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SERVICE TAX
2019-TIOL-1949-CESTAT-MAD
Info Services Vs CGST & CE
ST - The assessee-company provided Maintenance & Repair of Computer, computer systems and computer peripherals to M/s IBM - It is registered for providing Management, Maintenance or Repair Service - Upon audit, it was noted that though the assessee collected service tax, it failed to deposit the same within the due dates prescribed u/s 68 of the Finance Act 1994 - Pursuant to visit by Audit officers, the assessee paid some amount as service tax in cash and also reversed some amount of Cenvat credit with interest for the belated payment - SCN was issued proposing penalty u/s 76 & 78 of the Finance Act for default in payment of tax within the due dates - The assessee contended that the SCN was unwarranted since the duty with interest had been paid before the issuance of SCN - However, such proposal was confirmed in the O-i-O - Hence the present appeal.
Held: An identical issue stands settled in the judgment in M/s. Dusters Total Solutions Services Pvt. Ltd. Vs. CST, Chennai - The assessee therein paid up the duty with interest before issuance of SCN - The same enabled the assessee therein to avail benefit u/s 80 of the Finance Act 1994 - It had also been held that the provisions of Section 80 begin with a non obstante clause on account of which they have an overriding effect on Sections 76, 77 & 78 of the Finance Act - In such circumstances, the penalty imposed u/s 78 is unwarranted & merits being quashed, by exercising discretion u/s 80 of the Act: CESTAT
- Assessee's appeal partly allowed: CHENNAI CESTAT
2019-TIOL-1948-CESTAT-HYD
Integral Trading And Logistics Vs CCT
ST - The assessee-company provides services to its clients and also avails Cenvat credit - In respect of some services rendered by them, the assessee charged from their clients more than what was payable - Thereafter, credit notes were raised thereby returning the excess amount which had been collected - Since excess amount was charged, excess amount of service tax was also paid - The additional service tax paid can be taken back as credit u/r 6(3) of STR 1994 - Instead of taking credit u/r 6(3) of STR 1994, the assessee took this excess amount of service tax paid as Cenvat credit - This anomaly was detected during audit - The assessee then file4d revised ST-3 returns for the relevant period, deducting the credit taken & utilized from Cenvat a/c & adding it to Rule 6(3) a/c - During the relevant period, SCN was issued proposing recovery of irregularly availed credit, with interest & penalties - Such demands were confirmed upon adjudication & were sustained by the Commr.(A) - Hence the assessee's appeal.
Held: Considering the fact that the assessee mistakenly took excess credit in the Cenvat a/c and that such mistake was rectified upon prompting by Audit & revised returns were filed, there is no need to impose penalty on the assessee - While credit notes are invalid documents for taking Cenvat credit, they are valid when taking credit u/r 6(3) of STR - Merely entering figures under the wrong heading in its returns, with no revenue implication whatsoever & no intent to evade payment of duty or taking excess credit, does not render the assessee liable for penalty - The assessee's activity was a genuine mistake which was corrected upon directions of the audit - Hence there is no case for demand, interest or penalty - Hence the O-i-A in challenge is quashed: CESTAT
- Assessee's appeal allowed: HYDERABAD CESTAT
2019-TIOL-1947-CESTAT-AHM
Gujarat Flying Club Vs CCE & ST
ST - The assessee is engaged in providing flying training to candidate for obtaining commercial pilot license - The case of department is that the service of imparting flying training provided by assessee to the trainees/candidates is a taxable service under category of 'Commercial Training And Coaching Services' as defined under section 65 (27), 65(26) and 65(105)(zzc) of FA, 1994 - Accordingly, a SCN was issued - The issue is of taxability of flying training by assessee who are approved by DGCA, Ministry of Civil Aviation - Such training provided by assessee has been held non-taxable in the various judgments by Courts/Tribunal - In the case of Garg Aviation , Allahabad High Court, relying upon the Delhi High Court judgment in the case of Indian Institute of Aircraft Engineering - 2013-TIOL-430-HC-DEL-ST held that holding the petitioner to be assessable to Service tax is contrary to section 65(27) and the notification dated 25/04/2011 - Accordingly, the instruction given by department and the SCN given to the petitioners have been quashed - This Tribunal in the case of Ahmedabad Aviation and Aeronautics Ltd. - 2016-TIOL-471-CESTAT-AHM , relying upon the decision of Allahabad High Court relying in the case of Garg Aviation Ltd. set aside the demand under Commercial Training and coaching services in respect of flying training - The similar issue has been settled in the case of Indian Institute of Aeronautics and Engineering - 2018-TIOL-738-CESTAT-DEL , M/s Indira Gandhi Rashtriya Uran Akademi and Hindustan Academy of Aircraft Maintenance Engineers Lko - In view of the catena of judgments, the issue is no longer res integra - Accordingly, the impugned order is set aside: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
CENTRAL EXCISE
2019-TIOL-1451-HC-AHM-CX
N K Fire And Safety Vs UOI
CX - The matter of challenge in this writ-application is the order passed by respondent No.2 - The impugned order passed by respondent No.2 is an appealable order under Section 35(B) of CEA, 1944 - An appeal would lie before the Appellate Tribunal - Court took notice of the provision of Section 35(F) of the Act, 1944 - The same is with respect to the deposit of certain percentage of duty demanded or penalty imposed before filing an appeal - The writ-applicant, submitted that three principal submissions going to the root of the matter were canvassed and have been noted by Commissioner in his impugned order, but at the same time, they have not been dealt with in any manner - The writ-applicant has been able to make out a strong prima facie case to have an interim order in his favour - The respondents are directed that they shall not take any coercive steps with regard to recovery of duty, interest and penalty amount till the next returnable date: HC
- Application disposed of: GUJARAT HIGH COURT
2019-TIOL-1946-CESTAT-AHM
Salasar Copper Vs CCE & ST
CX - This appeal has been filed by assessee against denial of Cenvat credit on GTA services availed during period October 2015 to June 2016 - The observations of O-I-O that goods are sold on FOR basis has not been challenged and has not been upset by impugned order - Assessee pointed that in the case of Sanghi Industries Limited , in the similar circumstances, the benefit of Cenvat credit on GTA services was allowed - Similarly, in the case of Ultratech Cement Limited where there was no dispute for the sale being FOR basis, credit has been allowed - Also in terms of Board Circular 1065/4/2018-CX , there is no dispute on benefit of Cenvat credit if the sale is on FOR basis - In view of clear pronouncement of law as well as CBEC Circular, credit of service tax paid on GTA services where goods are supplied on FOR basis, Cenvat credit cannot be denied for the reasons that the said service has been availed for transportation of goods beyond the place of removal: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
2019-TIOL-1945-CESTAT-CHD
Saket Steels Ltd Vs CCE
CX - The assessee-company manufactures MS Ingots - It purchased some scrap, namely MS Billet from a dealer - Upon investigation at the end of the supplier, it was found that they had inadequate storage facilities - Further investigation revealed that the assessee did not receive MS Billets at all - SCN was issued proposing to deny credit on invoices issued by the supplier, along with demand for interest & imposition of penalties - On adjudication, the demands were confirmed and then sustained by the Commr.(A) - Hence the present appeals by the assessee.
Held: The sole grounds for denial of credit is that the assessee did not receive the goods - No discrepancy was found during the course of investigation - The Revenue did not establish as to from where the assessee procured the inputs for manufacturing the final goods, if the invoices were not accompanied by any goods - No investigation was conducted at the transporter's end to determine the truth - Hence no duty demand can be confirmed based merely on invoices issued by the supplier & the same must be quashed: CESTAT
- Assessees' appeals allowed: CHANDIGARH CESTAT
2019-TIOL-1944-CESTAT-CHD
Salsan Steel Pvt Ltd Vs CGST
CX - 155.979 MT of TMT bars found in excess lying in appellant's stock without entering in the statutory records are liable for confiscation under Rule 25 of the Central Excise Rules, 2002 – goods have been rightly confiscated, however, imposing redemption fine of Rs.6.5 lakhs is on the higher side, hence reduced to Rs.4 lakhs and penalty is reduced to Rs.75,000/- - appeal is disposed of: CESTAT [para 6, 7]
- Appeal disposed of: CHANDIGARH CESTAT
CUSTOMS
NOTIFICATION
28/2019-Cus (NT/CAA/DRI)
Appointment of CAA by Pr. DGRI CASE LAWS
2019-TIOL-1452-HC-AHM-CUS
CC Vs Mittal Pigments Pvt Ltd
Cus - This appeal under Section 130 of Customs Act, 1962 has been preferred by revenue challenging the order passed by Tribunal in 2018-TIOL-2022-CESTAT-AHM - It is apparent that against an order of Appellate Tribunal relating to the determination of any question having a relation to the rate of duty of customs or to the value of goods for the purposes of assessment shall lie before the Supreme Court and the High Court has no jurisdiction to entertain an appeal against such order - Having regard to the fact that controversy involved in the present case directly relates to the question of determination of rate of duty of customs, the appeal is not maintainable before this Court: HC
- Appeal disposed of: GUAJRAT HIGH COURT
2019-TIOL-1943-CESTAT-MUM
Chandra Shekhar R Shukla Vs CC
Cus - Different importers have filed B/E declaring the goods to be Walkman, Radios and Rechargeable Lantern - On examination it was found that the consignment contained Radio cassette recorder, DVD player, Emergency lights, Dry iron, Cordless phone, Shampoo, Deodorant and Perfumes - As there was mis-declaration, the goods were seized and SCN was issued to three importers as well as proposing penalty on other persons - In going through the O-I-O, the role of assessee was shown to be the main person behind the whole case and that is based on the statement of Shri Pansare who had claimed before the CHA that he has taken up with Shri C.R. Shukla and the statement of Shri Anwar saying that he had financial dealing with M/s. Gaylord Impex one of the importer and the fact that there are some call records showing conversation between the person involved, other than this no evidence has been brought to justify the imposition of penalty to Shri R. C. Shukla - It has not been brought out as to the exact role he played in rendering the case liable for confiscation in SCN nor the adjudication authority conclude that he would have been benefitted in any manner had the import been through - However the case cannot be built on the basis of vague statement of co-accused and more existence of call records - It has been considerably held by Tribunal that though the theory of preponderance of probability is hall mark in evasion cases of taxation than proof beyond doubt there should be some evidence, document to support scope for such prepondence of probability - No such record is available - It is reinforced by the fact that no evidence of any sort has been found during the search of assessee residence - It is also not clear whether investigation could reach of actual importer - In such situation imposition of penalty on assessee without properly establishing his role is not acceptable: CESTAT
- Appeal allowed: MUMBAI CESTAT |
By S Murugappan
