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SERVICE TAX
2019-TIOL-2437-CESTAT-BANG
Star Homes Enterprises Vs CCE & CT
ST - Assessee was engaged in the construction activity of residential buildings of more than 12 units from 2012 onwards but had not registered and had not paid any ST - the amount of Rs.47.64 lakhs was taxable income for the period 2011-12 to 2014-15 - further, they had also provided service under renting of immovable property service and received consideration of Rs.7 lakhs - SCN issued demand Rs.6.67 lakhs - the assessee also claimed the credit of the ST paid on input services - entire demand confirmed, penalties imposed - on appeal, the Commissioner (Appeals) modified the O-i-O - appeal to CESTAT.
HELD: Issue is no more res integra and has been settled in favour of the appellant that once the appellant pays the tax along with interest before the issue of SCN, then he is not liable to pay the penalty as held in various decisions -therefore, by following the ratio of the decision, on identical facts, in the case of Krishna HT [2018-TIOL-1819-CESTAT-BANG], appellants are not liable to pay the penalty under section 78 of the Finance Act, 1994, which is set aside -as far as penalty under rule 7C of Service Tax Rules, 1994 read with section 70 is concerned, it is also set aside because the same rule 7 is not applicable in the facts and circumstances of the case -penalty under section 77(1)(a) is upheld because the appellant failed to get themselves registered under the ST within the stipulated time -in view of the above, penalty under section 78 and rule 7C read with section 70 is dropped and penalty of Rs.10,000/- under section 77(1)(a) is upheld -appeal is disposed of in above terms : CESTAT [para6, 7]
- Appeal disposed of: BANGALORE CESTAT
2019-TIOL-2436-CESTAT-DEL
Cushman And Wakefield India Pvt Ltd Vs CST
ST - During audit of assessee's financial records, it was pointed out that though the assessee have reversed back the cenvat credit in compliance to the requirement of Rule 6(3) of CCR, 2004, however, reversal of cenvat credit has not been reflected in ST 3 returns for the relevant period- It is a matter of record that the assessee while filing ST 3 return for the period October, 2010 to March, 2011 on 25 April, 2011, had shown the reversal of cenvat credit - The cenvat credit which was already reversed was reflected in the financial accounts including the balance sheet for financial year 2009-2010 - It was only on comparison of balance sheet and the ST 3 returns which have been filed by assessee that the Audit party pointed out that the reversed back amount of Cenvat credit has not been shown as 'reversed back' in their ST 3 return for the relevant period - It is also a matter of record that interest which has been demanded by the Department under SCN has also been deposited by assessee, this was much before the issuance of SCN - The element of fraud, collusion, willful mis-statement or suppression of facts or contravention of any of the provisions of Finance Act with an intent to evade payment of service tax are not present at all in the case in hand as the assessee themselves have reversed back the cenvat credit and same has been duly reflected in their financial account including the balance sheet - Since they have already reversed the cenvat credit and have also paid interest, there was no need to issue SCN left aside invoking the provisions of Rule 15 (3) of CCR, 2004 for imposition of equal amount of penalty - Since the original amount of credit was already reversed as the assessee had claimed that they always had credits in accounts much above the required amount, the credits in a way have not been utilized by the assessee - So far as the imposition of penalty under Section 78 r/w Rule 15(3) of CCR, 2004 is concerned, same is not leviable - However, Tribunal also take shelter of decision of Tribunal in case of M/s. Grasim Bhiwani Textiles Ltd. 2015-TIOL-3078-CESTAT-DEL - The penalty under section 78 of FA, 1994 r/w Rule 15(3) of CCR, 2004 is not imposable: CESTAT
- Appeal allowed: DELHI CESTAT
2019-TIOL-2435-CESTAT-MAD
Wipro Acer Ltd Vs CC & CE
ST - The two issues that arise for consideration is with regard to disallowance of credit to the tune of Rs.4,73,349/- and Rs.27,446/- - As per SCN, the allegation with respect to Rs.4,73,349/- is that the credit entered in RG.23A Part II was made before receipt of goods into the factory - There is no case that such inputs were not used in manufacture of finished products - The availment of credit by making entries in RG.23A prior to receipt of goods into the factory is only a procedural one and the substantive beneficial right of credit cannot be denied for such procedural lapse - The second issue is with regard to denial of credit of Rs.27,446/- - Even after submission of material inward receipt the original authority has, after looking through such documents, denied credit to the tune of Rs.27,446/- - The said report has not been produced before Commissioner (A) - For this reason, assessee has failed to establish that inputs were actually received into the factory - Credit is therefore disallowed and the demand is sustained along with interest - However, penalty in this regard is set aside - Further, assessee has put forward explanation that these irregular availments occurred only because there was large number of documents to be entered and due to inadvertence the entries were omitted: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
CENTRAL EXCISE
2019-TIOL-2434-CESTAT-ALL
EL Pem Power Sector Vs CCE
CX - The assessee was granted a contract from Government of Syria for erection of a Thermal Power Plant in Syria - For fulfillment of said project, the assessee procured various capital goods from Indian manufacturer, in terms of Notfn 42/2001-CE(NT) which provides exemption, subject to fulfillment of certain conditions - Till 11/06/2012, the assessee was procuring goods from Indian manufacturer in terms of said Notfns and were exporting the same - There is no dispute to the said factual position - However, since there was unrest in Syria on account of terrorist activities, the assessee was directed by Indian Embassy to withdraw all its staffs from Syria - In compliance to said directions, the staff was withdrawn and the project came to a standstill - However as the project was stalled, the said duty free procured goods could not be exported by them within the period of six months, as provided in the Notfn - They sought extension of such period to export goods, which were granted from time to time - However ultimately, vide letter dated 23/02/2015, the Assistant Commissioner by referring to provisions of clause 13.6 of Chapter No.7 of Central Excise Manual, and by referring to the fact that number of extensions have already been granted, rejected the assessee's request to further extend the period for export - Same has admittedly not been challenged by assessee - As such the same has attained finality - Result and consequence of the same is as if there is no such extension order available on record as on date - If there is no extension having been granted by Authorities, in terms of provisions of Notfn 42/2001-CE(NT), condition of said Notfn stands violated - As such, confirmation of demand is only as a consequence of earlier proceedings of rejection of extension, which issue cannot be agitated before the Tribunal at this stage - Accordingly, the confirmation of demand alongwith interest is upheld, which in any case stands deposited by assessee - Assessee submits that the export could not take place on account of bona fide reasons, which were not in the hands of assessee - As such imposition of penalty upon them is not justified: CESTAT
- Appeal disposed of: ALLAHABAD CESTAT
2019-TIOL-2433-CESTAT-ALL
CCGST & CE Vs Hindalco Industries Ltd
CX - The dispute relates to availment of cenvat credit of service tax paid on various services which stands captively utilized by assessee - The Revenue's objection is that such services were utilized by assessee not in their factory but in Renusagar Power Division of their factory, which was located far away from the factory premises - The Revenue has not refereed to any particular provisions of law in the subsequent cenvat credit Rules to establish that input services used for captive consumption stand excluded from the availability and admissibility of credit - All the earlier decisions discussed in present impugned order of Commissioner, have held that M/s Renusagar Power Plant and M/s Hindalco Industries Ltd. are one integrated unit and the energy received from Renusagar power plant has to be treated as having been received from captive power plant - In the light of said declaration of law by Tribunal as also by Delhi High Court and Supreme Court, in the same assessee's case, no reasons found to take a different view - As such no infirmity is found in impugned order of Commissioner: CESTAT
- Appeals rejected: ALLAHABAD CESTAT
2019-TIOL-2432-CESTAT-MAD
E3 Innovations Vs CGST & CE
CX - The assessee is questioning the issuance of SCN invoking the extended period of limitation, apart from levy of penalty under Section 78 of FA, 1994 - The Revenue has not disputed the assertion of assessee that the tax portion was paid along with interest much before the issuance of SCN and even the O-I-O has appropriated the Service Tax to the extent of Rs. 34,90,385/- as against the demand of Rs. 35,41,407/- - While discussing the applicability of extended period, the Adjudicating Authority has inter alia apparently picked up the gross receipts as per P&L Account and gross receipts as per ST-3 from the assessee's books and thereafter, has quoted Section 73 (1) ibid., but however, has not discussed anywhere as to the misconduct in the nature of fraud, collusion, wilful mis-statement - It is a settled position of law that mere quoting of a Section or Sub-Section leads to nowhere unless the Revenue discharges the initial burden - Further, there is no doubt that the leviability of penalty under Section 78 is not mandatory and the same is controlled by Section 80 ibid - Even the Commissioner (A) though recorded that Section 73 (4) prevails over Section 73 (1) and (3), but still, there is no recording of any finding as to the conduct of assessee that could be termed as fraud - The jurisdictional High Court in case of M/s. Pondicherry Paper Ltd. has held that there is no justification for imposition of penalty especially when there is no allegation of fraud, mis-representation after following various judgements of Apex Court - This view of High Court has also been reiterated in case of M/s. Mahadev Logistics 2017-TIOL-898-HC-CHHATTISGARH-ST - The penalty under Section 78 ibid could not have been levied and therefore, the impugned order to this extent is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
CUSTOMS
2019-TIOL-2431-CESTAT-DEL
Silicone Concepts International Pvt Ltd Vs Pr. CIT
Cus - M/s. SCIPL is engaged in import and trading of various products as epoxy, stone cleaner, stone care, polyester and firelight imported from M/s. Akemi Chemisch Technische Spezialfabrik GMBH, Germany- The Department got an information about M/s. SCIPL to have mis-declared the value of imported goods to the Customs and to have mis-classified goods to evade payment on MRP/RSP basis and to not to have included the amounts paid to the parent Company terming them as 'Royalty' in connection with import of goods treated by M/s. SCIPL in the assessable value - The impugned appeal has been filed against an interlocutory Order passed by adjudicating authority below while adjudicating the impugned SCN vide which the request of cross examination of four persons whose statement were recorded during investigation i.e. prior issuance of impugned SCN was denied - Coming to the aspect of violation of natural justice, it has way back been listed by Supreme Court in Kanungo & Co. 2002-TIOL-252-SC-CUS-LB wherein it was held that principles of natural justice do not require that where the SCN set out of material on which the Customs Authorities had relied and it was for assessee to give a suitable explanation, persons who had given information should be examined in presence of assessee or should be allowed to be cross-examined by them on the statements made before the Customs Authorities - It was clarified that formal cross-examination was procedural justice and principles of natural justice did not require that there should be a kind of formal cross examination - The confessional statements are out of the ambit of Section 9D as relied upon by the assessee - The co-noticee, if his statement amounts to confession, cannot be compelled to be cross examined, there would be no violation of principles of natural justice in that case - Though ample opportunity with the assessee has to be granted to put forth his defence, however, the assessee cannot be compelled to self-incriminate himself - Permission for cross examining Shri Vineet Saluja and Shri Pradeep Sharma has rightly been denied - As far as Ms. N. Rashmi and Shri Amit Mallik are concerned, since their statements were given during the investigation do not amount to confession, they both can be allowed to cross-examine but not against their wish - Appeal is partly allowed by way of remand directing adjudicating authority to seek the consent of Ms. N. Rashmi and Shri Amit Mallik qua their willingness to be cross examined and to accordingly re-decide the issue of cross examination of said two witnesses, afresh: CESTAT
- Appeal partly allowed: DELHI CESTAT
2019-TIOL-2430-CESTAT-BANG
Joakim Yesudasan Vs CC
Cus - The appellants herein are employees of one M/s MBL Logistics Pvt Ltd & were engaged as sale agent, shipping agent and shipping line agent under the jurisdictional Customs commissionerate - The first appellant was engaged as Operations Assistant & handled Customs work for the company - Therafter, the company was investigated & the appellant's statements were recorded u/s 108 of the Act - It was claimed that such statement was recorded under threat, coercion & undue influence after search & seizure proceedings were conducted at the premises of M/s MBK Logistics Pvt Ltd - SCN was issued u/s 124 of the Act, proposing penalty u/s 117 - In response, the first appellant requested video footage of his examination & also retracted his statement - It was also alleged that copies of necessary documents were never provided and that he was not given enough time to peruse the relevant documents at time of cross examination - On adjudication, the proposals in the SCN were confirmed - Hence the present appeals.
Held - The penalty u/s 117 is based solely on the statements recorded u/s 108 of the Act - Such statements were found to have been retracted - Allegations of torture & inhuman treatment during recording of statements were also levelled - Copies of statements and other RUDs were not supplied to the appellants, hence depriving them of a chance to defend themselves properly - Moreover, the Revenue filed no police complaint alleging theft of its seal - Further, it is strange for the Commr.(A) to have not penalised the Senior Manager or the MD of the company - If such officials are exempted from penalty u/s 117, there is no reason to penalise the appellants herein - Also considering these contradictions and inconsistencies in the investigation, the Revenue has been unable to prove its allegations with cogent evidence warranting imposition of penalty u/s 117 - Hence the same is set aside: CESTAT
- Appeals allowed: BANGALORE CESTAT |
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