| SERVICE TAX
2020-TIOL-621-CESTAT-DEL
RK Transport And Construciton Pvt Ltd Vs CC, CE & ST
ST - Handling/Transport charges received from South Eastern Coal Field SECL and Mahanadi Coalfield Ltd MCL for transportation of coal within mines. [Demand of Rs.3,00,17,134/-]
Held: This issue was examined by the Supreme Court in Singh Transport - 2017-TIOL-249-SC-ST. The issue involved was whether coal transported from pitheads of the mines to the railway sidings would fall within the taxable service defined under section 65 (105) (zzzy) of the Act - The Supreme Court held that the activity would appropriately be classified under the head "transport of goods by road service" and the activity does not involve any service in relation to "mining of mineral" as contemplated under section 65(105) (zzzy) of the Act - The Supreme Court also held that the definition of "mines" has no apparent nexus with the activity undertaken under the service rendered - observation of the Commissioner runs contrary to what was held by the Supreme Court in Singh Transport hence it is not possible to sustain the confirmation of demand under this head: CESTAT [para 13 to 15]
ST - Construction of shop-cum godown for Krishi Upaj Mandi Samiti [Demand of Rs.1,13,68,453/-]
Held: It is a fact that the contention that the activity would appropriately be classified under "works contract" and, therefore, would not be covered under "commercial or industrial construction" was not taken by the appellant before the Commissioner, but being a legal plea can be permitted to be taken - the definition of "commercial or industrial construction" remained the same even after 1 June, 2007; the demand could not, therefore, have been confirmed under "commercial or industrial construction" service in view of the apex court decision in Larsen & Toubro Limited - 2015-TIOL-187-SC-ST and which was relied upon in the case of Mega Power Transmission Limited - 2019-TIOL-3154-CESTAT-DEL : CESTAT [para 21, 24]
ST - Construction of road inside the premises of BALCO, SECL, NTPC [Demand of Rs.1,50,11,016/-] & ST - CSEC internal road construction work provided to Prasad & Co. [Demand of Rs.6,13,030/-]
Held: The definition of 'commercial or industrial construction' clearly shows that services provided in respect of roads, airports, railways, terminals, bridges, tunnels and dams have been excluded - The Commissioner has observed that the road should be a ‘public road' and not a ‘private road' - It is not possible to accept this distinction drawn by the Commissioner because the section does not draw a distinction between a private road or a public road - Tribunal decision in Rajendra Singh Bhamboo - 2018-TIOL-1420-CESTAT-DEL relied upon - it is not possible to sustain the demand under this head: CESTAT [para 28 to 31]
ST - Construction of residential houses for employees of NTPC [Demand of Rs.12,70,497/-]
Held: Similar issue was examined by the Tribunal in Khurana Engineering Limited - 2010-TIOL-1712-CESTAT-AHM - The Bench has held that the residential complex was constructed for use by the Income Tax Department to provide the same on rent to its employees and, therefore, the service cannot be included in the definition of "residential complex" services - as the Appellant had constructed residential houses for employees of NTPC, the activity would not be subjected to levy of service tax - demand cannot be sustained: CESTAT [para 35 to 37]
ST - Handling/Transportation of coal within Jindal Super Thermal Power Plant [Demand of Rs.7,83,923/-]
Held: A perusal of the work order shows that the activity undertaken by the Appellant was of transportation of coal through dumpers - The Appellant loads the coal on to the dumpers using pay loaders and then transports the coal to the power plant - The activity, therefore, is clearly of transportation of goods by road and the liability to pay service tax is on the recipient of service and not on the service provider - Tribunal deicision in Jain Carrying Corporation - 2019-TIOL-3382-CESTAT-DEL relied upon - demand unsustainable: CESTAT [para 43, 45]
Conclusion: As none of the demands confirmed under the six heads can be sustained, they are set aside - appeals are allowed: CESTAT [para 46, 48]
- Appeals allowed: DELHI CESTAT
2020-TIOL-620-CESTAT-CHD
City Cable Opera Vs CCE
ST - The assessee is a Cable TV operation who entered into an agreement with M/s Sify Ltd to provide internet services of the latter through its cable network to its clients - It is the Revenue's case that the assessee is a service provider who is providing BAS to the main service provider and so such activity is taxable as such under BAS - The assessee claimed to not have provided any service per se but only to have entered into an agreement which is of the nature of joint venture with M/s Sify Limited as per which the assessee gets a share of the total revenue whilst M/s Sify retains the balance - Upon investigation, the Revenue issued an SCN which culminated into an O-i-O proposing duty demand and imposition of penalties - Hence the present appeal.
Held - The crux of the matter is determination whether activities of the assessee are in the nature of a service provider to M/s Sify Limited and therefore, chargeable to service tax under the head BAS or whether the assessee is a partner in a joint venture with M/s Sify Limited in which case they are neither the service providers nor are M/s Sify Limited the service recipients - Perusal of the agreement shows that it is not in the nature of an agreement between two principals, but rather is an agreement between principal and agent - As a principal, M/s Sify Limited is entitled to engage as many several agents as they please in addition to the assessee - As an agent, the assessee cannot provide services of other ISPs through its network - The agreement is for an initial term of three years & which is renewable at Sify's option for further period of one year - There is nothing in the agreement to suggest that a new joint venture has been formed or a joint venture between the two companies has been established as a business - Nothing in the agreement suggests that the assessee and Sify have an agreement on principal to principal basis - The main service provider/principal is the one who provides internet services to the customers and the assessee provides services to M/s Sify Ltd using its cable network and manpower ensuring last mile connectivity to the user's premises - The assessee also collects bills on behalf of M/s Sify Ltd - Hence the agreement is between a principal and service provider - Hence the activities in question are correctly taxable under BAS - The subject orders warrant no interference with: CESTAT
- Assessee's appeal dismissed: CHANDIGARH CESTAT
CENTRAL EXCISE
2020-TIOL-853-HC-AHM-CX
PR CCGST & CE Vs Shah Foils Ltd
CX - The assessee-company manufactures Stainless Steel Cold Rolled Coils and Stainless Steel Cold Rolled Strips falling under Chapter 72 of Central Excise Tariff Act, 1985 - It uses Stainless Steel Cold Rolled Coils as inputs for manufacturing these items - Based on intelligence inputs, DGCEI sleuths searched the premises of the assessee as well as those of some other persons - It was found that the assessee was operating a trading company which had been registered with the Excise Department as a dealer - Search of other premises revealed incriminatory documents and pen drives - Data retrieved from these pen drives were in the form of computerized ledgers, consisting of main ledgers such as purchase and sale of S.S.C.R. Coils, details of payment received and made vide cheque and cash, capital of directors of the assessee and Loss Account and Balance Sheet and relevant party ledgers - Considering the evidence at hand, it was alleged that the assessee suppressed production of final goods and cleared the same without cover of valid documents and invoices and without payment of Excise duty - It was also alleged that the assessee under-valued its final products at time of their removal from the factory and so had short paid Excise duty - The assessee was alleged to have availed ineligible Cenvat Credit on their purchase invoices received without actual receipt of the goods - It was also alleged that it availed inadmissible credit, received only invoices without receiving goods, with an intent to utilize it so that they could evade payment of appropriate duty and that the transactions related to the alleged clandestine removal and inadmissible credit were not recorded in account books - Duty demands were raised - Later, the Tribunal set aside such demands - Hence the Revenue's appeal.
Held - The Tribunal noted that the sole evidence which was relied upon by the Department was only pen driver data and statement of brokers which were self contradictory - The Tribunal observed it to be settled position in law that charges of clandestine removal were to be proven by means of cogent and unimpeachable evidence - It was further observed that as stood settled in various judgments, charges of clandestine removal could not be sustained solely on the basis of data retrieved from pen drives and loose sheets - Hence no substantial question of law arises: HC
- Revenue's appeal dismissed: GUJARAT HIGH COURT
2020-TIOL-619-CESTAT-DEL
Grasim Industries Ltd Vs CCGST, C & ST
CX - CENVAT - It is evident from the invoices that the same is towards the receipt of the services in the nature of labour for handling of stores - It is also evident that the service provider is registered with the Department and have charged service tax on the invoices, which have been undisputedly paid by the appellant - Further, it has been the consistent view of the Courts and also of the CBEC in its various circulars that, for any error on the part of the service provider, in the nature of mistake under the correct head, no adverse inference can be drawn against the service receiver - credit of Rs.7,64,318/- is admissible to appellant - Insofar as credit of Rs.19,26,435/- is concerned, the same pertains to renovation/repair services provided by M/s.Nagada Infratech Pvt. Ltd., Nagada and M/s.Fabrication, Nagda and some part belongs to repair and maintenance and some part towards the construction of new storage tank/pond - As storage tank is an eligible capital asset under Rule 2(a)(A) of CCR, appellant is eligible for cenvat credit - accordingly, appeal is allowed with consequential benefit: CESTAT [para 10]
- Appeal allowed: DELHI CESTAT
CX - CENVAT - Insurances availed in respect of Money Insurance, Public Liability Insurance, Product Liability Insurance, Loss of Profit for Unit and Fidelity Guarantee Policy are availed in or in relation to the manufacturing activity and, therefore, service tax paid on these services are entitled for credit: CESTAT [para 6]
CX - CENVAT - In respect of Group Personal Accident policy, the appellant has to establish that the personal accident policy is intended only for the employee and that separate premium is not collected for each dependent - There is no evidenced produced that premium collected in respect of group personal accident policy is for employee alone - Since the appellant has not furnished sufficient evidence, Bench is of the view that the rejection of credit in respect of Group Personal Accident policy is legal and proper - same is, therefore, upheld - However, as the issue is an interpretational one, penalty imposed is unwarranted and hence set aside: CESTAT [para 7]
- Appeals partly allowed: CHENNAI CESTAT
CUSTOMS
2020-TIOL-617-CESTAT-MAD
Sea Swan Shipping And Logistics Vs CC
Cus - The appellant is a Customs Broker, against which proceedings were initiated on allegations of violation of Regulations 11(a) & (n) of the CBLR 2013 - Orders were passed, imposing penalty on the appellant, who chose to pay the penalty and not contest the matter in appeal - Later, the appellant sought to expand its business operations but apprehended that it would be denied an NOC due to the penalty imposed - In consequence of legal advice obtained by it, the appellant filed the present appeal, claiming that no penalty is imposable when the inquiry report favors the Customs Broker.
Held - As the appellant has a good case on merits and so deserves a chance to contest the same - The appellant also seeks condonation of 764 days delay in filing appeal - Its primary contention is that the decision of the High Court of Delhi in HM Logistics Pvt. Ltd. Vs. Commissioner of Customs (General) is favorable to it, on account of which, imposition of penalty is not sustainable - It is settled position in law that merely because a favorable judgment comes to notice, the same is per se insufficient grounds to seek condonation of delay - The appellant failed to promptly avail the appellate remedy - Although the law of limitation is not meant to destroy the right of parties, it cannot favor those who sleep over their rights - In the present case, the appellant deliberately opted to not file appeal initially - Besides there is no evidence showing that the appellant's livelihood is affected or its intention to expand its business is interrupted - Hence the appeal merits being dismissed: CESTAT
- Appeal dismissed: CHENNAI CESTAT
2020-TIOL-616-CESTAT-HYD
Sesa Goa Ltd Vs CC
Cus - Export duty on Iron ore - appellant challenged the assessments of the Shipping bills arguing that the amount which they have received from customers on FOB basis must be taken as cum-duty price and the accordingly the Assessable value must be recalculated along with duty - In case of exports, the cost of freight and transit insurance are not part of the transaction value at the Port of export i.e. the Indian Port from where the goods are exported - It includes only the Free on Board (FOB) value and this is the value for the purpose of Section 14 and export duty must be calculated on this FOB value - A plain reading of Section 14 would not show such a change in the valuation methodology is permissible under the law - The appellant cannot, on their own, claim a new valuation methodology for their exports when the law specifically lays down that transaction value at the place of export is the assessable value for determining the export duty - However, it appears that a wrong practice was in vogue of taking the FOB price as cum duty price upto 2008 and this practice has been modified by CBEC Circular No. 18/2008-Cus, dated 10.11.2008 - appeals are, therefore, liable to be rejected: CESTAT [para 7 to 10]
- Appeals rejected: HYDERABAD CESTAT
|
