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SERVICE TAX
2020-TIOL-927-HC-AHM-ST
Smart Graph Art Advertising Pvt Ltd Vs UoI
ST - Applicant prays for issue of a Writ of Mandamus or any other appropriate Writ, Order or Diretion, so as to quash and set aside Reminder-I letter dated 02.12.2019 and letter dated 27.06.2019, both issued by the Superintendent (prev.), CGST, Ahmedabad South; that pending the hearing and final disposal of this petition, High Court be pleased to stay operation and execution of Reminder-I letter dated 02.12.2019 and letter dated 27.06.2019 - It is the case of the writ applicant that no such letter has been received till this date and, therefore, the writ applicant has no idea about the contents of such letter - It is also the case of the writ applicant that the letter issued, demanding documents for Audit, under Sub-rule 2 of the Rule 5(A) of the Services Tax Rules, is illegal as there is no sufficient cause in favour of the Department to issue such a letter, demanding documents at this stage, more particularly, when the provisions of the Services Tax Act, 1994,, i.e. Chapter-V of the Finance Act, 1994, have been repealed - Applicant submits that this issue is being looked into by this Court in the Special Civil Application No.14195 of 2019.
Held: Bench is of the view that the writ applicant should file a detailed reply to the impugned Reminder dated 2nd December, 2019 and the grounds which are urged before the Court shall be put forward before the concerned Authority - Writ Application is disposed of with a direction to the respondent No.3 to furnish a copy of the letter of the even no. dated 27th June, 2019 at the earliest and once the writ applicant is in receipt of such office letter dated 27th June, 2019, as referred to in the Reminder-I, the writ applicant shall look into the same and file an appropriate reply making good his case that the demand is not justified in law - Writ Application stands disposed of: High Court [para 7 to 9]
- Application disposed of: GUJARAT HIGH COURT
2020-TIOL-722-CESTAT-MAD
Olam Information Services Pvt Ltd Vs Commissioner of GST & CE
ST - The assessee is engaged in providing Information Technology Software Service, Online Information & Database Access Service and/or Retrieval Service to clients located outside India - They filed application under Rule 5 of CCR, 2004 seeking refund of unutilised Cenvat credit of service tax paid on input services - SCN was issued proposing to disallow the credit/refund availed on various services - The credit on various services is disallowed by lower authorities - The Cleaning Service-Pest Control Service have been availed for making the premises of assessee pest free - The disallowance of credit of such services is unjustified and is set aside - The credit availed on Air Travel Agent Service have been disallowed alleging that there is no evidence to establish that the services were availed by the employees in discharge of their office duty, the employees have travelled in connection with the discharge of their office duty and, therefore, credit/refund is eligible - The refund in respect of Group Insurance Service has been disallowed alleging that it is excluded from the definition of input services, assessee has not produced any evidence to show that said services are not availed for personal consumption of the employees - Hence, the rejection of refund by the authority below is upheld - The reasons for disallowance of credit on Hotel Services is that the same is excluded as these services are availed for personal consumption of the employees, assessee has to be given a further opportunity to establish their contention and furnish evidence that the said service has been used by employees in discharge of their official duty - This issue is remanded to the adjudicating authority - Credit in respect of Interior Decorator Service, Business support service and Event Management Service have been disallowed stating that these services do not have any nexus with the output service, the decision relied by assessee in case of M/s. Emerson Innovation Centre 2015-TIOL-887-CESTAT-MUM has analysed the issue and held that there is no requirement to establish nexus of input service with output service - Moreover, w.e.f. 2012, Rule 5 has been amended wherein, the refund is eligible on input services and it is not necessary that the assessee has to establish that the input services were used for providing the output service: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
2020-TIOL-721-CESTAT-DEL
Balaji Enterprises Vs CCE & ST
ST - The dispute is with regard to the subsidy received by the Appellant from Tata Tele Services on the sale of mobile handsets purchased from third party vendor - Tata Tele Services has not provided any handsets to the Appellant but the Appellant has purchased the handsets from third parties specified by Tata Tele Services - There is no agreement between the Appellant and Tata Tele Services for selling mobile handsets at a lower rate - The mobile handsets are independently purchased by the Appellant and VAT is discharged on the sale of mobile handsets to the customers - However, while selling the handsets, the Appellant sells them at a price lower than the purchase price and Tata Tele Services pays the differential amount as subsidy to the Appellant - SCN proceeds on the footing that the Appellant has received this amount of subsidy for providing the service of promotion of marketing and other services which amount, therefore, appears to be taxable under BAS defined under section 65(105)(zzb) of the Act – demand confirmed, therefore, appeal to CESTAT.
Held: Tribunal decisions in Swapnil Asnodkar - 2018-TIOL-92-CESTAT-MUM and United Telecoms - 2011-TIOL-56-CESTAT-BANG clearly hold that it is imperative for the Department to specify which specific service contained in the seven clauses of section 65(19) of the Act is being provided and in the absence of any specific service pointed out in show cause notice, the demand cannot be confirmed as the noticee will not be aware as to which precise service contained in the sub-clause has been rendered by him - In the present case, the show cause notice, even after reproducing the seven clauses of section 65(19), does not specify which particular clause was attracted and it only mentions that "the assessee is an authorized distributor appointed by M/s TTSL for selling CDMA handsets along with connection to the customers. The expenditure incurred by the distributor is reimbursed by M/s TTSL in the guise of subsidy and the same appears to be covered under the definition of "Business Auxiliary Service" and chargeable to Service Tax since, the amount received by the assessee was in respect of providing Business Auxiliary Service to M/s TTSL." - impugned order, therefore, can be set aside only on this ground as the show cause notice does not mention which service out of the seven services specified in section 65(19) of the Act was undertaken by the Appellant - The subsidy is paid to the Appellant by Tata Tele Services to compensate for the loss incurred by the Appellant on the sale of mobile handsets at a lower price and cannot be said to have any relation to the service of promotion or marketing - Thus, in the absence of any services provided by the Appellant to Tata Tele Services, service tax could not have been levied on the amount of subsidy received by the Appellant - Even if the subsidy is treated as a reimbursement, then too the same cannot be subjected to service tax in view of the decision of the Supreme Court in Intercontinental Consultants & Technocrats Pvt. Ltd. - 2018-TIOL-76-SC-ST – impugned order set aside and appeal allowed: CESTAT [para 16 to 18, 24, 25, 29, 34, 38, 43]
- Appeal allowed: DELHI CESTAT
CENTRAL EXCISE
2020-TIOL-720-CESTAT-BANG
West Coast Paper Mills Ltd Vs CCE & ST
CX - CENVAT credit on the items of iron and steel utilized for fabrication, construction etc is allowable - appeals are allowed with consequential benefits: CESTAT [para 5]
- Appeals allowed: BANGALORE CESTAT
2020-TIOL-719-CESTAT-DEL
Vipul Motors Pvt Ltd Vs Commissioner (Appeals), Central Excise And Central Goods and Service Tax
CX - The main business of assessee is to sell motor vehicles manufactured by Maruti Udyog Ltd. and they collected "handling/ logistic charges from the customers, over and above the ex-show-room vehicle price - A SCN was issued mentioning therein that assessee had not paid service tax on the handling/ logistic charges recovered from the customers for providing service of safe handling and cleaning of cars till the delivery to the customers - It is not in dispute that up to June 2010, the assessee had been paying service tax on the handling charges - They stopped paying service tax in view of assessment order dated 6 June 2011 issued under provision of VAT Act for the year 2011-12, based on the definition of 'sale' under the VAT Act and various decisions of Supreme Court - A Division Bench of Mumbai Tribunal in Automative Manufacturers (P.) Ltd. observed that service tax could not be levied on such charges since they form part of the value of goods sold - The Tribunal also held that 'handling charges' were incurred in connection with the procurement of the goods and are included in the value of goods sold and VAT liability has to be discharged by including the cost of handling charges - Thus, any consideration received for supply of goods would not be covered within the scope of section 66 of Finance Act - On a consideration of factual position before Mumbai Tribunal in Automative Manufacturers and the present Appeal, it would be seen that they are basically the same - What needs to be noted is that though the assessee had specifically referred to decision of Tribunal in Automative Manufacturers Ltd , both before the Joint Commissioner as also before the Commissioner (A), yet neither the Joint Commissioner nor the Commissioner (A) have made any reference to this decision - This decision, which has a great bearing on the controversy, should have been noticed and in case, the Joint Commissioner or Commissioner (A) thought that it was not applicable, should have distinguished - However, these decisions have not even been considered by said authorities - Thus, it is not possible to sustain the order passed by Commissioner (A), same is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2020-TIOL-718-CESTAT-DEL
Yutaka Autoparts India Pvt Ltd Vs Commissioner of Central Goods and Service Tax
CX - The assessee is engaged in manufacture of auto parts and supplying the same to M/s Honda Cars India Ltd. (M/s HCIL) - On the basis of an audit, it was alleged that the assessee have availed Cenvat credit wrongly of additional duty of customs paid by them on the import of various parts of auto parts as M/s HCIL while issuing the cenvetable invoices to assessee did not mention the particulars of import documents against which the supplier has availed Cenvat credit and used the same for payment of duty on the auto parts supplied by them to the assessee - A SCN was issued to assessee - It is a matter of record that the verification undertaken by Jurisdictional Assistant Commissioner categorically reports that the duty has been paid by supplier after debiting the credits of additional duty of customs - There is no dispute of the fact that the duty which is indicated on the invoices has been paid by assessee to the supplier of the goods - The inputs which are mentioned in invoices have been received and utilized in manufacture of excisable goods - The invoices on the strength of which the inputs have been removed contain all the details as are required under Rule 11 of CER, 2002 - There is complete transparency from both side that is, from the supplier side and on the part of assessee, on supply of inputs and their utilization as well as in availing of the Cenvat credit and its further utilization - No merit found in the conclusion which has been reached by Adjudicating Authority while denying the Cenvat credit to the assessee and therefore same is set aside - Since the appeal is being allowed on the merit itself and therefore no need to entertain other issues which has been raised by assessee during the course of hearing and in their appeal: CESTAT
- Appeal allowed: DELHI CESTAT
CUSTOMS
2020-TIOL-923-HC-DEL-CUS
DRI Vs C, CE & ST Settlement Commission
Cus - In the relevant period, DRI officers seized a 2 cars and a truck which arrived at a godown in Delhi - Search of the vehicles revealed 300 cartons of cigarettes - each carton had 60 boxes and the same had been concealed beneath Aluminium scrap - The goods were of Indonesian origin & as the persons in the vehicles were unable to produce any document establishing the licit nature of the imported goods, the goods were seized under the reasonable impression that they had been smuggled - Another container at ICD Ludhiana was seized & in such container, imported cigarettes were found as well - Thereafter, the persons - who were involved in the imports filed writ petition seeking provisional release of the seized cigarettes - They also sought that directions be issued to the DRI to issue SCN so that they could then approach the Settlement Commission and have the matter settled - Such pleas were allowed by the High Court - Ultimately SCNs were issued, proposing to confiscate the cigarettes imported - Duty demands were also raised and duty already deposited was proposed to be appropriated - Meanwhile the respondents approached the SETCOM to contest the duty liability and interest demand raised - Meanwhile, vide Notification No.103/2016-Customs(NT) cigarettes were notified u/s 123 of te Customs Act - The DRI claimed that by virtue of third proviso to Section 127B of Customs Act, the settlement applications were not maintainable as they were filed at time when cigarettes were notified u/d 123 - However, such argument of the DRI was rejected - The SETCOM proceeded to settle the case and quantified the duty and interest at a figure lower than as was raised in the SCN - Hence the present writ by the DRi in contest of such findings.
Held - It is seen that the SCNs in the present case were issued by the DRI and the goods were also seized by the DRI - The SCNs were yet to be adjudicated - Hence it cannot be said that the DRI being aggrieved party, is ineligible to maintain a writ petition against an order of the Settlement Commission: HC
Held - The proscription contained in third provision to Section 127B of the Customs Act, 1962 clearly attaches at the time of making of the application before the Settlement Commission, and not at any prior or later period of time including the date of the import of the goods - Applications in respect of items notified u/s 123 of the Act on the date when the applications are made are statutorily incompetent, due to the third proviso to Section 127B of the Act - Hence, once the goods are covered u/s 123, the respondents could not have filed an application u/s 127B of the Act - By no stretch of imagination can it be said that the Settlement Commission had any power, jurisdiction and authority to decide an application preferred by the respondents under Chapter XIV of the Customs Act - Hence the order passed by the SETCOM is de hors its jurisdiction and so merits being quashed: HC
Held - The respondents claimed that the settlement application was filed pursuant liberty granted by the High Court of P&H - It is obvious that the High Court of P&H never delved into the maintainability of the settlement application - As cigarettes were notified prior to the filing of the settlement application, the applications were expressly not maintainable - It is well settled that an order passed by a Court cannot be so interpreted as permitting a statutory authority to act in violation of the statute: HC
- Revenue's writ petition allowed: DELHI HIGH COURT
2020-TIOL-717-CESTAT-KOL
Vaishali Sedds Corporation Vs CC
Cus - In a case of illegal attempt for exportation of 508 cartons of pesticides without any valid Bill of Export, the adjudicating authority confiscated the seized goods and imposed redemption fine and also imposed penalties on the appellants herein -on remand by the Tribunal, the Commissioner (Appeals), vide impugned order, again upheld the adjudication order, hence appeal.
Held: Commissioner (Appeals) has almost reiterated the previous order and did not either get the documents submitted by the appellants further verified or justified the order with proper reasoning - the Department could not justify the reason for not chasing the persons alleged to have carried the boxes in their hands or on head load on foot to Nepal at 07.00 hrs. though they had the motor vehicle and manpower - it was also not clear as to how the Driver and Khalasi allowed unknown persons to unload cartons without their permission as no third person was available in that truck/vehicle - there is no explanation given by the Department for not showing all the documents recovered from the Driver/Vehicle in the seizure list as claimed by the appellants - in respect of the pesticides sold to M/s.Vaishali Seed, M/s.Dow Agro Science India (P) Ltd, appears to have satisfied the investigating agency, with documents and stated that M/s.Vaishali Seed was their Distributor and the impugned pesticides were actually supplied to them - the seizure was effected due to shortage of 22 cartons of pesticides in the truck - later, the appellant accounted for the same - there was no further investigation to verify the claim of the appellant but it was simply observed as concocted - the goods of other two parties were released though the goods of all three parties were seized from the same truck and booked for attempt to illegal export - on the basis of the above, it appears that the investigation agency could not prove beyond doubt that the goods were actually attempted to export illegally to Nepal - the activities of the appellants may be suspicious but not enough to hold charge of attempted to export in the absence of positive evidence - in view of the above, the impugned order passed by the Commissioner (Appeals) cannot be sustained and is set aside - the appeals filed by the appellants are allowed : CESTAT [para 8, 9, 11, 12]
- Appeals allowed: KOLKATA CESTAT |
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