SERVICE TAX

2019-TIOL-2958-CESTAT-ALL

Kunj Power Projects Pvt Ltd Vs CCE & ST

ST - Revenue entertained a view that that said M/s STPL, Kolkata had not provided any services to the appellant and appellant has availed the credit of Rs.1,15,27,245/- on the basis of fake and bogus invoices – appellant has enclosed the bank statement indicating the deposit of service tax by M/s STPL by way of various cheques - assessee is entitled to the Cenvat Credit of duty 'Paid' by the input service provider and if the input service provider has actually deposited the Service Tax, the same would be available as a credit to the service recipient - Revenue has disputed the fact of payment of service tax by M/s STPL on the ground that they were not found to be in existence at the time of investigations conducted by the Revenue - Further, Revenue has relied upon statements of various persons, who have not been offered for cross-examination - in the miscellaneous application, the appellant has produced evidences for deposit of service tax by M/s STPL – Bench, therefore, without expressing any opinion on the retraction of the statements by way of affidavits and certificates, sets aside the impugned order and remands the matter to the Original Adjudicating Authority for de-novo decision – Appeals allowed by way of remand: CESTAT [para 4, 5, 7]

- Matter remanded: ALLAHABAD CESTAT

Prompt Services Vs CCE

ST - Service tax demand stand confirmed against assessee alongwith penalty of identical amount for the period January, 2013 to March, 2014 by way of raising a SCN - The assessee was providing services to one M/s Gati Ltd. who are courier service provider - The assessee's job was to collect the shipment from the door of M/s Gati Ltd. and deliver the same at the door of consigner for which work the assessee was being paid consideration by M/s Gati Ltd. - Lower Authorities have observed that the said activity of assessee amounts to providing of services to M/s Gati Ltd. and fully covered by definition of 'service' provided under Section 65B(44) of the Act - Admittedly period involved is covered by negative list regime having been introduced on 01/07/2012 - The assessee has not been able to show that services provided by them to M/s Gati Ltd. fall either under the negative list or were exempted in terms of the Mega Notfn 25/2012 - However, it is seen that the total consideration received by assessee from M/s Gati Ltd. was to the extent of around Rs.7 lakhs - The lower authorities while confirming the demand have not extended the benefit of small scale exemption provided by Notfn 33/2012-ST - As such, for the said purpose, matter remanded to Original Adjudicating Authority for re-quantification of demand after allowing threshold exemption as available to the assessee in terms of the said Notfn - As regards to penalty, said services were not taxable for the earlier period and as such assessee may not be aware of the introduction of new regime of negative list era - In the absence of any positive evidence showing any mala fide on the part of assessee, penalty imposed upon him is not justified and the same is accordingly set aside: CESTAT

- Appeal disposed of: ALLAHABAD CESTAT

CENTRAL EXCISE

2019-TIOL-2956-CESTAT-ALL

CCE Vs Kay Pan Masala Pvt Ltd

CX - Appellant is engaged in the manufacture of Pan Masala containing Tobacco (Gutkha) and paying duty under the provisions of Pan Masala Packing Machine (Capacity Determination and Collection of Duty) Rules, 2008 [Rules, 2008] read with notification no. 13/2012-CE (NT) dated 17.3.2012 - since their factory remained closed for a continuous period of 16 days i.e. from 16.10.2012 to 31.10.2012, they applied on 7.11.2012 for abatement of duty in terms of rule 10 of the Rules, 2008 - the Deputy Commissioner vide his O-I-O dated 4.2.2013 granted the abatement amounting to Rs.1.30 crore holding that there was no manufacturing & clearance activity during the said period - this order was challenged by the Revenue before Commissioner (Appeals) who rejected the appeal - Revenue before CESTAT.

Held: For arriving at the finding in the impugned order, the Appellate Authority also referred to the Tribunal decision in the case of  Kay Pan Suganth Pvt. Ltd. wherein the Tribunal has observed that an assessee is to only apply for sealing of the machines and it is for the Revenue to seal the machines in accordance with law and if the same has not been followed, the assessee cannot be penalized - in the present case, all the machines were sealed and as such could not have been operated during the period of closure and as observed by Commissioner (Appeals) that even if the Department feels that sealing has not been done as per requirement of law then it was the fault of the Department for which the assessee cannot be penalized as he had filed timely intimation - no reasons found to interfere in the impugned order of Commissioner (Appeals) with which the Bench fully agrees - as such, no merits found in the Revenue's appeal and the same is, accordingly, rejected : CESTAT [para 4]

- Appeal rejected: ALLAHABAD CESTAT

Metlowood Creations Vs CCE

CX - Onus was on Revenue to establish that the job work did not amount to manufacture to demand service tax - Since the said burden was not discharged by Revenue, the demand of Service Tax and interest and penalty are not sustainable: CESTAT [para 4]

CX - Because they were manufacturing the same goods and had a common purchaser of the goods manufactured by them and on few occasion given and recovered loans to each other, their transactions cannot be clubbed together to deny SSI exemption - since there was no financial flow-back and common funding, therefore, the clearances could not be clubbed and individually all the three units were having clearances within the limit provided under said notification and, therefore, Central Excise duty demand is not sustainable - clubbing of clearances was not justified - impugned order set aside and appeals allowed with consequential relief: CESTAT [para 6]

- Appeals allowed: ALLAHABAD CESTAT

Zydus Healthcare Ltd Vs CCE & ST

CX - Issue involved relates to the applicability of assessment u/s 4A of CEA, 1944 to supplies of pharmaceuticals made for institutional buyers who are running hospitals and where the pharmaceuticals are intended for consumption in the hospitals and not for retail sale - Revenue has not produced any evidence that the said goods are sold by the institutional buyers and similarly no evidence has been produced to assert that the said pharmaceuticals are not consumed in the hospitals by these institutional buyers themselves - no merit in Revenue's allegation that such medicaments are liable to be assessed under section 4A – Assessee appeals E/12757/2018 and E/12758/2018 allowed: CESTAT [para 4, 4.1]

CX - Appeal no. E/778/2011 is dismissed as infructuous since the matter covered thereunder has been remanded by Tribunal vide order dated 09/05/2017: CESTAT [para]

- Appeals allowed: AHMEDABAD CESTAT

CUSTOMS

2019-TIOL-2953-CESTAT-MUM

Shubh Fab Tex Vs CC

Cus - By the impugned order, the Commissioner has absolutely confiscated the "Red Sanders Wood Logs" mis-declared on the shipping bill as "Synthetic Filament Yarn other than Sewing Thread Polyester Texturized Yarn" - While confiscating the said goods absolutely as these goods are prohibited for exports, Commissioner has imposed penalties - The SCN and the O-I-O have proceeded to impose penalties on assessee not for abetting or for any act of omission or commission leading to confiscation of goods as per section 113 of the Customs Act, 1962 - Not even investigations reveal that the assessee have not acted in manner expected of them in normal course of business to facilitate the fraud being perpetuated by the fraudsters - In absence of any such charge or finding in the impugned order, that any of assessee has deliberately knowingly or unknowingly assisted in commission of fraud by the fraudsters, Tribunal is not in position to uphold the penalties imposed under Section 114 of Customs Act, 1962 - The Commissioner has also imposed penalties on some of the assessees under Section 117 of Customs Act, 1962 - From the scheme of Section 114 and Section 117, it is quite evident that penalties under Section 114 and 117 could not have been imposed simultaneously - Penalty under Section 117, could have been imposed only in cases where the Custom Act, do not prescribe for imposition of penalty under any other provision - Once the penalties under Section 114 are set aside, Tribunal proceed to examine the penalties imposed under Section 117 - In fact the Commissioner in his order have observed that assessee on whom the penalties under section 117 have been imposed were negligent in some manner in fulfilling the statutory responsibilities - They could have been more careful in respect of their clients/ customers so that such frauds could have been prevented - The penalties imposed is necessary to deter assessee and signal to them to be more careful while conducting their business in relation to imports and exports of goods - However, the end of justice will be met if the penalties of Rs 1,00,000/- imposed by Commissioner under Section 117, is reduced to Rs 20,000/-: CESTAT

- Appeal partly allowed: MUMBAI CESTAT