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SERVICE TAX
2020-TIOL-45-CESTAT-ALL
Federal Security Pvt Ltd Vs CCE & ST
ST - The assessee provided 'Security Services' to the bank as well as they were engaged in providing cash van to the Bank for carrying cash from one place to another - The assessee was issued SCN stating that the said SCN was statement of demand-cum-show cause notice and it was stated that in continuation to earlier demand-cum show cause notice dated 23.12.2013 for the period 2011-12 since the grounds relied upon are the same and therefore the said statement of demand dated 14.10.2015 in the form of statement of demand-cum-show cause notice was issued - It was further stated that on the basis of earlier show cause notice for the period from 2011-12 a letter was written to the assessee to seek information - Duty demand was raised for the FY 2012-13 on the basis of difference between the figures reflected in the balance sheet and those on which service tax was already paid by the assessee and service tax payable against recovery from old debtors - The demands were confirmed on adjudication and then sustained by the Commr.(A) - Hence the present appeal.
Held - The proceedings initiated through SCN dated 23.12.2013 issued for the period 2011-12 ultimately reached this Tribunal and the same were considered along with two other proceedings initiated against the same assessee for the FY 2006-07 to 2010-11 and all the three appeals were decided through a common Final Order Nos.72386-72388/2018 dated 19.09.2018 - It was held therein that providing of cash van service with security guard is covered under 'cash van service' and cannot be termed as 'security services' as the dominant service is transportation of cash from one place to another through these cash vans - Hence the O-i-A merits being quashed: CESTAT
- Assessee's appeal allowed: ALLAHABAD CESTAT
2020-TIOL-44-CESTAT-AHM
Pranav Oxygen Vs CCE & ST
ST - The issue to be decided is that the job assigned to assessee for compressing and filling of gas in the cylinder by the help of Man Power dupted by assessee will among to provision of Man Power Supply and Recruitment Service - In this regard, Tribunal have gone though the contract between the assessee and the service recipient M/s. Inox Air Products Ltd and it is found that the job assigned to the assessee is for gas filling in cylinder, cylinder handling, cylinder loading and unloading dispatch of cylinder - The terms of the contract clearly show that even though the assessee deputed the employees in factory of M/s. Inox Air Products Ltd for doing the aforesaid job but the service recipient is concern about the job assigned to assessee i.e. filling of gas in cylinder, cylinder handling, cylinder loading and unloading - The service recipient is not making any payment toward the wages/salary of the employee for the job assigned to the assessee - All the employees are working under supervision and control of assessee and not under the supervision of M/s. Inox Air Products Ltd. - The assessee is under obligation to undertake all the compliance such as payment of wages in accordance with provision of applicable law - It shows that the service recipient M/s. Inox Air Products Ltd is not concern about all the statutory obligation - They are only obliged to make the payment as per quantum of gases filled in the cylinder by the assessee's employee - This arrangement shows that the assessee have not supplied the Man Power to qualify under the head of service, supply of Man Power and Recruitment service, they have provided the job of filling the gas in the cylinder, handling, loading and unloading, therefore, the activity of assessee is pre-dominantly appears to be covered under production for processing of goods on behalf of the client - However, the service is not covered under Man Power supply and Recruitment Service - The judgment relied upon by assessee in the case of M/s. Sureel Enterprise Pvt. Ltd is squarely applicable in the fact of the present case - The assessee have not provided the service of Man Power Supply and Recruitment Agency Service, hence, the demand confirmed under the said head is not sustainable: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
CENTRAL EXCISE
2020-TIOL-43-CESTAT-DEL
Pr. CGST & CE Vs Unique Structures And Towers Ltd
CX - Assessee is engaged in manufacture of fabricated and galvanized tower parts - During audit, some discrepancies were noticed - On perusal of Purchase Order, it was observed that the assessee had to supply 132 KV Tower with accessories & complete erection to M/s Madhya Pradesh Power Transmission Company - The price of said tower is inclusive of packing and freight charges for delivery at the stores to be set up by assessee at the site, in addition to all costs relating to fabrication/galvanisation - The sole question to be adjudicated is; whether the freight charges shall be included in transaction value - Admittedly, the buyer/customer has paid the freight charges and even for the transit risk & department has included those charges in transaction value - The original adjudicating authority had confirmed the demand holding the proposal as correct - However, Commissioner (A) has set aside the order based upon the decision of Apex Court in case titled as Ispat Industries Ltd. - 2015-TIOL-238-SC-CX holding that the amount qua transit risk and transportation cannot be included in transaction value - Triggering event for the purpose of ascertaining the transaction value/normal price/whole sale cash price is the sale of goods - Resultantly, the manufacturer's place can be a place of mere clearance but place of removal since has a nexus with ascertaining the transaction value it cannot be the place meant merely for clearances rather it is the place where clearances are made at certain price to the buyer - It is also clear that Excise duty has not to be paid at the time of mere clearance which may be from the factory to its warehouse or depot or any other place where manufacturer still holds the control, it has to be paid when actually the property in goods is transferred to the buyer against a price agreed for the purpose - It is this place which is the place of removal and time thereof is the time of removal - Since, during this stage the buyer is not in picture nor the sale is, the question of inclusion or exclusion of the transportation charges from the place of production to the place of captivity has no meaning - It further reiterates that the place of production or captivity will become the place of removal only and only when sale takes place at that particular place - This situation stands corroborated from Section 4(ia) as inserted in 1996 w.e.f. 28.09.1996 i.e. different places of removal may have a different price and the value relevant for assessing excise duty of such goods shall be the value in relation to each such place of removal - Factory gate or any other place as mentioned in Section 4 of CEA, 1944 from where the manufacturer sells its goods is the place of removal - Since, the transportation charges have been paid for delivery of goods from the factory gate to a store at site but prior the sale of towers to MPPTP Ltd. which was subject to verification and approval of the buyer's engineer and the payment/consideration was to be passed on thereafter only - The site store, in this place, is the case of removal and the value of transportation charges to the store at site has to be included in the transaction value - It is in this backdrop that the eligibility to CENVAT credit on related input services has been decided by Supreme Court in Ultra Tech case - The Commissioner (A) has committed an error while ignoring that the goods were not sold at the factory gate but at the ex-factory store at the buyer's site - Thus factory here is not the place of removal but merely the place of clearance of goods - It was also ignored that the prices as agreed to be paid were not only including the charges of insurance risk but all such other charges as mentioned and were agreed to be paid only after approval/ certification by engineers of buyer (MPPTC) - These facts are sufficient to hold that present is not the case of payment of sale consideration in future but is the case of sale in future subject to approval - Said order is set aside and the O-I-O is restored: CESTAT
- Appeal allowed: DELHI CESTAT
2020-TIOL-42-CESTAT-HYD
Vishnu Chemicals Ltd Vs CCE, CE & ST
CX - The assessee is engaged in manufacture of Sodium Bichromate (SB), Basic Chromium Sulphate (BSS) and Yellow Sodium Sulphate (YSS) - The officers of Central Excise searched the premises and took stock and found that there was shortage of Sodium Bichromate Mother Liquor (SBML) in the factory - Further, they conducted detailed investigation and recorded statements of various persons and seized private records which showed removal of goods without showing them in Central Excise records and paying Central Excise duty - This is a case of alleged clandestine removal of goods - Therefore, it is unthinkable that there will be official records of clandestine manufacture and clandestine clearance - If these were recorded, they will no longer be clandestine - Private note books seized from factory under panchanama during investigation and their analysis, as supported by the statements of various persons in the factory, form a fairly sound basis for demanding duty on such clearance - Such statements were recorded in this case - After a gap of eight years, during cross-examination, four of them have retracted their statements - However, this can, at best, be said to be an afterthought - Any person who makes statement under duress or coercion will, at the earliest opportunity, retract the statement so made - The conduct of these persons does not instil confidence that they have not voluntarily given the statements - Nevertheless, even if the statements of the alleged recipients are ignored, the statements of factory employees themselves also support the evidence of clandestine removal of goods - Therefore, the demand to that extent sustained - As far as alleged clandestine production of goods is concerned, this is listed in Annexure-D and E of the SCN - Annexure-D deals with the differential production arrived at from the differences between the RG-1 and the private notebooks also seized from the factory of the manufacturer - The demand raised under Annexure-D needs to be set off against demands alleging clandestine clearance for the same period under Annexure-A, B & C - As far as Annexure-E is concerned, this is based on labour contractor reports which are meant for paying amounts to the labour contractor, Shri S. Ganga - It is not clear as to who has prepared these records - Shri S. Ganga himself states to be an uneducated person and is unable to support the statement as representing the manufacture of goods clandestinely removed during the period - Further, there is no quantification of demand in this annexure - For these reasons, demand in Annexure- E is not sustainable and is set aside - In conclusion, the demands raised under Annexure-A, B & C to the SCN are upheld; demand under Annexure-D is upheld but the same needs to be set off against any demand on the ground of clandestine clearance in Annexure-A, B & C for the same period - Consequently, the demand of interest has to be recalculated and the penalty under section 11AC upon the assessees also needs to be recalculated - Considering the reduction in demand, the penalty under Rule 173Q upon assessee is reduced; the personal penalty on Shri CH. Krishna Murthy, Managing Director of assessee, under Rule 209A is also reduced; penalty on Shri M.V. Murali Krishna is reduced to Rs.8,000/- and the penalty on Shri M.V. Ramana Murthy, Central Excise Incharge of assessee is reduced to Rs.2,000/- - The appeals are remanded to original authority for the limited purpose of calculation: CESTAT
- Appeal dispose of: HYDERABAD CESTAT
CUSTOMS
2020-TIOL-44-HC-MAD-CUS
Sea Queen Shipping Services Pvt Ltd Vs CC
Cus - Customs Brokers Licensing Regulations, 2013 [CBLR, 2013] –Petitioner seeks quashing the impugned O-I-O passed by the respondent pursuant to SCN dated 13.2.2017 under Regulation No.20(1) of the CBLR, 2013.
Held: As per Regulation 20(1), the SCN has to be issued within a period of 90 days from "receipt of the offence report" - the Division Bench of Court while passing its order on 13.10.2017, in C.M.A. 730 of 2016, has viewed that SCN was beyond the period of 90 days from the date of the offence report – as the issue regarding the limitation is now squarely covered by the above decision of the Division Bench of this Court, the issue in favour of the petitioner, even though the petitioner had an alternate remedy, there is no point in relegating the petitioner to the alternate remedy at the stage - since, the SCN dated 13.2.2017 is to be construed beyond the period of limitation, in the light of the above decision of the Division Bench of this Court in C.M.A.No.730 of 2016, the impugned order is also liable to be held without jurisdiction and is, therefore, liable to be quashed - the impugned order is quashed as prayed for: HIGH COURT [para 11, 12, 13, 14] - Petition allowed:
MADRAS HIGH COURT
2020-TIOL-41-CESTAT-KOL
Merico Logistics Pvt Ltd Vs CC
Cus - The issue involved is regarding cancellation of CHA licence of assessee - It is the contention of Revenue that the assessee was himself involved in manipulation of weight of imported consignment in connivance with the importers - No doubt there is a variation in the declared weight of imported consignment and the actual weight thereof as contended by Revenue - When the weighment slips are not signed by the employee of Weigh Bridge Operator, Shri Ratan Baidya, who has mainly been responsible for the weighment of the import cargo and has given inconsistent statements on various occasions regarding as to who, from the assessee side, has instructed him to manipulate the weight of imported consignments - The department have not taken any statement from him as to whether the weights of imported consignment were being manipulated by CHA on behalf of importer - The Director of assessee company has contradicted the statement of Shri Ratan Baidya regarding collusion for suppression of weight of the imported consignments - Further, Shri Ratan Baidya in his statement stated and tendered 63 weighment slips, however only five weighment slips were relied upon by DRI for the purpose of investigation - No explanation is contained for that, in the revocation order regarding mis-declaration of net weight declared in the documents pertaining to the imported consignment - It is found from the statement of Shri Ratan Baidya that computer system at CONCOR CFS contains the weighment slips and which could have been retrieved from the computer system - This would not have been possible unless the Weigh Bridge was in operation - So there are plethora of contradiction in statement of Shri Ratan Baidya so as to conform the manipulation in weight conclusively - Inspite of having connived with the assessee company as stated in investigation, the department has not initiated any action against Shri Ratan Baidya - In view of the corroborative evidences on record other than statements recorded under Section 108 of the Customs Act, it would be too harsh to impose penalty on the assessee by revocation of their CHA licence as has been held in case of Mehul & Co. - 2017-TIOL-615-CESTAT-MUM - By revocation of licence of assessee, there is denial of livelihood of assessee along with their employees - Due to inherent contradiction among the statements recorded by various persons, the revocation of CHA licence, which is harshest should not have been imposed by impugned order as it would be disproportionate to the offence committed by assessee even if it is held so - Since the investigation was not carried out in respect of all consignments of import of old and used garments, for which weighment slips were made available it cannot be established beyond doubt that offence has been committed for all as held in the impugned order - Further, penalty that has been imposed against assessee in the impugned order is disproportionate to the penalty imposed - The assessee has suffered from the date of suspension of his licence till now which in itself is sufficient considering the gravity of offence committed by assessee - The impugned order is not sustainable and is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
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