2019-TIOL-2622-CESTAT-MAD  

CGST & CE Vs Updater Services Pvt Ltd

ST - The assessee is engaged in various services - On verification of records, it was noticed that the assessee had realized an amount of Rs.63,90,740/- for cleaning services rendered to the Child Trust Hospital but had not discharged the service tax on such amount - Further, it was noticed that the assessee had availed abatement of 50% in regard to outdoor catering service under Notfn 1/2006-ST - As regards to the demand of service tax on cleaning services, assessee has produced documents to show that the said hospital been given approval under section 80G(5)(iv) of the Income Tax Act for deduction in donations made to Kanchi Kamakoti Child Trust Hospital - The department merely alleges that the hospital is receiving fees and therefore cannot be considered as non-commercial hospital - No evidence is put forth by department that the hospital has collected expenses / fees from patients for treatment - If a hospital merely collects registration fees for registration of patient and does not collect expenses for treatment, it cannot be said that the said hospital would fall out of the category of non-commercial building / hospital - The conclusion arrived by Commissioner (A) that said hospital is a non-commercial hospital and the services rendered by assessee to the hospital would not come within the purview of service tax requires no interference - The next issue is with regard to the demand confirmed in respect of outdoor catering service for the normal period - There are no exempted services provided by the assessee - They had availed the benefit of notfn 1/2006 - One of the condition in said notification is that the assessee should not avail credit on input services used for providing such output service - They have availed credit on various input services like telephone, courier, security which are used for providing outdoor catering service - On such score, it is very much clear that there is violation of condition of the notification - The demand confirmed by Commissioner (A) for the normal period on outdoor catering service is legal and proper - Resultantly, the impugned order does not call for any interference: CESTAT

- Appeal dismissed: CHENNAI CESTAT

CENTRAL EXCISE

2019-TIOL-2623-CESTAT-MAD  

Mudhra Fine Blanc Pvt Ltd Vs CGST & CE

CX - The assessee has challenged the denial of CENVAT Credit in respect of Credit availed on GTA Services, Invoices addressed to Corporate Office, Credit availed on Hotel stay and Credit availed on Auction Services - As regards to Credit availed on GTA Services, this Bench has been consistently remanding the matter back to the file of Adjudicating Authority in the light of subsequent Board Circular 1065/4/2018-CX and also the binding decisions of Supreme Court in cases of M/s. Ultra Tech Cement Ltd. 2018-TIOL-42-SC-CX and M/s. Roofit Industries Ltd. 2015-TIOL-87-SC-CX to consider the plea of assessee that the sale was on 'FOR' destination basis - Therefore, the Adjudicating Authority shall afford opportunities to the assessee on this, ascertain actual facts and then give a finding - With regard to invoices addressed to Corporate Office, the registration as ISD is not mandatory, which is evident from C.B.E.C. Circular 1063/2/2018-CX wherein the Board has accepted the decision of High Court of Gujarat in case of M/s. Dashion Ltd. 2016-TIOL-111-HC-AHM-ST as also the decision in case of M/s. National Engineering Industries Ltd. 2016-TIOL-922-HC-RAJ-CX wherein it has been held that non-registration of ISD is only a procedural irregularity, for which reason the benefit of CENVAT Credit cannot be denied to the assessee - As regards to Credit availed on Hotel stay, the First Appellate Authority has not referred to or relied on any piece of evidence as to his observation that "when the services are used primarily for personal consumption of any employee, then such input credit on such services is not an eligible credit" and nor is it the case of Adjudicating Authority that the same were used for 'personal consumption of any employee' - Therefore, the denial is not proper and is only on assumptions - Accordingly, the impugned order to this extent is set aside - As regards to credit availed on Auction Services, both the authorities below have denied the CENVAT Credit holding that the said service is a post manufacturing activity - In effect, it only means that the same is relating to commission paid towards 'sales' and there cannot be anything other than this post the activity of manufacture - The definition of Rule 2(l) of CCR, 2004 covers commission paid on sales promotion as well, which is in relation to manufacturing activity - Hence, the CENVAT Credit availed on Auction Services in case on hand also deserves credit, more so because the sale by auction has suffered Central Excise Duty as well as VAT - It is also an admitted position that even the registered auctioneer has remitted Service Tax on the commission it received from the assessee - Therefore, the denial is unsustainable, for which reason the impugned order to this extent is set aside and the issue is decided in favour of the assessee: CESTAT

- Appeal partly allowed: CHENNAI CESTAT

2019-TIOL-2621-CESTAT-AHM

Palav Synthetics Vs CCE & ST  

CX - The assessee is engaged in manufacturing of Made Up Fabrics - They had availed credit on the basis of invoices issued by 22 various firms which on investigation by department were found to be non-existent - Based upon investigation, assessee was issued SCN to disallow the credit wrongly taken and utilized on basis of invoice issued by fake/ bogus/ fictitious firms under Rule 12 of CCR, 2002/ Rule 14 of CCR, 2004 r/w Section 11A and to recover interest - Penalty was also proposed under Rule 15 - The investigations by revenue revealed that the issuing invoice were declared as fake/non-existent/bogus/fictitious as per Alert Circular and as per verification report of concerned Range Superintendent - Clearly visible to even a layman, a massive fraud was orchestrated to cause revenue loss by issue of fraudulent invoice - In their defence, the assessee could not provide testimony from merchant manufacturer that they have purchased goods from genuine party - The person issuing the invoice on which credit was availed by assessee were found to be non-existent - When all the invoices that too issued by 22 firms were given to assessee after endorsement, he should have verified the fact - In the light of bunch of Alert Circular issued by department, it is thus just obvious that the non-existent firms were issuing invoices in bulk to the persons just to avail fraudulent credit - It is not disputed that the credit was availed on invoices issued by all fradulent firms who were found to be non-existent and such fraud vitiates the transaction - The invoice cannot be held valid for availing credit - The revenue should not suffer on account of such mass fraud - The assessee did not fulfill the obligation cast upon them and the fraud came to the knowledge only after investigation which means that the situation of passing of and availing fraudulent credit was so grave that it led to issue of number of Alert Circulars by the department - No merit found in the appeal, same is rejected: CESTAT

- Appeal rejected: AHMEDABAD CESTAT

CUSTOMS

2019-TIOL-2624-CESTAT-MUM

Mehul And Company Vs CC

Cus - Assessee is having Custom Brokers license and operating in terms of CBLR, 2013 - The first issue that needs to be considered is whether the delay in conducting enquiry proceedings and revocation of license of assessee has been explained/ justified by adjudicating authority as has been mandated by High Court of Bombay while remanding the matter back to the CESTAT - From the date sheet as submitted appears to be considerable unexplained delay in various steps of proceedings - It is the fact that no explanation has come forth for the delay in issuance of the notice which was issued beyond 90 days of receipt of offence report - Also the delay in start of inquiry proceedings after the issuance of notice is not explained - Finally what was the reason for not calling Shri Mehul Sanghawi immediately after 11.02.2014, is also not coming forth - Why he was called for examination after lapse of nearly six months too is not explained and thereafter without any actual examination of Shri Mehul Sanghawi, the proceedings were concluded and report submitted on 15.12.2014 i.e. after lapse of more than 90 days from the date when last date of proceedings was fixed - Order of Bombay High Court has authoritatively laid down the law that delay needs to be explained by the authority - On the merits of case, no justifiable reason being put forth to hold that Shri Sanjay Mishra was not the employee of assessee - In the examination done before enquiry officer, Shri Sanjay Mishra has specifically deposed that he is G Card holder given to him by Customs after conducting CHA examination as a permanent employee of a Custom Broker - He is thus authorized to meet the client and customs authorities and for signing the documents for clearance of goods - He has also accepted that he forwarded the documents related to B/E to M/s Mehul and Co and he attended to the clearance of goods imported vide B/E No 8060973 dated 27.09.2012 - The CB has not denied that his employee Shri Sanjay Mishra used to meet clients, bring them business jobs, attend to clearance work, pay them commission, their contention is only that Sanjay Mishra was a authorized employee, a G Card holder and hence there was no sub letting - The Commissioner has not rebutted the claims of Custom Broker and Shri Sanjay Mishra to the effect that there was employer employee relationship between the two - Once the fact of Shri Sanjay Mishra being the employee of Custom Broker is accepted, all other charges will fall: CESTAT

- Appeal allowed: MUMBAI CESTAT