2019-TIOL-2987-CESTAT-AHM

Sanghi Infrastructure Ltd Vs CST

ST - The assessee was issued SCN alleging that during audit of assessee, it was found that assessee had rendered the "Dredging Services" but short paid the service tax - The assessee later paid the said amount - Also for the year 2009-10, the assessee did not pay service tax or file returns - Shri Anil Ramsahay Agarwal, the Manager (Accounts) of assessee in his statement informed the officers that they could not pay service tax due to huge amount of expenditure incurred for repair and maintenance of dredgers - That the value of services shown less in Service Tax Returns was due to lapse of accounts department but they have discharged the service tax liability - For the year 2009-10, a service tax demand of Rs. 2,80,136/- was demanded and to appropriate an amount of Rs. 30,00,390/- paid by assessee against said demand - It was also proposed to demand interest and penalty upon assessee - The short payment of service tax was detected during audit from the accounts of assessee - They had paid the service tax demand for the period 2008-09 but could not pay the service tax for period 2009 -10 nor did file returns due to financial problem - However the fact remains that the assessee had recorded all the transactions in books of accounts and produced the same before the audit officers during audit - However, assessee failed to file necessary periodical ST-3 returns to the department, therefore, the fact regarding non payment of service tax was not brought to the notice of department - Therefore, extended period is rightly invoked by lower authority; accordingly, the demand majority of which amount paid by assessee is sustainable - As regard to penalty imposed under Section 76, it is found that penalty under Section 76 & 78 both cannot be imposed simultaneously in the view of Gujarat High Court judgement in case of Raval Trading Co. 2016-TIOL-112-HC-AHM-ST, accordingly, penalty imposed under Section 76 is set aside - As regard penalty imposed under Section 78, as per assessee’s submission, the non payment of service tax is due to financial difficulties - It is also observed that the assessee have recorded the transaction in their books of account and from which only audit could point out the non payment of service tax - Assessee has made out a strong case for waiver of penalty under Section 78 invoking Section 80 of FA, 1994: CESTAT

- Appeal partly allowed: AHMEDABAD CESTAT

2019-TIOL-2986-CESTAT-BANG

Shenoy Cinemax Vs CCT & CE

ST - The assessee is engaged in providing services under various categories in relation to running of a Cinema theatre, display of advertisements and selling of time slots for advertisements - They also avail credit of service tax paid on input services under CCR, 2004 and utilize the credit for discharge of their service tax liability on output services provided by them - The assessee filed a refund claim and the ground shown for claim was the excess utilization of Cenvat credit - Same was rejected - Commissioner (A) has afforded opportunity to the assessee to appear on various dates but the assessee did not appear on any of the dates and also did not seek adjournment - This observation of Commissioner is factually incorrect as the assessee has placed on record a letter which is adjournment request letter and the same was received in the office of Commissioner (A) - Further the assessee has also produced Local Delivery Book which shows that he has sought adjournment on 05.03.2018 and 19.03.2018 because the seal of the Department is also annexed in the Local Delivery Book but in spite of the adjournment request, the Commissioner has observed that the assessee did not seek any adjournment and therefore he has decided the appeal in the absence of the party on the basis of the records available - The assessee has proved that he has made request for adjournment and the Commissioner (A) has wrongly observed that the assessee did not seek any adjournment - The impugned order passed in the absence of assessee is violative of principles of natural justice - Matter is remanded to the Commissioner (A) to decide the same on merit after affording an opportunity of hearing to assessee: CESTAT

- Matter remanded: BAGNALORE CESTAT

Prasanna Technologies Pvt Ltd Vs CCE & CT

ST - The assessee is registered under Service Tax for providing taxable services under category of 'BAS' - In the SCN, it is alleged that assessee has violated Rule 6(4) of STR, 1994 - However, the Commissioner (A) has given a different finding that Rule 6(4A) is applicable and accordingly the assessee is not eligible to adjust the excess payment of Service Tax and this finding of the Commissioner is beyond the SCN - In this regard, the judgment in case of Kandarp Dilipbhai Dholakia 2014-TIOL-2719-HC-AHM-CX is relied upon, wherein it has been held that if the impugned order is beyond the SCN then the same is liable to be set aside - Assessee have also produced the certificate from service receiver who has certified that original bills were revised and they have paid Service Tax on revised invoice - Reduction in invoice value was due to negotiations and revised invoices were raised - Therefore, the demand confirmed is not tenable in law - As far as availment of CENVAT credit paid as rent and telephone bills is concerned, this pertains to Service Tax paid with regard to the rent and telephone services which have been used for rendering the output services - The payment made in respect of service received and consumed as service provider and further output services are not exempted from tax and Service Tax is payable on output services therefore there is no dispute with regard to the receipt of services as utilized for output service and as per provision of Rule 4(7) of CENVAT Credit Rules, assessee has availed the credit of Service Tax on input services which is permitted under Rule 4 (7) of CENVAT Credit Rules therefore denial of credit is set aside - With regard to short payment of Service Tax for the period 2013-14 is concerned, the same has been denied on the ground that the invoice produced by assessee does not provide the details of the recipient of service and the same is not appearing on the face of the invoice - The Commissioner (A) has not denied the fact that the input services are in relation to rendering output services - Assessee have availed the credit of Service Tax on input services only after the payment made to service provider - They had recorded the payment in input credit ledger and bank statements also showing the payment of Service Tax - Therefore, the denial of CENVAT credit only on the ground that the name of service recipient is not mentioned in the invoice is not sustainable in law when all other details which are required as per Rule 9 are present - As far as invoking the extended period is concerned, the period covered in SCN is 4/2013 to 3/2015 and the SCN was issued on 30.12.2016 which is clearly beyond the normal period of 18 months and therefore the entire demand raised in the SCN is time barred - Further, the SCN was also issued on the basis of audit where the assessee produced all the records before the audit party - Tribunal rely upon the decision of High Court of Calcutta in case of Simplex Infrastructure Ltd. 2016-TIOL-779-HC-KOL-ST wherein it was held that extended period is not invokable without any basis and when the SCN was issued on the basis of audit - The impugned order is not sustainable in law on merits as well as on limitations: CESTAT

- Appeal allowed: BANGALORE CESTAT

CENTRAL EXCISE

2019-TIOL-2410-HC-P&H-CX

PR CCE & ST Vs Ashok Nayyar

CX - Ashok Nayyar is the Director of M/s Kunal Calcium Limited who along with many other companies/ proprietary concerns/ partnership firms were proceeded against for “the clandestine removal of goods” - Ashok Nayyar filed the appeals and the Tribunal has set aside the O-I-O and decided in favour of the Company as also the Directors / CEO's concerned - Hence, revenue is assailing the impugned order, whereby penalty imposed upon Director was set aside - The connected appeal filed by Revenue assailing the aforesaid common order passed in case of M/S Kunal Calcium Limited stands dismissed vide M/S Kunal Calcium Limited on the ground that the appeal has to be filed before the Supreme Court under Section 35 L of the Act: HC

- Appeal dismissed: PUNJAB AND HARYANA HIGH COURT

2019-TIOL-2989-CESTAT-AHM

Sweety Industries Vs CCE & ST

CX - The issue involved is that whether the assessee being manufacturer of ‘Biscuit' on job work basis on behalf of M/s Parle Products Pvt. Ltd is entitled for cenvat credit on outward GTA when the goods are cleared to depot of principle and excise duty is paid on MRP based valuation in terms of Section 4A of CEA, 1944 - There are many manufacturers of biscuits for same principal M/s Parle Products Pvt. Ltd and the modus operandi is that the goods are manufactured on job work basis and the same is cleared to depot of M/s Parle Products Pvt. Ltd and excise duty is paid on MRP based valuation - On the same facts, Division Bench of Tribunal in case of M.P. Biscuit Pvt. Ltd 2013-TIOL-158-CESTAT-DEL allowed the cenvat credit - The same view was taken in case of MB Bakers Pvt. Ltd 2014-TIOL-2666-CESTAT-DEL - Rajasthan High Court on the identical facts in the case of Mound Trading Company Pvt. Ltd. 2019-TIOL-1795-HC-RAJ-CX held that cenvat credit is admissible to the job worker like assessee and Revenue's appeal was dismissed - On the contrary, the Division Bench of Tribunal in case of Kohinoor Biscuit Products in the identical facts after considering the provision of Section 4A and Section 4(3)(c) of Central Excise Act and Rule 3 of CCR, 2004 held that goods cleared from job work to principle manufacturer's depot by determining the value of goods under Section 4A of CEA, 1944, the factory gate is place of removal hence, the definition of place of removal as given in Section 4(3)(c) cannot be adopted for purpose of CCR, 2004 accordingly, cenvat credit was denied - In view of various contrary judgments not only of the Division Bench of Tribunal but also by High Courts of Rajasthan and Allahabad, there is no consistency on the legal position for availment of cenvat credit on outward GTA in case of goods manufactured and cleared to principles at their depot particularly in the set of facts of present case - Therefore, to arrive at consistent view, the matter needs to be considered by Larger Bench of this Tribunal - The Registry is directed to place this matter before the President of this Tribunal for constituting a Larger Bench: CESTAT

- Case deferred: AHMEDABAD CESTAT

2019-TIOL-2988-CESTAT-AHM

Swagat Synthetics Vs CCE & ST

CX - The preventive checks were conducted at the manufacturing unit of assessee - During check, some shortage of gray fabric procured by assessee in CT-3 from an EOU, were found when compared to stock in statutory records - In follow up action, further evidence was gathered in the form of statement of partners of assessee firm - In the second round of litigation, confirmed the demand of duty, interest under section 11AB, imposed penalty on M/s. Swagat Synthetic, imposed personal penalty each on shri. Nareshbhai Natwarlal Madhvani and shri. Manikumar Jain partners of Swagat Synthetics under Rule 26 of CER, 2002 and also imposed penalty on M/s. Seema Textiles under rule 26 of CER, 2002 - The said order was challenged by M/s. Swagat Synthetic and its both partners before Commissioner (A) - The Commissioner (A) rejected all the appeals and upheld the O-I-O, therefore the present appeals - The fresh issue raised by assessee is indeed a question of law which can be raised at any stage of litigation - However, the question of law raised by assessee is mixed question of law and facts and particularly this issue has not been raised by assessee before lower authorities nor has been considered the same - Since, the question of law is mixed of the facts and law, the same needs to be considered by the lower authority - Accordingly, the matter remanded to adjudicating authority to pass a fresh order after considering the new defense raised by assessee - The assessee is directed to produce all the records in this regard to the adjudicating authority: CESTAT

- Matter remanded: AHMEDABAD CESTAT

CUSTOMS

2019-TIOL-2990-CESTAT-MUM

Kaushal A Shah Vs CC

Cus - The assessee-company imported certain goods and sold the same on high sea basis to two entities, allegedly by mis-declaring the value - It was alleged that by mis-declaring the value itself, the assessee abetted the two firms to mis-declare the value and short pay the duty - In statements recorded u/s 108 of the assessee's authorised representative, such mis-declaration was admitted - SCN was issued to the importers and the assessees - The importers who filed BoE paid the differential duty and got the matter resolved before the Settlement Commission - Meanwhile, the adjudicating authority proceeded to adjudicate the case against the remaining noticees and for the act of abetting the misdeclaration of the goods, held them to be liable for confiscation - Penalty was also imposed u/s 112(a) and u/s 114AA of the Act for filing or causing the documents to be filed with misdeclared value - Hence the present appeals.

Held: Once a person who filed BoE admitted and paid differential duty on account of misdeclaration of value, the value as determined in the SCN and by the SETCOM would become the value u/s 14 of the Act - There is no merit in the assessee's submission that the Commissioner should have re-determined the value as per the Customs Valuation (Determination of Price of Imported Goods) Rules, 2007 - Once the value has been found declared, the goods become liable for confiscation u/s 111(m) of the Act and the person misdeclaring or abetting such misdeclaration is liable to penalty u/s 112(a) - The appellants were responsible for issuing invoice mis-declaring the value, in which case, the provisions of Section 114AA merit being invoked - The appellant's submission referring to the Twenty Seventh Report of the Standing Committee on Finance on the Taxation Law (Amendment) Bill 2007 and stating that Section 114AA would apply only in cases of fraudulent exports to avail benefit of export promotion scheme, does not hold much water - The words of the statute are plain and unambiguous, in which case courts and Tribunals cannot take a contrary view by relying on external aids, as was canvassed by the appellants - Apart from relying on the 27th report, the appellants were unable to counter the factual findings recorded by the Commissioner for imposing penalty u/s 114AA - It is not even the case in the O-i-O that the penalties for the same offence and under the same provision has been imposed upon the proprietor and proprietorship concerns - The O-i-O itself restrains from imposing penalty u/s 112(a) on the proprietors as penalties are already imposed on the firms - Hence the present appeals are devoid of merits: CESTAT

- Appeals dismissed/In favor of Revenue: MUMBAI CESTAT