SERVICE TAX

2019-TIOL-1853-CESTAT-DEL

ST - The assessee was engaged in providing taxable service under category of 'commercial and industrial construction service' and was service tax registered payee - Whether the assessee is entitled to small scale exemption benefit in terms of Notfn 6/2005 has to be calculated by taking into consideration the full value of services or the abated value of service in terms of Notfn 1/2006 - The assessee have claimed exemption by taking into consideration the value of services after abatement - It stand held in the decisions in Shri Ashok Kumar Mishra , M/s. Aryavrat Housing Construction (P) Ltd. and Alok Pratap Singh and others that the value of the services required to be computed for the purpose of small scale exemption benefit is the value arrived at after allowing the abatement - The impugned order is set aside: CESTAT

-Appeal allowed:  NEW DELHI CESTAT

2019-TIOL-1852-CESTAT-MAD

ST - The assessee is engaged in providing various services like Treasury Management Services, General Accounting Services, Business Information Services, Financial Analytics and Strategic Market Research - With effect from 01.04.2007 another unit, namely, M/s. Office Tiger Database Systems India Pvt. Ltd. registered under category of BAS, BSS, Banking and Financial Services, Manpower Recruitment Agency Services and Maintenance and Repair Services merged with assessee-company pursuant to the Order passed by High Court of Madras - During audit, it was noticed that they had availed CENVAT Credit of the various services and according to Department, some of the Credit was not eligible - SCNs were issued proposing to disallow the Credit along with interest and for imposing penalties - The period involved is prior to 01.04.2011 - The impugned services like Outdoor Catering Services, Air Travel Agent Services, Rent-a-Cab Services and Insurance Services have been held to be eligible for Credit in assessee's own case - Following the same, the Credit is eligible - The Department has filed appeals against the Order passed by Commissioner who dropped the demand on the ground of limitation - This amount relates to services like Outdoor Catering, Rent-a-Cab, Air Travel Agent and Insurance, which have been held to be eligible in various decisions passed by High Courts as well as the Tribunal - Therefore, the disallowance of Credit on the ground that these services have no nexus with the output service or that the invoice address is that of the erstwhile company name, is unjustified - The differential interest has been demanded alleging that there is a delay in realization of the cheque - The Tribunal in case of M/s. Travel Inn India Pvt. Ltd. 2015-TIOL-1259-CESTAT-DEL has categorically held that when the cheque has been realized, the date of presentation of the cheque in the treasury should be considered as the date of discharge of service tax as per Rule 6(2A) of STR, 1994 - Following the same, the demand of interest cannot sustain - The disallowance of Credit is unjustified and requires to be set aside - The impugned Order, to the extent of disallowing the Credit, is set aside along with the interest thereon as well as the penalties imposed: CESTAT

-Assessee's appeals allowed:  CHENNAI CESTAT

CENTRAL EXCISE

2019-TIOL-1851-CESTAT-AHM

CX - The issue involved is; whether the assessee is liable to pay duty on transaction value of waste and scrap of capital goods on which Cenvat credit was availed - The period involved is 2005-06 to 2006-07 - As regards the dutiability on clearances of waste and scraps on which Cenvat credit is availed, there is no dispute that after inserting Rule 3(5A) in Cenvat Credit Rules, the assessee is required to pay duty on waste and scraps of capital goods on which Cenvat credit is availed - As regards the decision in the case of Shriram Alkali & Chemicals , the issue in that case was of classification of waste and scrap and on the substantial portion of goods, the assessee had not taken Cenvat credit - Whereas there is no dispute that assessee had availed Cenvat credit on the capital goods - Therefore, the decision cited by assessee is not applicable - Accordingly, Tribunal is not agree with assessee that the demand is time-barred - The impugned orders are upheld: CESTAT

-Appeals dismissed: AHMEDABAD CESTAT

2019-TIOL-1850-CESTAT-ALL

CX - The assessee-company manufactures PU Foam Sheets, Mattress & Pillows falling under Chapter 39 of CETA 1985 - It availed Cenvat credit of duty paid on various raw materials - Upon audit conducted at the assessee's factory, it was noted that in the same FY, the assessee received back certain goods out of the consignments originally cleared on payment of duty - It was noted that the distributors returned the same as the goods were found to be defective - The assessee availed credit based on such invoices, which was objected to by the Audit - SCNs were issued proposing to deny Cenvat credit on grounds that dealers' invoices were not proper documents for availing credit as per Rule 9 of CCR - On adjudication, duty demand was confirmed with interest & equivalent penalty u/r 15 of CCR 2004 along with penalty u/s 11AC - Hence the present appeal.

Held: The Rule 9 prescribes documents for availment of Cenvat credit in the ordinary course of availing the credit in respect of inputs & capital goods - Meanwhile, Rule 16 authorizes a manufacturer to receive back the originally cleared duty paid goods in the factory for purposes of re-making, refining & reconditioning - The manufacturer can avail credit of duty paid on goods at time of original clearance conditional upon the receipt being recorded - Thus the entire concept behind Rule 16 is that if duty-paid goods are later received by the manufacturer, he would be entitled to avail credit of duty paid originally, which would be utilized in subsequent clearances of the goods after repair & the manufacturer cannot be made to pay duty again in respect of the same goods - Wherever such goods are not repaired & no duty is to be paid, the entire credit must be reversed - Hence the entire exercise provided u/r 16 is revenue-neutral - Moreover, the provisions of Rule 16 nowhere provide the documents based on which credit is to be availed - The assessee mentioned during adjudication that entire credit availed was used upon clearance of the returned goods - The Revenue does not dispute the same - Hence the demand for reversal of credit so availed is tantamount to double taxation in respect of the same goods which are cleared on payment of duty - The Revenue does not dispute that while returning the goods, distributors have issued credit notes in the manufacturer's favor also reflect the duty amount originally paid - Hence the Revenue's objection that the documents are unspecificed u/r 9 cannot be entertained - Hence the O-i-O is quashed & the demands set aside: CESTAT

-Assessee's appeal allowed: ALLAHABAD CESTAT 

2019-TIOL-1849-CESTAT-ALL

CX - The assessee is engaged in manufacture of sugar, molasses, spirit and ethanol - They are claiming credit on inputs/capital goods and input services - Assessee claimed credit of the duty paid on capital goods and service tax on input services - On the basis of investigation, department issued SCN alleging wrong availment of credit on certain input services on the basis that said services do not qualify to be input service, invoices of input service provider were not in accordance with Rule 4A, M/s Krishna Datt & Co did not deposit tax and credit availed on documents which were not in their name - While denying credit, the SCN invoked extended period - The denial of credit in most of the cases is either on the ground that the same are not services or on the technical ground of the invoice not being proper in terms of Rule 4A of Central Excise Rules - Various disputed services or input stand held to be admissibly cenvatable input or services by Tribunal's decision referred to and relied upon by assessee - There is neither any allegation nor any finding to the effect that assessee has not received the said services or the said services are not tax paid or they do not stand utilized by assessee in manufacture of their final product or in their business activity - In the absence of any findings to that effect, that denial of credit on hyper technical and procedural grounds cannot be held to be justified - SCN stand issued on 24.06.2011 for the period June, 2006 to March, 2007 - The assessee was availing cenvat credit by entering the same in their statutory records - There is no explanation by Revenue for such delayed issuance of SCN - The assessee immediately replied to the communication addressed to them by their Range Central Excise Authority and as such, the proceedings by invoking extended period of limitation against the assessee was not justified - The impugned order is set aside and the assessee's appeal is allowed: CESTAT

-Assessee's appeal allowed: ALLAHABAD CESTAT

CUSTOMS

2019-TIOL-1848-CESTAT-MUM

Cus - The appellant is a C&F agency - During the relevant period, proceedings were initiated against the appellant in respect of certain imports made by two individuals under the name and style of another entity, wherein the value of goods had been mis-declared in order to evade payment of duty - The appellant's license had also been revoked as per Regulation 20 of the CBLR 2013 - Thereupon, penalty u/s 112 of the Act had been imposed on a partner in the appellant-firm, for the same involvement which had been set aside by an order passed by the Tribunal - Later the High Court remanded the matter back to the Tribunal - Hence the present appeal.

Held: Record of proceedings reveal that 310 days lapsed between issuing notice of enquiry & submission of enquiry report - There is no justification for the delay in completion of the enquiry proceedings - No witnesses or additional documents were placed on record on the appellant's behalf - The proceedings were also found to have been repeatedly adjourned, in one case, without specyfing the next date of hearing which was to be intimated in due course - Hence it is seen that the delay is attributable entirely to the enquiry - Non-availability of documents cannot be treated as mere procedure - Absence of relevant documents before initiating proceedings reflects lack of application of mind on part of the licensing authority - No justifiable reason is given for not placing these documents on record - The avoidable adjournments arose from the inability of the presenting officer & the enquiry officer to ensure that the requisite conditions for commencing proceedings had been complied with - Moreover, the very statements relied upon by the authorities concerned were found to be exculpatory - Hence the adjudication order merits being quashed: CESTAT

-Appeal allowed: MUMBAI CESTAT