|
SERVICE TAX
2020-TIOL-1071-CESTAT-DEL
Krishi Utpadan Mandi Samiti Vs CCGST
ST - The only issue to be decided is whether assessee has crossed the threshold limit of Rs. 10 lakhs - Admittedly, the period of demand is 2009 to 2014 i.e. pre as well as post Negative Regime - It is also admitted that gross rent received by assessee during these years is Rs. 15253485/- whereupon service-tax payable is Rs. 1748702/- - It is nowhere has been denied that some part of rent is received for sheds/shops/godowns used for purpose of agricultural produce - With the introduction of Negative List Regime of Taxation w.e.f. 1.7.2012, the assessee's services were excluded from the tax liability - It is clear that the assessee, being an Agricultural Produce Marketing Committee, is excluded from the tax liability in terms of the provisions - Services relating to agricultural produce by way of storage or warehousing are in the negative list - The scope of negative list has been examined by Board in Education Guide dated 20.06.2012 - Accordingly, assessee is not liable to service tax on renting of immovable property used for storage of agricultural produce in the market area - Hence, the gross rent received w.r.t. activities related to agricultural purposes has to be excluded from the gross value of rent as confirmed by adjudicating authority below - Support drawn from decision of Tribunal in assessee's own case in 2017-TIOL-2049-CESTAT-DEL - Now coming to issue of "aggregate value" mentioned in notification, this notification was effective upto 30.06.12 and thereafter the SSI exemption was continued vide Notification 33/2012-ST - Clause (vii) and (viii) of Para 2 and Explanation (B) regarding "aggregate value" given in the said notification dated 30.06.2012 are relevant in the instant case - Adjudicating authority has wrongly clubbed to incomes of various Mandi Parishads to that of assessee's value of rent received - Hence, said amount is also liable to be deducted - In Catalco Chemical (P) Ltd. , it was held that while clubbing of clearances, department has to establish mutuality of interest of flowback of funds else clearances of different units cannot be clubbed together for ascertaining the SSI exemption benefit - Since each Mandi Samiti has its own PAN number and that all the statutory dues like Income tax, House Tax & other taxes are deposited separately & individually, thus each Samiti is an independent legal entity and should be treated as a separate body - Clubbing receipts of all Samitis is not justified and benefit of exemption limits should be given to assessee - It becomes clear that the rent received by assessee qua sheds rented for commercial purpose is liable to service tax - Admittedly, the assessee is a Government Organisation; their functions are regulated by the enactment and the rules - In such situation, it is clear that there will be a rebuttable presumption regarding non-existence of any of these ingredients on the part of assessee - There is no evidence of assessees' malafide act to evade Service Tax liability by resorting to conduct, which will attract any of the serious allegation listed in proviso to Section 73(1) of the Act - It stands clear that demand confirmed against assessee is set aside because the value of rent which falls within tax net and within normal period of limitations remains less than the threshold value of Rs. 10 lakhs in the impugned notification: CESTAT
- Appeal allowed: DELHI CESTAT
2020-TIOL-1070-CESTAT-ALL
Manoj Jain Vs CCE & ST
ST - Appellant entered into a contract with M/s Obra Thermal Power Station for providing services under the category of 'Repair & Maintenance Services' - Inasmuch as the said contract indicated the value of the services as also the value of the goods separately, the appellant was filing ST-3 returns and was discharging service tax liability only on the value of the service – Revenue entertained a view that the gross value has to be taken into consideration for payment of service tax – demand issued by invoking the extended period of limitation – appellant took the stand that they are entitled for abatement of the value of the goods since they had paid VAT, however, no evidence furnished; also that the demand is hit by limitation – lower authorities confirmed demand, hence appeal to CESTAT.
Held: Identical issue was the subject matter of the Tribunal Final Order No.71839-71842/2018 dated 06/08/2018 wherein identical services were being provided to another Thermal Power Station and the Tribunal had held that no malafide could be attributed since the contracts were entered with a public sector undertaking and that the extended period of limitation could not be invoked, penalties could not be imposed – Bench, therefore, holds the demand to be barred on limitation and remands the matter to Original Adjudicating Authority to re-quantify the demand falling within the limitation period, if any; that appellant is also at liberty to raise the issue of payment of VAT; penalties set aside –Appeal disposed of: CESTAT [para 6, 7]
- Appeal disposed of: ALLAHABAD CESTAT
2020-TIOL-1069-CESTAT-KOL
Royalline Resources Ltd Vs CCE
ST - The assessee is an exporter of goods and had filed refund claims under notfns 17/2009 and 52/2011 for exports made during the period December 2010 to May 2012 - There is no need for a claimant to file evidence to substantiate that service providers have not availed exemption/ tax benefit, especially when there was no such condition in notification itself - Thus by holding so, the Commissioner (A) has added his own condition to the notification, which is not permissible under the law in view of decision in case of Radhu Industries relied upon by the assessee - In view of the amendment to definition of port services, all services provided within the port area are classified as port services - Further, there is no such condition prescribed in the notification which requires the service provider to be authorized by the port - However, it is observed that in the case of R R Global Enterprises 2016-TIOL-3308-HC-AP-CX itself, the High Court has held that insignificant requirements like endorsement of applications prescribed merely for orderly conduct of business can be waived off - As is evident from the discussion, the current set of appeals are arising out of non-compliance of such insignificant requirements only - Therefore, the reliance on this decision is incorrect - Since the assessee's refund claim was for more than 0.25% of FOB value of exports, there was no need for self-certification - The Chartered Accountant certificate submitted by assessee was enclosed along with the refund application stating the shipping bill against which the certificate was issued - The conclusion of Commissioner (A) that the certificate is a general open–ended certificate is erroneous and not tenable, especially when the notification is silent w.r.t the format in which the certificate has to be submitted - The impugned order is set-aside: CESTAT
- Appeals allowed: KOLKATA CESTAT
CENTRAL EXCISE
2020-TIOL-1084-CESTAT-BANG
Tally Solutions Pvt Ltd Vs CCE
CX - Appellant are providers of taxable output services and had an accumulated CENVAT credit of Rs.2,01,80,704/- till November 2008 when they started manufacture and clearance of packaged software - Credit to the extent of Rs.1,59,77,335/- was utilised by them in terms of rule 3(4) of the CCR for payment of central excise duty on the excisable goods cleared by them - Revenue objected to such utilisation and issued a demand notice dated 05.09.2011 which stands confirmed by the Commissioner along with imposition of equivalent penalty - aggrieved, assessee is in appeal.
Held: From a reading of rule 3(1) of CCR, 2004, it is seen that a manufacturer of excisable goods can take credit of CENVAT paid on input services and there is no such requirement of one to one co-relation and there is no bar on the utilisation of CENVAT credit availed on input services for payment of tax on excisable goods manufactured and cleared - Issue is already settled in favour of the appellants in a host of cases and though they are not exactly on similar facts or circumstances, they decide the general principles that in respect of utilisation of credit there is no one to one correlation and cross utilisation of credit is permissible - any contra view if taken would defeat the very scheme of credit - while disposing the stay petition, the Bench had also observed - 2014-TIOL-490-CESTAT-BANG that prima facie there was no suppression of facts or mis-declaration on the part of the appellants inasmuch as timely scrutiny of the returns by the department would have shown that there is huge accumulated credit and department was free to investigate the matter and issue timely SCN - appellants, therefore, also have a strong case on limitation - impugned order, therefore, does not survive, both on merits as well as limitation - Appeal is allowed: CESTAT [para 6 to 9]
- Appeal allowed: BANGALORE CESTAT 2020-TIOL-1068-CESTAT-KOL
Til Ltd Vs CCE
CX - The assessee supplied certain goods without payment of duty by availing the benefit of Notfn 10/97-CE - The description of the goods as well as conditions to be satisfied, for such duty free clearance is also specified in the notification - The assessee received the certificate as required under the notification from the Director, Defence Research and Development Organization ('DRDO') for certain goods - There is no dispute that DRDO is one of the organizations for whom the goods may be cleared subject to production of a certificate from an Officer of appropriated rank - The dispute is regarding claim of assessee for the benefit of notfn 10/97-CE - The notification permits duty free clearances for goods to be supplied to Public Funded Research Institutions - DRDO, to whom the assessee has cleared the goods, is one of the agencies specified in the notification - The Department noticed discrepancies in the original certificates issued by the DRDO - However, the DRDO has subsequently issued amended certificates in respect of clearances which are the subject matter of another appeal - The goods cleared by assessee are covered by amended certificates and the assessee will be entitled to benefit of duty free clearance under the said notification - In respect of the goods which are the subject matter of this appeal, the goods mentioned in DRDO certificate are not in the nature of 'Prototype' as can be seen from the amended certificate issued by DRDO in respect of one set of the items for another appeal - Thus, the benefit cannot also be denied for the same goods cleared to DRDO - The impugned orders are set aside: CESTAT
- Appeals allowed: KOLKATA CESTAT
2020-TIOL-1067-CESTAT-KOL
CCE Vs Texmaco UGL Rail Pvt Ltd
CX - Assessee had filed a refund application for Rs.7,27,52,794/- under Rule 5 of CCR, 2004, in respect of various input services which remained unutilized during the period April, 2014 to June, 2014 - Assessee further submits that out of refund claim of Rs.7,27,52,794/-, the department has allowed refund of Rs.1,75,79,982/- and balance refund of Rs.5,51,72,812/- has been rejected - The only question on the basis of which refund claim has been rejected is on the ground that input services used by assessee were in relation to set up of factory which has been specifically excluded from the definition of input services as provided in Rule 2(l) of CCR, 2004 - It is observed that in the SCN, the refund was rejected without rejecting eligibility of input service in terms of Rule 2(l) of CCR, 2004 - Thus, rejection of refund claim on this ground is beyond jurisdiction and bad in law - It is settled legal principle that any new findings not forming part of allegation raised in SCN is legally not tenable, hence on this ground itself department have no case and appeal is allowed - Various kind of input services has been taken by them during the set up stage of manufacturing unit - These services do not form part of such exclusion clause, hence they are clearly available as credit - Moreover, adjudicating authority has admitted in impugned order that the input services on which credit has been availed were essential for running of business and a pre condition for manufacturing final product - This also goes long way in establishing the fact that these services were eligible: CESTAT
- Revenue's appeal rejected: KOLKATA CESTAT
2020-TIOL-1066-CESTAT-KOL
SAIL Vs CCE
CX - The assessee has an integrated steel plant having more than 2 million ton iron and steel manufacturing capacity - It consists of several plants - A SCN was issued alleging that structural parts, pipes, spares manufactured internally by assessee were removed for captive and/or for home consumption without payment of duty, availing the benefit under Notfn 281/86-CE, though not eligible during the period March 16, 1987 to March 15, 1989, thereby evading central excise duty - The benefit under said Notification has been denied on the grounds that the goods were used in structures and parts thereof and not used as parts of machinery; that such goods were not coming within the purview of repair or maintenance as specified in said Notification to attract the benefit thereof, in as much as they were meant for replacement of complete machinery and/or were too extensive and elaborate in nature to be covered by the term "repair or maintenance"; that some goods were cleared outside the factory to different parties surreptitiously without payment of duty - As regards to the first ground, the term "machinery" in said Notfn is not confined to a single machine but extends to a machine and group of machines to perform useful function - All goods manufactured in workshop in assessee's factory used for repair or maintenance of such machines in a Steel Melting Shop are therefore eligible to exemption under the said Notification - In respect of the goods under second category, there has been replacement of worn out or damaged or defective parts with the subject goods - Such replacement of parts is fully covered by the term "repair" in said Notification - This has been held by Tribunal in case of A.S. Moloobhoy & Sons 2011-TIOL-1546-CESTAT-MUM while interpreting a similar notification - Applying the same, it is held that the assessee has correctly availed benefit under said Notfn in respect of the goods covered under this category - In respect of the 3rd category of goods, assessee has already, more than 28 years back, in February and April 1991, deposited Rs. 1,48,736/- out of the demand of Rs. 1,90,707/-, although contending that most of the goods are of such nature, e.g., steel cots, handles, press stand and sport materials on which no central excise duty was payable and hence no exemption under the said Notification was availed - Considering the smallness of the amount involved and the fact of deposit of most of the demand by assessee in the year 1991, Tribunal is not inclined to go into this dispute any further, while holding that the payment as abovestated made by assessee settles the issue - There can be no application of the extended period of limitation in the instant case - Further, the Commissioner and the Deputy Commissioner, as well as the jurisdictional Commissioner (A) have dropped the SCNs/demands of duty in respect of similar goods, upon accepting the assessee's contentions on the self same/similar issues involved herein for subsequent periods, which orders have been accepted by the Revenue - Hence, there can be no allegation of suppression of any material fact or wilful misstatement on the part of assessee - In such a case, there can be no invocation of extended period of limitation as per the Proviso to Section 11A of the Act - The penalty imposed upon the assessee is also unsustainable: CESTAT
- Appeal allowed: KOLKATA CESTAT
CUSTOMS
2020-TIOL-1232-HC-DEL-CUS
Ramesh Chadha Vs PR CC
Cus - Petitioner seeks quashing of 84 notices issued by the Customs Department, to show cause why penalty under Section 112(b)(ii) read with 114AA of the Customs Act, 1962, for improper importation of goods etc. should not be imposed - Some of the SCNs having already been decided penalties imposed and the same are also challenged though the said orders are statutorily appealable and appeals are stated to have been preferred and pending but still this petition is filed, contending that the contents of the SCNs issued, insofar as against the petitioner and the findings returned in the decisions pursuant to some of the show cause notices, do not show any case against the petitioner under Section 112(b)(ii) to have been made out - Respondent has contended that the writ petition is not maintainable and ought not to be entertained owing to the appellate remedy available.
Held: Bench has heard the petitioner at length but is unable to find any case for quashing of the show cause notices or the orders passed in pursuance thereto, in writ jurisdiction - Counsel for the petitioner seeks to withdraw the petition with liberty to pursue the statutory appeal - Petition is, therefore, dismissed as withdrawn with liberty to pursue the statutory remedies - Petitioner seeks consolidation of all the proceedings due to his advanced age, therefore, the petitioner is entitled to make a representation for consolidation to the authorities concerned and which representation if made, shall be dealt with in accordance with law: High Court [para 4, 6]
- Petition dismissed: DELHI HIGH COURT
2020-TIOL-1065-CESTAT-KOL
Seatrans Marine Pvt Ltd Vs CC
Cus - The assessee is engaged in shipping business and had acted as Shipping Agent of importer M/s JSW JSW Steel Ltd., who had chartered a Foreign Vessel M.V.Spar Virgo for carriage of Iron Ore Fines - The assessee filed Bill of Entry for payment of duty on bunkers, provisions and stores likely to be consumed during coastal voyage - The Bill of Entry was provisionally assessed and the assessee paid provisional duty vide TR-6 Challan - Subsequently, the said Bill of Entry was finalized on 31.08.2015 - The said assessment order was not challenged by any party and attained finality - Thereafter, a SCN was issued to assessee for payment of differential Customs duty along with interest - The assessee is not the importer and in fact, the importer is M/s JSW as per Section 2 (26) of Customs Act, 1962 - In the case of Aspin Wall and Company , it has been held that simply by presenting papers for clearance of goods, one does not become importer of goods or agent of importer under Section 147 of Customs Act, 1962 - The person presenting the papers cannot be held to be responsible for short levy of duty on grounds of having filed Bill of Entry on behalf of importer - Further, the addition of 1% of price paid to ship owner as loading and un-loading charges is also not sustainable in law in view of the judgement of Apex Court in case of Wipro Ltd. 2015-TIOL-79-SC-CUS wherein it is held that unloading charges at a flat rate of 1% of FOB value added by Customs authorities in assessable value is in violation of Section 14 of Customs Act, 1962 - The actual unloading charges being nil, nothing can be added towards un-loading charges - Further, the addition of 20% and 1.125% of the price paid to ship owner towards freight and insurance, is also not sustainable in law because the said addition is based on a wrong presumption that price paid to ship owner for bunkers and stores is a FOB price - No amount has been incurred by JSW in addition to what has been paid to ship owner and on which duty has already been assessed towards freight and insurance - Thus, when Customs duty has already suffered on value of bunkers and provisions, which included all costs incurred upto the Haldia Port, there is no question of any addition of freight and insurance - The impugned orders are not sustainable in law and therefore, same are set aside: CESTAT
- Appeals allowed: KOLKATA CESTAT
2020-TIOL-1064-CESTAT-KOL
Ganpat Rai Shri Ram & Company Vs CC
Cus - The assessee had imported goods declaring them as 100% Polyester Bed Cover/Quilt Cover classifying the same under CTH 6304 - Intelligence gathered by DRI showed that unscrupulous importers were importing Polyester Woven Fabrics classifiable under CTH 5407 and mis-declared them as Polyester Bed Cover/Quilt Cover - A SCN was issued to assessee proposing to reject the classification sought by them and instead to classify the product as Polyester Woven Fabrics and accordingly, demanding differential duty - It was also proposed to confiscate the goods under Section 111 and impose penalties - In the proceedings before the Commissioner (Port), assessee sought cross examination, which was denied to them relying on Madras High Court's Order in case of K.P.Manish Ingredients Global Pvt. Ltd. 2017-TIOL-1998-HC-MAD-CUS - The entire SCN rests on documents, namely, test report of ATIRA and Textile Committee, Bombay - There are no other relied upon documents in SCN - Both the reports disputed the classification and description of the imported goods claimed by assessee - Any adjudication order passed by denying such cross-examination is unlikely to stand the test of legal scrutiny - On the other hand, assessee has been careless in not even filing a written reply to SCN, but only seeking cross-examination - Since the entire SCN is based only on the reports of ATIRA and Textile Committee, the letter issued by Deputy Commissioner, communicating the decision of adjudicating authority to deny the cross-objection, is a significant decision which falls within the ambit of Section, 129A of Customs Act, 1962 as a decision by the adjudicating authority - Therefore, the present appeal is maintainable - The denial of cross-examination communicated through the impugned order is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT |
|
