SERVICE TAX

2019-TIOL-2483-CESTAT-ALL

MR Proview Real Tech Pvt Ltd Vs CCE & ST

ST - The assessee was engaged in providing taxable services falling under category of 'Construction of Residential Complex' - It was noticed that the assessee was engaged in construction of residential complexes under the names of Shalimar City, Officer City II, Studio One, Delhi 99 etc w.e.f. 01.07.2010 and were collecting service tax from the prospective buyers and were not depositing the same with the exchequer - A SCN was issued invoking extended period of limitation and leveling allegation of suppression of facts from the knowledge of Department and intention to evade payment of service tax - The service tax payable was around Rs.12.81 crore whereas the payment was only through debit of around Rs.4.05 crore - The service tax payable during the calendar year 2010 was not paid till October 2012 - Service tax payable up to September 2011 were not paid till October 2012 - Then service tax payable for the months of November and December 2011 were paid in January and February of 2013 - Service Tax payable in year 2012 was paid in calendar year 2013 - Further service tax payable for remaining period was also delayed by up to 243 days - Original Authority has confirmed the demand of interest - Therefore, it is clear that the assessee had not paid interest on delayed payment of Service tax before issuance of SCN - The allegations of suppression are therefore proved and since the assessee had not deposited service tax on due date and not paid interest when deposited belatedly, intention to evade is established - No interference is required in impugned order: CESTAT

- Appeals rejected: ALLAHABAD CESTAT

2019-TIOL-2481-CESTAT-DEL

International Logistics Vs CC & CE

ST - The SCN was issued for three services, namely man power, security and miscellaneous reimbursement - The Adjudicating Authority earlier in its order dated 30 November 2006 had dropped the levy of service tax for miscellaneous reimbursement but had confirmed the demand for man power and security - In the appeal filed by assessee before the Commissioner (A), the demand confirmed by Adjudicating Authority for man power and security services was also dropped - The Department was aggrieved only by dropping of the demand in regard to man power and security services and it is for this reason that the Department had filed the appeal before the Tribunal - The Tribunal had remanded the matter to the Adjudicating Authority to pass a fresh order who was, therefore, required to re-determine the quantum of tax for two services, namely man power and security services - There was no occasion for Adjudicating Authority to determine the quantum of tax for 'miscellaneous reimbursement' as that was not even an issue before the Tribunal - The assessee is therefore, justified in ascertaining that the order passed by the Adjudicating Authority to the extent it quantifies the amount of service tax for miscellaneous reimbursement needs to be set aside - Same is set aside: CESTAT

- Appeal allowed: DELHI CESTAT

CENTRAL EXCISE

2019-TIOL-2013-HC-MP-CX

Commissioner, CGST & CE Vs National Fertilizers Ltd

CX - The assessee-company manufactures Urea & sells the same to the ultimate consumers - During the relevant period, the assessee filed Form R, claiming refund of service tax paid by it to M/s Gas Sale and Transportation of APM Gas; Gas Sale and Transportation of PMT Gas; Gas sale and Transportation of SPOT Gas and in respect of supply and transport agreement - The service tax on transportation of natural gas was paid on provisional rate basis - The Petroleum and Natural Gas Regulatory Board revised the transmission charges - The Revenue issued SCN proposing to reject the refund on grounds that there was no evidence of any service tax having been paid by the assessee or that the incidence of such tax had not been passed on by the assessee - Such proposals in the SCN were confirmed in the O-i-O - Further, such O-i-O was upheld by the Commr.(A) - Such findings were reversed by the Tribunal - Hence the Revenue's appeal. Held - Jurisdiction - The first question is whether the issue of determination of any question relating to rate of Excise duty or to value of goods for assessment purposes, would bar the jurisdiction of this court - In the present case, the controversy does not relate to either the classification of service availed or to the rate at which such service is availed or provided - The transmission charges are filed by the Petroleum and Natural Gas Regulatory Board - The issue in fact pertains to whether based on alleged credit note given by the service provider, the assessee is entitled for refund de hors stipulations contained in Section 11B and Section 12B of CEA 1944 - Hence, the preliminary objection qua sub-section (1) of Section 35G that the appeal is not tenable, is negatived: HC

Held - Merits - There is no material on record establishing that the assessee has not passed on the burden of tax to its customers in response to the SCN - The assessee did not adduce any proof that the incidence of the duty had not been passed on by it - The entry of recoverable amount of service tax shown in theor books of accounts as per the CA certificate does not prove that the incidence of tax was not passed on to the ultimate buyer of manufactured products - The noticee provided no documentary evidence showing that while working out the cost of production of their product and claiming subsidy from the Government, it has not added in the cost of production of their product, the element of service tax sought to be refunded - Hence the assessee's assertion that it itself borne the incidence of tax is unacceptable as not supported by documentary evidence - Hence refund cannot be sanctioned - However, the Tribunal cryptically decided the appeal, by observing that since the tariff is managed by the statutory body to be followed by the gas companies and the service tax payment is provisional and so with determination of final rate, a right accrues to the assessee & so the limitation be construed accordingly - The Tribunal overlooked the fact that M/s GAIL had not sought a provisional assessment and it was not its case that on final assessment, there is a determination that the service tax paid is on the higher side and therefore it should revert to the service recipient - Hence the Tribunal erroneously held that refund be treated as being within time and that the claims are to be processed - Shifting the burden on the Revenue to determine whether the assessee passed on burden of tax on the final consumer, cannot be countenanced: HC

- Revenue's appeal allowed : MADHYA PRADESH HIGH COURT

2019-TIOL-2480-CESTAT-ALL

Hindalco Industries Ltd Vs CCE & ST

CX - The assessee was engaged in manufacture of aluminium and aluminium products and availing facility of Cenvat credit - They were receiving raw material Bauxite-ore from various mines which were named by assessee as Lohardaga Mine situated in the State of Jharkhand, Bagru Mine situated in the stated of Jharkhand and Samri Mine situated in the state of Chhattisgarh - Various input services were received at the said mines - The said input services were distributed by said mines to the manufacturing units of assessee - The input services were GTA Service and Business Auxiliary Service - The mines received the input services, availed the Cenvat credit of the same and distributed Cenvat credit so availed to the manufacturing unit - It appeared to revenue that such Cenvat credit was not admissible to the assessee - After amalgamation w.e.f. 01.04.2004 and as per the agreements entered into between the assessee and the respective State Government for enjoying the rights of mining, the mines located at various places which were named by assessee as Lohardaga mine, Bagru mine and Samri mine were supplying Ores to the assessee - In the absence of any evidence that the said mines supplied ores to any other entity, as held by Supreme Court in case of Madras Cement - 2010-TIOL-59-SC-CX the said mines were capitive mines of assessee - The Supreme Court in case of Vikaram Cement - 2006-TIOL-04-SC-CX-LB had ruled that if the mines are the captive mines then the Cenvat credit on capital goods used in such mines will be available to the assessee - The above stated mines were captive mines for the assessee also due to reason that revenue has stated on record that the records being maintained at various mines were having the same PAN Number - Therefore, the Cenvat credit of service tax on services availed at mines was admissible to the assessee - Further, assessee was availing Cenvat credit received through invoices issued by Lohardaga mines which has registration as 'Input Service Distributor' and therefore, said Cenvat credit was admissible to them - As held by Gujarat High Court in case of Dashion Ltd. - 2016-TIOL-111-HC-AHM-ST even for the period when Lohardaga unit was yet to register as input service distributor the Cenvat credit distributed by said Lohardaga mine was admissible to the assessee, since Lohardaga mine was part and parcel of the establishment of assessee - Some discrepancies found with the invoices were only procedural infirmities and did not come across any evidence on record to establish that the services covered by said invoices were not availed by assessee - The Input Service Distributor is covered by Rule 7 of CCR, 2004 and there were no allegation that the procedure required to be followed as per said Rule 7 was not followed by assessee - The impugned order is not sustainable: CESTAT

- Appeal allowed: ALLAHABAD CESTAT

2019-TIOL-2479-CESTAT-MAD

ITC Ltd Vs CGST & CE

CX - Input Service - Rule 2(l) of CCR, 2004 - Whether appellants are eligible for credit on outdoor catering services availed prior to 1.4.2011 as well as after the said date.

Held: Exclusion part (C) of the definition of ‘input service' after 1.4.2011 states that when outdoor catering services are availed for personal use and consumption of an employee, the same does not qualify as 'input service' and, therefore, not eligible for credit - the decision of Larger Bench of the Tribunal in the case of Wipro Ltd. - 2018-TIOL-3256-CESTAT-BANG-LB has answered the specific issue as to whether credit is eligible on outdoor catering services post 1.4.2011 and held that it is not eligible even if availed in compliance with statutory requirement - by judicial discipline, respectfully following the Tribunal's Larger Bench decision in Wipro Ltd., which is on the specific point, the Bench is of the view that credit is not eligible - the demand along with interest in respect of outdoor catering services post 1.4.2011 is, therefore, upheld - the credit in respect of employer's contribution for the period prior to 1.4.2011 is eligible - regarding penalties imposed, being an interpretational issue, penalty imposed prior to 1.4.2011 as well as post 1.4.2011 is unwarranted and requires to be set aside, and is set aside - the impugned orders are set aside to the extent of setting aside the penalties imposed entirely without disturbing the demand along with interest for the period after 1.4.2011 - the appeals are partly allowed on above terms : CESTAT [para 7, 9, 10, 11, 12]

- Appeals partly allowed: CHENNAI CESTAT

2019-TIOL-2478-CESTAT-MUM

JSW Steel Coated Products Ltd Vs CCE & ST

CX- Appellant is engaged in manufacturing of CR coils/sheets, color coated/galvanized sheets - SCN dated 10.12.2015 issued to appellant proposing recovery of wrongly availed CENVAT credit during the period April, 2014 to March, 2015 on the grounds that address of the appellant mentioned in the input invoices was not that of factory of manufacturing to qualify as valid duty paying documents and that payment of value of service and ST was paid by the CHA sub-contractor and not by CHA itself - entire demand of Rs.17.05 lakhs confirmed - on appeal, the Commissioner (Appeals) reduced the duty demand to Rs.12.33 lakhs - appeal to CESTAT.

Held: In view of Tribunal decision in the case of Om Textiles - 2006-TIOL-1524-CESTAT-MUM invoices showing wrong address, if subsequently corrected, are to be treated as eligible documents for availment of credit - further, if duty is paid by the sub-agency who carried out the work and passed on through the intermediary, credit of ST paid in such process is admissible credit - the appeal is allowed by setting aside the impugned order: CESTAT [para 5, 6]

- Appeal allowed: MUMBAI CESTAT

CUSTOMS

2019-TIOL-2012-HC-MAD-CUS

Cus - Case of the petitioner is that as per the four Bills of Entry, the importer has classified natural pepper under Tariff item 3302 1010 in two Bills of Entry and Tariff item 3302 1090 in the other two Bills of Entry; that since the respondent had not given the reasoning as to why these tariff items will not be applicable to the description of their product, it would amount to a non-speaking order; secondly, the order is liable to be set aside on the ground of laches, since it was belatedly disposed without adhering to the time limit stipulated in the Circular 732/48/2003-CX ., dated 05.08.2003 of the Department Counsel for Revenue submits that since the reasoning has been given in the impugned order for the specific description of pepper and as such, it cannot be termed as a non-speaking order; that the Circular referred to by petitioner is not mandatory in nature and is only directory and, therefore, the impugned order need not be set aside on that ground.

Held: When the Bills of Entry specifies a tariff item, it would be appropriate for the respondent to have discussed as to why these tariff items are not applicable to the petitioner's product - On this ground, it can be said that the impugned order is bereft of reasoning and, therefore, requires reconsideration - In the instant case, the impugned order came to be passed after more than two years from the date when the personal hearing had concluded - Though, the Circulars of the Department may not be mandatory to be complied with, the respondent atleast should have justified the reason for such belated disposal of the case after the personal hearing - On this score also, the order is liable to be set aside - impugned order dated 16.01.2014 is set aside and the matter is remanded - respondent to pass a speaking order atleast within thirty days from the date of conclusion of the personal hearing Petition disposed of: High Court [para 6 to 8]

- Petition disposed of : MADRAS HIGH COURT

2019-TIOL-2477-CESTAT-MAD

Steel Authority of India Ltd Vs CC

Cus - The issue is with regard to interest on delayed refund - As per Section 27 of Customs Act, 1962, the assessee is eligible for interest in case refund is not sanctioned within three months from the date of application - On perusal of facts presented, it is seen that the department has filed stay application before the Tribunal - The stay application was dismissed on 30.4.2013 - The refund ought to have been sanctioned to the assessee on dismissal of the stay application - Thus, there is indeed delay in sanctioning the refund - The assessee is therefore eligible for interest on the delayed refund - Assessee is eligible for interest from three months after the dismissal of stay application - The impugned order rejecting the interest on delayed refund is unjustified and same is set aside - The appeal is allowed with a direction to the lower authority to quantify and pay the interest payable on the delayed refund amount with immediate effect: CESTAT

- Appeal allowed: CHENNAI CESTAT

2019-TIOL-2476-CESTAT-KOL

CC Vs VS Impex

Cus - COD of 111 days - In view of the reasons as explained by Revenue, the delay in filing the appeals before Tribunal is condoned - The Revenue has also filed Miscellaneous Applications for withdrawal of their appeals in terms of litigation policy vide Board's instruction being F.No. 390/Misc./163/2010-JC - Same are dismissed as withdrawn: CESTAT

- Appeals dismissed: KOLKATA CESTAT