| SERVICE TAX 2020-TIOL-43-SC-ST
PR CCGST & CE Vs Shreno Ltd
ST - Construction of residential complex service - While dismissing Revenue appeal, High Court inter alia held that Tribunal had rightly held that once the respondents are not required to reverse any credit availed by them on valid input services availed during the period 2010 till obtaining of completion certificate, the said amounts reversed by them under protest cannot be retained by the revenue authorities and have to be refunded to the respondent - Revenue in appeal before Supreme Court.
Held: After condoning delay, directions given to issue notice and tag the matter with Civil Appeal Nos.1992-1993 of 2019: Supreme Court
- Notice issued: SUPREME COURT OF INDIA
2020-TIOL-260-HC-PATNA-ST
Akash Auto Planet Vs State of Bihar
ST - The petitioner-company filed the present writ seeking that directions be issued to the Revenue authorities to refund the amount of service tax deducted from the petitioner's bill - It also seeks that directions be issued to the Revenue authorities to not deduct service tax from any of the petitioner's bills in future.
Held - It is seen that a similar issue was settled in the judgment in M/s. Rishi Builders India Pvt. Ltd. Vs. The State of Bihar and Ors - The petitioners therein executed different contracts entered into with the Road Construction Department of the Govt of Bihar, in different circles and divisions - It was found therein that there was no mention in the Notice Inviting Tender or in the BOQs of including service tax - The Revenue authorities therein too were unable to justify the action of the authorities as to under what authority of law, the service tax had been demanded - The court had then held it to be well-settled that as per Article 265 of the Constitution, no tax could be levied or collected without authority of law and had found that the Revenue authorities therein lacked the authority to collect service tax which is not leviable as per law - Hence the Revenue authorities therein were directed to refund the amount of service tax deducted from the bills of the petitioners therein - The findings in M/s. Rishi Builders India Pvt. Ltd. Vs. The State of Bihar and Ors are applicable mutatis mutandis to the facts and circumstances of the present case - Hence the Revenue authorities are directed to consider the representation made by the petitioner herein: HC
- Writ petition disposed of: PATNA HIGH COURT
2020-TIOL-241-CESTAT-CHD
MPA Marketing Pvt Ltd Vs CCE & ST
ST - The assessee-company is engaged in photography service and paid service tax on the same - For the relevant periods, the assessee reflected certain miscellaneous receipts on its balance sheets and based on the same, SCN was issued proposing to raise duty demand - On adjudication, the proposals in the SCN were confirmed, along with demands for interest and penalty - Hence the present appeal.
Held - The Revenue failed to prove that the miscellaneous receipts shown by the assessee are part of photography service - It is solely an assumption that miscellaneous receipts are part of photography service - Without any evidence and record, on miscellaneous receipts shown by the assessee in its balance sheet, no service tax can be demanded from the assessee - This follows from the decision of the Tribunal in CCE, Ludhiana vs. Mayfair Resorts - Hence in absence of any evidence placed on record by the Revenue, the demand for service tax is not sustainable: CESTAT
- Assessee's appeal allowed: CHANDIGARH CESTAT
CENTRAL EXCISE
2020-TIOL-42-SC-CX
National Fertilizers Ltd Vs CCGST & CE
CX - In Revenue appeal, High Court had held that the controversy does not relate to either the classification of service availed or to the rate at which such service is availed or provided and, therefore, the preliminary objection qua sub-section (1) of Section 35G that the appeal is not tenable, was negatived - Also held that shifting the burden on the Revenue to determine whether the assessee passed on burden of tax on the final consumer, cannot be countenanced - assessee in appeal before Supreme Court.
Held: After condoning the delay, directions given to issue notice, returnable in four weeks: Supreme Court
- Notice issued: SUPREME COURT OF INDIA
2020-TIOL-244-CESTAT-AHM
Kaira Can Company Ltd Vs CCE & ST
CX - The appellants are engaged in the manufacture of Metal Containers - during the course of audit, it was noticed that for the purpose of packing of their final product i.e. Metal Container, they are using corrugated boxes which were supplied by their buyers free of cost - however, the cost of such corrugated boxes supplied free of cost by the buyers were not included in assessable value of the final product - the case of the department is that since the packing material i.e. corrugated boxes were supplied free of cost by the buyers, the cost of the same needs to be included in the assessable value as, in the form of supply of corrugated box, there is an additional consideration flowing directly or indirectly from the buyers resulting in undervaluation of excisable goods and short levy of duty - accordingly, various SCNs were issued for different periods demanding duty on cost of corrugated boxes - the Adjudicating Authority confirmed the demand of duty along with interest and also imposed penalty equal to duty under Rule 25 of Central Excise Rules, 2002 - on appeal, the Commissioner (Appeals) upheld the order of the adjudicating authority - aggrieved, appellant is before CESTAT.
Held: From the new section 4, it can be seen that only in cases where the transaction value is sole consideration such transaction value shall be the Assessable Value for charging of Excise Duty - however, in the present case, apart from the transaction value the packing material supplied Free of Cost by the customer was also used by the appellant - the value of such packing material was not included - when any Excisable product is manufactured and cleared, the value of such goods shall be the total value of the goods in the form it is cleared from the factory of the Assessee - since the appellant have charged the value excluding the Cost of packing material, the revenue is right in including the Cost of the packing material for a very simple reason that the goods were cleared duly packed in such corrugated boxes - merely because the corrugated box was supplied by the customer does not make any difference as far as inclusion of cost of packing material required to arrive at the Assessable value - since the Transaction Value is not the sole consideration as the packing cost was not included, the value has to be determined resorting to the Valuation Rules made by authority of Section 4 - from a reading of Rule 6 of the Central Excise Valuation (Determination of price on excisable goods) Rules 2000, it is absolutely clear that the said rule was made amongst other circumstances for the purpose of inclusion of Cost of packing material, if it is supplied Free of Charge by the buyer - therefore, by virtue of the above Rule 6 read with Explanation 1 Clause-iii, the value of packing material supplied Free of Cost by the buyer mandatorily needs to be included in the price of final product - therefore, in view of the above Section 4 read with Rule 6 there is absolutely no ambiguity on the issue involved in the present case in as much as the cost of corrugated boxes supplied by the buyer to the appellant is includable in the Assessable Value - since the goods are cleared in the packed form, the cost of packing material needs to be included in the Assessable value - hence the argument of the appellant that the packing of the Metal container is beyond the stage of manufacturing will not help as long as the valuation of goods is for the purpose of charging Excise Duty in the form it is cleared - after introduction of amended Section 4 and New Central Excise Valuation Rules, 2000 the law is very clear that in case where the packing material is supplied Free of Cost by the buyer to the assessee the cost thereof is includable in the Assessable value - there are various judgments on this issue, therefore, it cannot be said that the appellant had any mala fide intention - the appellant have never suppressed any fact as regard non-inclusion of the Cost of corrugated box supplied Free of Cost by their buyer - therefore, when the supply of corrugated box Free of Cost by the customer to the appellant was declared by the appellant to the department, it was open for the department to make out a case if they desired and issue the SCN well within the stipulated time period of one year but despite all the details available with the department the SCN was not issued in the normal period - in this fact, the demand for the period before one year of the date of SCN is time barred and the demand for the extended period is set aside - in view of the above, on merit, the demand is sustainable and on limitation demand for the extended period is set aside - Appeal Nos. E/642/2008, E/795/2011, E/10112/2014 are partly allowed and all other appeals are dismissed: CESTAT [para 10.1, 10.2, 11, 14, 15]
- Appeals disposed of: AHMEDABAD CESTAT
CUSTOMS
2020-TIOL-243-CESTAT-HYD CC, CE & ST Vs GMK Products Pvt Ltd
Cus - DRI alleged that respondents were misclassifying their export products under the DEPB schedule with the intention of claiming higher DEPB credit - in adjudication proceedings, original authority confirmed the reclassification of the exported goods and restriction of the DEPB credit; held goods liable for confiscation, imposed redemption fine and also imposed penalties - Commissioner(A) set aside this order and, therefore, Revenue is in appeal before CESTAT.
Held: It is not in doubt that the goods were declared in a particular manner in the export documents and that they were cleared by the department officers after assessment and examination - As per the description given in the documents, the DEPB schedule under which they claimed credit matched - There is nothing on record to show that the duplicate set of invoices which they prepared for the overseas importers were presented before the customs officers - Only subsequent investigations by the DRI resulted in unearthing of the documents including the duplicate set of invoices - Appellate Authority has not considered this aspect or given any findings thereon, hence matter is remanded with a direction to give a specific finding with regard to the mis-declaration of the goods by way of duplicate set of invoices and the consequences of such mis-declaration on the eligibility of DEPB credit at the rate claimed by the respondent - insofar as order of confiscation of goods and imposition of redemption fine, since the goods have already left the country, the said orders cannot be upheld and so is the case of imposition of penalty u/s 114 - since no duty is involved, imposition of penalty u/s 114A is untenable: CESTAT [para 8 to 10]
- Matter remanded: HYDERABAD CESTAT
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