|
SERVICE TAX
2020-TIOL-1114-CESTAT-DEL
Lemon Tree Hotel Vs CGST, CE & C
ST - Issue is whether the advance received from a customer for booking of a room in a hotel, whether on the cancellation of the booking, the said amount or a portion forfeited by way of cancellation charges, whether the same amounts to taxable receipt under Section 66 E(e) of Finance Act, 1994 and whether any service is involved for delivery of food in the room of the hotel, is taxable - Commissioner (Appeals) while confirming the demand in the matter of the first issue has observed that retention of such cancellation charges is not against the provisions of intended services but for not availing the said services by the customers, which the appellant has tolerated.
Held: Observations of the Commissioner (Appeals) are erroneous and have no legs to stand - Admittedly, the customers pay an amount to the appellant in order to avail the hotel accommodation services, and not for agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; and chargeable on full value and not on abated value - The amount retained by the appellant is for, as they have kept their services available for the accommodation, and if in any case, the customers could not avail the same, thus, under the terms of the contract, they are entitled to retain the whole amount or part of it - Accordingly, it is held that the retention amount (on cancellation made) by the appellant does not undergo a change after receipt - no service tax is, therefore, attracted under the provisions of Section 66E(e) of the Finance Act: CESTAT [para 5]
ST - Regarding service tax on food served in the room is concerned, Bench finds that the appellant, prima facie , sold the food, which attracts service tax/VAT - Further, CBEC in its Circular No. 139/8/2011-TRU dated 10.05.2011 has clarified that when the food is served in the room, the service tax cannot be charged under the restaurant service as the service is not provided in the premises of the air-conditioned restaurants with a licence to serve liquor, and also the same cannot be charged under the Short Term Accommodation head, if the bill for the food is raised separately and it does not form part of the declared tariff - Service tax can be levied if there is an element of "Service" involved which would typically be the case where the food is served in restaurant - The element of service is not involved and it amounts to sale and does not attract service tax - Admittedly, it is the case of the Department that the appellant has provided food in the rooms, which is not included in the room service - appellant is, therefore, not liable to pay service tax on the delivery of the food in their hotel rooms - Appeal allowed with consequential benefit: CESTAT [para 6]
- Appeal allowed: DELHI CESTAT
2020-TIOL-1113-CESTAT-KOL
Fairfest Media Ltd Vs CGST & CE
ST - The assessee is registered under category of "Business Auxiliary Service" and is engaged in organizing of travel and other business exhibitions in various States within the Territory of India - They also got registered for import of service - During audit, it was noticed that the assessee has not paid service tax on software service and patent related expenses and also from legal charges paid, which they were required to pay under the reverse charge basis - Accordingly Spot Memo was issued and assessee paid the service tax along with interest and communicated the same to the Department vide their reply - SCN was issued demanding service tax along with interest and for imposition of penalty under Section 78 - The issue is no more res-integra in view of the decision of Tribunal in case of Bhoruka Aluminium Limited 2016-TIOL-3060-CESTAT-BANG wherein it is held that the Department did not bring any material on record to prove that there was suppression and concealment of facts to evade payment of tax, consequently, imposition of penalty under Section 78 of the Act is not justified - In view of the same, the impugned orders are set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2020-TIOL-1112-CESTAT-KOL
Advent Multi Services Pvt Ltd Vs CCE
ST - The assessee is engaged in running a training institute imparting vocational training under general insurance training programme - They had obtained Service Tax registration under the category of 'commercial training and coaching services' and had also paid Service Tax on such services - Thereafter, they felt that they did not have to pay the Service Tax on service rendered by them, as vocational training institutions were exempted by Notfn 9/2003-ST from payment of service tax - Based on this belief, they filed a refund application - As the issue was not examined by Commissioner(A) or by the Tribunal, but appeals were dismissed on the question of maintainability itself, doctrine of merger does not apply in this case - The Commissioner has overturned the refund sanctioned by Deputy Commissioner firstly on the ground that the assessee was not entitled to the exemption Notification and secondly on the ground that they have voluntarily paid the Service Tax - Thirdly, he also reversed the refund which was sanctioned by Deputy Commissioner on the ground that the refund claim was filed beyond the period of one year prescribed under section 11B of Central Excise Act as made applicable to the Service Tax - On the first question of admissibility of exemption Notification to the services in question, IRDA (Licensing of Insurance Agents) Regulation, 2000 require the specific practical training imparted by assessee for anyone to work as an agent - Therefore, by undertaking the training one would be able to seek employment or become self-employed - The coaching/training imparted by assessee is vocational training in terms of exemption Notfns - Therefore, assessee was not liable to pay Service Tax, but undisputedly they did so - The relevant period in the case is 19.12.2003 to 31.03.2006 - The refund application was filed on 27.10.2006 which would mean that part of their refund claim was filed beyond the period of one year within which the refund claim must be filed - Part of the refund claim is within the period of limitation - Therefore, it would meet ends of justice if refund is sanctioned within the period of limitation - Any claim filed beyond the period of limitation is not admissible in view of the statutory time limit - The refund claim must still be sanctioned, but credited to consumer welfare fund instead of giving it to the assessee - However, the assessee must be given an adequate opportunity to establish whether they have passed on the burden of the Service Tax to their clients or otherwise: CESTAT
- Appeal partly allowed: KOLKATA CESTAT
CENTRAL EXCISE 2020-TIOL-1111-CESTAT-CHD
Brawn Loboratories Ltd Vs CCE & ST
CX - The assessee is in appeal against impugned order wherein the claim of refund of duty accumulated on account of export under Rule 5 of CCR, 2004 - The Apex Court in case of Spentex Industries Ltd. 2015-TIOL-239-SC-CX has examined whether under Central Excise Rules, the rebate is admissible - No where in the said case, the Apex Court considered the admissibility of refund claim under Rule 5 of CCR, 2004 - Therefore, the said decision is of no help to the assessee - As per Rule 5 of CCR, 2004, a manufacturer who has cleared his final product for export without payment of duty under bond or letter of undertaking can file refund claim under Rule 5 - Admittedly, none of these conditions has been satisfied by assessee as they have neither cleared the goods under bond without payment of duty or through letter of undertaking - Therefore, fundamentally, the assessee has not complied with the condition of Rule 5 of CCR, 2004 - Further, as per the proviso of said rule, no refund of Cenvat credit shall be allowed if manufacturer avails drawbacks allowed under customs duty or Central Excise and service tax drawbacks Rules 1995 or claim rebate of duty under Sections of CER, 2002 which means that the assessee shall not claim rebate of duty under CER, 2002 - Admittedly, assessee has claimed rebate of duty under Rule 18 of CER, 2002 - Under the provision of Rule 5 of CCR, 2004, the refund claims are not maintainable - In these terms, no infirmity found in the impugned orders, same are upheld: CESTAT
- Appeals dismissed: CHANDIGARH CESTAT
2020-TIOL-1110-CESTAT-ALL
Shivashakti Bio Technologies Ltd Vs CCE
CX - Notification No.50/2003-CE dated 10.06.2003 - Dispute revolves around the correct classification of the products manufactured by the appellant for the purpose of deciding entitlement to exemption – whereas appellant had classified the goods manufactured under Chapter 38, Revenue contended that the correct classification is under 31.05 and consequently exemption under 50/2003-CE is inadmissible - declarations filed by the assessees located in the area notified for area-based exemption are required to be examined for verification - The Range Superintendent had undertaken such verification and filed a detailed report dated 19.01.2010 to the Assistant Commissioner at Rudrapur - In the said report, the range Superintendent mentioned that in order to examine the admissibility of the said notification and to verify the genuineness of the claim of the party, the factory premises of the appellant was visited along with sector officer on 29.12.2009 and thereafter a verification report was submitted in which it is communicated that benefit under this notification appeared to be available to them – Subsequently, on visit of officers, show cause notice dated 19.05.2014 was issued demanding duty for the period 01.03.2011 to 31.03.2014 and the same was confirmed – appeal to CESTAT.
Held: In terms of the documentary evidences placed on record, the entire facts were placed by the appellant before their jurisdictional Central Excise Authorities which stands examined, verified and accepted by them - As such, it cannot be said that there was any suppression or mis-statement on the part of the appellant with intent to evade payment of duty - In the absence of any evidence to the contrary, Bench is of the view that bonafide of appellant cannot be doubted - Consequently, the extended period is not available to the revenue - demand falling beyond the normal period of limitation is set aside along with penalty - appellants have referred and relied upon various precedent decisions which were not available at the time of adjudication – As applicability of the said decisions are required to be examined, matter is remanded to the said extent to the Original Adjudicating Authority: CESTAT [para 7 to 9]
- Appeal disposed of: ALLAHABAD CESTAT
2020-TIOL-1109-CESTAT-KOL
Bombay Food Products Vs CCE & ST
CX - The assessee was engaged in manufacture and trading of biscuits - It had purchased 4,140 bags of sugar, being the old stock from the period 1994-95 and 1995-96, at an auction conducted by Bihar State Sugar Corporation in February, 2001 - The Revenue views that the assessee had used 3,265 bags of unaccounted sugar of which 875 bags had been seized and subsequently provisionally released, in the clandestine manufacture and sale of biscuits - This resulted in the issuance of SCN - There is a want of evidence with respect to the adverse findings against the assessee that it utilized unaccounted stock of old sugar towards clandestine manufacture of biscuits - Such findings are neither supported by material proving unaccounted procurement of maida, ammonia, salt or flavours nor flowback of funds in the assessee's accounts - The purported buyers of such clandestinely cleared biscuits remained unidentified - Further, the Impugned Order has not dealt with the infrastructural incapability of assessee to manufacture such huge quantities of biscuits - The consumption of electricity was also in consonance with the assessee's stated figure of 1,600-2,000 kgs. daily biscuit production - It is an undisputed fact that on the day of search and seizure, 70 bags of dry and white sugar had been found in assessee's factory premises - This had been further explained by assessee's proprietor Sri B. K. Khetan during question by Central Excise officers - Supporting bills in respect of such sugar purchase had also been submitted on sample basis - In the Form 3CD (Mishri Division) for AY 2002-03 sugar purchase of 16.50 MT meant for biscuit production had been declared - On the same lines the Manufacturing Trading and Profit and Loss Account for the year ended 31.03.2002 showed raw materials purchase for Rs.11,88,958.34 - The Commissioner fell in error by recording that the assessee had not given details of mishri production - Further, the assessee throughout maintained that contract labourers had been separately engaged for mishri production with labour charges shown in the Trading and Profit and Loss Account (Mishri Division) as on 31.03.2002 - However, no follow up investigations seem to have been done proving that such claims of engaging contract labourers were false or that the assessee had concocted a story to guard its clandestine activity - The Commissioner has mis-read the several statements given during the course of investigation explaining the method of mishiri production - Nothing contrary found therein - The finding in impugned Order that the assessee did not purchase Parel-G biscuits from M/s Maruti Foods has not been substantiated - The Impugned Order is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
CUSTOMS
2020-TIOL-1272-HC-DEL-NDPS
Nitesh Amrut Bhai Patel Vs Narcotic Control Bureau
NDPS - Appellants have been convicted for the offence punishable u/s 23 r/w s.29 of the Narcotics Drugs and Psychotropic Substances Act, 1985 (NDPS Act) and have been sentenced to undergo Rigorous Imprisonment for ten years with a fine - Appellants challenge the impugned judgment, essentially, on four fronts, First, that the trial court has erred in convicting the appellants solely on the basis of self incriminating statements of the appellant Nitesh Patel, which were not made voluntarily; Secondly, the case set up by the prosecution is not supported by evidence on record; Third, that the sample tested by the Central Revenue Laboratory is not the sample of the seized substance allegedly sent to the said laboratory and, fourth, that the case has not been properly investigated.
Held: [para 112 to 120]
+ NCB has founded its case on statements of the accused Nitesh Patel, Sagar Iyer (PW8) and Mushahid Ali (PW18) - Notwithstanding that there is little evidence to corroborate the statements, the Trial Court accepted the said case on the premise that the self-incriminating statements of the accused were corroborated by the statements of Sagar Iyer(PW8) and Mushahid Ali (PW18) - said premise is erroneous and therefore, the impugned judgment cannot be sustained.
+ Unsubstantiated statements recorded by NCB in their offices are intrinsically weak evidence and of limited evidentiary value even though the same may be considered as admissible - It would be unsafe to convict any person solely on basis of such statements - It is equally unsafe to accept such statements as corroborative of one another, in cases where hard evidence to establish whether such statements are true or false exist but are not produced.
+ A fortiori, such statements would lose any evidentiary value if they do not conform to the available tangible evidence - In the present case, the statements made by the accused and Mushahid Ali is not consistent with the evidence on record including the POBC Delivery Run Sheet.
+ Further, Mushahid Ali's (PW8's) testimony – and his statement (ExPW1/Z8) – seeks to establish that he could identify the parcel dispatched by Sagar Iyer (PW8) as the parcel dispatched by him to Ahmedabad on the basis of the Proforma Invoice, Airway Bill in question and VISA manifest report (Ex PW1/B1 an Ex PW1/B2), which is impossible in the given facts. Clearly, his statement/testimony could not be relied on to provide the link evidence or ascribe any corroborative value.
+ The Trial Court erred in not examining the material placed on record and accepted the prosecution's case even though there is sufficient material to doubt the case set up by the prosecution - The Trial Court had completely ignored that the parcel seized by NCB weighed 2.4 kgs and the parcel allegedly received by Nitesh Patel weighed 36 kgs and this belied the prosecution's case that the parcel dispatched by Sagar Iyer was the same that was received by Nitesh Patel from Chennai.
+ There is a doubt whether the sample of the substance seized is the same as the sample received by the Central Revenue Control Laboratory because the weight of the sample sent and received is different.
+ NCB has failed to garner any hard evidence either on account of being highly economical in carrying out any investigation or for some ulterior motives.
+ The net result of the exercise conducted by the NCB is also that the person (Sagar Iyer) who is admittedly guilty of fabricating the invoice; falsely signing on behalf of the shipper of the parcel; and shipping the parcel, has been absolved of his role in the said offence. This is despite his statements indicating the reasons for doing so are not consistent. Further, there is no credible explanation as to why he was chosen to book the parcel by another courier agent (Nitesh Patel) even though he was not the franchisee of Fedex and the parcel was booked through Freight Centre (as reflected on the Airway Bill in question).
+ Appeals are allowed. The impugned judgment convicting the appellants and the impugned order are set aside. The appellants are acquitted of the charges and shall be released from custody forthwith if they are not required in any other case. -Appeals allowed : DELHI HIGH COURT 2020-TIOL-1271-HC-DEL-NDPS
Devki Global Capital Pvt Ltd Vs UoI
NDPS - Petitioners are feeling aggrieved by the non-registration by the respondent no.2-the Narcotics Commissioner, of their contracts for import of poppy seeds from Turkey.
Held: A reading of the Schedule I - Import Policy [ITC (HS) 2017] would clearly show that though described as freely importable, the import of poppy seeds is subject to the policy conditions, which inter alia restricts the countries from which such imports can be made; the requirement of such opium poppy being grown legally in that country; and the registration of the import contracts with the respondent no.2 in accordance with the Guidelines issued by the Department of Revenue, which may inter alia include fixing of the Country Cap - The 'National Policy on Narcotic Drugs and Psychotropic Substances', in Clause 17 provides that the import of poppy seeds will continue till self-sufficiency is achieved - A fair and harmonious reading of the Clauses of MoU would clearly show that even though one of the relevant consideration for determination of the Country Cap is the quantity of the poppy seeds available in Turkey for exports, the same is not the sole criteria, and such determination can take place based on other relevant criteria/considerations, such as domestic production and demand of poppy seeds in India - In the present case, though the Committee appointed in terms of Clause 1 of the Guidelines acknowledges the availability of 8438 MTs of poppy seeds in Turkey for exports to India, the Competent Authority has taken into account the imports allowed from China and Czechoslovakia, the domestic licit production of poppy seeds in 2019, and the expected production/availability of poppy seeds in April-May, 2020, for its decision to finalize the Country Cap at 18000 MT - Such determination cannot, therefore, be said to be arbitrary or unreasonable - In terms of Clause I of the Guidelines, the Competent Authority has to base its decision determining the Country Cap on the recommendation of the Committee constituted in terms of the said Clause - However, it cannot be said that such recommendation is binding on the Competent Authority, that is, the Department of Revenue. The Competent Authority, for germane reasons, may decide not to agree with the recommendations, as has happened in the present case - The relevant file notings on the consideration of the recommendations by the Competent Authority reflects due application of mind on the recommendations and reasons for not agreeing to the same - The determination of the Country Cap would be in the realm of economic policy and unless found to be mala fide, unreasonable, arbitrary or unfair, this Court in exercise of its powers of judicial review cannot interfere with the same. in terms of Clause 1 and Clause 2 of the Guidelines, it is the exporting company in Turkey which has to get the sales contract registered with the Turkish Grain Board (TMO) and only upon such registration, the Indian importer can approach the respondent no.2 for seeking registration of the sales contract - Therefore, registration of the Agreement by TMO is a matter between the exporter and the TMO, with which the respondents cannot be concerned or in any manner influence - The TMO shall be bound by its own procedures and law applicable in Turkey - This Court cannot examine the procedure followed by the TMO or issue any directions there against - This court also cannot ask TMO to explain how, if at all, and on what basis only the contracts that were registered prior to notification of the Country Cap got re-registered thereafter - As far as the respondents are concerned, once the sales contracts of the petitioners were not found on the online system as being registered by the TMO, the respondents have rightly refused to register such contracts and no fault can be found in such an exercise - Clause 3 of the MOU between the Government of India and Government of Turkey casts a responsibility on the TMO not to register sales contract in excess of the Country Cap declared by the Government of India - It would be for the TMO, therefore, to determine in what manner and following what procedure such contracts shall be registered by it - It can also not be said that the respondents have failed to discharge any duty by not inquiring from the TMO about the non-registration of petitioners' contracts - In any case, the occasion for the respondents to adopt 'first cum first serve' principle would never arise: High Court [para 16, 17, 22, 23, 24, 25, 32, 33, 35, 36] -Petition dismissed : DELHI HIGH COURT
2020-TIOL-1108-CESTAT-KOL
Shri Mayeen Uddin Vs CC
Cus - A SCN was issued proposing confiscation of seized gold and to impose penalty on the appellants - By the Adjudication order, the Commissioner confiscated the seized 20 nos. Gold bars absolutely and imposed penalties on appellants - Both the appellants have filed these appeals in respect of imposition of penalty - The appellants are not claiming the seized gold - There is no need to determine as to whether the goods were smuggled or not - The question is as to whether penalty would be imposable on the appellants under Section 112 (b) (i) of Customs Act, 1962 - It is seen that the Customs Officers on 02.03.2017 found one Orange colour Polythene Bag Lying on the table of Billing Counter of the shop - Shri Mayeenuddin informed the Officers that the said packet was kept by Mr. Rouf who left the place before entering the Officers - It is stated by Shri Mayeenuddin that since there was no other customer in the shop at that time, he was going through the Accounts of the Shop - The Customs Officers immediately took possession of orange colour polythene packet - Md. Saleh Ahmed who is the owner of M/s Zaman Traders stated that he deals with hardware items like sanitary goods, pipes and pipe fittings - Both the appellants in their statements stated that they have no knowledge of material contained in the said packet - The Adjudicating Authority observed that it is not at all believable that any person would keep gold bar without his knowledge and consent - On the other hand, it is contended by appellants that if they had any knowledge of the seized gold, they would not keep the goods on the table of the shop in such a manner - In any event, there is no material available on record that the appellants had any knowledge of seized gold - It appears that the Adjudicating Authority imposed penalties on the basis of assumption and presumption, which is not permissible under the law - Hence, no justification found to impose penalty on the appellants - Accordingly, the penalties imposed on the appellants are set aside: CESTAT
- Appeals allowed: KOLKATA CESTAT
2020-TIOL-1107-CESTAT-KOL
Madhukar Sonaba Bhagat Vs CC
Cus - The issue arises for consideration is, whether the assessee has satisfactorily discharged his onus under Section 123 of Customs Act, 1962 to the effect that the gold seized from him is not smuggled gold and consequently, whether the seizure of gold under Section 111 and confiscation of Indian Currency under Section 121 and imposition of penalty under Section 112 of the Act, are sustainable - The allegation is that the assessee has smuggled gold, which is liable for confiscation under Section 111 of the Customs Act, 1962 - The gold was seized from his shop in the City - In such cases, Section 123 of Customs Act, 1962, provides in respect of the gold and some other notified goods, if the seizure was under reasonable belief, that they are smuggled, the onus of proving that they are not, rests upon the person from whom the goods were seized - The seizure was based on information that they had received and that the documents pertaining to the gold, were not found in shop at the time of seizure - There is nothing on record to suggest that the pieces which were seized had any foreign markings - There was no reasonable belief for the seizure - Further, assessee had produced various documents to show how he came in possession of gold and these documents, on investigation, were found to be genuine - It is for this reason that the Commissioner has refrained from imposing any penalty upon assessee under Section 114AA of Customs Act, 1962 - The confiscation of gold and the currency and imposition of penalty upon assessee under Section 112 of Customs Act, 1962, are, therefore, not sustainable and the impugned order is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT |
|
