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SERVICE TAX
2020-TIOL-858-CESTAT-BANG
Hotel Moti Mahal Vs CCE & ST
ST - Assessee is a restaurant having banquet halls - They sometimes charge only for the food served and do not charge any rentals for the banquet halls - The argument of the department was that any prudent man can understand that without any function no person can stay in the hotel for the entire day and have mid-morning tea with biscuit, buffet lunch, evening tea with biscuit and dinner; though no separate rent was collected for the function hall, charges were recovered for use of LCD projector, laptop, white board, mike system and podium and service charge on the same was paid; organization of function is evident by the usage of LCD projector and the rent for the function hall is inbuilt in the value of food served in function; the temporary occupation throughout the day is to be construed as social function; and therefore, liable to pay service tax and tax was correctly paid after allowing permissible deduction - Revenue has proceeded on certain surmises and conjectures - The two major surmises were that with the usage of LCD display, it is evident that the banquet halls were let out temporarily for a day and that the charges for the same are inbuilt into the bill raised by assessee towards the food charges and this inbuilt value needs to be treated as consideration towards the 'Mandap Keeper' services provided by assessee - It is not open to the Revenue to decide the taxability of a new entry merely on the basis of imagination - For any service to be held to be taxable, there should be a service provider, service recipient and consideration for the service - It cannot be imagined that such consideration was inbuilt - It is incumbent upon Revenue to show such consideration in quantifiable terms in order to levy service tax, though on a discounted value - This becomes more important looking into the fact that the assessee have discharged VAT on the food supplied by them and have also discharged service tax on items like LCD projector allowed to be used - Revenue could not place any proof in the form of a bill to substantiate the allegation that the banquet halls were rented out for a consideration - Therefore, the department's stand is not substantiated so far as the reduction of refund is concerned on merits - The O-I-A is set aside: CESTAT
- Appeal allowed: BANGALORE CESTAT
2020-TIOL-857-CESTAT-CHD
Orange Business Services India Solutions Pvt Ltd Vs CST
ST - The assessee is engaged in 100% export of IT enabled and back end support services to overseas client - They filed the claim for quarters from April, 2008 to September, 2009 for claiming refund of unutilized Cenvat credit of service tax on input services under Rule 5 of CCR, 2004 r/w Notfn 5/2006- CX (N.T.) - Same were rejected on the ground that the refund claims are barred by limitation, no correlation established between exports and invoices and payment realized in convertible foreign exchange - The assessee has made payment against most of the input service invoices after refund claim period and therefore Cenvat credit taken on input services for which refund is being claimed is not correct in view of Rule 4(7) of Credit Rules, 2004 - The similar issue came up before this Tribunal in the case of Emerson Innovation Centre 2016-TIOL-3217-CESTAT-MUM wherein the Tribunal has observed that at the time of sanction of refund when the service charges and service tax stood paid to the service provider the refund cannot be denied for the reason that the assessee was not entitled for the cenvat credit initially - But after payment of service charges and service tax to the service provider they became entitled for the cenvat credit and the sanction of refund claim thereafter cannot be disputed - Although the assessee is not entitled to take credit in terms of Rule 4(7) of CCR, 2004 but no SCN was issued to them under Rule 14 of Cenvat Credit Rules to deny Cenvat credit - The said issue has been examined by Allahabad High Court in case of M/s. HCL Comnet System & Services Ltd. - Admittedly, no SCN has been issued to assessee to deny cenvat credit in question - Therefore, at the time of entertaining refund claim, the admissibility of cenvat credit cannot be denied - Further, at present the assessee is entitled to avail credit in terms of Rule 4(7) of CCR, 2004, therefore, the refund claims cannot be rejected - The impugned order is set aside: CESTAT
- Appeal allowed: CHANDIGARH CESTAT
CENTRAL EXCISE
2020-TIOL-856-CESTAT-MAD
Mahle Engine Components India Pvt Ltd Vs CCE & ST
CX - CENVAT – Rule 2(l) of CCR, 2004 - GTA service - After issuance of the Circular 1065/4/2018-Cx dated 8/6/2018, the Tribunal has decided several cases by remanding the matter to look into the question as to which is the place of removal for the assessee - all these appeals relating to the issue of eligibility of Cenvat credit in respect of Outward Transportation Services upto buyer's premises are remanded to the adjudicating authority who will reconsider the matter afresh keeping the judgments of M/s. Ultra Tech Cements Ltd., M/s. Roofit Industries Ltd., and Board's Circular 08.06.2018 – impugned orders set aside and appeals allowed by way of remand: CESTAT [para 11, 14]
- Matter remanded: CHENNAI CESTAT
2020-TIOL-855-CESTAT-MAD
Advait Steelrolling Mills Pvt Ltd Vs Commissioner of GST & CE
CX - Appellants had availed credit of duty of Rs.14,64,350/- on MS Angles, MS Plates, MS Channels, MS Joist, HR Plates etc. - The department was of the view that these items do not fall within the definition of "capital goods" and, therefore, are not eligible for CENVAT credit under such category – in remand proceedings, original authority again confirmed the demand and imposed penalties and interest, which order was upheld by Commissioner(A), therefore appeal to CESTAT.
Held: In the Show Cause Notice, it is alleged that the appellants have not declared to the department as to what is the capital goods they have manufactured using the MS Angles, Channels etc.; that the description or chapter heading of such capital goods is not stated - The Chartered Engineer Certificate is produced by appellant to show that MS Angles, Channels etc., were used for manufacture of capital goods - The SCN does not specifically allege that these are used for support structures, but merely states that the details of capital goods fabricated is not declared - jurisdictional High Court in the case of M/s. India Cements Ltd. - 2015-TIOL-650-HC-MAD-CX has considered the same issue and held that such items used for fabrication of capital goods and for support of various machines like crusher, kiln, hoopers etc., is eligible for credit – following the said decision, impugned order is set aside and appeal is allowed with consequential relief: CESTAT [para 7 to 9]
- Appeal allowed: CHENNAI CESTAT
CUSTOMS
2020-TIOL-854-CESTAT-HYD
Vasudha Pharma Chem Ltd Vs CC
Cus - The assessee is a manufacturer of pharmaceutical bulk drugs and had exported 22 consignments of drug called "Cisapride Monohydrate BP" - The allegation in SCN is that the export of drug in question was prohibited and 22 consignments of this drug were exported in violation of this prohibition and therefore such exports could amount to smuggling in terms of Section 2 r/w section 113 of Customs Act - Accordingly, the sale proceeds which they received are liable to confiscation under Section 121 of Customs Act - Penalties were proposed under Section 114 and 114 AA - The very basis of SCN that the export of drug was prohibited is not correct as has been clarified by Central Drugs Standard Control Organisation vide their letter dated 30.12.2011 - The Notfn prohibited manufacture, sale and distribution but did not specifically mention export - A doubt can arise whether sale does not include sale through export also - This point was clarified by very organisation which is supposed to administer the prohibition - Therefore, the drugs in question were not prohibited drugs for export during the relevant period - The assessee have not taken NOC before export - In such a case, when the shipping bills were processed, the exports could have been stopped by Customs Officer who were processing the goods - Even if Assessing Officer had missed out the fact that no NOC was submitted, the officer issuing Let Export Order is expected to verify all documents before issuing Let Export Order - This system continues even today even in cases of facilitated shipping bills proceseds through Risk Management System - It was wrong on the part of assessee to export drug without obtaining NOC - It was equally wrong on behalf of Customs Officer to have cleared the export consignment without the NOC - The lapse of assessee in not obtaining an NOC before exporting the drug doesnot requires confiscation of goods which were already exported under Section 113 - This section provides for confiscation of goods attempted to be improperly exported - The impugned order is not sustainable: CESTAT
- Appeal allowed: HYDERABAD CESTAT |
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