2020-TIOL-471-HC-JHARKHAND-ST

Deoraj Singh Vs CCGST & CE

ST - Petitioner was running a business as sole proprietorship concern - subsequently, a partnership firm was constituted and the business of proprietorship firm was taken over with all assets and liabilities, however, service tax for some period was continued to be paid in the name of the sole proprietorship business - partnership firm has, therefore, claimed that the tax that was paid for the relevant period be treated as the tax paid by them - a representation in this regard was given on 22.7.2019 and the same is still pending before the Commissioner, therefore, the petition.

Held: Writ application is disposed of with a direction to Commissioner to pass a speaking order in the matter of representation made within a period of four weeks: High Court

- Application disposed of: JHARKHAND HIGH COURT

2020-TIOL-371-CESTAT-MAD

TVS Interconnect Systems Ltd Vs CCE & ST

ST - The assessee-company is engaged in providing services of erection, commissioning or installation - During the relevant period, it entered into an agreement for supply, erection and installation of communication systems in toll plaza - The assessee in this regard paid service tax under such heading on the amounts received from the customer - The main contractor refused to pay service tax on grounds that the service relating to construction of road was taxable as Works Contract Service, which was exempt - The assessee then filed claim for refund of such amount of service tax - An SCN was issued proposing to reject the refund claim on grounds that it was not correct - On adjudication, the rejection of refund claim was upheld and subsequently was sustained by the Commr.(A) - Hence the present appeal.

Held: It is not disputed as regards the assessee rendering services to M/s. GMR SPV in the capacity of a sub-contractor with the main contractor rendering the services of construction of roads, which included installation of Highway Traffic Management System, Toll Management System, etc., to ensure complete functioning of the road in all respects - It is also not disputed that the assessee was awarded the contract by the main contractor for supply and installation of toll collection and traffic control equipment with the scope of work including supply, installation, integration and commissioning of complete optic fibre based Gigabit Ethernet Communication Backbone Systems and also including detailed design of associated civil infrastructure and implementation - It is clear that the nature of service being WCS, is clearly exempt since the service is provided only towards the construction of road and not for the benefit of any of the parties - Hence the rejection of refund is improper: CESTAT

- Assessee's appeal allowed: CHENNAI CESTAT

CENTRAL EXCISE

2020-TIOL-374-CESTAT-MUM

Ujwal Pharma Pvt Ltd Vs CCE

CX - Issue involved is regarding utilisation of CENVAT credit in discharging monthly duty liability during the period of default; whether the same is irregular and in breach of rule 8(3A) of CER, 2002.

Held: Issue is no more res integra as the same has been considered by the Gujarat High Court in the case of Indsur Global Ltd. - 2014-TIOL-2115-HC-AHM-CX and also by the Bombay High Court in the case of Shanti Engineering - 2019-TIOL-961-HC-MUM-CX and wherein it is held that utilisation of CENVAT credit during the period of default is not irregular and consequently the said portion of rule 8(3A) laying down the same is ultra vires - following the said precedents, no merit in the impugned order - same is set aside and appeal is allowed with consequential relief: CESTAT [para 6]

- Appeal allowed: MUMBAI CESTAT

2020-TIOL-373-CESTAT-MUM

Mercedes Benz India Pvt Ltd Vs CCE (Dated: January 31, 2020)

CX - The assessee-company is engaged in manufacture of motor vehicles and parts thereof - On such goods, the assessee paid the appropriate Excise duty at time of clearance of the same from the factory - Besides manufacturing, the assessee also provides taxable output services and paid service tax thereof - The assessee also imports cars in fully manufactured condition, a.k.a. Completely Built Unit - Such vehicles were sold by the assessee through dealers' network - Since no manufacture activity or any service was provided in relation to the imported cars, neither Excise duty nor service tax is paid on the sale of such cars - The assessee availed Cenvat credit of Excise duty paid on input goods, services and capital goods - The credit availed on inputs are not used in import and sale of CBUs - However, credit availed on certain input services are used for manufacture and clearance of dutiable final product, provision for taxable services and also for import and sale of CBUs - The issue at hand arises from common input services used in the manufacture of goods, providing taxable output services and sale of CBUs - The common input services are advertisement services, event management services, provisional services, cleaning of premises & telecommunication services - During the relevant period, the Revenue alleged that the assessee is not eligible for Cenvat credit on service tax paid on the portion of input services, utilised in the sale of CBUs - Two SCNs were issued, proposing reversal of credit as per Rule 6 of CCR 2004 - Both were adjudicated, whereupon the proposals therein were confirmed and penalty was imposed - Later, the Tribunal dismissed the assessee's appeal and allowed that of the Revenue seeking enhancement of penalty - Two more SCNs were issued proposing to raise duty demand for the relevant periods and both were confirmed with interest and penalty - In regard to these, the Tribunal remanded the matter for recomputing the demand on pro rata basis - On appeal, the High Court remanded all the matters to the Tribunal to re-decide upon the issue - Hence the present appeals.

Held: Considering the arguments of both sides, it is clear that the nerve chord of the dispute lies in the determination and scope of determination of value of traded goods for purpose of Rule 6(3A) of CCR 2004 - As per Rule 6(3A) of CCR 2004 as was in force in the relevant period, there is no mention about determination of value of traded goods - In the explanation, it is provided that the value of the goods is to be determined as per Section 67 of the Finance Act 1994 - Perusal of the Section 67 r/w Service Tax (Determination of Value) Rules 2006 reveals that the value of taxable services cannot include the value of the material/goods being used in redering the taxable services - Simultaneously, it is also accepted that the cost of all anciliary and incidental services for providing the taxable service cannot form part of the value thereof - Applying such principle to the present case, in determining value of non-taxable service, ie trading of imported cars, it cannot include the value of imported cars while apportioning the quantum of credit availed on common input services and attibutable to sale of imported cars - But the total value of the services/expenses incurred in trading of the imported cars, ought to be considered as part of the value for purpose of formula prescribed in Rule 6(3A)(c)(iii) for the relevant period - A similar principle was incorporated in understandin the value of the traded goods under the amended provisions of Rule 6(3)(iv) of the CCR 2004 w.e.f. 01.04.2011 - Thus, to apportion the quantum of Cenvat Credit availed on various common input services and attributable to sale of the imported Cars as per the formula prescribed at Rule 6(3A)(c )(iii) of CCR, 2004, for the period 01.4.2008 to 31.3.2011 the matter needs to be remanded to the adjudicating authority, who would determine the said amount by applying the principles discussed above and other factors for the normal period of limitation - No penalty is to be imposed in these circumstances: CESTAT

- Case remanded: MUMBAI CESTAT

TP - PSUs are not just driven by profit motive but also by other objectives such as discharging social obligations - hence PSUs cannot be adopted as comparable to private companies: ITAT

TP - It is fit case for remand so as to ascertain which between TNMM and CUP methods is appropriate for benchmarking transactions pertaining to advisory and other services, more so where assessee cites its own case to canvass for applying TNMM method: ITAT

TP - It is fit case for remand, where TPO adopts certain comparables without recording reasons thereof & also without providing filters applied or approach followed in such selection: ITAT

TIOL CORPLAWS

Trademark - Suit u/s 20 of CPC can be filed at places in respect of any cause of action arising were infringer has its registered office or at place were infringement has expanded to: HC

Competition - DG investigation can be ordered if prima facie case of contravention against MMT for abuse of dominant position u/s 4 and case against MMT and OYO for entering into vertical arrangement having adverse effect on competition is made out u/s 3(4) read with sec 3(1): CCI