SERVICE TAX

2019-TIOL-2054-HC-MAD-ST

ST - The assessee-company is a 100% EoU engaged in manufacturing and exporting garments - During the relevant period, it claimed Cenvat credit of service tax paid on commission paid to foreign agents who procured customers and orders - Such credit was denied by the Revenue - Subsequently, the Tribunal allowed the assessee's appeal and held that the assessee was eligible to avail such credit - Hence the Revenue's appeal.

Held - The Tribunal took a correct view of the matter and rightly found that the foreign agents of the assessee rendered post sales and post export services, apart from also being engaged in market exploration, adviding the designs for manufacture and supplies for specific orders procured by them and assisting in the clearance of the garments and export to foreign countries - The commission agents also earn foreign currency as per their obligations as 100% EoU - Hence the service tax paid on commission to foreign agents could not be denied benefit of cenvat credit under the CCR 2004 - The findings of the Tribunal are backed by the High Court decisions in the cases of Commissioner of Central Excise, Ludhiana v. Ambika Overseas and Coca Cola India Pvt. Ltd. v. Commissioner of Central Excise, Pune-III - Hence such findings warrant no interference with: HC

- Revenue's appeal dismissed: MADRAS HIGH COURT

2019-TIOL-2545-CESTAT-DEL

ST - The assessee which is the Municipal Corporation for the city of Jaipur, floated a tender for sale of space for hoarding in public places - The tender was for the period 01.06.2006 till 31.03.2007 - The auction was conducted on 21.04.2006 and the entire consideration for the said period was received by assessee in advance - Revenue was of the view that service tax is liable to be paid by assessee on the amount so received under the category of "sale of space or time for advertisement services" which was included in the statute book w.e.f. 01.05.2006 - The auction carried out by assessee for licensing of hoarding was on 21.04.2006 and at the time the entire consideration for the period of contract i.e. 01.06.2006 to 31.03.2007 was received by assessee - During the period on or after 01.05.2006, assessee did not receive any consideration even though the service was to be provided for the period when the levy was in existence - The consideration has been received on 21.04.2006 when there was no levy in existence and since no consideration has been received after 01.05.2006, the levy of Service tax cannot be sustained: CESTAT

- Appeal allowed: DELHI CESTAT

CENTRAL EXCISE

2019-TIOL-2061-HC-MUM-CX

CCE & ST Vs Taha Wires Pvt Ltd

CX - Motion taken out for Condonation of delay of 621 days - order passed by Prothonotary and Senior Master dismissing the Applicant's appeal for non-removal of office objections - When the reorganization of the Appellant took place, after the introduction of Goods and Service Tax Act, 2017 the papers regarding this appeal were transferred to Daman Commissionerate and it is at that point of time, on enquiry, the Applicant realized that the appeal was not numbered and it stood dismissed consequent to the order dated 17 March 2016 passed by the Prothonotary and Senior Master; that on account of the above misunderstanding of the order dated 3 October 2016 passed by this Court, the Applicant could not take steps early to set aside the order dated 17 March 2016.

Held: Bench is satisfied with the reasons for the delay in filing this application - notice of motion in terms of prayer clauses (a) and (b) is allowed: High Court [para 4 to 6]

- Notice of motion allowed: BOMBAY HIGH COURT

2019-TIOL-2544-CESTAT-BANG

CX - The assessee is engaged in manufacture of flooring leveling compounds, tile adhesive and grouts, water proof compounds and are availing the facility of cenvat credit under provisions of CCR, 2004 - The Department entertained a view that the assessee has wrongly availed the cenvat credit on input services because all services are not directly or indirectly used in or in relation to the manufacture of final products - The denial of cenvat credit on input services availed at the depot viz. accounting services, audit services, renting of immovable property and telecommunication services is not sustainable in law - Depot and branches play a crucial role for the manufacturers as orders have to be collected from customers and manufactured goods are stored prior to their sale - This facilitates higher volume for manufacturing at factory - In case of Tata Steel Ltd. 2017-TIOL-3021-CESTAT-MUM , credit was allowed on input services received at depot as these were used for overall business activity of manufacturing by the assessee - In the case of Tally Solutions Pvt. Ltd. 2017-TIOL-1654-CESTAT-BANG , Tribunal allowed the credit on services received at branches as these branches facilitated manufacture - In view of various decisions, cenvat credit on input services availed at depot is allowed being input service - Similarly, denial of cenvat credit on GTA services from factory to depot and transit insurance from factory to depot are also allowed being input service - These services are used for removal of goods from the factory to depot for sale at depot - Therefore, the place of removal of goods is depot and transportation services up to the place of removal are covered under inclusive part of the definition - With regard to denial of cenvat credit on Clearing and Forwarding Services, these services are availed for purpose of procuring inputs, exporting finished goods outside India, therefore these services are relating to procurement of inputs and transportation of goods up to the place of removal and are covered under the inclusive part of the definition of 'input service' and therefore the same is qualified as 'input service' - With regard to denial of cenvat credit on Intellectual Property Right service is concerned, assessee pays royalty to the parent companies and the same is directly related to the manufacturing process of final products - Hence the credit related to Intellectual Property Right Service is eligible - Assessee is not liable to penalty on wrong availment of GTA services up to the customer's premises because it was an interpretational issue and was settled by Apex Court in case of Ultratech 2018-TIOL-42-SC-CX and therefore no intention to evade service tax can be imputed on assessee: CESTAT

- Appeal disposed of: BANGALORE CESTAT

2019-TIOL-2543-CESTAT-ALL

CX - The assessee was engaged in manufacture of Collar Joint Pipe, Kiln Shell and other machinery parts - For the month of January 2008, assessee had discharged part of their duty liability on 15 February, 2008 by debiting their cenvat account - For the month of January 2008, remaining duty liability were discharged by assessee through PLA payments on 26 February, 2008 and 12 March, 2008 - It appeared to Revenue that as on 31 January, 2008, there was no balance in the cenvat account maintained by assessee and therefore payment of the said amount through debit of cenvat account on 15 February, 2008 towards discharge of central excise duty for the month of January, 2008 was in contravention of provision of Sub-Rule (4) of Rule 3 of CCR, 2004 - The Gujarat High court in case of Advance Surfactants India Ltd. 2017-TIOL-1538-HC-AHM-CX has held that there is no one to one co-relation between raw material and finished goods and therefore to restrict utilization of credit earned up to the last date of duty payment is contrary to the principals of Cenvat Credit Rules and therefore the High Court has held that Sub-Rule (4) of Rule 3 of CCR, 2004 is ultra vires - There is no stay on the operation of said Ruling by Gujarat High Court in said case of Advance Surfactants India Ltd. , therefore, after applying the said ruling to the present case the debit of Rs.1,80,764/- on 15 February, 2008 for payment of Central Excise duty for the month of January, 2008 is in accordance with law - Therefore, default remained only from 05 March, 2008 to 12 March, 2008 - During the period from 05 March, 2008 to 12 March, 2008 there was no payment of central excise duty through debit of cenvat credit - Therefore, there were no grounds to invoke provisions of Rule 8(3A) of Central Excise Rules - The impugned orders are not sustainable: CESTAT

- Appeals allowed: ALLAHABAD CESTAT

CUSTOMS

2019-TIOL-2542-CESTAT-ALL

Cus - The main allegations are against one M/s A & R Mesh Solutions, importer of the goods, who declared the same in Bills of Entry as 'Water Glass' - However, inspection of containers revealed that the imported goods were firecrackers which is a prohibited item for import - The role attributed by Revenue to the present assessee is that he filed the online bill of entry for said import and as such must have been aware of the fact that the goods were being declared - The use of expression 'must have' is indicative of the fact that Adjudicating Authority is not sure about the role played by said assessee - Otherwise also, filing of online bill of entry by itself cannot be held to be punishable offence unless Revenue produce evidences to establish that the person concerned, by his active involvement, aided and abated the importer - No justifiable reasons found to impose penalty upon assessee - Accordingly, the same is set aside: CESTAT

- Appeal allowed: ALLAHABAD CESTAT