SERVICE TAX

CST Vs Looked India Ltd

ST - Respondent-Assessee is engaged in providing advertisement services to their clients for publishing/broadcasting of advertisements in various print and electronic media - In respect of advertisements published in the print media, the Respondent paid service tax on the 15% of the gross value of the bills raised to their clients and in case of advertisements broadcasted in the electronic media, they used to pay service tax on the total amount billed to their clients - however, after July, 2006, the Respondent raised debit notes to their clients to realize the amounts charged to them by the electronic media - SCN issued demanding service tax on the said amount - In adjudication, Commissioner dropped the demand and, therefore, Revenue is in appeal.

Held: Adjudicating authority has correctly held that the service tax was not required to be paid by the Respondent on the amount paid by them to the print media and they have rightly paid the service tax on the discount and commission allowed by the print media during the material period - Adjudicating Authority found that they issued debit notes on their clients for reimbursement of the bills raised by the electronic media and also issued separate bill to their clients for their service charge - It emerges from the above fact that the amount charged by the electronic media, relates to sale of space and time for advertisement to the electronic media - The sale of advertising space and time is a separate taxable service, which came under service net on 01.05.2006 - Respondent acts as an intermediary between the clients and electronic media and therefore, on the basis of analogy adopted in TRU letter F.No. 332/4/2008-TRU dated 05.05.2008, the Respondent cannot be made liable to pay service tax again on the amount charged for sale of time and space in electronic media, which was held to be separate tax altogether, however, the amount received by the Respondent for providing the service as an intermediary was liable to service tax - no infirmity in the impugned order, therefore, Revenue appeal is rejected: CESTAT [para 8]

-Appeal rejected : KOLKATA CESTAT

Rajit Jain Succeesor And Legal Heir Vs CC, CE & ST

ST - Re-rubberisation of old, worn out rubberised rollers of various industries is correctly classifiable under Business Auxiliary Service and not under 'Management, Maintenance or Repair' service - Tribunal decision in Zenith Rollers Ltd. - 2013-TIOL-1841-CESTAT-DEL followed - impugned order set aside and appeal allowed with consequential relief: CESTAT [para 3, 4]

-Appeal allowed : ALLAHABAD CESTAT

S Gopal Kamath Vs CC, CE & ST

ST - As per the definition of 'Clearing and Forwarding Agents' in terms of Section 65(25) of the Finance Act 1994, the activities of Clearing and Forwarding Agents include that of Consignment Agent, therefore, the lower authority and the Commissioner (Appeals) have rightly upheld the classification under Clearing and Forwarding Agents - since appellants did not dispute the payment of tax for the period 01.04.2001 to 09.07.2004, the appeal has no bearing on the tax liability of the appellant - Appeal dismissed: CESTAT [para 2(a)]

ST - CENVAT - Rule 6 of CCR - Allegation in the show-cause notice is that the assessee is utilizing the input service for providing output taxable service of Clearing and Forwarding Agent Service as well as for trading - Original authority has dropped the demand by concluding that trading is not an exempted service - by an order-in-revision, the order of original authority has been reversed - appeal to CESTAT.

Held: Conclusion that service on which no service tax is leviable under Section 66 can be termed as 'exempted service' is a very curious and extended argument - to be an exempted service, the activity should be a service - Without any statute categorizing the trading as a service, it cannot be held that it is an 'exempted service' - no infirmity with the order of the original authority, hence order-in-revision is unsustainable - Appeal allowed with consequential relief: CESTAT [para 2(b)]

ST - CENVAT denied on Mobile phone bills on the ground that the telephone was not installed in the business premises - as long as the input services are utilized for the purpose of providing the output services, credit is admissible - Appeal allowed with consequential relief: CESTAT [para 2(b)]

-Appeal No. ST/172/2008 dismissed/Appeal No. ST/469/2009 allowed : BANGALORE CESTAT

CENTRAL EXCISE

CCE & ST Vs Sterling Sez And Infrastructure Ltd

CX - The assessee is developer of Special Economic Zone and have filed a refund claim on 26.06.2009 for the period March 2009 to may 2009 with Central Excise Division Bharuch in terms of Notfn 09/2009-ST as amended by Notfn 15/2009-ST - The SCN was issued proposing rejection of refund claim under Section 11B of CEA, 1944 on the ground that the assessee have not fulfilled the provisions of Notfn 09/2009-ST as amended by Notfn 15/2009-ST in as much as the assessee have not produced the evidences envisaging duty payment of service tax and required evidences & documents in terms of Notfn 09/2009-ST as amended by Notfn 15/2009-ST that taxable services provided by SEZ unit are consumed partially or wholly in the SEZ - The only ground made by Revenue in this appeal is that the Commissioner while allowing the appeal has not seen that the condition 1(c) of notfn 09/2009-ST was not complied with - Since the service was wholly consumed within SEZ, the assessee is otherwise entitled for the refund - It is also observed that as regard the condition and documents, the Commissioner has given a categorical finding - Therefore, no infirmity found in the order - On the identical facts, this tribunal has taken view in the case of Zydus BSV Pharma Pvt. Ltd. 2018-TIOL-3317-CESTAT-AHM - In view of said judgment which is based on various other judgments, the assessee was rightly entitled for the refund - Accordingly, the impugned order is upheld: CESTAT

- Appeal dismissed : AHMEDABAD CESTAT

Volvo India Pvt Ltd Vs CCE, C & ST

CX - The assessee is engaged in repacking and selling of automobiles parts from central warehouse as well as service centres located all over the country - Re-packing and re-labeling of automobiles parts as amounted to manufacture in terms of Section 2(f)(iii) of CEA, 1944 w.e.f 01.06.2006, for the period June 2006 to April 2007 the assessee have paid duty along with interest - They contended that they had a credit on goods lying in stock as on 01.06.2006 and they are eligible to pay applicable duty through CENVAT also - Therefore, they have ended up paying more interest and accordingly filed a refund claim which was rejected - The assessee have submitted that they have paid interest and are entitled for refund as there was huge stock of materials lying in stock as on 01.06.2006 the credit on which is available to them therefore the duty paid by them in cash should only be reckoned for the purpose of calculating interest as this is the duty which is actually not paid - The interest is payable on differential amount only - However, in this case, the availability of credit is in dispute and this Bench has directed the lower authorities to allow credit after verifying the record, available with the assessee or the Department, pertaining to receipt (imports), storage and distribution of parts to various service centres within three months of receipt of order - In view of Miscellaneous Order, the claim of interest by assessee is pre-mature - First, the amount of credit available to assessee needs to be arrived at by authorities and thereafter, the net amount payable as on the date of payment of duty by assessee i.e. 04.05.2007 requires to be arrived at - The differential amount alone shall be reckoned for the purpose of payment of interest: CESTAT

- Matter remanded : BANGALORE CESTAT

ST Woven Bags Pvt Ltd Vs CE & CGST

CX - The assessee have established their factories situated in the State of Rajasthan and were operating under Rajasthan Investment Promotion Scheme - Under the various schemes of Rajasthan Government, the assessees was eligible for subsidies - As per various schemes applicable to assessees, they were required to deposit VAT/CST/SGST at the applicable rate with Government and in terms of scheme notified, will be entitled to disbursement of subsidy by appropriate authorities - The subsidy concerned is sanctioned and disbursed in form 37B and such challan in form VAT 37B can be utilized for discharge of VAT liability of assessee for subsequent periods - Revenue was of the view that VAT liability discharged by utilizing investment subsidy granted in form 37B cannot be considered as VAT actually paid, for the purpose of Section 4 of CEA, 1944 - For the initial period, the assessee is required to remit the VAT recovered by them at the time of sale of goods manufactured - A part of such VAT is given back to them in the form of subsidy in Challan 37 B - Such Challans are as good as cash but can be used only for payment of VAT in the subsequent period - In terms of the scheme of the Government of Rajasthan payment of VAT using such Challan are considered legal payments of tax - Revenue is not correct in taking the view that VAT liability discharged by utilizing such subsidy challans cannot be taken as VAT actually paid - By following the decision of Tribunal in Welspun Corporation Ltd. 2017-TIOL-1287-CESTAT-MUM and Shree Cement , there is no justification for inclusion in assessable value, the VAT amounts paid by assessee using VAT 37B Challans: CESTAT

- Appeal allowed : DELHI CESTAT

CUSTOMS

Allcargo Logistics Ltd Vs CC

Cus - The assessee-company imported capital goods such as Kalmar Reach Stacker under the EPCG Scheme - The goods were assessed at concessional rate of duty under Notfn 55/2003 which extends concessional rate of duty with the condition that the importer must fulfil the export obligation on FOB basis valued to eight times the duty saved on the goods imported within 8 years from the date of issue of license - The assessee executed the requisite bond and furnished bank guarantee at time of clearance of the goods, binding it to strictly comply with the conditions of the Notfn - As per the license, the assessee was obliged to export Cargo Handling Services - On examining the documents submitted, the Revenue observed that the vouchers were not raised against services provided by the use of capital goods, but were issued towards Ocean Freight charges - Further of the four Kalmars, only one was found operational at the assessee's premises, while three others were deployed on rental basis in other premises - SCN was issued proposing confiscation of goods with redemption fine, raising duty demand and imposing penalty - On adjudication, the same were confirmed - Hence the present appeal.

Held - That the capital goods were installed in the assessee's premises is evident from the certificate issued by the Chartered Engineers - Such certificate was not disproved by the Revenue - Besides, the assessee also filed statements before the DGFT regarding the forex earned by it as per the EPCG scheme, wherein it had stated the category of service provided as Cargo Handling Service - Based on such records, the DGFT confirmed that the export obligation against the EPCG authorization had been discharged - It transpires that the export obligation was achieved - Further, the DGFT had included other services namely Cargo handling service, storage & warehouse service and freight transportation for the purpose of fulfilment of 100% export obligation in terms of Public Notice 42 dated 28.01.2004 - Hence where the licensing authority confirmed the achievement of export obligation, benefit of concessional rate of duty as per Notfn No 55/2003-Cus cannot be denied - As has been settled in Titan Medical System Pvt. Ltd. it is clear that once an advance license was issued & not questioned by the licensing authority, the Customs authorities cannot deny exemption based on allegation that there was misrepresentation involved - Where the licensing authority issues redemption letter confirming achievement of export obligation, such certificate cannot be questioned: CESTAT

- Assessee's appeal allowed : MUMBAI CESTAT

Late Bathula Siva Prasad Vs CC & CE

Cus - The assessee is a dealer in Stones - The assessee was approached by one person for exporting Stones to one M/s Shanghai United Granite Industrial Trading Company - The assessee procured the stone through the local market and exported the same through such individual - This person approached the assessee again, whereupon the latter procured granite blocks/stone slabs and provided them to the former - The individual took the goods to one M/s Sterling Container Line Madras Pvt Ltd., for stuffing the containers - This company issued the admittal form for the stone blocks - The goods were stuffed in the presence of Custom's officials & were to be shipped from the Chennai Port - Upon receipt of intelligence that Red Sanders Logs were to be smuggled to Singapore, the DRI officials intercepted some containers and their search revealed revealed presence of some wooden logs, which appeared to be Red Sanders, whilst the cargo declared was of Galaxy Rough Blocks - SCNs were issued to the assessee, its premises were searched and statements of various persons were taken - The assessee filed reply to SCN and also sought for cross-examination of some persons, including certain Customs officers - On adjudication, the assessee was held to be negligent and that it failed to exercise due diligence, resulting in manipulation by the person - Penalty was imposed u/s 114 of the Act on the assessee and on some of the other persons - The Red Sanders logs were confiscated, with option of redemption fine being given - Hence the present appeal.

Held - Statements taken from the various individuals reveals their complicitness in the attempted smuggling - Further, one block was loaded individually on each container and the containers were sealed with the Customs seal, with the agents affixing their seal too - Hence it appears that the assessee took all reasonable care and no mens rea can be attributed to it for the manipulation done by the person - From the facts on record and from the statements of the officers concerned, it appears that the assessee did nothing of a deliberate nature or misdeed in the alleged smuggling attempt - The assessee unknowingly and in good faith allowed the use of its IE code - Hence no case is made out for imposing penalty u/s 114 of the Customs Act & the same merits being quashed: CESTAT

- Assessee's appeal allowed : HYDERABAD CESTAT