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SERVICE TAX
2020-TIOL-206-CESTAT-MUM
Taj Sats Air Catering Ltd Vs CCGST
ST - The assessee-company is engaged in providing Management Consultants Service, Manpower Recruitment and Supply Agency, Storage and Warehousing Service, Dry Cleaning Service and also Outdoor Catering Service - The main service provided by the assessee is Catering Service - On audit, it was observed that the assessee wrongly availed credit of service tax paid on transportation of employees to and fro Andheri & Kurla to its premises - The Department claimed that such activity had no nexus with the output service provided by the assessee - Two SCNs were issued proposing duty demand with interest & penalty - On adjudication, the demands proposed were confirmed and thereafter sustained by the Commr.(A) - Hence the present appeal.
Held: The Rent-a-cab/Tour Operator service is in relation to the business activity undertaken by the assessee and for the period prior to 1.04.2011, the assessee is eligible for credit on such input services - The Revenue's contention that input services do not have direct nexus to the business activity of the assessee is not sustainable - Regarding the issue of limitation, the assessee timely submitted its Cenvat a/c durin the relevant period, wherein the details of credit taken and availed has been reflected - The assessee also filed regular ST-3 returns, along with credit details and invoices for the relevant period - The assessee's records were regularly audited and no objections were raised - The condition precedent for invoking extended limitation is that there has to be some fraud, collusion or suppression on part of the assessee - In the present facts, any element of fraud, mis-statement or suppression is missing on part of the assessee - Hence the demand raised for period between April 2006 to March 2011 is not sustainable on grounds of limitation - Regarding the credit availed for the period after 01.04.2011, the service of Tour Operator/Rent-a-cab has been excluded from the scope of input service u/r 2(l) w.e.f. 01.04.2011 only if it is provided by way of renting of a motor vehicle in so far as it relates to a motor vehicle which is not capital goods - W.e.f. 1.4.2011, the CCR 2004 have been amended to provide for specific exclusion in respect of rent-a-cab service from the definition of input service - In terms of Rule 2(l)(b) of CCR 2004, the credit can be taken only if the services are used for providing taxable services for which credit on motor vehicle is available as capital goods - The issue in respect of interpretation of amended Rule 2(l) in respect of rent-a-cab service was up for consideration before the Tribunal in M/s Marvel Vinyls Ltd vs Commissioner of Central Excise, Indore wherein the Tribunal held that the assessee therein was entitled to credit of service tax paid - Following the ratio in this case, the assessee is entitled for Cenvat credit on rent-a-cab/tour operator service, even for the period 2011-12 also: CESTAT
- Assessee's appeal allowed: MUMBAI CESTAT
2020-TIOL-205-CESTAT-DEL
Tracks And Towers Infratech Pvt Ltd Vs CST
ST - The issue in these appeals is whether the assessee-company, which constructed Railway siding for private parties, is liable to pay service tax - SCNs were issued proposing duty demand after invoking extended period of limitation - Later, the adjudicating authority held that the activities of the assessee were for private parties thus ultimately for commercial use only and such service does not qualify for exemption from the service tax - Accordingly, the demands raised were confirmed - Hence the present appeals.
Held: The demand raised is barred by limitation, considering that the audit objection was raised on 26.03.2012 on some different grounds to which reply was filed by the assessee on 10.05.2012 - SCN was issued after two years on 11.04.2014 - Hence it is barred by limitation - In the second appeal for the period ending April 2014, the SCN is not time barred - Besides, the issue at hand stands settled in favor of the assessee through the decisions in SMS Infrastructure Ltd. vs. CCE, Nagpur and in United Road Consultants Pvt. Limited & Others - Hence the orders merit being set aside: CESTAT
- Assessee's appeals allowed: DELHI CESTAT
CENTRAL EXCISE
2020-TIOL-204-CESTAT-KOL
Lukwah Tea Estate Vs CCE
CX - The appellant is a manufacturer of tea and has submitted an application on 2.1.2008 seeking exemption from duties of excise in terms of notification no.33/99-CE dated 8.7.1999 on the ground that they have increased their overall installed capacity by 37% during the period 1.1.1998 to 1.7.1999 -they also submitted a Chartered Engineer's assessment report for installed capacity, invoices/challans in respect of the new machinery installed by them, diagrammatic representation of the machines before and after expansion, etc. -the department issued a SCN on 29.9.2008 alleging that the appellant has submitted their application after about nine years from the date of completion of expansion or the date of the said Notification -it is also alleged that they have not stated any reasons for the inordinately long delay nor submitted original copies of the relied upon documents - the lower authorities rejected the claim as time barred, hence appeal before CESTAT.
Held: The exemption notification in question is a conditional exemption available by way of refund - para 2 of the exemption notification prescribes the procedure for claiming it -this procedure requires the manufacturer to submit a statement of duty paid etc. on a monthly basis to the Assistant/Deputy Commissioner, who is required to verify the same and refund the amount -admittedly, the appellant had not done so - clearly, the exemption notification provides for a separate statement and not merely the RT-12 returns which have to be filed in the way -therefore, to that extent, the appellant has not fulfilled the condition of the exemption notification -secondly, except for the cursory remark on one of the RT12 returns stating that they are expanding the capacity of the plant to claim exemption, there is nothing in the returns to show that they had intended to claim the benefit of exemption notification no.33/99-CE or actually claimed in any of their returns whatsoever - this cannot be equated with fulfilling the conditions required under para 2 of the exemption notification -the Bench respectfully follows the judgement of the Constitutional Bench of the Apex Court in the case of Dilip Kumar - 2016-TIOL-67-SC-CUS-LB wherein it has been categorically held that benefit of an exemption notification must be construed strictly and any benefit of doubt must go against the assessee and in favour of the Revenue -in this case, the availability of benefit is clearly not beyond any reasonable doubt -for that reason, the appellant is not entitled to the benefit of this exemption notification -all the three case laws relied upon by the appellant pertain to the period prior to the legal position settled by the Constitutional Bench in the case of Dilip Kumar and, therefore, stand over ruled - it is further found that RT-12 returns which have been assessed were not challenged by the appellant - as held by the Larger Bench of the Apex Court in the case of ITC Limited - 2019-TIOL-418-SC-CUS-LB the refund which arises out of an assessment cannot be sanctioned unless the assessment itself has been challenged which is not the case in this appeal -for these reasons, the appellant is not entitled to the benefit of the refund claim - in view of the above, the impugned order is upheld and the appeal is rejected : CESTAT [para 13, 14]
- Appeal rejected: KOLKATA CESTAT
2020-TIOL-203-CESTAT-KOL
Gautam Ferro Alloys Vs CCE
CX - Department is in appeal challenging dropping of CE duty demand of Rs.2.34 crore for the period from 1997-98 to 2001-02 (upto Oct' 2001) on grounds of undervaluation of Silico Manganese, being appeal no.E/590/2009 -the assessee is in appeal challenging confirmation of CE duty demand of Rs.13.36 lakh along with interest for the period Jan' 2001 to Aug' 2001 and imposition of equal penalty under section 11AC of the CEA on the ground of undervaluation of their final product i.e. Silico-Manganese for the period from January 2001 to September 2001 and shortage of 10.005 MT of Silico Manganese being appeal No.E/584/2009 -the Managing Director, ShriHari Krishna Budhia and Shri A.D. Singh, Authorised Signatory have filed separate appeals challenging imposition of personal penalty of Rs.5 lakhs and Rs.2 lakhs respectively under rule 209A of the Central Excise Rules, 1944/ rule 26 of Central Excise Rules, 2001, being appeal nos.E/585/2009 and E/586/2009.
Held: The Commissioner, in the Impugned Order under Para 75, has clearly held that there is no evidence available on record to substantiate charges of undervaluation in respect of duty demand of Rs.2.34 crore - in absence of evidence of flow back of funds over and above the invoice price, which are missing in the instant case, the charge of undervaluation cannot be sustained -there is no material on record to prove that the material supplied by the assessee were not of inferior quality but were prime material -the Department failed to cull out evidence in investigation with the buyers in support of the charge as none of the buyers have accepted payment of any amount over and above the invoice price nor receipt of prime quality materials in the guise of inferior quality material -further, the entries found in the private diaries were only for the period Jan' 2001 to Sep' 2001 i.e. eight months - no hesitation to hold that the order of the Commissioner is in accordance with law and hence upheld and the Department Appeal is devoid of any merits- the Commissioner has confirmed duty demand of Rs.13.36 lakhs on the basis of 40 entries in the private diary as per which the appellant assessee supplied goods to various buyers who were never identified or examined to cull out evidence - the duty demand of Rs.13.36 lakhs is upheld by Commissioner merely on the basis of entries in the private diary maintained by the Managing Director who never confessed to the guilt and whose statement is not tested in accordance with section 9D of the CEA - accordingly, the said demand of Rs.13.36 lakhs is set aside - however, the duty demand of Rs.24,012/- on shortage of Silico-Manganese is upheld - in the result, the Department Appeal fails and the Assessee's Appeal is partly allowed -the Appeal filed by Sri Hari Krishna Budhia, Managing Director and Sri A.D. Singh, Authorised Signatory challenging imposition of penalty under rule 209A of the Central Excise Rules, 1944/Rule 26 of Central Excise Rules, 2001 are allowed and the penalty is set aside - all the four appeals are disposed of in the above terms : CESTAT [para 10, 11, 12, 13]
- Appeals disposed of: KOLKATA CESTAT
CUSTOMS
2020-TIOL-202-CESTAT-MUM
Amit Sareen Vs CC
Cus - The present appeal is filed against an order of provisional release in respect of goods which were seized by the Customs authorities - The assessee claimed that the conditions stated for provisional release were exceptionally harsh and so sought that such order be modified to incorporate less strenuous terms.
Held: There is no bar to the assessee requesting for reconsideration of conditions imposed for provisional release of the seized goods - The CBEC issued Circular No 35/2017-Cus. , dated 16.08.2017 which incorporate guidelines for provisional release of seized imported goods pending adjudication u/s 110A of the Customs Act - This Circular be accounted for when disposing off the representation made by the assessee - Hence the ends of justice would be met if the adjudicating authority is directed to consider the representation made by the assessee - The adjudicating authority is free to reconsider and re-determine the value of bond and quantum of security - As the matter involves live consignment, the adjudicating authority is advised to dispose off the representation expeditiously within a month's time after affording opportunity of personal hearing: CESTAT
- Case remanded: MUMBAI CESTAT
2020-TIOL-201-CESTAT-DEL
MC Overseas Vs CC
Cus - The assessee-company imported branded ACs and TVs - It regularly imported O-General brand of ACs from distributors in Singapore - Based on intelligence of undervaluation of goods by the assessee, investigations were conducted - Upon enquiry, SCN was issued to the assessee and two persons, alleging undervaluation and mis-declaration of the goods for Customs purposes - The declared value was proposed to be enhanced with the proposal for confiscation as well as imposition of penalties on the assessee and others - On adjudication, the value of goods imported under past 14 BoEs was held to be under-valued and the value was re-determined - The value of goods under seizure from the go-down was also re-determined - The declared MRP was rejected and re-determined - The goods seized were ordered to be confiscated, with option of redeeming on payment of fine - The differential duty was determined u/s 28 along with equivalent penalty on the assessee u/s 114A - Personal penalty was imposed on three persons - On appeal, the matter was remanded, whereupon the Revenue reiterated the demands - Hence the present appeal.
Held: It is seen that the facts based on which under-valuation was alleged, namely the NIDB Data or import value of another company, were available throughout with the Revenue - Admittedly, the other entity is also a regular importer of O-General brand of ACs - Accordingly, demand w.r.t. the past 11 BoE which were filed and assessed prior to 13.03.2012, is held to be time-barred and is quashed - Consequently, the revaluation and confiscation is also quashed in respect of these 11 Bills of Entry: CESTAT
Held: Regarding the rejection of transaction value w.r.t. live BoE and the goods found and seized in the godown, it is to be seen in terms of provisions of Section 14 of the Act - Admittedly in the present case, the buyer and seller are unrelated - There is no allegation against the assessee that it remitted any amount directly or indirectly to the seller and shipper of the goods other than through normal banking channel, than the amount mentioned in the import documents - Hence rejection of transaction value by the Revenue is held to be against Section 14 of the Customs Act and the same is set aside - Besides, the differential duty worked out and demanded from the assessee based on MRP of the other entity is untenable since the goods were not manufactured in India - There is no prescribed MRP by the manufacturer under the Legal Metrology Act r/w the rules thereunder - In case of import, the importer is free to determine the RSP or MRP - There is no law under which the assessee is bound to sell the goods as RSP or MRP - Further distinguishing feastures in the sales made by the entity, like providing free installation and copper tubing and after sales service, are not being done or provided by the assessee herein - Hence the MRP of the assessee is not comparable with the MRP of the other entity - Further, the goods found in the assessee's godown have been imported after filing proper BoE, which have been assessed by the competent officer of Customs - Hence the O-i-O in question is improper and is erroneous and so merits being set aside - The personal penalties are quashed as well: CESTAT
- Appeals allowed: DELHI CESTAT
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