the same facts and circumstances - Accordingly, as the appellant has recovered the electricity charges on actual consumption basis and not on floor area basis, for their shop premises, thus electricity charges cannot be clubbed with the amount of rent, for purpose of levy of Service Tax : CESTAT
- Appeal allowed : DELHI CESTAT
2019-TIOL-1587-CESTAT-DEL
Wild Expedition Tours And Travels Vs CCE
ST- The assessee is engaged in business of providing rent a cab service-It was alleged by department that the assessee had not declared the correct taxable value of rent a cab service as they had been providing cab on higher basis to West Central Railway Zone as well as Indian Army and the value of services provided to these organizations were not included in the taxable value-The assessee has failed to prove that the receipts in balance sheet and profit and loss account are accountable for activity of rent a cab service-The assessee has been changing its stand before various authorities in an attempt to get out of the service tax liability-At one stage they argued that they did not own the required number of vehicles for providing rent a cab service and were providing cars only on commission basis-The decision in the case of R.S. Travels 2014-TIOL-1796-HC-UKHAND-ST is of no help to the assessee as same has been considered in case of Vijay Travels and a contrary view has been taken-Thus, it can be seen that the type of services provided by assessee is covered within the scope of Rent-A-Cab service-The assessee has failed to discharge its service tax liability on the same and, therefore, no fault found with the conclusions arrived at by Commissioner (A)-A perusal of certificate indicates that the assessee has in fact received the payment in lieu of providing the rent a cab service in form of Indian currency-Payment has been received in convertible foreign exchange by main service provider namely, Ess Dee Travel Express Pvt. Ltd. and not by the assessee-The benefit of Notfn 21/2003-ST cannot be extended to assessee as a plain reading of the notification indicate that exemption will be available to persons who receive payment in the convertible foreign exchange-This apart, the benefit of notification may have been availed of by M/s Ess Dee Travels Express Pvt. Ltd: CESTAT
- Appeal dismissed : DELHI CESTAT
CENTRAL EXCISE
2019-TIOL-1599-CESTAT-MAD
Titan Industries Ltd Vs CCGST & CE
CX - Assessee is engaged in the manufacture of 'watches' [CSH 9101.90, 9102.90] - goods having been notified items under Sub-Section (2) of section 4A, are definitely assessable under Section 4A of the Act - contention of the appellants that the goods do not fall under the category of packaged commodities, etc., cannot be accepted - impugned orders do not call for any interference - appeals dismissed: CESTAT [para 7.2, 8, 9]
- Appeals dismissed: CHENNAI CESTAT
2019-TIOL-1598-CESTAT-MAD
CGST & CE Vs Titan Industries Ltd
CX - Assessee had manufactured and cleared in bulk certain quantity of watches [Ch. 91] on specific order given by some industrial organizations to be given for free distribution to the employees of such industrial organizations - The assessee declared the contract price and availed concessional rate of duty of 8% under Notification No. 10/2003-CE dated 01.03.2003 as the contract price, according to them, was less than Rs. 500/- per watch - Department's contention is that the contract price at which the assessee has paid duty cannot be considered as M.R.P. and hence, Notification No. 10/2003-CE is not applicable - Commissioner (Appeals) held that the goods are liable to be assessed under Section 4A and concessional rate of duty under Notification No. 10/2003-CX is eligible for the clearances effected by the assessee to the industrial consumers - Commissioner (Appeals) further observed that apart from the four instances, there was no evidence adduced by the assessee to show that the watches were sold at a price less than Rs. 500/-, hence the remanded the matter to the adjudicating authority to rework out the duty payable - while assessee is aggrieved by such Order that the watches are assessable to duty under Section 4A and disallowance of concessional rate of duty for major part of the clearances, Revenue is aggrieved with that portion of the order wherein concession has been granted.
Held: Definition of 'retail sale price' in Explanation II to the Notification No. 10/2003-CE starts with the words "for the purpose of this Notification", whereas the definition of 'retail sale price' in Explanation I in the Central Excise Act, 1944 starts with the words "for the purposes of this Section" - Section 4A has a reference to the Standards of Weights and Measures Act, 1976 (SWM Act), however, the Notification does not have any reference to the SWM Act - It can be understood that the definition of retail sale price given in the Notification is only for the purposes of the Notification - The 'retail sale price' in the Notification, therefore, cannot be stretched to the application of the SWM Act and the SWM (PC) Rules, 1977 - The Notification does not lay down that the benefit is applicable only to goods to which the SWM Act and Rules apply -Thus, it is not necessary that for availing the benefit of the Notification, the goods have to be assessable under Section 4A of the Act - The Department has confused the definition of retail sale price given in the Notification with that of the definition given in Section 4A of the Central Excise Act - Thus, in the case of goods which are assessable under Section 4A, when the goods are cleared to industrial consumers, as per the provisions of the Standards of Weights and Measures Act, there is no requirement to affix the M.R.P - In such cases, the goods would be assessable under Section 4 of the Central Excise Act, 1944 - Thus, even if the goods are cleared to industrial consumers or otherwise, if they are sold to the ultimate consumer at a price which is not exceeding Rs. 500/- per piece, the clocks or watches would be eligible for the benefit of the Notification - Further, even the Show Cause Notice states that the assessee has cleared the watches only to institutional consumers - So also, it is seen stated that they have cleared it below Rs. 500/- - On this score, the finding of the Commissioner (Appeals) that the goods are to be assessed under Section 4A since the assessee has not established that they have cleared their goods to institutional consumers in the cases excepting the four instances, is factually incorrect - O-in-A is set aside - Assessee Appeal is allowed with consequential reliefs and Department Appeal is dismissed: CESTAT [para 8, 9.1, 9.2, 9.3, 9.4, 12]
CX - Notification 10/2003-CX - It is also noteworthy that the name of the industry/organization was engraved on the watches and the assessee has put forward a specific plea that these were sold to the industrial organizations for being distributed to their employees as complimentary gifts - The Department has not put forward any evidence to show that there has been a further sale by the industry/ organization to another person - Therefore, the ultimate consumer is the industry/organization to which the assessee has sold the watches - This being so, the retail sale price being less than Rs. 500/-, the assessee are eligible for the benefit of the Notification: CESTAT [para 10]
- Assessee appeal allowed/Department appeal dismissed: CHENNAI CESTAT
2019-TIOL-1585-CESTAT-AHM
Dagon Pharmaceuticals Pvt Ltd Vs CCE & ST
CX - The assessee-company manufactures medicaments and also clears physician samples - In case of own manufacture of the latter, the assessee paid Excise duty on cost construction method & in case of physician samples manufactured and cleared on Loan Licensee basis are also cleared on cost construction basis - During the relevant period, the Revenue opined that in both types of clearances, the duty must have been paid on the pro rata value of the trade pack of the same medicament - Hence the Revenue raised duty demand by invoking extended period of limitation.
Held: The matter can be decided on limitation grounds itself & without having to delve into merits of the case - The High Court of Gujarat in CCE, Vadodara vs. Marsha Pharma Pvt. Limited had adjudicated upon a similar set of facts and circumstances and had quashed the duty demands on account of being time barred - In the present case, no suppression of any facts or mala fide intention to evade payment of duty is attributed to the assessee - Hence the demand raised is time barred: CESTAT
- Assessee's appeal allowed : AHMEDABAD CESTAT
2019-TIOL-1584-CESTAT-BANG
BMM Ispat Ltd Vs CCT
CX - The assessee manufactures Iron Ore pellets, Sponge Iron Lumps, MS Billets, TMT Bars falling under Chapter 26 and 72 of CETA 1985 - Upon verification of records, it was noted that the assessee availed credit on fabrication of Steel items and other services used for setting up factory - Credit was sought to be denied on grounds of not falling within ambit of Rule 2(l) of CCR 2004 - SCN was issued proposing to recover credit of service tax paid on such ineligible services, with interest and penalty being proposed - On adjudication, the jurisdictional Superintendent of Central Excise confirmed the demand - On appeal, the Commr.(A) sustained such demands - Hence the present appeal.
Held: The input services were used for fabrication, erection and installation services of equipment like Hoppers, Chutes, Ducts and Air Tubes and not used for setting up of a factory or office building or for laying foundation - The scope of input service post amendment in 01.04.2011, includes any service used by manufacturers directly or indirectly or in relation to manufacture of final product - Records show that all services were used for fabrication and erection of various equipment and machinery and has not been used for setting up of the plant or civil structure - In such circumstances, the O-i-A in challenge is unsustainable: CESTAT
- Assessee's appeal allowed : BANGALORE CESTAT
CUSTOMS
2019-TIOL-1586-CESTAT-MUM
Ami Clearing And Forwarding Pvt Ltd Vs CC
Cus - Applications made for restoration of appeal - Matter was indeed disposed of ex parte by Tribunal albeit with elaborate findings - there is also no doubt that notice had been issued but the applicant had changed their address and failed to inform the Registry and also had opted to be without legal representation for quite a while - It is the applicant who has failed to protect its interest by neither intimating the change of address to the Registry nor informing the postal authorities of the forwarding address - the same lack of diligence is amply displayed in the failure to avail of legal representation for which no justifiable reasons are offered - Effectively, what is pleaded for by the applicant is not the right to be heard but the right to be represented by proper counsel - principles of natural justice cannot be stretched that far - no reason to entertain these applications, hence rejected: CESTAT [para 6, 7]
- Applications rejected : MUMBAI CESTAT |
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