SERVICE TAX

2019-TIOL-1743-HC-MUM-ST

Konkan Railway Corporations Ltd Vs UoI

ST - Revenue opined that the activity of laying down railway tracks on which the Railways were to operate their wagons, amounted to providing Infrastructure Support Service - Pursuant to the order dated 27 th June 2019 passed by the Bench, Revenue has filed an affidavit and states that they are in the process of challenging the order of the Tribunal dated 25 March 2019 in the case of M/s. Bharuch Dahej Railway Co. Ltd. - 2019-TIOL-1175-CESTAT-DEL - said order is a common order in respect of Bharuch Dahej Railway Co. Ltd. and Krishnapatnam Railway Co. dated 25 March 2019 - 2019-TIOL-1175-CESTAT-DEL , which dismissed the Revenue's two appeals by following the tribunal's earlier decision in Mundra Port & Special Economic Zone Ltd. vs. CCE, Rajkot - 2011-TIOL-1321-CESTAT-AHM and which is pending consideration in appeal before the Supreme Court on identical issues, after the Revenue's appeal was admitted.

Held: In the light of the above facts, particularly the Revenue not accepting the decision of the Tribunal in Bharuch Dahej Railway Co. Ltd. (supra) and Krishnapatnam Railway Co. (supra) of the Tribunal and being in the process of filing an appeal, Bench is of the view that the Petitioner should approach the appellate authority by filing a statutory appeal under the Act - When the relief sought before the Bench is something which could be sought before the Tribunal, then there is no reason for the Bench to exercise its discretion to entertain the writ - It is not the case of the Petitioner that the impugned order is without jurisdiction - In this case, Bench finds that the order has already been passed - There is, therfore, no reason, at this stage, to set aside the order of the Commissioner and restore the show cause notice to Commissioner so as to only compel the Revenue to follow the Master Circular and keep the show cause notice in abeyance and await the decision of the Supreme Court in the case of Mudra Port & Special Economic Zone Ltd. (supra) - reliance upon the decision of the Gujarat High Court in Darshan Boardlam is inappropriate in the present facts - question of tax on the entire freight is an issue, which is best left to the appellate authority to deal with - no occasion to exercise extraordinary jurisdiction to entertain this petition can arise - in case the Petitioner does file an appeal within a period of four weeks, then the Tribunal would consider the appeal on merits, without taking up the issue of limitation - Petition disposed of in above terms: High Court [para 3, 7 to 10]

Discretion - Status of Petitioner - Submission is that in view of the status of the Petitioner viz. namely, shareholding pattern of the Petitioner is distributed entirely between the Central and four State Governments coupled with it acting under the directions and control of the Ministry of Railways, the Writ Court should exercise its discretion and entertain this petition.

Held: The status of a party can never be the basis of exercising discretion to entertain a writ - In fact, the discretion is exercised on the basis of the action of the authority being without jurisdiction and not on the basis of the status of the party moving the Court - To decide on the basis of the status of the party would be the very antithesis of the rule of law, viz. equality before the law, in the absence of any statutory distinction - The fact that the Petitioner is a Limited Company, has shares distributed in their entirety between the Central and State Governments does not warrant a different treatment under the Act: High Court [para 6]

- Petition dismissed: BOMBAY HIGH COURT

2019-TIOL-2253-CESTAT-MUM

City And Industrial Development Corporation Of Maharashtra Ltd Vs CST

ST - Appellant, CIDCO, is a limited company incorporated under Companies Act, 1956 as subsidiary of State Industrial and Investment Corporation of Maharashtra Limited which is wholly held owned by state of Maharashtra - Government of Maharashtra acquired lands in the project area from land owners under Land Acquisition Act - On such acquisition, the ownership of the land vested in the Government of Maharashtra vide Section 16 or 17(1) of Land Acquisition Act, 1894 and always continued to remain with the Government only - Appellants after following the procedure leased the land to various private persons - For the purpose of leasing the land, appellants first enter into an agreement to lease on payment of lease premium, thereafter on completion of the construction activity and after obtaining occupation certificate and satisfying the terms of agreement, they enter into a lease deed with the intending Lessee, whereby it leases the plot of land along with structure to the lessee for a term of 60 years for a yearly rental Rs.100/- - Since the appellants were not paying service tax on the said transactions which as per the revenue were taxable under the category of “Renting of Immovable Party” a show cause notice dated 19.10.2012 was issued to the appellants demanding the Service Tax not paid during the period 1.06.2007 to 31.03.2012 along with interest and penalties - After 01.07.2012, as per the revenue, appellants were liable to pay service tax under Section 66B off the Finance Act, 1994- For period 01.04.2012 to 31.03.2013 a demand notice dated 06.05.2014 and for the period 1.04.2013 to 31.03.2014 demand notice dated 23.03.2015 has been issued to the appellants -Demand notices were issued and adjudicated by the Commissioner confirminga total service tax demand in excess of 275 crores with penalties - appeal to CESTAT - appellant argues, both on merits as well as limitation.

- Appeals dismissed/matter remanded: MUMBAI CESTAT

2019-TIOL-2250-CESTAT-DEL

ST - The assessee is engaged in providing taxable services under category of GTA Services to M/s. Western Coal Field Ltd. - SCNs were issued on the ground that the assessee was doing loading, transport and unloading of coal from mining under category of "Cargo Handling Services" - It can be seen from terms of contract that rates which have been provided to the assessee is based on the distance for which transportation of the coal is to be undertaken by service provider - The relevant price is also subject to escalation of transportation rates as per changes in fuel price for the relevant period - This basically signifies that the rates are pre-dominantly for transportation of cargo rather than for handing of cargo - However, before proceeding further, the relevant section 65 A of FA, 1994 need to be looked into in detail for classification of service rendered by assessee - It can be seen from a plain reading of 65A (2)(b) that the classification in case of combined service is to be decided by analyzing the fact as to which service gives essential character to the service being performed - As can be seen from the contract, the essential character of service for which contract has been entered by service provider is that the service received are for transportation of coal for mining area to the railway siding and the activity of loading/ unloading mechanically or otherwise is only incidental to the activity of transportation of the cargo - The service provided by assessee have rightly been classified in GTA service - This issue has already been examined by Supreme Court in case of Singh Transporters 2017-TIOL-249-SC-ST wherein it is held that activity undertaken by assessee of transporting of coal from the pithead of the mines to railway siding is more appropriately classifiable under service head of Transport of Goods by road services - No merit found in the impugned order, same is set-aside: CESTAT

- Appeal allowed: DELHI CESTAT

2019-TIOL-2249-CESTAT-HYD

ST - The issue is regarding demand of service tax for the period 01.04.2006 to 31.03.2007 under the category of "Business Auxiliary Service" for rendering the services of marketing to one M/s e-Biz.Com (P) Limited - It is the case of Revenue that the assessee having received consideration for marketing of software in the form of CDs, he is liable to pay service tax under the category of "Business Auxiliary Service" while it is the case of assessee that they being an individual, is not covered under the definition of taxable service for Business Auxiliary Service inasmuch he being an individual is not covered in the phrase "Commercial Concern" - N othing survives in this appeal as the order passed by the first appellate authority is a detailed one and does not require any interference: CESTAT

- Appeal rejected: HYDERABAD CESTAT

2019-TIOL-2248-CESTAT-KOL

ST - The assessee is engaged in providing taxable services such as "maintenance and repair service" and "commission and installation service" - A SCN was issued to assessee alleging that they had contravened the provisions under Sections 67 and 68 of FA, 1994 r/w Rule 6 of Service Tax Rules - The assessee contends that the said adjudication order was never received by them - The Commissioner (A) has held that the adjudication order was sent to assessee by speed post on 10.12.12 and since the post had not been received back by adjudication authority, it was assumed that the said post had been duly delivered to the assessee - A Larger Bench of this Tribunal in case of Margra Industries Ltd. 2006-TIOL-1220-CESTAT-KOL had held that ‘Dispatch of adjudication order by speed post/registered post would not amount to a valid service in the absence of proof of actual delivery of speed post' - It is pertinent to decide a matter with due notice to the concerned parties and that every effort must be taken to realistically serve such notice to the concerned parties, not only with an intention to ensure that the party has knowledge thereof but also to enable the party to initiate any permissible action - Therefore, the Commissioner (A) ought to have decided the assessee's case on merits - Matter is remanded to the Commissioner (A) to be decided on merits: CESTAT

- Matter remanded: KOLKATA CESTAT

CENTRAL EXCISE

2019-TIOL-1734-HC-MUM-CX

CUSTOMS

2019-TIOL-1733-HC-MAD-CUS

2019-TIOL-2251-CESTAT-MAD

Cus - The assessee-company imported a consignment of Agar Agar Strips from a Hong Kong-based company - It paid duty on such consignment - Before clearance from Customs charge, the goods were examined - Samples were drawn and the goods were seized - The samples were forwarded to the Centre for Advance Studies in Botany at the Madras University, which reported the the sample was Agar Agar with no pathogenic micro-organisms upon culture on different media - Another sample was sent to the Central Food Laboratory at Mysore, which held that the sample did not conform as Food Ingredient as per the PFA Act 1954 - SCN was issued to the assessee proposing to reject the price per Kg/CIF declared in the current as well as past five consignments - The price was proposed to be enhanced - The SCN also proposed to deny benefit under Notfn No 21/2002-Cus, confiscate the current & past consignments and raise duty demand for such consignments with interest & penalty - Personal penalty was also imposed on the partners in the firm - On appeal, the Commr.(A) set aside the redemption fine, directed that the current consignment be re-tested & sustained the O-i-O for valuation and suppression of facts - The appellants then approached the Tribunal, pursuant to whose orders, re-test was conducted - Based on the report, the jurisdictional Addl Commr conducted fresh adjudication & directed enhancement of value of goods - It was held that the goods had expired and did not conform to the Food Safety & Standards (Packaging & Labelling) Regulations 2011 - Option of redemption fine was given, the goods were directed to be re-exported and penalty was imposed - On appeal, the Commr.(A) allowed partial relief to the assessee - Hence the present appeal in the second round of litigation.

Held - It is difficult to reconcile with the humongous delay of more than 16 months in respect of the live consignment, for a journey from import stage to orders by the Commissioner (Appeals) for goods which admittedly had a limited shelf life - This sad episode does not stop here - The Stay Order of Tribunal dated 22.03.2012 had categorically directed the adjudicating authority to decide the issue whether the goods are fit for human consumption preferably within a period of 15 days from today - However, the authority took another 60 days to decide this aspect and further, choose to go beyond the scope of the directions of the Tribunal to re-adjudicate all the aspects of the import once again - In the first place, the Revenue's lethargy, in particular, the 16 months delay has resulted in such a piquant situation that when the sample was sent for re-test, CFTRI Laboratory could only point out that the goods have less than 60% shelf life since they expired on 20.04.2012 - To add insult to injury, the adjudicating authority in his unauthorised readjudication order blithely held that as the goods have already expired, they cannot be consumed and so decides that the goods cannot be released since they are not fit for human consumption - Moreover, the first CFTRI test report opined that the sample did not conform as food ingredient as per PFA Act 1954 as technical details such as batch number, date of manufacture & expiry were not mentioned - Such discrepancy cannot be attributed to the assessee but to those officers who forwarded the samples for test - The second sample for retest was obviously sent after prolonged delay as a result of which the CFTRI rightly pointed out that the goods were nearing their expiry period - Besides, even when the CFTRI in its initial report flagged the non-mention of batch number & other relevant dates, the Revenue goofed up again by not mentioning the manufacturer's name - The Revenue must bear the cross for this since the assessee had given all details at time of import - Hence the report given by the University of Madras be taken as the correct report since it discusses the actual nature & condition of the imported goods - In such case, the goods cannot be assailed for not conforming to the Food Safety and Standards (Packaging and Labelling) Regulations, 2011 - Hence the O-i-A in question are quashed & the penalties are set aside: CESTAT

- Assessee's appeals allowed: CHENNAI CESTAT