SERVICE TAX

2019-TIOL-2570-CESTAT-DEL

ST - The assessee is providing 'Outward Catering Service' for which they are duly registered with the Department - M/s V.K. Bhandari has also acquired a rental premises of M/s Bhandari Farm & Resort at some other place on rent vide agreement dated 01.11.2009, and providing 'Mandap Keeping' service - M/s V.K. Bhandari is holding a separate registration for taxable services provided by him - Scrutiny of entries in seized records and also the data retrieved from LAPTOP at the business premises revealed that the assessee appeared to have not discharged service tax against many entries in these records for services provided by them - Scrutiny of documents further revealed that entries of service provided by two registrants are mixed-up in common record and, therefore, was not possible to ascertain as to which entry is related to which firms - As regards to the demand of service tax of Outdoor Catering Service, it is raised on the basis of entries available in seized documents - During investigations, assessee has explained that various person approached them for enquiry of catering for their functions - The assessee suggested such persons various options of food to be served during such function and offer their quotations - It is their submission that out of such several enquiries only few have materialized and whenever they provided catering against such materialized enquiries, they have issued bills and paid proper Service Tax - The Department has presumed that catering was provided against all enquiry appearing in the record - The department has not confirmed this facts by recording statement of persons whose name are appearing in the record and presumed that catering was provided for all such persons - The SCN alleges provision of service for several crore against which tax is not discharged, however, there are no evidence of recovery of unaccounted money - Thus, demand is raised on merely on the assumption that catering was provided by assessee against all the entries in the resumed document - There are no corroborative evidences for such allegation, in absence of which, allegations contained in SCN cannot survive - Further, the demand is also raised on the basis of data contained in the laptop without following the procedure of Section 36 B of CEA, 1944 as made applicable to the service Tax matter under the provisions of Section 83 of FA, 1944 placing reliance in case of M/s Popular Paints and Chemicals 2019-TIOL-1239-CESTAT-DEL - Thus the demand is not sustainable on this score as well: CESTAT

- Appeal allowed: DELHI CESTAT

2019-TIOL-2569-CESTAT-DEL

ST - The assessee is engaged in providing various construction services - The dispute covers the period 2006-07 to 2010-11 - During this period, assessee provided various services such as construction of boundary wall, sewerage and drainage system, roads and laying of pipeline - Such services were provided in residential complexes being constructed by M/s Hansal Properties and Infrastructure, Sahara India Ltd., and Stadia Landmark - Since said services were provided in relation to construction of complex, Revenue took the view that the activity is taxable under the category of Construction of Residential Complex Services - The dispute which covers the period 2006-07 to 2010-11, is in respect of the activity of Construction provided by assessee in relation to Construction of Residential Complex by certain builders - From the nature of service provided, it is evident that the assessee was also required to supply construction material to be used in the activity of construction - Consequently the activity is in the nature of composite service - In case of Larsen and Turbo 2015-TIOL-187-SC-ST , the Apex Court has held that composite services are to be classified only under the category of Works Contract Services with effect from the date of introduction of such service i.e. 1.06.2007 - The Apex Court has also categorically held in its finding that such composite services cannot be liable for service tax under any other category prior to introduction of WCS - In the light of decisions of Apex Court, there can be no levy of service tax for the period upto 31.05.2007 - The perusal of the Show Cause Notice indicates that the demand for the service tax has been raised under the category of Construction of Residential Complex Services - In view of the Apex Court decision in the case of Larsen and Tubro, the liability for service tax, if at all, can be raised only under the category of WCS - Perusal of the decisions relied upon by assessee leads to the position that the demand raised under the Construction of Complex Services cannot be upheld in view of the Apex Court decision: CESTAT

- Appeal allowed: DELHI CESTAT

CENTRAL EXCISE

2019-TIOL-2568-CESTAT-DEL

CX - The main assessee is engaged in manufacture of Chewing Tobacco in the brand name of 'Ratna Chhap Zafrani Patti,' 'Prabhat brand Zafrani Patti' and 'Rajratna special Qiwam' - It is alleged that assessee was indulging in clandestine removal of their final goods - The mandate of Section 9D of Central Excise Act has not been followed by Commissioner - In view of the law declared by High Court of Punjab and Haryana in G. Tech Industries 2016-TIOL-2749-HC-P&H-CX , if the provisions of Section 9D is not followed, then the statement recorded under Section 14, cannot be relied upon - In the present case, the Commissioner has not followed the mandate of section 9D, which requires the witness to be examined in Adjudication proceedings, which includes cross–examination, therefore, the statements recorded under Section 14 have to be eschewed from evidence - Shri Purshottam Kumar Arya and Shri K. N. Mehrotra retracted from their statements, after getting bail from the Court of Additional Session Judge, New Delhi - The High Court of Delhi in case of Vishnu & Co. , held that if a statement is retracted, then the said statement cannot be relied upon - The department is relying upon the records recovered from the premises of M/s. Rudraksha Marketing, Delhi - However, assessee was having a family dispute with them, which is evident from the pleadings and various documents annexed with the appeal - Therefore, the recovered documents cannot be relied upon in isolation - M/s Rudraksha Marketing and M/s Aggarwal Trading Co. were also dealing or distributing the goods manufactured by competitors/ relatives of assessee - The charge of clandestine removal is a serious charge, and has to be proved by the department by bringing on record positive and corroborative evidence - There is no credible evidence which shows that the assessee is involved in clandestine removal of goods - Accordingly, the impugned order is set aside: CESTAT

- Appeals allowed: DELHI CESTAT

2019-TIOL-2567-CESTAT-DEL

CX - The assessee is availing the benefit of Cenvat Credit of duty paid on inputs as also of service tax paid on Input Services - The provisions of Rule 4 (7) of CCR, 2004 were amended vide Notfn 21/2014 laying down a time limit of six months from the date of issuance of invoices, for the purpose of availing credit - As per audit objection, it was found that in respect of certain invoices, the assessee had availed credit beyond the period of six months from the date of issuance of the same - The issue is no more res Integra in view of Indian Potash Ltd. 2019-TIOL-120-CESTAT-ALL and Hindustan Coca Cola Beverages Pvt. Ltd. 2019-TIOL-149-CESTAT-BANG wherein it was clearly held that the six month limitation provided w.e.f. 01/09/2014 would not apply to cenvatable invoices issued prior to said date - The other decisions relied upon by assessee are also to the same effect but multiplying the precedent decisions would not make a difference as it is a settled law - Further, not only various Tribunals' decisions but Delhi High Court also in case of Global Ceramics Private Limited and Ors. 2019-TIOL-1129-HC-DEL-CUS has also observed to the same effect in their decisions - As such, issue stands settled in favour of assessee - However, the fact that the invoices in question were prior to 01/09/2014 is required to be verified - Accordingly, the impugned order is set aside: CESTAT

- Appeals disposed of: DELHI CESTAT

2019-TIOL-2566-CESTAT-BANG

CX - Appellant, a partnership firm engaged in the manufacture of Ready Mix Concrete, cleared the same without payment of CE duty for the period from October 2013 to September 2015 - SCN issued demanding duty of Rs.20.31 lakhs - demand confirmed along with interest, equivalent penalty imposed on the appellant, penalty of Rs.20.31 lakhs also imposed on M.A.Mathew, Partner-Commissioner (A) rejected the appeal of the appellant - with regard to Mathew, the Commissioner (A) held that he did not file any appeal as he has not paid the statutory pre-deposit towards the penalty imposed on him for filing the appeal and the original order has become final and binding - appeal to CESTAT.

HELD: AR has informed that the Appellant has collected the duty from its customers but did not deposit the same with the Government which amounts to suppression of fact with intent to evade duty - further, the appellant has also not filed returns - once the equal penalty has been imposed on the firm, the imposition of equal penalty of Rs.20.31 lakhs on the Partner is not justified and, therefore, penalty is reduced to Rs.1 lakh on Shri M.A. Mathew, Partner of the firm under rule 26 of Central Excise Rules, 2002 -as far as other demands on the firm are concerned, no infirmity found in the impugned order, which is upheld by dismissing the appeal of the appellant : CESTAT [para 6]

- Appeal of appellant dismissed/ Appeal of Partner partly allowed: BANGALORE CESTAT

CUSTOMS

2019-TIOL-2565-CESTAT-MUM

Cus - These appeals pertains to the import of two 'harbour mobile cranes' vide bill of entry - The primary allegations against importer which were upheld are that the duty foregone on these cranes had not been debited in licence issued under EPCG scheme of FTP and that the permissible debit was limited to Rs. 60,59,395/- - The impugned order has noticed that the importer had initially sought exemption under notfn 21/2002-Cus and 6/2002-CEx as well as for benefit under notfn 97/2004-Cus intended for operationalizing the said scheme in FTP - As the two exemptions which were cited in bill of entry are mutually exclusive, only the eligible concession/exemption could have been made extended to import by the assessing officer - From the records, it is found that such an elimination has not been carried out despite which the adjudicating authority has proceeded on the assumption of lack of eligibility for exemption under notfn 21/2002-Cus along with notfn 6/2002-C.Ex - It also appears that the absence of debit of entire duty saved in the licence was held to suffice for recovery of differential duty - The impugned order reasons that the amended licence was not produced before the assessing officer with deliberate intent to evade liability - That conclusion, however, did not prevent the adjudicating authority from taking notice that the importer did not utilize the unutilized amount of duty saved limits for effecting any other import or was deficient in fulfilling export obligation to the extent of duty actually saved by resort to the scheme - It was for the adjudicating authority to determine, in the absence of such exercise by the assessing officer at the time of clearance, the eligibility for import under the scheme for which licence of competent authority was furnished - Any consequence, in terms of duty, confiscation or penalty, should have emanated from conformity, or lack thereof, with the said scheme - Matter is remanded back to the original authority to complete the process of adjudication - The penalties under section 114A and section 114AA of Customs Act, 1962 are also set aside to be determined afresh by the original authority in accordance with law: CESTAT

- Matter remanded: MUMBAI CESTAT

2019-TIOL-2564-CESTAT-DEL

Cus - The assessee is holder of a Customs Broker Licence - On the basis of an enquiry conducted against assessee, his CB licence has been revoked and his security deposit of Rs. 75,000/- has been forfeited vide impugned order - The required KYC were produced by assessee to the Department at a later stage to the Licence Issuing Authority and not to the investigating Agency - This suggests that the necessary KYC documents were actually not present with the assessee when the investigating agency visited and asked them to produce the KYC documents of the importer firm - This very facts prove that the assessee had indeed not negotiated the clearance of impugned consignments and have allowed his licence to be misused by other persons and have thus violated the provisions of Regulation 11 (a) of CBLR, 2013 - There is nothing on record to suggest that any mis-declaration with respect to the consignments examined under Bill of Entry was in the knowledge of CB or his authorized representative Mr. Ajesh Kumar, the G Card Holder or even Mr. Surender Kumar who represented before the Investigating Authorities on behalf of the CB - Thus the charge of failure to advise the client to comply with Regulation 11(d) or the charge of concealment of any document as per regulation 11(j) does not hold good as these charges are not substantiated by any positive evidence with respect to knowledge of CB or circumstantial evidence like extra pecuniary gain - However, assessee has failed to give any plausible explanation with respect to authorizing of Shri Surender Kumar who was not his employee and neither a G Card Holder or H card Holder to represent on him on his behalf or conduct a business through him - This facts establishes that the assessee has allowed some other persons to use his CB licence in violation of CBLR, 2013 - There is also nothing on record to show that assessee was too prevented from being present personally or through his authorized G Card or H Card representative when called by the investigating agency for participating in examination of impugned import consignments, the arguments adduced by them in their support are without valid evidences and thus assessee has violated the provisions of Regulation 11(b) - Thus, no need to interfere with the impugned order: CESTAT

- Appeal dismissed: DELHI CESTAT