|
SERVICE TAX
2019-TIOL-2808-HC-P&H-ST CCE & ST Vs Kanhai
ST - It was alleged that the respondent was engaged in the Commercial and Industrial construction services, during the period 10.09.2004 to 15.06.2005 inasmuch as respondent was providing the services in the nature of 'completion and finishing services' and was taxable in a general manner under the category of 'construction services', introduced from 10.09.2004 - SCN dated 21.04.2010 was issued to the respondent demanding service tax of Rs. 1,09,41,059/- for the period 10.09.2004 to 31.05.2007 by invoking extended period of limitation - demand confirmed by Commissioner with penalty and interest but in appeal, the CESTAT vide order dated 10.08.2016 held that the services fell under the category of 'work contract service' which was made chargeable to service tax w.e.f. 01.06.2007 and thus dropped the demand - In the Revenue appeal filed before the High Court following substantial questions of law arise for adjudication viz. (1) Whether the Tribunal can allow the party to retreat from their earlier stand of paying Service tax under a certain category after claiming the benefit of abatement? and (2) Whether the party can be allowed to approbate and reprobate on the same issue?
Held: Subject matter in this appeal as also the substantial questions of law, already stand adjudicated by the High Court in Commissioner of Central Excise and Service Tax, Panchkula vs. M/s Satish Kumar Contractor Ltd., Panchkula, - 2019-TIOL-2359-HC-P&H-ST , wherein this Court while relying on the decision of Supreme Court in Larsen & Tourbo Ltd.'s case ( 2015-TIOL-187-SC-ST ) set aside the service tax demand upto 30.05.2007 and confirmed the same only from 01.06.2007 - since the subject matter of this appeal is squarely covered by the ratio of apex court judgment (supra), therefore, no illegality or perversity could be pointed out in the order passed by the Tribunal which may warrant interference by this Court - Appeal dismissed: High Court [para 9 to 11]
- Appeal dismissed : PUNJAB AND HARYANA HIGH COURT
2019-TIOL-3545-CESTAT-ALL HCL Learning Ltd Vs Commissioner of CGST
ST - In the present case the employer has been served with a show cause notice demanding service tax on that part of the amount which he recovers out of the salary paid to the employee, if the employee breaches the contract of total term of employment - It is noticed from the terms of contract between the appellant and his employee that the employee shall be paid salary and the term of employment is a fixed term and if the employee leaves the job before the term is over, then certain amount already paid as salary is recovered by the appellant from the employee - This part of the recovery is treated as consideration for charging service tax - demand confirmed by lower authorities, therefore, appeal to CESTAT.
HELD: Said recovery is out of the salary already paid and moreover salary is not covered by the provisions of service tax, therefore, impugned order is set aside and appeal is allowed: CESTAT [para 2]
- Appeal allowed : ALLAHABAD CESTAT
2019-TIOL-3543-CESTAT-HYD
CC Vs Clough Engineering
ST - The respondent having their site office at Rajahmundry entered into an agreement with M/s ONGC for construction of off shore well and modification of existing off shore well platform in Krishna-Godavari basin, besides some other construction services - Based on intelligence and verification of records and consequential investigation, Revenue has come to the conclusion that the services rendered by respondent are classifiable under ECIS on which the service tax was chargeable on services rendered - During hearing, it is prayed that the impugned order may be set aside to the extent it holds that the demand of CENVAT Credit irregularly availed and utilised by respondent is included in service tax payable - He also prays that the imposition of penalty under Rule 15 of CCR, 2004 for irregular availment and utilisation of CENVAT Credit on input services may be increased to mandatory penalty, equivalent to the amount of irregularly availed CENVAT Credit - As can be seen that the final order portion of Commissioner is contrary to her own findings in para 25 of the order - Therefore, the sentence "The total amount of Rs. 25,78,46,297/- demanded above towards total service tax payable includes CENVAT Credit demanded also" in para 'v' of ORDER needs to be quashed as it is contrary to the findings of the adjudicating authority in para 25 - In terms of Section 78 of FA, 1994, the penalty imposable is equivalent to the amount of service tax not paid - Accordingly, in cases of wrong availment of CENVAT Credit, the amount of penalty imposable is also equivalent to the amount of CENVAT Credit wrongly availed - The adjudicating authority has no discretion of imposing a lesser penalty than what is mandatory, under Rule 15 of CCR, 2004 - Accordingly, the penalty under Rule 15 needs to be enhanced - The penalty imposed under Rule 15 of CCR, 2004 for irregular availment and utilisation of CENVAT Credit on input services imposed under Section 'ix' of the ORDER portion of the impugned O-I-O is increased to Rs.1,20,09,077/- being the amount of CENVAT Credit irregularly availed: CESTAT
- Appeal allowed: HYDERABAD CESTAT
2019-TIOL-3539-CESTAT-MUM
Arcadia Shipping Ltd Vs Commissioner of CGST & CE
ST - Appellant is engaged in providing shipping agents/liner operations, offshore services for which they were registered with the Department under the various categories - The appellants have been regularly paying service tax and filing periodical ST-3 Returns - appellant have entered into an agreement of services with M/s. Valentine Maritime Ltd., Abu Dhabi - As per the terms of the agreement, the appellant is to provide support services to VML for which they receive fee /service charges - appellant raised bill for service charges for various services given by them to VML and has paid paid service tax on the bill amount as per applicable rate - Such amounts paid by the appellants, with respect to service procured for VML as Pure Agent, are reimbursed to the appellant - On such input services received by the appellants, the appellant availed cenvat credit benefit, as the same qualify as input services for them under Rule 2(l) of CCR - During the course of audit, it was alleged that the appellants have availed ineligible cenvat credit in as much as the appellants have not paid service tax on the entire amount of incidental expenses recovered from VML - SCN was issued and the adjudicating authority held that the appellant is not entitled to take credit of services procured as Pure Agent for VML, for which they receive full reimbursement including the amount of tax from VML - appeal to CESTAT.
Held: It is an admitted fact that on certain services procured by the appellant for M/s. VML, where also the invoices were in the appellant's name, but they have claimed full reimbursement from M/s.VML by further adding their service charges - Admittedly, the appellants have paid service tax (output tax) only on the service charges/mark-up made by them or levied by them - Thus, it is held that such services will not form part of input services under Rule 2(l) of Cenvat Credit Rules for the appellant - However, on other input services, where the appellant have not recovered the amount of service charges plus service tax by way of reimbursement, they shall be entitled to cenvat credit - In the circumstances, the issue is wholly interpretational in nature and there is no element of contumacious conduct or suppression of facts - Admittedly, all the transactions are duly recorded in the books of accounts ordinarily maintained - Further, the appellants were registered with the Department and have been regularly complying including filing periodical returns - Accordingly, the penalty imposed u/r 15 of CCR read with Section 78 of the Finance Act is set aside - Thus, the appeal is allowed in part - appellant is entitled to consequential benefit, in accordance with law: CESTAT [para 25]
- Appeal partly allowed: MUMBAI CESTAT
CENTRAL EXCISE
2019-TIOL-3538-CESTAT-CHD
Nandan Auto Tech Ltd Vs CCE & ST
CX - The assessee has exported a consignment of cobalt bearing tools which was rejected by foreign buyer and goods came back to their factory premises, the duty payable on the said export goods was Rs. 8,21,837/- - Later on, the said returned goods were sold by assessee as scrap on payment of duty of Rs. 19,584/- and all these facts have been shown by them in their regular ER-1 returns - A SCN was issued by invoking the extended period of limitation to demand differential duty on the ground that the duty payable on the said export goods was Rs. 8,21,837/- whereas the assessee has paid a duty of Rs. 19,584/- on the said goods as they had cleared as scrap - Admittedly the facts of clearance of the said subject goods on lower duty was in the knowledge of the department itself in the year 2000, therefore, the extended period of limitation cannot be invoked - As, the issue is decided on limitation itself, therefore, no need to interfere with the merits of the case - The impugned order is set aside: CESTAT - Appeal allowed: CHANDIGARH CESTAT
2019-TIOL-3537-CESTAT-ALL
Purvanchal Projects Pvt Ltd Vs CCE
CX - The assessee-company was engaged in construction of residential complex, for which purpose, it also manufactured Ready Mix Concrete - For manufacturing RMC, the assessee installed one batch plant at its project site and in reply to inquiry, informed the Revenue that it was manufacturing RMC by mixing the ingredients and such RMC was used for construction work at site - The Revenue opined that in view of Circular No. 368/1/98-CX dated 06.01.1998 concrete manufactured by the assessee was RMC and the same was different from Concrete Mix, which was exempted from payment of duty through Notfn No 4/97-CE dated 01.03.1997 - Hence SCN was issued, invoking extended limitation, raising duty demand - On adjudication, the demand was confirmed with interest and penalty was imposed on the assessee - On appeal, the Commr.(A) quashed the duty demand with interest beyond the normal period of limitation and the penalty imposed on the assessee has been quashed as well - The Commr.(A) also confirmed the demand payable under normal limitation, on grounds that the goods manufactured by the assessee is RMC, classifiable under Tariff Item 38245010 - Hence the present appeal before this Tribunal.
Held - The counsel for the assessee could not establish that the goods manufactured by the assessee were anything other than RMC - The Revenue meanwhile established that the goods manufactured were RMC - Hence the ruling of the Apex Court in Larsen & Toubro Ltd. Vs Commissioner of Central Excise = 2015-TIOL-236-SC-CX , Hyderabad is squarely applicable in this case - The court in this case settled the issue in respect of RMC and held that Concrete Mix and RMC are two different products and the Notfn No 4/97-CE extends exemption only for Concrete Mix and such exemption is not available for RMC - Hence the assessee made out no case warranting interference with the O-i-A in challenge: CESTAT
- Assessee's appeal dismissed: ALLAHABAD CESTAT
CUSTOMS
2019-TIOL-2809-HC-KERALA-CUS Anu Cashews Vs CC
Cus - Petitioners are exporters, who seek to avail the benefit of the Merchandise Exports from India Scheme [MEIS] as envisaged under the Foreign Trade Policy, 2015-20 - Petitioners, while claiming the benefit of the MEIS Scheme, indicated their intention to claim the reward under the Scheme in a specific box provided for the same in the software that provided for uploading the details to the web portal of the Central Government - Unfortunately, in a further column which required them to check the appropriate box with regard to the intention to claim reward in respect of the export consignment, the petitioner omitted to check the box stating "Yes", and on account of that, the system recorded the default setting, which indicated "No" - claim of the petitioners for the benefit of the reward was, therefore, disallowed by the respondents, who took the stand that in view of the exporter not having indicated its intention of claiming the benefit under the MEIS Scheme, the necessary verification of the export consignment was not done prior to its export, and a verification of the export consignment is now not possible.
Held: Court had directed the parties to produce a screen shot of the web portal which would show the details that were required to be filled in while uploading the shipping bill in relation to the exports thereto - A perusal of the screen shot produced indicates that there are separate columns wherein the description of the goods, and the intention of the exporter to claim the export benefit, can be entered - Over and above this, there is another column requiring the exporter to indicate whether he intends to avail the benefit of the Export Benefit Scheme against which the default setting reads as "No" - In other words, the default setting in respect of a claim for the benefit of an Export Promotion Scheme is always in the negative, and it requires a positive act on the part of the exporter to uncheck the box reading "No" and check the box reading "Yes", for the purposes of claiming the benefit - while the exporter did not check the box concerned to read "Yes", in the column meant for the description of the goods he had clearly indicated his intention to avail the benefit of the Export Promotion Scheme - Under such circumstances, Bench is of the view that the denial of a claim for export benefit could not have been done in a mechanical manner merely because there was a technical lapse on the part of the exporter concerned in not checking a particular box in the web portal, more so when there was sufficient indication from the other details entered therein that pointed to the exporter's intention to claim the reward - Writ petitions are disposed of with a direction to the respondents, including the additional 5th respondent in both the writ petitions, to consider the claim of the petitioners for export benefit, afresh, in the light of the observations in this judgment, and to grant the export benefits, within one month, if on an overall consideration of the details furnished by the petitioner, the intention to claim the benefit of the MEIS Scheme was seen manifested at the time of export: High Court [para 4 to 6]
- Petitions disposed of : KERALA HIGH COURT 2019-TIOL-3536-CESTAT-BANG
NC John And Sons Pvt Ltd Vs CC
Cus - The appeal is directed against impugned order whereby the Commissioner has rejected the request of M/s. JN Freight Forwarders Pvt. Ltd., made on behalf of the assessee for 'No Objection Certificate' for claiming MEIS by amendment of reward option from 'No' to 'Yes' in shipping bills - The Commissioner has failed to notice that the assessee has declared their intention to claim MEIS benefits in all the shipping bills which have been produced on record - The only lapse on the part of assessee was that they have mentioned in reward column as 'N' instead of 'Y', which is only a procedural defect - Otherwise, the assessee is entitled to claim MEIS benefit as per the export policy - Failure to mention 'Y' in the reward column of shipping bill for availing the benefit under MEIS scheme can be corrected by amending the shipping bill as held by Madras High Court in case of Pasha International - 2019-TIOL-373-HC-MAD-CUS - Further, Delhi High Court in case of Kedia (Agencies) Pvt. Ltd. 2017-TIOL-08-HC-DEL-CUS has also allowed the amendment even in a situation where there was no declaration of intention whereas in the present case, assessee has made the declaration on front page of shipping bills regarding their intention to claim MEIS benefit - The other ports have allowed the amendment of shipping bill in identical situation - The rejection of request for amendment of shipping bill by Commissioner is not sustainable in law and therefore, the impugned order is set aside and the Custom Authorities are directed to allow the amendment in shipping bill as per the request of assessee on production of certified copy of this order: CESTAT - Appeal allowed: BANGLAORE CESTAT |
|
ADAHEAD_15.jpg)
