2020-TIOL-NEWS-028, Dated: Monday, February 03, 2020

ST - Refund - Rule 5 of CCR, 2004 - At the time of entertaining the refund claim, the admissibility of CENVAT credit cannot be questioned - on this ground the refund claims cannot be rejected and are admissible - Tribunal decision in Verisign Services India Pvt Ltd - 2018-TIOL-1473-CESTAT-BANG followed - refund claims, where the appellant failed to produce the invoices or where address of the appellant was not correct in the invoices, the same are rejected - appeals disposed of: CESTAT [para 6 to 8]

ST - The issue at hand arises from the Conducting Agreement entered into by the assessee, which the assessee executed with the conductor, one M/s Movie Time, for granting conducting rights & which also included option to purchase or lease the theatre belonging to them for lump sum consideration - Of the agreed amount of consideration, M/s Movie Time placed a part thereof as interest free security deposit while on acceptance of the request, paid a certain sum per week as lease rental till the transfer of property for 999 years against lease rent of Rs 100/- per annum, for a certain consideration which was adjusted from the security deposit and on payment of an additional amount - Duty demand was worked out in respect of Renting of Immovable Property Service, on the lease premium received and the lease receipts on which the tax liability had not been discharged and on the finding that the transaction layered under misleading description for such purpose - On adjudication, the proceedings initiated in the SCN were dropped - Such O-i-O was reversed by the Commr.(A) - Hence the present appeal.

Held - The assessee initially contracted with M/s Movie Time for use of theatre for conducting and on exercise of option, purportedly, of purchase, transferred possession itself against annual 'lease rental' and one-time 'premium' components - This prima facie brings the contractual agreement within the scope of the rentals considered by the Tribunal and High Courts in the decisions cited - As pointed out in the O-i-A, the entire property and its benefits thereof, were not alienated by the assessee - The retention of the right to built up space above and around the contracted property was incorporated in the agreement - Therefore, it cannot be determined to be a sale agreement as commonly understood - Hence the consideration is for limited use of the property which falls squarely within the scope of Section 65(105)(zzzz) of the Finance Act 1994 - Considering the absence of complete and entire ownership of the property and in light of the decision in Hobbs Brewers India Pvt Ltd v. Union of India and in RIICO Ltd v. Commissioner of Central Excise, Jaipur-I and considering that 'premium' being 'rent', except in the peculiar circumstances of transactions with entities of state governments, the only issue which remains for resolution is the extent to which the decision in Greater Noida Industrial Development Authority favors the assessee - From a perusal of the judgment, it appears that the principle of taxability that found favor was discarded in circumstances peculiar to that case and the absence of challenge in such circumstances is not be presumed as acceptance of a contrary proposition - Therefore, the lump sum payment becomes taxable under the Finance Act 1994 in addition to the periodic payments: CESTAT

CX - The assessee-company manufactures pure lead and lead alloys - It purchased inputs on high seas import basis through different importers and filed Bills of Entry - On audit, the Department observed that the principal importer received certain services from various providers regarding cargo handling upto the port - These service providers raised BoE directly to the principal importer, which further sent those bills to the assessee for passing of credit - The Revenue opined that the assessee neither availed any service nor paid any amount in lieu of the service, but availed credit of service tax for the relevant period - SCN was served to the assessee proposing to recover such credit with interest and penalties - Such proposals of the SCN were confirmed upon adjudication - Appeal against such O-i-O was rejected by the Commr.(A) - Hence the present appeal.

Held: The proviso to Rule 9(2) states that credit shall not be denied on grounds of lack of documents if the particulars w.r.t. details of service tax payable, description of taxable service, assessable value, service tax registration number of the person issuing invoice and his address, which otherwise were available on record - The provision extends power to the authorities to allow credit in case these details were available in the documents submitted - Considering the list of documents supplied by the assessee, they clarify that all requisite details as mentioned in proviso to sub-Rule 2 of Rule 9 were made available to the Department while availing the credit by the assessee - In such circumstances, the denial of credot for the sole reason that the invoices issued by the service provider were not in the name of the assessee, who was availing credit, is not justifiable - It is clear that the other conditions for availing Cenvat credit were fulfilled by the assessee who admittedly paid the service tax - Hence the O-i-A in challenge is unreasonable, in the sense that it ignores the intent of Rule 9 of CCR 2004 - Otherwise also, the availability of Cenvat credit is a substantial relief, which cannot be denied on account of procedural lapses - Besides, there has been a wrong observation by the Department about payment to have been made by the assessee - The documents listed are sufficient to prove that it was the assessee only who made payment of service tax for the invoice raised by the service providerss though in the name of the principal importer - It is the said principle importer with whom the appellant had entered into an agreement of purchasing the inputs at high seas basis - Hence the O-i-A merits being quashed: CESTAT

CUSTOMS

2020-TIOL-220-CESTAT-DEL

CC Vs Sun Tex

Cus - The respondent-assessee had filed a writ petition seeking to assail the reference order dated 22.01.2019 alleging that specific 'point or points' on which the Members differed were to be recorded while making a reference to the Third Member, in keeping with the specific provisions u/s 129C of the Customs Act 1962 - The miscellaneous application was submitted before the President with a prayer that the bench referring the matter should have specifically stated the 'point or points' on which they differed to a Third Member or the matter may be directed to be heard by another bench.

Held: Considering the decision of the Bombay High Court in Jagat Alloys Pvt. Ltd. vs Union of India it is noted therein that the counsel for the petitioner in the case was verbally directed to approach the President of the CESTAT to ensure that the provisions of Section 129C of the Customs Act were complied with by the Tribunal - The President observed that Section 129C(5) mandatorily required that if the Members were equally divided, to frame the point or points on which they differed but felt handicapped in passing any order - The high court further observed that the Members who expressed a dissenting opinion were bound by the statute to state the point or points of difference and then make reference after making such statement - It was also observed that the entire appeal could not be transferred to a Third Member - In light of such findings, it is necessary to refer the matter to the Members constituting the Division Bench to specifically formultate the point or points of difference of opinion while placing the matter before the President for nominating a Third Member to decide the point or points of difference of opinion: CESTAT

- Application disposed of: DELHI CESTAT

2020-TIOL-219-CESTAT-MUM

P Cawasji and Company Vs CCE

Cus - Penalty - In the absence of any indication that the CHA concerned was complicit in the facts of a particular case, it cannot ordinarily be held liable - If one interprets Regulation 13(o) reasonably in the light of what the CHA is expected to do, in the normal course, the duty cast is merely to satisfy itself as to whether the importer or exporter, in fact, is reflected in the list of the authorized exporters or importers and possesses the Importer Exporter Code (IEC) Number - As to whether in reality, such exporters in the given case exist or have shifted or are irregular in their dealings in any manner (in relation to the particular transaction of export), can hardly be the subject matter of "due diligence" expected of such agent unless there are any factors which ought to have alerted it to make further inquiry - decision of the Delhi High Court in- 2019-TIOL-178-HC-DEL-CUS squarely covers the issue under consideration and following the decision the penalty imposed upon Custom House Agent under Section 112(a) needs to be set aside - appeal of CHA is allowed: CESTAT [para 4.4 to 4.6]

Cus - Duty demand - Issue raised in the appeals filed by the revenue is in relation to quantification of demand - Commissioner should have recorded finding in respect of each Bill of Entry covered by Show Cause Notice dated 11.03.2010 and then confirmed or dropped the demand made - If there was any overlapping demand in the two show cause notices, then the demands should have been adjusted to the extent of overlap - Thus the matter needs to be remanded back to the adjudicating authority to re-determine the issues in respect of the Bill of Entries covered by 2nd Show Cause Notice, which have been removed by him for the reason of their being covered by 1st Show Cause Notice: CESTAT [para 3.4, 5.1]

- CHA appeal allowed/Revenue appeal, matter remanded: MUMBAI CESTAT