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SERVICE TAX
2019-TIOL-2099-CESTAT-MUM
Latur District Central Cooperative Bank Ltd Vs CCE & ST
ST - CENVAT - Issue pertains to admissibility of Credit in respect of Service Tax charged on Insurance Premium paid by banks to Deposit Insurance Credit Guarantee Corporation (DICGC) for providing mandatory insurance coverage to deposit of customers - Appellant submits that contradictory findings have been rendered by Benches of CESTAT inasmuch as in the case of DCB Bank Ltd. - 2017-TIOL-2849-CESTAT-MUM, Punjab National Bank - 2018-TIOL-1395-CESTAT-DEL and State Bank of Bikaner & Jaipur - 2019-TIOL-558-CESTAT-DEL, findings were given in favour of assessee but in Final order dated 12.02.2019 - 2019-TIOL-589-CESTAT-MUM, Division Bench had held that the credit on tax collected towards Insurance premium paid to DICGC is inadmissible as the same is not an Input Service.
Held: There is a need for bringing consistency in the matter in dispute by way of constitution of a Larger Bench - President is requested to constitute a Larger Bench to bring clarity on the following points of law viz. Whether Insurance premium paid by the banking institutions to DICGC to secure deposits of the customer comes within the definition of service for which service tax is to be paid by the bank, which is not insuring its own asset but insuring the deposits of its customers; whether service tax paid on insurance premium to DICGC for insuring deposits is eligible Input credit for the banking institutions - Matter referred to President, CESTAT for constituting Larger Bench: CESTAT [para 1, 2]
- Matter referred: MUMBAI CESTAT
2019-TIOL-2085-CESTAT-MAD
Lakshmi Vilas Bank Ltd Vs Commissioner of GST & CE
ST - The assessee-company provides taxable services under category of Banking & Other Financial Services - On verification of accounts for the relevant FYs, the Revenue noted that the assessee availed Cenvat credit of Additional Duty of Customs paid on capital goods - It was also noticed that Cenvat credit had been availed based on photocopies of invoices - SCN was issued proposing to raise duty demand with interest & penalty - Such proposals were confirmed upon adjudication, albeit some amount of credit was allowed - Such findings were upheld by the Commr.(A) - Hence the present appeal.
Held: The assessee did not import ATM machines - Hence there is no Customs liability on the assessee - Perusal of reply to SCN clarifies that credit was availed based on original invoices maintained at various branches - The Head office had obtained their copies for sake of convenience - The assessee also furnished a letter requesting that the original invoices could be furnished given an opportunity - Such letter was acknowledged by the audit party & no action was taken till date of SCN - This is beyond the perceivable period of limitation - The purchase was made in 2011, while they were looked into in 2013 - If in doubt, nothing prevented the Revenue from issuing SCN - This is clearly a change of opinion - The allegation of suppression is not backed by evidence - As the Revenue miserably failed in justifying invocation of extended limitation, the O-i-A in challenge is unsustainable: CESTAT
- Assessee's appeal allowed : CHENNAI CESTAT
2019-TIOL-2084-CESTAT-AHM
Framroz Perviz Kekobad Vs CST
ST - Demand has been raised under head Interior decorator service for the period 01.04.2003 to 28.02.2008 and Management, Maintenance and Repair Service for the period 16.05.2006 to 28.02.2008 - As regard to interior decorator service, said services be applicable only in circumstances were advice, consultancy and technical assistance is in relation to planning, design or beautification of spaces - The two representative agreements shown by assessee in the appeal memorandum do not involved any consultancy/advisory service or service of landscape design - It is not clear that whether the assessee has recorded income under the head of design and consultancy income under these agreements or other - It is therefore, necessary that all contract and account entries made by assessee need to be examined before going to the final conclusion regarding liability to service tax under the head of interior decorator service - The matter remanded to original adjudicating authority for examination of contract and come to the conclusion regarding liability of service tax depending on the specific advisory consultancy and technical assistances provided under such contract or otherwise.
The second issue relates to the demand under head of Management, Maintenance and Repair Service - Assessee relies on the decision of Tribunal in case of ANS contracts ltd - 2009-TIOL-1459-CESTAT-DEL - The decision in the case of ANS Construction was based on the ground that the grass and plants being maintained by assessee were not immovable property and thus not liable to tax under the definition of Maintenance, Management and Repair Service - However, the decision would not be applicable for the period after amendment w.e.f 01.06.2006 - Demand for the period after 01.06.2006 can be sustained - Assessee has pointed out that they were paying service tax on their own for certain period and later stop paying - They have also collected the service tax and not paid to the government tragedy in certain case - In these circumstances, the benefit of limitation cannot be extended to assessee as they were obviously aware of the law - Consequently, the benefit of section 80 also cannot be extended to the assessee: CESTAT
- Matter remanded : AHMEDABAD CESTAT
CENTRAL EXCISE
2019-TIOL-2083-CESTAT-HYD
Steel Exchange India Ltd Vs CC, CE & ST
CX - Valuation - Section 4 of CEA, 1944 - Allegation is that the appellant had cleared Steel Ingots to their sister concerns (related parties) at transaction value which are lower than the prices on which such goods were sold to independent buyers - SCNs issued for recovering differential duty and confirmed along with interest and penalty - appeals to CESTAT.
Held: Bench finds strong force in the argument of the appellant that the demand was raised on the basis of some report sent by the range officer which was collected behind his back - In the body of the show cause notice, in Para 8 there is a table illustrating with five invoices the value adopted for the sale to related parties and to unrelated parties on the same date - The extent of undervaluation is different in each of the five invoices, therefore, the extent of alleged undervaluation varied from invoice to invoice and the complete picture can only be found if duty paid with respect to each clearance to the related buyer and the transaction of unrelated buyer used for comparison is available - show cause notice is vague inasmuch as the basis for alleging the undervaluation and calculating the extent of differential duty payable are not clear - The differential duty has been worked out with respect to these clearances to related parties compared with the highest transaction value (presumably during the month) - There is nothing on record to show as to why a highest transaction value should form the basis for clearances to related parties - show cause notices do not indicate as to how the differential duty was worked out, invoice wise and which invoice value was used for comparison - On a specific query from the bench, departmental representative also submitted that he does not have any other information other than what is available in the show cause notices and the impugned order - impugned order is set aside on the ground that the show cause notice is vague and unclear - Appeals allowed: CESTAT [para 6 to 8]
- Appeals allowed : HYDERABAD CESTAT
2019-TIOL-2082-CESTAT-ALL
Sukalp Agencies Vs CCE
CX - Although the appellant has filed an application under order 47 Rule 1 of C.P.C. 1908, for review of the order of the Tribunal, but the said application is in nature of application for rectification of mistake and the same can be filed under Section 35C(2) of the Central Excise Act, 1944 - considering the fact that the purchase order which was sought by this Tribunal were not in the possession of the appellant, therefore, the observation of this Tribunal "that as the documents were in the possession of the appellant, there is abuse in process of law on behalf of the appellant" is mistake apparent on record - Bench recalls the said finding of the Tribunal in the Final Order No. 55868-55878/2013 dated 19.03.2013 - 2013-TIOL-863-CESTAT-DEL and remands the matter back to the adjudicating authority to verify the purchase orders in dispute and to decide the said issue on merits in accordance with law - Miscellaneous application disposed of: CESTAT [para 12]
- Matter remanded : ALLAHABAD CESTAT
2019-TIOL-2081-CESTAT-DEL
Shreeraj Panmasala Pvt Ltd Vs CC
CX - Allegation of Clandestine manufacture and removal of Gutkha - Duty along with Cess demanded of Rs.8,17,63,074/- along with interest and equal penalty from appellant and confiscation ordered of goods (not seized or available) valued at Rs.24.05 crores - fine imposed of Rs.2.5 crores along with penalties u/r 26 on other appellants - appeal to CESTAT.
Held: Persons concerned responsible for dispatch of Gutkha from the Appellant's factory at Jodhpur were never questioned in the entire investigation nor even confronted with the entries in the note book (recovered from G.M. Carrier) based on which the entire demand was raised and confirmed - Many of the statements of witnesses, which were relied on in the show cause notice were either retracted on the ground that these were obtained forcefully by physical abuse or were disowned as involuntary during cross-examination of these witnesses - Revenue has not corroborated its allegations with sufficient reliable evidence - Bench, therefore, holds that the allegations in the show cause notice are based more on assumptions and presumptions, having no legs to stand - penalties imposed u/r 26 are, therefore, set aside - Impugned order set aside and Appeals allowed: CESTAT [para 17, 21, 27 to 30]
- Appeals allowed :DELHI CESTAT
CUSTOMS
CIRCULAR cuscir20_2019 Guidelines for disposal of Muriate of Potash (MoP) seized/confiscated by Customs CASE LAW
2019-TIOL-2080-CESTAT-DEL
Quest Retail Pvt Ltd Vs CC & CE
Cus - The period of demand is from 6.9.2011 to 18.3.2015 involving a Customs duty demand - The issue involved is as to whether the royalty charge and franchisee fees paid to foreign supplier in terms of agreement and two side letters dated 19.1.2006 and 16.3.2010, are liable to be included in assessable value of imported goods for purpose of payment of Customs duty under Rule 10(1) and Rule 10(1)(e) of Customs Valuation Rules, 2007 - A perusal of agreement along with side letter indicate that the franchise/royalty fee is paid for provisions of management, consultation, advice service and training provided to the assessee in connection with use of Body shop products and the proprietary Marks of M/s Body shop - The condition of payment of royalty, which is contingent upon the volume of sale in domestic market after importation of goods has no connection with the import of goods - Once the goods have been cleared from the Customs area the same is not required to be treated as imported goods and all the activities of the management, consultation etc. is relatable to the goods which is ceased to be imported goods in terms of the Customs Act, 1962 - While a large number of consignments which has been adjudicated upon in impugned order, is provisionally assessed and the Commissioner has ordered the finalization thereof in terms of Section 18 of Customs Act, but also imposed a penalty of equivalent amount under Section 28(4) of Customs Act - This is clearly not permissible as per Section 18 of Customs Act, on the ground that the relevant date for payment of duty has yet to arrive after finalization of assessment by proper officer in terms of the impugned order - Similarly, in case of demand pertaining to Bills of Entry which has been finally assessed has not been re-determined by any assessment and also not permissible without filing appeal against the assessment order as has been held in Priya Blue case - The impugned order is also not sustainable - It is on record that earlier SCN has been issued to assessee on the similar set of facts and circumstances and in respect of same agreement and said letters - The case was adjudicated upon and the same was settled by order of Settlement Commission - This indicates the fact that both the department and the assessee were aware of the entire fact regarding non-inclusion of royalty/franchise fee in the assessable value for the purpose of payment of customs duty - When the facts are known to both the parties there cannot be any suppression of facts requiring invocation of extended period of limitation - As the impugned order is not sustainable on merits as well as on limitation and there is no question of imposition of penalty on other assesses - The impugned order is set aside: CESTAT
- Appeals allowed :DELHI CESTAT |
