2020-TIOL-120-SC-IT

PR CIT Vs SNS Textiles Ltd

In writ, the Apex Court dismisses the Revenue's Special Leave to Petition.

- Revenue's SLP dismissed: SUPREME COURT OF INDIA

2020-TIOL-1165-HC-KERALA-IT

NK Vinoba Vs ITO

In writ, the High Court directs that recovery proceedings against the assessee be kept in abeyance and also directs the CIT(A) to decide upon the assessee's stay application, within two months' time after affording a personal hearing.

- Assessee's writ petition disposed of: KERALA HIGH COURT

2020-TIOL-816-ITAT-KOL

Astik Mondal Vs ITO

Whether it is fit case for remand where the Fair Market Value of certain property is determined without giving access to the assessee to DVO's report and without considering the assessee's objections to the valuation determined by the DVO - YES: ITAT

- Assessee's appeal allowed: KOLKATA ITAT

2020-TIOL-815-ITAT-DEL

Dharam Bir Singh Vs ITO

Whether it is fit case for remand where additional evidence is submitted first before the CIT(A), without the AO having an opportunity to examine the same - YES: ITAT

- Case remanded: DELHI ITAT

2020-TIOL-814-ITAT-MUM

Ashapura Minichem Ltd Vs DCIT

Whether the steps taken by the High Court and Supreme Court indicate that this period of lockdown can be treated as ordinary period during which the normal time limits were to remain in force - NO: ITAT

- Assessee's appeal allowed: MUMBAI ITAT

2020-TIOL-813-ITAT-JAIPUR

Kedia Exports Pvt Ltd Vs ACIT

Whether AO, after rejecting the books, can estimate the income at exorbitant figures ignoring the past history- NO : ITAT

- Assessee's appeal partly allowed: JAIPUR ITAT

2020-TIOL-1172-HC-MAD-CT

Raj Blue Metals Vs ACST

In writ, the High Court finds that in the cited case, the Revenue was directed to not restrict the use of C Forms for inter-State purchases of six commodifies by registered dealers & also permitted online downloading of such declaration. Hence the court follows its verdict and issues similar directions in the present case also.

- Writ petition allowed: MADRAS HIGH COURT

2020-TIOL-1166-HC-MAD-VAT

Calico Industrial Suppliers Vs ACCT

Whether it is fit case for remand where the Revenue rejects assessee's claim for ITC on purchases made from registered dealers & where no reasons are recorded for rejecting the credit - YES: HC

- Case remanded: MADRAS HIGH COURT

2020-TIOL-1006-CESTAT-CHD

Rackitt Benckiser India Ltd Vs CCE & ST

ST - Appellant is engaged in the manufacture and sale of various formulations (fast moving consumer goods) - Appellant discharged Service Tax liability on the royalty paid by the Appellant to the licensors under the category of IPR Service under reverse charge mechanism - The Appellant also paid R & D cess @5% and availed the benefit of Notification 17/2004-ST dated 10 September, 2004 – Revenue view is that the services are correctly classifiable under the category of "franchise service" and consequently the benefit of the aforesaid exemption notification is unavailable – SCN issued demanding the service tax differential for the period 2005-2006 to 2009-2010 - Commissioner confirmed the demand of Service Tax with interest and penalty, but dropped the demand for the period prior to 18 April, 2006 – Assessee is in appeal before the CESTAT.

Held: There is nothing in the agreement which may indicate that the "franchisee" has lost its individual identity and is representing the identity of the franchisor to the outside world - The arrangement is clearly a typical case of a licensing transaction and is in no way similar to a 'franchisee' agreement as understood in the commercial world - In a 'franchisee' agreement, the franchisor owns IPR and allows the franchisee to set up and run the business in the name of the franchisor - The customers coming to the outlets of the franchisor believe that they are directly dealing with the franchisor - A typical example of such an agreement, as has been noticed by a Division Bench of the Mumbai Tribunal in Global Transgene Ltd. - 2013-TIOL-1259-CESTAT-MUM , is of McDonalds where the customer are not concerned with who owns the McDonald restaurant because the customers identify the restaurant with McDonalds - The terms of the agreements, therefore, leave no manner of doubt that the agreement is not a 'franchisee' agreement - The agreement executed between the parties in the instant Appeal clearly shows that the licensor does not have any significant control over the manner in which the Appellant conducts its operation - The Appellant is free to procure the raw materials as per its will and it has a right to fix the selling price of the final product - It is also free to run its business, marketing, distribution, sourcing and other activities as per its own choice without any inference by the licensors - It also makes its own marketing strategy - The only right which the licensor has is to supervise whether the products manufactured by the Appellant are in conformity with the quality, since the brand name of the licensor is being used by the Appellant - This singular right under the agreement will not constitute any control, much less significant control over the operations of the Appellant – Consequently, the arrangement between the Appellant and the licensors will not constitute a franchisee agreement, since the licensor does not have any significant control over the operations of the Appellant - It is, therefore, clear that the services have been correctly classified by the Appellant as IPR - Order dated 16 October, 2012 passed by the Commissioner confirming the demand of service tax and imposing penalty cannot be sustained and is set aside - Appeal is, accordingly, allowed: CESTAT [para 40, 41, 42, 46, 55]

- Appeal allowed: CHANDIGARH CESTAT

2020-TIOL-1005-CESTAT-KOL

Saturday Club Ltd Vs CST

ST - The assessee is engaged in providing club services and other related services and is registered with the service tax department since the introduction of Club and Association services in the Finance Act from 16/06/2005 by inserting the taxable service under section 65(105)(zzze) of FA, 1994 - A SCN was issued to assessee in 2008 alleging non-payment of service tax on corporate membership fees received by assessee prior to 16/06/2005 but for which services are to be provided after 16/06/2005 also proportionately based on the Explanation 3 inserted in Section 67 of FA, 1994 w.e.f. 13/05/2005 for the period 2005-06 including cess and also for non payment of service tax on Junior membership and NRI membership billed in July 2005 and Oct 2005 respectively - Thus the total demand being Rs.41,54,045/- - The major issue to be decided is whether the amounts received by assessee prior to the introduction of levy of service tax under Club and Association services w.e.f. 16/06/2005 can be made exigible to service tax or not - Issue involved is no more res-integra in view of the decision of High Court of Rajasthan in case of CARRIER POINT - It is not in dispute that the department has sought to tax the amounts received as corporate membership prior to 16/06/2005 on proportionate basis after the introduction of levy of service tax on club and association services - Hence, by respectfully following the said decision, the levy on such amounts cannot be sustained and hence the demand to that extent is set aside - However, since the assessee has already collected and paid the service tax, Tribunal refrain from commenting on the aspect of refund of said amount to the assessee - Further, as regards the demand of service tax on Junior and NRI Membership as also on account of Corporate membership from Greaves Cotton Limited, assessee have already paid the service tax on said amounts, however interest on the same has not been paid by them - Thus, interest on the said amount is payable by assessee for delayed payment of service tax - As regards imposition of penalty, the levy was itself introduced w.e.f. 16/06/2005 and the major demand itself not being sustainable, the question of invoking suppression cannot be upheld in the current case - Thus, penalty under section 78 cannot be imposed on assessee - Thus, the impugned order is modified accordingly by setting aside the demand of service tax along with penalty: CESTAT

- Appeal partly allowed: KOLKATA CESTAT

2020-TIOL-1173-HC-DEL-CX

Skyline Engineering Contracts India Pvt Ltd Vs UoI

SVLDRS - The petitioner filed the present petition to contest rejection of its application filed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - The petitioner claimed that the quantification of tax liability has not been done completely and investigation is still pending - The petitioner also claimed that out of three orders filed, two were accepted - However, one was rejected without offering a personal hearing - The petitioner also states that it does not fall under any of the ineligible clauses u/s 125(1).

Held - Notice be issued to the parties in this regard - The Respondent-Revenue is given two weeks' time to file counter affidavit - Matter be listed for hearing on Aug 26, 2020: HC

- Notice issued: DELHI HIGH COURT

2020-TIOL-1004-CESTAT-ALL

Surya Food & Agro Ltd Vs CCE

CX - It is undisputed fact that during the relevant period appellant treated lamination as manufacture and availed cenvat credit on bare films and paid central excise duty on laminated rolls and cleared the same along with other manufactured goods – Pursuant to the Supreme Court decision in Metlex (I) Pvt. Ltd. - 2004-TIOL-77-SC-CX holding that lamination does not amount to manufacture, instructions were issued by CBEC to recover cenvat credit paid on inputs going into manufacture of laminated printed rolls - Accordingly, proceedings were initiated against the appellant by way of issuance of show cause notice dated 23 September, 2008 wherein there was a proposal to recover cenvat credit of around Rs.1.35 crore availed on the bare films which were further used in the manufacture of laminated rolls under Rule 14 of Cenvat Credit Rules, 2004 - There was also another proposal to recover amount of Rs.1.25 crore being a specific percentage of the value of laminated films cleared under the provisions of Sub Rule (3) of Rule 6 of Cenvat Credit Rules, 2004 – demands confirmed and penalty imposed of around Rs. 2.61 crore along with interest – appeal to CESTAT.

Held: In the case of Asian Colour Coated Ispat Ltd. - 2014-TIOL-2111-CESTAT-DEL by a majority it was held that when cenvat credit is availed and the same is utilized for payment of central Excise duty on the goods which were not attracting excise duty, under such circumstances such cenvat credit cannot be recovered - Gujarat High Court in the case of Creative Enterprises - 2008-TIOL-784-HC-AHM-CX has held on similar lines - By following the said rulings the impugned order is not sustainable insofar as it relates to confirmation of demand of Rs.1,35,95,084/- along with interest and equal penalty: CESTAT [para 2]

+ Amount of around Rs.1.25 crore was confirmed under Sub Rule (3) of Rule 6 of Cenvat Credit Rules 2004 – Rule 6(3) provides for recovery of amount in respect of goods which are cleared without payment of duty - It is undisputed fact that laminated rolls were cleared on payment of duty, therefore, the impugned order is not sustainable in respect of the said amount of around Rs.1.25 crore; equal penalty is also not sustainable – impugned order set aside and appeal allowed with consequential relief: CESTAT [para 3]

- Appeal allowed: ALLAHABAD CESTAT

2020-TIOL-1003-CESTAT-ALL

Prabhat Zarda Factory International Vs CCE

CX - Allegation of Clandestine manufacture and clearance without payment of duty - Statement which is not put to scrutiny as examination-in-chief cannot be relied upon as evidence, therefore, statement of Shri Surendra Prasad who was not cross examined before the Original Authority cannot be relied upon in terms of Section 9D (1) of Central Excise Act, 1944 - it is also not established beyond doubt that the said 62 loose papers were recovered from the possession and control of the appellant since during cross examination it is revealed that the said papers were brought from outside – statement as well as the 62 loose papers do not have evidentiary value - Further, the evidence which was relied upon for dropping of the demand of around Rs.31,99,818/- was the evidence relied upon for confirmation of demand of Rs.3.16 crores and thus there is contradiction in the impugned order – impugned order is set aside and appeal is allowed: CESTAT [para 5, 6]

- Appeal allowed: ALLHABAD CESTAT

2020-TIOL-1002-CESTAT-MAD

Pee Industrial Valves Pvt Ltd Vs CGST & CE

CX - For few invoices, the appellant discharged Central Excise duty and later these invoices were cancelled - Undisputedly, the appellant had intimated the department that these invoices are cancelled and thereafter they have taken credit of the said amount - The only allegation is that the appellant ought to have sought for refund instead of taking suo motu credit - Since it was an error which has been intimated to the department and thereafter, no demand was raised with respect to the amount indicated in these invoices, the suo motu credit availed in order to correct the accounts is legal and proper - demand on this score requires to be set aside – insofar as the CENVAT credit issues are concerned of entitlement to credit of tax paid on GTA Services and Rent-a-cab services, matter is remanded: CESTAT [para 5, 6]

- Appeal partly allowed: CHENNAI CESTAT

2020-TIOL-1001-CESTAT-MAD

Care Intra Exim Vs CC

Cus - Goods which are under dispute are drivers for LED panel lights - The adjudicating authority has ordered for absolute confiscation of the goods as the BIS number embossed on the driver did not tally with the registration number given in the BIS certificate - It was held that the subject goods were prohibited for import without BIS certification and ordered for destruction of the same - Penalty of Rs.1 lakhs was imposed on the appellant under section 112(a) of Customs Act, 1962 – as the importer lost his appeal before the Commissioner(A), they are in appeal before CESTAT.

Held: On the drivers, instead of embossing the said Indian Standard number, the Indian Standard number of LED lights happened to be embossed - The appellant has produced letter dated 27.12.2018 issued by M/s. Newsen Electronics Ltd. In the said letter they have stated that it was erroneously printed on the drivers as IS 15885 "PART 5/SEC -2" - From the said letter, it can be understood that the manufacturers has owned the responsibility for the difference in embossing the number on the drivers - It can be understood that the supplier/dealer in the foreign country i.e., M/s. World Light Industries Ltd. will not be able to explain with regard to the difference in BIS numbers - This argument of the AR that the letter is clarification issued by the manufacturer and not by the supplier of the goods is of no substance or relevance – There is merit in the clarification given by the manufacturers stating that it was an error while embossing I.S. no. on the drivers – confiscation cannot sustain and so is penalty which is also set aside – appeal allowed: CESTAT [para 11 to 13]

- Appeal allowed: CHENNAI CESTAT

2020-TIOL-1000-CESTAT-DEL

Trident Techlabs Pvt Ltd Vs CC

Cus - The assessee is engaged in import of software tools and educational kits (Educational Softwares) - A SCN was issued to assessee wherein it has been alleged that the software tools imported by them during the period from September, 2012 to March, 2017 are liable for reassessment on the basis of MRP /RSP for the purpose of levy and assessment of the Additional Duty of Customs (CVD) - The softwares have been procured by assessee from foreign suppliers on the basis of customised orders placed by these institutions to meet their specific needs - Where the customised orders have been procured by assessee after detailed discussions with the concerned departments regarding their specific requirement for a particular kind of software and such software have been got prepared by assessee from foreign suppliers and imported - Such softwares cannot be considered as 'packaged softwares' because such softwares are developed to meet the specific requirement of particular customer/buyer and it cannot be used by variety of users - The O-I-O has failed to analyse the nature of individual software imported by assessee and has not determined individual as to how every consignment of a particular software can be considered as a packaged software - Tribunal is not right forum to undertake primary examination of nature of each individual software to determine whether the same is liable for assessment on the basis of MRP price or RSP value or not - The original adjudicating authority need to undertake a detailed examination of individual software and its related literature and specifications for determining whether they fall under the category of 'packaged software' or not - And to further ascertain whether a particular software requires assessment as per the provisions of Section 4A of CEA, 1944 - The impugned O-I-O is without any application of mind and therefore, the same is set aside - The department is directed to re-adjudicate the matter within a period of three months: CESTAT

- Matter remanded: DELHI CESTAT