SERVICE TAX

2019-TIOL-1639-HC-MUM-ST

Neelkamal Realtors Towers Pvt Ltd Vs UoI

ST - During the relevant period, the assessee company claimed to have reversed Cenvat credit of about Rs 11.25 crores, under threat of arrest in the absence of payment or reversal of credit - Moreover, such reversal was made before issuing of SCNs - Hence the present writ petition was filed, challenging the actions of the Revenue in compelling the assessee to reverse such credit.

Held - The Revenue's counsel sought time to receive further instructions and for making the requisite preparations - Hence such time sought for is granted - Matter be listed for hearing on July 30: HC

- Case deferred : BOMBAY HIGH COURT

2019-TIOL-2174-CESTAT-BANG

Vijaya Bank Vs CCT

ST - Appellant bank acts as an agent of RBI and carried out various Government transactions involving receipt and payment on behalf of the Central and State Governments and is receiving commission known as 'agency commission' from RBI for carrying out these transactions - Department entertained a view that the appellant is not paying Service Tax on Government transactions which they are liable to pay - SCN issued - RBI vide letter dated 04.11.2016 directed the banks to pay the Service Tax on the Government business and seek reimbursement of the same from them - in compliance, the appellant remitted tax even before collecting the same from RBI - Adjudicating authority confirmed the demand and appropriated the tax paid but dropped the demand of interest and penalty and, therefore, the Revenue went in appeal before Commissioner(A) who allowed the Department appeal partly by upholding the demand of interest under Section 75 of the Finance Act, 1994 and dropped the penalty by giving the benefit under Section 80 of the Finance Act - Appellant is before the CESTAT against the demand of interest.

Held: Larger Bench in the case of State Bank of Patiala - 2016-TIOL-2849-CESTAT-DEL-LB has held that the appellant being agent of the RBI is not liable to Service Tax on Government business - nonetheless, based on the RBI communication, appellant has paid the Service Tax in compliance of Section 73A(2) of FA, 1994 - Further, in the facts and circumstances of the case, demanding interest under Section 75 is not tenable in law because the appellant is not liable to pay Service Tax under Section 68 - impugned order demanding interest in terms of Section 11AA of the Central Excise Act is not sustainable in law, therefore, same is set aside - appeal allowed: CESTAT [para 6, 6.1, 7]

- Appeal allowed: BANGALORE CESTAT

2019-TIOL-2173-CESTAT-CHD

Venus Albums Company Pvt Ltd Vs CCE

ST - Manufacturing and sale of photo books to photography studio or individual photographers who outsources such work to the appellant - demand of service tax has been confirmed on the premise that the activity of printing of personal photographs which is undertaken for a particular person falls under the scope of photography service till 30.6.2012 - It was also held that activity undertaken by the appellant for making photo book does not amount to manufacture and photo book does not classify under chapter 4911 of the CETA; that the impugned service does not fall under the scope of works contract service, therefore, no exemption is available to intermediate printing process and that the benefit of Notification No. 12/2003-ST dt. 20.6.2003 is not available - appeal to CESTAT.

Held: For the process of formation of photo book, the photographers provide pre-designed photos in soft form via e-mail or on CD/Pen drive, to the appellant for supplying the photo book - In terms of the arrangement agreed, the appellant cannot format, edit or alter the photographs received by it in the soft form - The Customer specifies the nature of sheets covers, etc. to be used in photo books - The appellant prints photographs on both sides of standard plain printing paper by using high quality digital press - Thereafter, the printed photo sheets are laminated on both sides and specified number of printed photo sheets and then wire-stapled on the stapling machine - Finally, plain sheets are pasted on both sides of the stapled book and thereafter, cardboard cover having digital printed photographs of the function is pasted with the stapled book to finally make a photo book - Thus, there is a complete change in the identity and nature of the photographs when printed from soft form to hard bound form as a photo book - In view of the judicial pronouncements in Fitrite Packers - 2015-TIOL-235-SC-CX, Delhi Press Patra Prakashan - 2013-TIOL-463-HC-Del-IT, Jamal Photo Industries (P) Ltd - 2006-TIOL-141-HC-MAD-IT, it is very much clear that the appellant has undertaken the activity of printing photograph on plain printing paper and thereafter bind them and selling them as photo books - The said activity amounts to "manufacture" and the appellant is paying VAT and, therefore, the said activity merits as manufacturing activity and classified under Chapter 4911 and the appellant has classified accordingly - Moreover, after introduction of GST, the classification of the same has been answered vide Circular F.No. 332/2/2017-TRU dt. December, 2017 by observing that these items fall under HS Code 4911 and attract 12% GST - also, the activity of printing as job worker is exempted from payment of service tax in terms of various notifications - on merits, the activity undertaken by the appellant amounts to manufacture and is classifiable under the Chapter 4911, therefore, no service tax is payable by the appellant - Even in the alternative, the activity undertaken by the appellant is exempted from payment of service tax - impugned orders are set aside and appeals are allowed: CESTAT [para 15, 19, 20, 21, 22, 23, 24, 25]

- Appeals allowed: CHANDIGARGH CESTAT

CENTRAL EXCISE

2019-TIOL-2172-CESTAT-MUM

Todi Industries Pvt Ltd Vs CCE

CX - Rubber solution - Appellant submits that SCN proposed classification under heading 4005, however, the impugned order classified the same under heading 3506 of the CETA, 1985 and has, therefore, travelled beyond the limited charge in the SCN - appeal to CESTAT.

Held: From the submissions made, it is apparent that the issue in dispute is not about the classification but about the recovery of differential duty arising from the revised classification - As the classification has since been settled and the re-working of the differential duty thereof on the RT-12 filed for the relevant period is a mandatory consequence, Bench finds that the original authority has merely utilized the proceedings arising out of the show cause notice to issue directions for compliance with the orders of the Tribunal which are anyway to be implemented - Bench does not find any flaw in the order as this is not a decision on classification on the initiative of the original authority after due evaluation of any submission but mere direction to enable implementation of the orders of the Tribunal - appeal dismissed: CESTAT [para 4, 5, 6]

- Appeal dismissed: MUMBAI CESTAT

2019-TIOL-2171-CESTAT-MUM

CCE Vs Saptashringi Alloys Pvt Ltd

CX - Allegation of clandestine removal of 506MT of MS Ingots during the period January to February 2008 without payment of duty - Commissioner(A) set aside the order on the ground that the earlier SCN dated 09.05.2008 included the period January 2005 to March 2008 and the impugned SCN resulted into multiple proceedings for the same set of facts - Revenue in appeal before CESTAT contending that the earlier SCN was based on electricity consumption whereas the impugned SCN was on specific intelligence and investigation carried out by DGCEI; that there is no overlapping demand as concluded by the Commissioner(A).

Held: Respondent assessee could not produce any evidence or worksheet to show that the demand relating to 506 MTs of MS Ingots was also included in the show-cause notice dated 9.5.2008, therefore, to ascertain the said facts, matter is remanded to the adjudicating authority: CESTAT [para 6]

- Matter remanded: MUMBAI CESTAT

2019-TIOL-2170-CESTAT-MUM

NRC Ltd Vs CCE

CX - Assessment was made provisional as the value of the goods cleared could not be determined at the time and place of removal, since the said goods were sold from the depots - Therefore, resorting to Rule 7 of the Central Excise Valuation Rules, 2000, the value was determined on the basis of the greatest aggregate quantity of goods sold i.e. the normal transaction value of the goods and adopted the same for finalization of the assessment - Revenue filed an appeal on the ground that the detailed work-sheet of the calculation of the 'greatest aggregate quantity of goods' sold has not been elaborated in the order of the adjudicating authority while finalization of the assessment, hence, the same is bad in law - Commissioner (Appeals) remanded the matter to the adjudicating authority - appeal by assessee before CESTAT.

Held: In para 16 of the order of the adjudicating authority, relevant month-wise data for the assessment period has been mentioned, which was based on the report of the Range Superintendent - No contrary evidence has been placed by the Revenue to show that the data reflected in the impugned order by the adjudicating authority is incorrect - In absence of evidence, rebutting the said finding of the adjudicating authority, Bench finds no merit in the impugned order of the Commissioner (Appeals) doubting the normal transaction value calculated as per Rule 7 of the Central Excise Valuation Rules, 2000 adopting the procedure laid down in Board's Circular dated 27.12.2004 - impugned order set aside and appeal allowed with consequential relief: CESTAT [para 6]

- Appeal allowed: MUMBAI CESTAT

CUSTOMS

2019-TIOL-2169-CESTAT-BANG

Parag Domestic Appliances Vs CC

Cus - The assessee have imported the Multi Digital Function machines and thereafter cleared the same on payment of SAD @ 4% and thereafter sold the same to various purchasers on payment of VAT/CST and thereafter filed the refund claim under Notfn 102/2007 along with all the documents and the reconciliation statement but the Customs Authorities issued him a SCN on the allegations that the invoices produced by him are forged and fabricated and the certificate issued by Chartered Accountant was also found to be false certificate - Merely on finding of discrepancies in the invoices, the original authority has no basis to come to the findings that the invoices were forged and fabricated - Forging of invoices for claiming the refund is a serious allegation against the assessee which should not have been levelled without any enquiry and investigation - Further the assessee has explained the discrepancies but the same was not considered by both the authorities - The certificate issued by Chartered Accountant was held as false certificate without any basis - The said certificate was furnished as per the requirement of the Notification which should have been considered by both the authorities in order to decide the claim of assessee but the same was not done - Therefore, these two cases need to be remanded back to the original authority with the direction to consider the correlation sheets filed by assessee certified by the Chartered Accountant for claiming the refund of SAD: CESTAT

- Matter remanded: BANGALORE CESTAT

Dhanraj S Jain Vs CC

Cus - The Miscellaneous applications have been filed by assessee seeking to condone the delay of forty six days in filing these appeals - The delay of forty six days in filing the appeals was only for the reason that one of the main assessee is around 85 years old and was unable to coordinate with the counsel for the purpose of preparation of appeal - The reason for the delay being genuine as also the delay not being too high, the same is condoned: CESTAT

- Miscellaneous Applications allowed: CHENNAI CESTAT