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SERVICE TAX
2020-TIOL-1026-HC-DEL-ST
Team Hr Services Pvt Ltd Vs UoI
ST - Refund of pre-deposit of Rs.2,38,00,000/- - appeal filed by the petitioner against the order passed by the Commissioner (on 03.10.2011) was allowed by CESTAT by order dated 22.02.2018 and the Revenue appeal against this order was dismissed by the High Court on 24.08.2018 declaring that the respondent Revenue had no right to retain the said money of the petitioner – Since there was no compliance, neither of the order dated 17th December, 2019 nor of the order dated 25th February, 2020 of the High Court, vide order dated 3rd March, 2020, contempt notice was issued to the respondents, clarifying that in case the amount due to the petitioner was refunded with interest within one week therefrom, the contempt notice shall stand automatically discharged – Petitioner filed an application for early hearing and which was taken up on 13th May, 2020.
Held: In the present case, as aforesaid, the amount of Rs.2,38,00,000/- was deposited by the petitioner of its own volition, during the audit/investigation, though under protest - The petitioner for the first time sought refund of the said amount vide letter dated 2nd May, 2018 - Considering the said facts, Bench does not find the petitioner entitled to interest at any higher rate than @ 6% per annum from the date of deposit i.e. 27th October, 2006 till the end of May, 2018 i.e. 31st May, 2018 - However, there is no justification for the respondents retaining the said amount thereafter and find the respondents liable for interest with effect from 1st June, 2018 onwards and till date @ 7.5% per annum - While so enhancing the rate of interest, Bench has also taken into consideration the non-compliance by the respondents of the orders of this Court leading to a contempt notice being issued to the respondents - The respondents are expected to at least now, on or before 15th July, 2020 refund the amount of Rs.2,38,00,000/- with interest @ 6% per annum from 1st November, 2006 to 31st May, 2018 and with interest @ 7.5% per annum from 1st June, 2018 till the date of refund on or before 31st July, 2020 - However, if the said amount is not refunded by 15th July, 2020, the rate of interest with effect from 1st August, 2020 shall stand enhanced to 12% per annum – Respondents, inspite of being State within the meaning of Article 12 of the Constitution of India and expected to not act to the prejudice of its citizens, are acting as "finders keepers", by inspite of having been held to be not entitled in law to the entire amount of Rs.4,66,39,061/-, refusing to refund what has already been received and to which they have not been held to be entitled - Bench is also of the view that no purpose will be served in proceeding with the contempt proceedings and the contempt notice issued vide order dated 3rd March, 2020 is discharged - The respondents having however indulged in frivolous litigation, are burdened with costs of Rs.25,000/- payable to the petitioner along with the amounts with respect whereto mandamus has been issued - Petition is disposed of: High Court [para 10, 20 to 22, 24 to 26]
- Petition disposed of: DELHI HIGH COURT
2020-TIOL-866-CESTAT-CHD
CCE & ST Vs Gee 7 Graphics Pvt Ltd
ST - The assessee is engaged in manufacture and sale of photobooks to photography studio or individual photographers who outsourced such work to the assessee against agreed consideration - The photographers/photo studio provides predesigned photos in soft form (CD/pen drive) to the assessee - The assessee cannot format, edit or alter the photographs received by it in the soft form - The customer specifies the nature of sheets and covers to be used in photo books - The assessee prints photographs on both sides of standard plain printing paper by using high quality digital press - Thereafter, the printed photo sheets are laminated on both sides and specified number of printed photo sheets are wire stapled on the stapling machine - Finally, plain sheets are pasted on both sides of stapled book and thereafter, cardboard cover having digital printed photographs of the function is pasted with the staple book to finally make a photo book - There is a complete change in the identity and nature of the photographs when printed from soft form to hard bound form as a photo book - The Revenue views that the activity undertaken by assessee fall under the category of 'Photography service' - The issue has been examined by Tribunal in case of Venus Albums Company Pvt.Ltd. wherein it is held that as the activity of printing has also been exempted from payment of service tax, if the activity undertaken by assessee is in relation to photography service then also the activity undertaken by assessee is not taxable - As the issue has already been settled by Tribunal, therefore, the issue is no more res integra - No infirmity found in the impugned orders and the same are upheld: CESTAT
- Appeals dismissed: CHANDIGARH CESTAT
2020-TIOL-865-CESTAT-CHD
Bharti Airtel Ltd Vs CCE & ST
ST - A demand of Rs.4,17,269/- was confirmed on account of inclusion of value of SIM cards sold by the appellant during the period 01.04.2006 to 31.12.2006 through SCN dated 15.05.2008 – appellant contests the demand on ground of limitation.
Held: Issue, whether on the value of SIM cards the appellant is required to pay service tax or not, was settled by the Supreme Court on 04.08.2011 in the case of Idea Mobile Communication Ltd - 2011-TIOL-71-SC-ST wherein it is held that the value of SIM cards is required to be added in the assessable value of the service provided by the appellant – Therefore, extended period of limitation is not invokable – as the entire demand is for the extended period, on limitation itself, impugned order is set aside – appeal allowed: CESTAT [para 6, 7]
- Appeal allowed: CHANDIGARH CESTAT
CENTRAL EXCISE
2020-TIOL-864-CESTAT-CHD
Bharat Insecticides Ltd Vs CCE & ST
CX - The assessee is located in State of Jammu & Kashmir and availing the benefit of exemption Notfn 01/10-CE - They procured certain inputs and availed credit of duty paid on these inputs - The case of Revenue is that during the relevant period i.e. 01.06.2012 to 19.01.2014, an assessee is not entitled to avail credit against the inputs issued by the units, who are availing exemption under Notfn 01/10 CE and after introduction of Notfn 02/14-CE (N.T.) , the notfn 01/10-CE was amended thereafter the credit was available to the assessee - Without going into the merits of the case, it is found that similarly placed assessee was allowed the credit although against those orders, the appeals have been filed by the Revenue before the Commissioner (A), in that circumstance, when the Revenue is having divergent views on the issue, the extended period of limitation is not applicable - Admittedly, in this case, the SCN has been issued by invoking the extended period of limitation, therefore, the denial of credit is barred by limitation: CESTAT
- Appeal allowed: CHANDIGARH CESTAT
2020-TIOL-863-CESTAT-CHD
CCE Vs Godrej And Boyce Manufacturing Company Ltd
CX - It is a case of dispute regarding valuation of goods transferred to sister concerns when there is also sale price of the same goods to independent consumers through service branches by the respondent - The respondent is a manufacturer of various parts of refrigerators and compressors which they transfer to their sister concerns - They also sell these parts to various independent buyers for use in repair and maintenance - SCN was issued to respondent alleging that since there is a sale to independent buyers, the same value must also be adopted to the goods transferred by them to their sister concerns - Section 3 of Central Excise Act is the charging section for Central Excise duty and this duty can be levied either on the basis of quantity or value - If the goods are to be taxed on advalorem basis, valuation has to be done in terms of Section 4 of Central Excise Act, read with the Central Excise Valuation Rules - Prior to 2000, the valuation under Section 4 was on the basis of "normal value" i.e., the price at which such goods are sold in the course of wholesale trade where the buyer and seller are not related persons - The Valuation Rules during that period also enabled arriving at such normal price - This Section was completely revamped and a new Section 4 has been introduced w.e.f. the year 2000 - Instead of charging duty on the normal price, duty is thereafter to be charged on the transaction value - When there was a concept of normal price, a price list would be filed by assessee and approved by the officers which would show the normal price after appropriate calculations including deductions on account of trade discount and transportation - After 2000, the concept which has been introduced was that of transaction value - Therefore, if the same goods are sold by same assessee at different prices on different dates or to different customers, each such price would be the transaction value for the purpose of determining Central Excise duty - In this changed law, a doubt had arisen in the minds of officers as to how deal with the cases where there is sale to independent buyers as well as sale of the same product to sister concerns by the assessee - This has been clarified by CBEC in aforesaid Circular categorically holding that the price at which goods are sold to independent buyers cannot be applied to determine the value for sale to related persons - The Commissioner has correctly followed this circular in impugned order and Tribunal found no infirmity in the same: CESTAT
- Appeal rejected: CHANDIGARH CESTAT
CUSTOMS
2020-TIOL-862-CESTAT-CHD
Texas Hosiery Mills Vs CC
Cus - Notification No. 102/2007-Cus dt. 14.09.2007 - Refund of SAD - Sole issue for denial of the refund claim is that there is a mis-match in the description of the goods, therefore, it was concluded that the goods imported by the appellant were not the same which were sold by the appellant – appeal to CESTAT.
Held: Merely because there was a mis-match in the description of the goods cannot be the reason to deny the refund claim to the appellant - This fact could have been verified by the authorities after verifying the records of the appellant - onus is on Revenue to prove that the goods sold by the appellant are not the same goods which have been imported - More so, in this case on the invoice the appellant has undertaken that the burden of SAD has not been passed on the buyer and has paid the VAT - Therefore, as the Revenue failed to prove contrary to the claim of the appellant, the refund claim cannot be rejected – impugned order set aside and appeal allowed with consequential relief: CESTAT [para 6, 7]
- Appeal allowed: CHANDIGARH CESTAT |
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