| SERVICE TAX
2020-TIOL-775-CESTAT-DEL
Delhi Duty Free Services Pvt Ltd Vs Commissioner CGST
ST - Appellant is engaged in sale of goods from outlets located at Customs Area, Terminal 3, IGI Airport, New Delhi and had entered into a License Agreement with Delhi International Airport Ltd. (DIAL) for licensing of duty free area to operate shops on payment of license fee, airport service charges, marketing fee and utility charges - DIAL charges Service Tax, Krishi Kalyan Cess and Swachh Bharat Cess on the services provided to the Appellant and the same was paid but a Division Bench of the Mumbai Tribunal in M/s Flemingo Duty Free Shop Pvt. Ltd. - 2017-TIOL-3744-CESTAT-MUM held that the duty free area qualifies as a non-taxable territory and so the Appellant could not have been subjected to the levy of Service Tax, Krishi Kalyan Cess or Swatch Bharat Cess – refund claim filed and Assistant Commissioner sanctioned a refund of Service Tax of Rs. 27,84,25,899/- in favour of the Appellant but denied refund of Rs. 12,77,92,894/- - Assistant Commissioner observed that since the refund applications were filed on 31 January, 2018, only such claims on which duty was paid after 1 February, 2017 shall be eligible for refund of Service Tax and, therefore, all invoices issued from 1 January, 2017 shall be eligible for refund of Service Tax, the rest being time barred - The Assistant Commissioner also observed that the issue regarding unjust enrichment would not be applicable to the refund claims filed by the Appellant – Appeal filed before Commissioner(A) who remitted the matter back to the Adjudicating Authority to examine the refund claim afresh inter alia taking into account the judgment in Vasu Clothing - 2018-TIOL-2931-HC-MP-GST – against this order, appeal filed before CESTAT.
Held: It was imperative for the Commissioner(A) to have confined himself to the issue raised in the show cause notice but what transpires from the Order passed by the Commissioner is that the Commissioner instead of examining this limited issue relating to limitation went beyond the show cause notice and in fact went to the extent of observing that it was necessary for the adjudicating authority to have examined whether the supply by the Appellant qualifies "export of goods" - As noticed above, the show cause notice did not call upon the Appellant to submit a reply on this issue and in fact proceeded on the footing that the sale of goods by a duty free shop to outbound international passengers was "export of goods" - Adjudicating authority or the appellate authority cannot go beyond the allegations contained in the show cause notice - SCN proceeded on the footing that the Appellant qualified as an exporter of goods - impugned order dated 2 May, 2019 is, accordingly, set aside and the Appeal is allowed - The Appellant would be clearly entitled to refund of the amount of Rs. 12,77,92,894/- that was denied to the Appellant by the Assistant Commissioner [para 15, 29, 30]
- Appeal allowed: DELHI CESTAT
2020-TIOL-774-CESTAT-ALL
Major Kalshi Classes Pvt Ltd Vs CCE
ST - The assessee is engaged in providing Commercial Training or Coaching Service - It also provided coaching services for recruitment to the National Defence Academy, and for clearing the Combined Defence Service examination and Service Selection Board interview - The assessee also sell text books and provide hostel facility to some of the service recipients - In the relevant period, the assessee was found to have collected tuition fee and also proceeds from sale of books and forms - Hostel charges were recovered as well - The Revenue issued SCN proposing to treat all these activities and receipts thereof as being bundled service - Duty demand was raised with interest and imposition of penalty - Personal penalty was also imposed on the director of the assessee-company - On appeal, such findings were sustained by the Commr.(A), who nonetheless allowed cum tax benefit and reduced quantum of the penalty imposed u/s 78 - Hence the appeals.
Held - Sale of books - It is not compulsory that books cannot be sold to any other person than the one who was receiving the commercial training or coaching service - The books were published by M/s MKC Publication and were available on flipkart for purchase by anybody -Separate invoice were issued for sale of books and cash receipts out of sale on books were separately maintained in the book of account - The Revenue's contention that the books are rendering 800% profit and therefore, the profits should be clubbed with provision of commercial training or coaching service, are not tenable, because Revenue did not provided any information as to how they have come to a conclusion that there was 800% profit - Further the value of the books cannot be ascertained on the basis of the cost of paper used and cost of printing - Further, separate invoice were issued for book and anybody could have purchased the books - Hence, the sale of books was not taxable activity and therefore, there was no service tax leviable on the sales value of books: CESTAT
Held - Considering the mandate of the Taxation of Services: An Education Guide it is clear that if large number of service receivers of such bundle of services reasonably expect such services to be provided as a package then such a package would be treated as naturally bundled. Revenue has not brought any evidence on record that large number of service receivers reasonable expect every provider of commercial training or coaching service to provide hostel facility - The CBIC also noted that if the majority of service provider in a particular area of business provide similar bundle of services then they should be bundled - The Revenue has not brought forward any evidence that majority of service providers in the field of commercial coaching or training service provided hostel facility. In terms of the criteria stated in the manner of determining if the services are bundled as clarified by Central Board of Excise & Customs it is not possible to bundle service of provisions of hostel facility with commercial training or coaching in the present case - Hence the provisions of commercial training or coaching service and provisions of hostel cannot be bundled under the provisions of Section 66F of the Finance Act, 1994: CESTAT
Held - Hostel facilities - The same are provided for less than Rs 100/- per day and so are entitled for exemption under Notfn No 31/2011 & Sr No 18 of Notfn No 25/2012-ST - Hence the demand on this count is quashed - As the demands are quashed, the penalties merit being quashed as well: CESTAT
- Assessees' appeals allowed: ALLAHABAD CESTAT
CENTRAL EXCISE
2020-TIOL-773-CESTAT-DEL
Akash Ispat Pvt Ltd Vs CCE & C
CX - The assessee filed the present appeal, seeking interest on the amount pre-deposited by it as per mandate of Section 35F when filing appeal before the Tribunal - While refund of the principal amount was sanctioned, the O-i-O made no mention of interest - On appeal, the Commr.(A) upheld the denial of interest - Hence the present appeal.
Held - The Commr.(A) relied upon the findings of the High Court of Delhi in AFCONS Infrastructure Ltd. wherein it was held that interest on pre-deposit amount is available only from the date beyond the period of three months from the date of receipt/copy of the order by the Department and not from the date of pre-deposit - Considering the settled position in law, the present appeal is devoid of any merit: CESTAT
- Assessee's appeal dismissed: DELHI CESTAT
2020-TIOL-772-CESTAT-DEL
Hindustan Copper Ltd Vs CCE & C
CX - Demand has been raised on account of alleged shortage in the quantity of copper metal of 1.290 MT, sulphuric acid of 1.075 MT and also alleged shortage of 54.411 MT of copper in the smelter plant - discrepancy of ore of 21873 MT is equivalent to metal content (as it is worked out to 377.488 MT) on which Revenue demanded excise duty for the alleged shortage, treating the same to be clandestine removal by the appellant.
Held: Discrepancy (shortage) is a normal loss arising due to various factors like handling loss, evaporation loss (moisture content), calculation error (as admittedly ore is estimated as regards the quantum of production and quantum received in the concentrate plant) - cogent explanation given by the appellant has not been found to be untrue - authorities below have erred in not considering the normal loss - Further, there is no single instance of clandestine removal on the part of the appellant - In this view of the matter, the appeal is allowed and the impugned order is set aside - The appellant is entitled to consequential benefits: CESTAT [para 13, 14]
- Appeal allowed: DELHI CESTAT
CUSTOMS
2020-TIOL-771-CESTAT-DEL
Highlink Exporters Pvt Ltd Vs CC
Cus - Appellant is an importer who has imported Deodorant/ perfumes - As per the bill of lading, the port of discharge is Nava Sheva and place of delivery is ICD, Garhi Harsaru, which comes under the Commissioner of Customs, ICD, Patparganj - goods were confiscated with an option for their release on payment of redemption fine on the ground that goods at the time of import were not bearing MRP/RSP - inasmuch as appellant have violated the provisions of Legal Metrology Act, 2009 read with the rules and further, as the goods have been imported at ICD, Garhi Harsaru instead of a 'notified sea port' for import of drugs and cosmetics - as this order has been upheld by the Commissioner(A), the importer is before the CESTAT.
Held: There is no violation by the appellant as the goods have been imported through Nava Sheva which is the notified sea port and further ICD, Garhi Harsaru falls under the jurisdiction of Commissioner of Customs, ICD, Patparganj - The provision of Legal Metrology Act read with the rules thereunder do not prohibit stickering as regards MRP, prior to out of charge given by the customs - Admittedly, such stickering has been done in the facts of the present case - Accordingly, the appeal is allowed and the order of confiscation/imposition of penalty is set aside: CESTAT [para 4]
- Appeal allowed: DELHI CESTAT
2020-TIOL-770-CESTAT-AHM
Parsvnath Metals Vs CC
Cus - The assessee had filed bills of entry declaring the imported goods as Heavy Melting Steel Scrap - The transaction value of goods as mentioned by assessee was USD 300/PMT - However, on first check examination, the goods were found to be Shredded Scrap - Further, based on the contemporaneous imports of Shredded Scrap, it was found that the same is being assessed @ 325 USD/PMT - As the descriptions and transaction values of goods were mis-declared, the Adjudicating Authority has confiscated the imported goods with an option to redeem the same on payment of fine under Section 125 of the Act; demanded differential duty; imposed penalty under Section 112(a) of Customs Act, 1962; and the goods were ordered for assessment at the rate USD 325/PMT after classification under its respective heading - The assessee has nowhere disputed about the mis-declaration of description of goods and enhancement of value of the imported goods - All along the submission of assessee is that there is no malafide intention in mis-declaring the description of the goods - Both the descriptions i.e. Heavy Melting Scrap or Shredded Scrap falls under the same tariff description as well as same Customs Tariff Heading - The rate of duty is same - Moreover, the differential duty on enhancement value is CVD which is available to the assessee as Cenvat credit - There is no malafide intention on the part of assessee - However, it is admitted fact that description i.e. Heavy Melting Scrap was wrongly declared as against the actual material of Shredded Scrap - When there is a declaration of wrong description, the goods are liable for confiscation - As no malafide intention exists, redemption fine and penalty is reduced: CESTAT
- Appeal partly allowed: AHMEDABAD CESTAT |
