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SERVICE TAX
2019-TIOL-1952-CESTAT-MUM
Jayesh Hotels Pvt Ltd Vs Commissioner of CGST
ST - Appellant is engaged in the business of lodging, restaurant and bar - on the ground that the appellant had not taken registration and not paid service tax for the period May 2011 to March 2015, SCN was issued and duty demand was confirmed along with interest and penalty of Rs.19,83,479/- was imposed - appellant accepted the charge except the demand on room rent service on the ground of mis-calculation and penalty imposed was also challenged - Commissioner(A) reduced duty demand on room service to Rs.59,254/- along with interest and reduced penalty u/s 78 of FA, 1994 for the whole of service tax realised as well as recoverable - legality of such order to the extent of penalty is challenged before CESTAT - Appellant submitted that during the relevant period s.78(1) as in force clearly prescribed penalty @50% of service tax so determined in cases where the details regarding transactions are recorded in the specified record of the appellant and it is clear from the SCN as well as the o-in-o that only on the basis of records maintained by the appellant the duty/tax demand was raised and confirmed. Held: Having regard to the first proviso of s.78 which was effective from 04.04.2011 till the effective date of implementation of Finance Bill of 2015 which is admittedly effective after April 2015, appellant is liable to pay 50% of the duty demand as penalty since the duty assessment was done only on the basis of records maintained by it - interest is also payable - appeal is allowed in part: CESTAT [para 5, 6]
- Appeal partly allowed : MUMBAI CESTAT
2019-TIOL-1951-CESTAT-MUM
A T E Enterprises Pvt Ltd Vs Commissioner of CGST
ST - Case of Revenue is that appellant had availed common input services for use/utilisation in providing the taxable output services and for trading activities; that in the absence of maintenance of proper records, as per rule 6(3)(c) of CCR, 2004, the appellant was permitted to utilise CENVAT credit upto 20% of the output tax payable
Held: Period involved is up to October 2007 and the definition of 'exempted service' at the material time did not provide that 'trading' is an exempted service - moreover, insertion of explanation in rule 2(e) w.e.f 01.04.2011 being a substantive enactment cannot be applied retrospectively - appellant had reversed CENVAT credit for the FY 2006-07 and 2007-08 attributable to trading activity on the basis of turnover ratio of traded goods and taxable services and the said particulars were endorsed by the CA - thus the embargo created in rule 6 shall not be applicable for maintenance of separate records and for utilisation of restricted credit as envisaged - no merits in the impugned order, hence same is set aside and appeal is allowed: CESTAT [para 6 to 8]
- Appeal allowed : MUMBAI CESTAT 2019-TIOL-1450-HC-MUM-ST
CCT & CE Vs Brihanmumbai Municipal Corporation
ST - Imposition of penalty - It is a case where the Commissioner of Central Excise sought to file this appeal due to the subsequent decision of the Tribunal in the case of Hindustan Petroleum Corporation Ltd. - 2014-TIOL-2070-CESTAT-MUM wherein while confirming the penalty imposed, it is observed that being a government entity cannot mean that there is no intent to evade tax - Bench is satisfied that the subsequent circumstances pointed out in the affidavit filed by Revenue would warrant their pursuing the present appeal - This even though the order of the Tribunal in Gadkari Rangayatan - 2013-TIOL-2187-CESTAT-MUM had been accepted - contention of respondent assessee that uniformity of treatment would require the appeal being dismissed as here also the party respondent is the Municipal Corporation is not tenable - appeal entertainable: High Court [para 5, 6]
- Appeal admitted : BOMBAY HIGH COURT
2019-TIOL-1942-CESTAT-DEL
Hindustan Copper Ltd Vs CCE
ST - The service tax to the tune of Rs.4,53,372/- stands confirmed against assessee alongwith confirmation of interest and imposition of penalties - A part of demand stands confirmed in respect of technical testing and analysis services, which are being received by assessee from a Foreign Service provider in respect of anode slime manufactured by them - The samples of the same are being sent by assessee to their Foreign Service provider, who test the same and such samples are never returned by the service provider - The assessee's case is that since such services stand provided outside India, they cannot be taxed in India on reverse charge basis - The demand also stands assailed on the point of limitation - Both the issues stand decided in favour of assessee by decision in Molex (India) Ltd. - 2007-TIOL-1263-CESTAT-BANG - As such, no merit found in Revenue's case - Accordingly, the impugned order is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2019-TIOL-1941-CESTAT-DEL
Precision Technocrates And Marketers Vs CGST, CC & CE
ST - The assessee is engaged in providing commercial or industrial construction services - During audit, for the period w.e.f. October, 2009 to March, 2011, Department observed that the assessee has availed credit of Central Excise Duty paid on various items as that of Cement, M.S. Plates and M.S. Channels used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods as inputs - Department alleging the credit to have been wrongly availed, served the SCN upon assessee proposing that the credit be disallowed to the assessee and be rather recovered alongwith the interest at the appropriate rate and the proportionate penalties - It is foremost important to look into the definition of input as was existing since CCR, 2004 came into existence, as it got amended in year 2009 and subsequently in year 2011 - The plain reading of amended explanation makes it clear that the opening line for Explanation 2 is about the input including goods as are used in the manufacture of the capital goods used in the factory of the manufacturer - It becomes clear that the explanation is exclusively in respect of manufacture only, that too when it is used for construction of factory shed, building or laying of foundation or making of structure - The use of word factory shed further clarifies that the explanation is exclusively for the manufacturer and not for the service provider - Thus, credit in respect of inputs, which is undisputedly used for providing output service namely errection, commission, installation, the credit cannot be denied to the assessee - In view of decision in case of Ultratech Transmission - 2018-TIOL-2979-(Tri.-Ahmedabad) , the findings of Commissioner (A) do not help the Revenue as the exclusion made under explanation to definition of input service does not extend to the service provider - The impugned order is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2019-TIOL-1940-CESTAT-MUM
Indfab Agencies Vs CST
ST - During the relevant period, the Revenue acted upon intelligence developed by the Data Analysis and Research Cell of the jurisdictional Commissionerate, to the effect that the assessee was engaged in providing service as agent and was receiving commission which is covered under definition of BAS - SCN was issued raising proposing duty demand under BAS and Management of Business Consultant Service - The SCN also proposed interest & 75 and penalties u/s 77(1)(a) and 77(2) of the Act - On adjudication, such proposals were sustained and then sustained by the Commr.(A) - Hence the assessee's appeal contesting such findings.
Held: BAS - It is undisputed that the assessee is acting on behalf of manufacturers of grey fabrics, for sale of grey fabric to various customers identified by the assessee - For affecting such sale, commission is paid by the manaufacturer of grey fabric to the assessee - No service is provided by the assessee to the purchaser of the grey fabric for which any consideration is paid by the purchaser - The commission is paid by the manufacturer of grey fabric for effecting the sale of its goods - From such activities, it is clear that the assessee's activities will qualify as BAS: CESTAT
Held: Notfn No 14/2004-ST - It exempts the services provided in respect of BAS provided by any person, namely service provider, to his client subject to fulfilment of the conditions specified in the relevant clauses in the Notfn - Further, exemption is admissible only if the services provided are in relation to agriculture, printing, textile processing or education - Only those services provided by the service provider to his client if they fulfil the other conditions specified by the Notfn are only exempted - In the present case, the services provided by the assessee to its client i.e., grey manufacturers are in respect of sale of their goods & do not fall within the relevant clauses in the Notfn: CESTAT
Held: Management & Business Consultancy - The assessee's contention that the services provided by it as commission agent is exempt from payment of service tax, is not sustainable - Hence the demand is sustained: CESTAT
Held: Limitation - The assessee put forth nothing on record to evidence that it was under bona fide belief of not being liable to pay duty - Hence the demands raised by invoking extended limitation are sustainable - Thereby, interest u/s 75 is a natural corollary - As extended limitation is justified, so is the penalty u/s 78 of the Finance Act - Since the assessee failed to take registration and pay the service tax, penalties under section 77(1)(a) &77 (2) of the Act are justified and sustained: CESTAT
- Assessee's appeal dismissed: MUMBAI CESTAT
CENTRAL EXCISE
2019-TIOL-1449-HC-MUM-CX
Commissioner Of CGST & CE Vs Raymond Ltd
CX - Revenue in appeal challenges the Tribunal decision wherein it is held that cash refund is permissible in terms of clause (c) to the proviso to section 11B(2) of the Central Excise Act, 1944 where an assessee is unable to utilize credit on inputs.
Held: It is an agreed position between the parties that the above issue as urged stands concluded in favour of the Revenue and against the assessee by the decision of the larger Bench in M/s. Gauri Plasticulture P. Ltd. - 2019-TIOL-1248-HC-MUM-CX-LB - following the same, Revenue appeal is allowed: High Court [para 6, 7, 9]
- Appeal allowed : BOMBAY HIGH COURT
2019-TIOL-1939-CESTAT-MAD
Tyco Sanmar Ltd Vs CGST & CE
CX - The assessee-company manufactures industrial valves & spares for valves - Upon scrutiny of records, it emerged that some customers paid an amount in excess of the actual purchase value - It was also noted that such excess amount was not adjusted in subsequent years - It was also noted that in the trial balance, the assessee reflected an excess amount under the heading of Misc Income - The Revenue opined that as per the mandate of Section 4(3)(d) of the CEA 1944, the excess amount collected from the customers was to be treated as additional consideration & that the assessee was liable to pay Excise duty on such additional collection - SCN was issued raising demand for such short-paid dity with interest & penalties - Such demands were upheld upon adjudication - These were sustained by the Commr.(A) - Hence the present appeal by the assessee.
Held: Undisputedly, the assessee discharged the entire duty liability on the entire assessable value shown in the invoice - It was also not alleged that the assessee received money over and above the entire assessable value on negotiation as escalation cost or otherwise after clearance of goods - The assessee also discharged duty on the entire assessable value - However, the due to delay in despatch of goods, the customers held back certain amounts as liquidated damages - On negotiation, such amounts were paid to the assessee - There can thus be no allegation that the assessee had not discharged total duty liability as was payable upon cleanrance of goods - Hence the allegation of short-payment of duty is unsustainable - Hence the O-i-A in challenge merits being set aside: CESTAT
- Assessee's appeal allowed: CHENNAI CESTAT
2019-TIOL-1938-CESTAT-ALL
Tata Motors Ltd Vs CCE & ST
CX - The SCN was issued after 26 months after conducting audit - The Allahabad High court in the case of Triveni Engg. & Industries Ltd. has held that if a SCN is issued after a gap of 22 months after an audit was conducted then proviso to sub-section 1 of section 11A of CEA, 1944 is not applicable unless there is a clear indication mentioned in respect of suppression or fraud - It was held that mere act of omission by assesse without there being any intention to evade payment of tax cannot be a ground to invoke extended period especially when evasion came to the notice of the department when the audit was conducted - The ruling of Allahabad High Court in said case is squarely applicable in the present case where omission on the part of assessee came to the knowledge of department on 27.02.2009 and SCN was not issued within normal period of limitation - Demand for the period of four months is covered by normal period, the impugned order is set aside and matter is remanded to the original authority to decide the inadmissible Cenvat credit for the normal period of four months - Since extended period limitation is not applicable equal penalty is not imposable: CESTAT
- Matter remanded: ALLAHABAD CESTAT
2019-TIOL-1937-CESTAT-AHM
Tema India Ltd Vs CCE & ST
CX - The assessee-company availed Cenvat credit on input services of fabrication of Heat Exchanger & Hydro Test - However, the same was denied by the Revenue - Hence the present appeals.
Held: It is seen that the matter stands settled in the assessee's own case for a previous year - Therein, it was held that the fabrication services were directly used in manufacture of final product - It was also held that if the service is provided outside the factory but is used in manufacturing final product, even then credit is admissible - Following such findings, credit stands allowed in the present case as well: CESTAT
- Assessee's appeal allowed: AHMEDBAD CESTAT
CUSTOMS
2019-TIOL-1439-HC-MUM-CUS
CC Vs Razvi Shipping Agency
Cus - This appeal under Section 130 of Customs Act, 1962 takes exception to the order dated 18th April, 2017 passed by Tribunal - The impugned order of Tribunal set aside the revocation of Customs Brokers licence granted to respondent besides forfeiting the security deposit - This on account of inordinate delay in disposing of disciplinary proceedings against respondent being violative of Regulation 22 of CHALR, 2004 - The impugned order holds the Regulation 22 itself provides timeline within which proceedings for suspending/revoking licence of Customs House Agent/Customs Broker should be completed - This Court in Unison Clearing P. Ltd. - 2018-TIOL-1826-HC-MUM-CUS held that the timeline provided in Regulation 22 were directory in nature and not mandatory - The said decision of this Court would apply on all fours to the present appeal - Therefore, the substantial question of law is answered in negative i.e. in favour of Revenue - Consequently the impugned order is set aside: HC
- Appeal allowed: BOMBAY HIGH COURT
2019-TIOL-1936-CESTAT-HYD
CCT Vs Sameera Trading Company
Cus - The assessee is engaged in export of iron ore fines - They filed shipping bill dated 10.06.2008 for export of 54,700 MT of iron ore fines - They paid Customs Duty of Rs.1,64,10,000/- and Cess of Rs.54,700/- on 10.06.2008, Duty @ Rs.300/MT and Cess @ Rs.1/MT on the date of filing the shipping bill - After paying Customs Duty, they presented the shipping bill for assessment and the same was assessed and let export order was issued on 10.06.2008 - By Notfn 78/2008- Cus, the rate of duty was changed from specific rate to 15% adv with immediate effect - They then filed refund claim - The department is aggrieved by order passed by Commissioner (A) who held that the assessee is eligible for refund as prayed for in their refund application - The refund for Rs.71,74,423/- has been denied mainly for the reason that the assessee has not challenged the assessment order on shipping bill - The issue whether the assessee can file refund claim without challenging assessment order is settled by various decisions of the Courts - In Karnataka Power Corporation Ltd - 2002-TIOL-567-SC-CUS-LB and Aman Medical products Ltd - 2009-TIOL-566-HC-DEL-CUS it has been held that filing of refund claim itself is a challenge of the assessment order, and the legitimate right of refund cannot be ignored - Following the said decisions, non-challenging of assessment order is not a ground to deny the refund of duty wrongly collected and therefore, the decision of Commissioner (A) on this issue requires no interference - The second ground raised in the appeal by department is that the revised claim filed by assessee is barred by limitation since it is filed only on 13.03.2009 - It has to be noted that the said amount has been claimed as refund by assessee for the reason that the notification has come into force only on 13.06.2008 whereas the let export order has been issued on 10.06.2008 - On perusal of the impugned order it is seen that the Commissioner (A) has referred to Section 16 & Section 51 of Customs Act to arrive at the conclusion that the relevant date for reckoning the rate of duty to be paid is the date of let export order - Further, it is seen that the enhanced duty was paid by assessee after issuing letter of protest - Therefore, limitation does not apply even if it is considered as subsequent claim - The refund claim then cannot be said to be time barred - The impugned order does not call for any interference: CESTAT
- Appeal dismissed: HYDERABAD CESTAT |
