| SERVICE TAX
2020-TIOL-1183-CESTAT-DEL
Bureau of Indian Standards Vs Pr CST
ST - Issue is whether the appellant, a statutory body, Bureau of Indian Standards is liable to pay service tax on 'hall marking charges', received on the membership fees paid in foreign exchange to international Standards bodies ISO and IEC, under reverse charge and on the library membership fees charged for use of library facilities.
Held:
+ Service tax on the Hallmarking charges received by the Appellant for the impugned period has already been paid by the appellant, and no further tax remains to be paid on this account and which fact is not disputed by the Department - Therefore, there is no merit in the service tax demand of Rs.3,39,800/- and the same is set aside: CESTAT [para 14.8]
+ Impugned show cause notice does not allege any service or quid pro quo for the membership subscription paid by Appellant in foreign exchange as member body to ISO/IEC - Adjudication order also does not meet the contention of the appellant that there is no service by ISO/IEC to member organizations, and thus no quid pro quo by ISO/IEC - Membership fees paid by the Appellant Body in foreign exchange as member body to the International Standards Bodies ISO/IEC is not exigible to tax under reverse change because BIS is not a service recipient, as held by the Adjudicating Authority and hence use or consumption of knowledge obtained overseas, no tax liability arise nor legally valid - ISO/IEC and its members being one and the same, the activities undertaken by the former cannot be considered as a service, exigible to service tax under the principle of mutuality - Contributions for discharge of liabilities or for meeting common expenses of a group of persons aggregating for identified common objectives will not meet criteria of taxation in absence of identifiable service that benefits an identified individual or individuals who make contribution in return for benefit so derived - impugned order set aside and appeal allowed: CESTAT [para 16.1, 16.5, 16.6]
+ Library provides free services to Students and Government Organizations, and for individuals only a nominal fee is charged - The library is also open to readers on all working days which shows that BIS library is a public library - Bench notes that services of public libraries by way of lending of books, publications or any other knowledge enhancing content or material are exempt from whole of service tax leviable thereon under Section 66B of the Act, vide exemption notification no.25/2012-ST dated 20.06.2012 by entry no. 35 - if the library was provided free of charge, issue of paying of service tax would not arise in the absence of any consideration and question of exemption would not arise at all - Bench holds that the library services provided by the Appellant is a public library service and qualifies for exemption under the aforementioned exemption notification and there is no merit in the service tax demand of Rs.3,70,232/- made in the impugned order: CESTAT [para 17.3 to 17.5]
- Appeal allowed: DELHI CESTAT
2020-TIOL-1182-CESTAT-MUM
Bharat Petroleum Corporation Ltd Vs CST
ST - Dispute is limited to confirmation of Rs. 5,44,531/-, being the reimbursement to out chartering agents, Rs. 1,62,70,710/-, being payment to agents for handling port charges outside India, Rs. 16,273/- towards the reimbursement of deputation expenditure, Rs. 11,84,500/- as sales promotion expenditure, Rs. 4,30,648/- as expenditure on maintenance and repair and Rs. 7,20,126/- towards expenditure on consulting engineers and training - charge was fastened on the appellant in terms of section 66A of Finance Act, 1994.
Held: Chartering out of vessels, in the possession of the appellant but lying idle, is a separate business activity - It is in the nature of a service rendered outside India by the appellant and the agency commission, disbursed in India and remitted outside India, is a business expenditure in furtherance of rendering that service - Even if such activity were to conform to a description of the taxable services in section 65(105) of Finance Act, 1994, its lack of linkage with business and commerce in India would take it out of the purview of the said Rules and, thereby, section 66A of Finance Act, 1994 - Consequently, the taxability of commission paid to agents for handling of vessels outside India as well as for out-charter of vessels fails and, with it, the other detriments fastened on the appellant in relation to these demands - The appellant has discharged the tax liability on 'maintenance and repair' and 'consulting engineer and training' services - Tribunal has in Jet Airways (I) Ltd - 2016-TIOL-2072-CESTAT-MUM held that the revenue neutrality of CENVAT credit in procurement of services from outside the country blunted the scope for alleging the existence of ingredients that permit the invoking of the extended period of limitation as well as penalty under section 78 of Finance Act, 1994 – Bench has no hesitation in setting aside the penalties under section 78 of Finance Act, 1994 attended upon the two services that remain in dispute – Appeal disposed of: CESTAT [para 10, 11]
- Appeal disposed of: MUMBAI CESTAT
2020-TIOL-1178-CESTAT-ALL
Encardio Rite Electronics Pvt Ltd Vs CCE & ST
ST - Work undertaken by the appellant were in relation to laying of track for Indian Railways and the work associated was construction of dams etc. for the said purpose of laying of track for Indian Railways - The entire activity was performed in the state of Jammu & Kashmir - It appeared to Revenue that since the registered office of appellant and registered office of main contractor for whom the appellants were sub-contractors are in taxable territory, therefore, the services rendered and consumed in the state of Jammu & Kashmir are taxable in view of Rule 6 of the Taxation of Services (Provided from Outside and Received in India) Rules, 2006 as well as Rule 8 of the Place of Provision of Services Rules, 2012 - demands confirmed hence appeal.
Held: Provisions of Rule cannot override provisions of Section provided in the Act - There is no dispute that services were provided and consumed in the State of Jammu & Kashmir - Section 64 of Finance Act, 1994 clearly lays down that provisions of Chapter V of Finance Act, 1994 which deals with service tax are not applicable in the State of Jammu & Kashmir - Bench, therefore, holds that the stand taken by Revenue is not sustainable - Impugned orders are set aside and appeals are allowed: CESTAT [para 2]
- Appeals allowed: ALLAHABAD CESTAT
2020-TIOL-1176-CESTAT-KOL
Suzica Color Laboratory Vs CCE & ST
ST - Appellant is engaged in providing photography services - Noticing that the appellant was not paying service tax properly during the period 16.07.2001 to 31.03.2004, demand issued on three counts viz. appellant did not include the entire amount of developing and printing charges collected for payment of service tax; that there was a difference in the amount of charges collected by the appellant as appearing in the balance sheet and as declared by the appellant for payment of service tax; that abatement under Notification No.12/2003 dated 20.06.2003 is not admissible - demand upheld along with imposition of penalties and interest - in denovo proceedings ordered by Tribunal, the impugned order is passed by Commissioner(A) - appeal before CESTAT.
Held: [para 9 to 13]
+ With reference to the inclusion of value of material in view of the provision of service, issue stands decided in favour of Revenue in the Larger Bench decision of the Tribunal in the case of Aggarwal Colour Advance Photo System - 2011-TIOL-1208-CESTAT-DEL-LB .
+ Demand stands raised by invoking the longer period of limitation - Tribunal in case of Truvision Colour Lab - 2016-TIOL-3358-CESTAT-DEL , in identical circumstances, has held that the longer period of limitation would not be available to the Revenue.
+ SCN dated 08.08.2006 has been issued for the period 16.07.2001 to 31.03.2004 - Since extended period of limitation cannot be invoked, no demand will survive within the normal period of limitation.
+ Impugned order is, therefore, set aside and the appeal is allowed.
- Appeal allowed: KOLKATA CESTAT
CENTRAL EXCISE 2020-TIOL-1330-HC-AHM-CX
Rakesh Sureshbhai Patel Vs UoI
SVLDRS - The present petition was filed on account of the rejection of the petitioner's application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 on grounds that the declaration had been filed by a different person, whereas the case pertained to a different person - The petitioner claimed that two other declarations of the same firm through its proprietor have been accepted and processed and benefit extended to the petitioner, yet the present application had been rejected.
Held - The matter stands adjourned for a period of three weeks, as sought by the Revenue's counsel - This is to place on record copy to inform us about the final adjudication of the declaration form - Matter listed for hearing on Aug 27, 2020: HC
- Case deferred: GUJARAT HIGH COURT
2020-TIOL-1181-CESTAT-DEL
Unnati Alloys Pvt Ltd Vs CCE
CX - It is alleged by DGCEI that the Appellants had issued CENVATable invoices without supply of goods and thus enabled buyers to avail credit - Penalty under 26 of the CER has been imposed on the appellants for aiding and abetting M/s Mica Industries Limited, Unit-I and Unit-II to take inadmissible cenvat credit on the basis of invoices issued by appellant, M/s Unnati Alloys Pvt. Limited - appeal to CESTAT.
Held: On the same set of investigation and same set of evidences involving other manufacturers, Tribunal vide order in the case of Synergy Steel Pvt. Ltd. vs. CGST & CCE, Alwar vide Final Order No. 50673 of 2019 dated 15.03.2019 and in Gian Castings Pvt. Limited held that as no investigation was conducted against the manufacturer/buyer of the goods to confirm that they have not received the goods and to ascertain the fact that if the goods have not been procured from M/s Unnati Alloys from where the inputs have been procured which have been used in manufacture of the final product which has been cleared on payment of duty - Therefore, no penalty is imposable on the appellant - impugned orders are set aside and appeals are allowed: CESTAT [para 4]
- Appeals allowed: DELHI CESTAT
2020-TIOL-1180-CESTAT-KOL
IOCL Vs CCE
CX - The assessee is a manufacturer of petroleum products at Haldia and procured capital goods for setting up a new plant (ISO Dewaxing Unit) and availed the cenvat credit on duty paid on such capital goods in two parts - They availed 50% in the month of March, 2002 and the balance 50% in the month of April, 2002 i.e. the next Financial Year - The said ISO Dewaxing Unit was set up and finally was available for commercial production on 26.03.2003 - There is no dispute on the availment of credit on the first installment in March, 2002 - The second installment of the 50% of the cenvat credit stands availed by assessee in April, 2002 - This is sought to be denied by Revenue for the reason that in April, 2002, ISO Dewaxing Unit was under erection and was ultimately commissioned and capitalized only w.e.f. 26.03.2003 - The availment of cenvat credit on capital goods during the period of dispute is governed under Rule 4 of CCR, 2001/2002 - The second installement of cenvat credit on capital goods will be available if capital goods are in possession and use of manufacturer of final products in the subsequent year - To resolve the dispute, it is required to decide whether the conditions of said Rule are satisfied by assessee - It is not in dispute that the capital goods used in setting up of ISO Dewaxing Unit was commissioned on 26.03.2003 - Identical issue has been decided by Larger Bench of Tribunal in the case of BPCL - The decision of Larger Bench of Tribunal has also been upheld by Gujarat High Court in assessee's own case - By following the decision of Larger Bench, it is concluded that the capital goods lying in factory of assessee pending installation and erection, may be considered as capital goods in possession and use for the manufacture - Consequently, no reason found to deny the second instalment of the capital goods - The impugned order is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT
2020-TIOL-1179-CESTAT-KOL
Hindalco Industries Ltd Vs CCE
CX - The assessee-company manufactures Aluminium Rolled products falling under Chapter Heading No. 7606/7607 of the Central Excise Tariff Act 1985, from its unit at Belur - The assessee's Head Office entered into job work agreement with two companies which supplied the inputs, wherein the assessee received foil scraps/ aluminium ingots from them for conversion into rolled products - Such conversion was undertaken partly at another unit at Taloja and partly through the Belar unit - The assessee claimed that both units paid Excise duty in respect of the processes undertaken, by calculating the assessable value based on the cost of production as contemplated u/r 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000 - The issue at hand is as to whether in case of inter-unit transfer of goods from the Taloja unit to the Belur unit, the entire value (i.e. 115% or 110% as the case may be) of the cost of production or the actual cost of production (i.e. 100% of cost excluding the notional loading of 15% or 10%) of the goods, manufactured by the Taloja Unit, would be the cost of the raw material for the Belur Unit of the Appellant for the purpose of determining the assessable value under rule 8 of the 2000 Valuation Rules, for ultimately transferring the goods to the supplier of goods - An SCN had been issued to the assessee, alleging that during the relevant period, it had reduced the assessable value of the finished product of converted goods, resulting in under valuation and short payment of duty, with intent to evade payment of Excise duty - The provisions of Section 11A(1) of the CEA 1944 were sought to be invoked - Such findings were later sustained by the Commr.(A)
Held - The facts of the present case are similar to those in I.T.C Ltd. vs Commissioner of Central Excise, Chennai-I where in respect of the facts therein, it was held that in determining the cost of production of packaging material, the cost of paper and paper board (the raw material procured from the Bhadrachalam unit of the Appellant for captive consumption at the Chennai unit) must be taken as the actual cost of production determined in terms of CAS-4 and as set out in Appendix-I of the said standard ; and would not include loading of the notional amount, of 15%/10% to the cost of production of the raw material, which loading is solely pursuant to mandate of Rule 8 of the Valuation Rules and for remittance of excise duty by the Bhadrachalam unit, for the Chennai unit, which used these goods for manufacture of the packaging material - Following such findings in respect of the present case, the assessee was justified in reducing the assessable value to the actual cost of production, i.e., 100% of cost excluding the notional loading of 15% or 10% of the goods manufactured by the Taloja Unit as the cost of raw material for the Belur Unit for the purpose of determining the assessable value under rule 8 of the 2000 Valuation Rules - Hence the O-i-A merits being set aside: CESTAT
- Assessee's appeal allowed: KOLKATA CESTAT
CUSTOMS
2020-TIOL-1333-HC-DEL-CUS
Dish Tv India Ltd Vs UoI
Cus - Petitioner prays for issuing a writ/direction directing the respondent no.2 to entertain the appeals by dispensing with the petitioner requiring to deposit a further amount of Rs.3,23,53,823/- being the balance of 7.5% of the assessed duty u/s 129A of Customs Act, 1962 in regard to the appeal against o-in-o no. 2 dated 28.04.2020 and also a direction directing that the amount totalling Rs.16 crores deposited by the petitioner during the course of investigation be applied as pre-deposit for appeals against o-in-o no. 2 dated 28.04.2020 and o-in-o no. 1 dated 27.04.2020.
Held: In view of the statutory provisions contained in section 129E of the Customs Act, it appears that the statute has now effected waiver of pre-deposit to the extent of 90% or 92.5% of the duty amount and has made it mandatory to deposit 7.5% or 10% of the duty amount, as the case may be - It ought to be kept in mind that the relief is granted by the law itself - Courts cannot be more charitable than the law - When the provisions of the law are explicitly clear or where the provisions of law are absolutely unambiguous, such type of pre-deposits cannot be waived by the courts - Statute itself has waived 90% or 92.5% of the duty amount, as the case may be, assessed by the authorities under the Customs Act, 1962 - The petitioner-assessee has to deposit only 7.5% or 10% (as the case may be) of the duty assessed - Thus, there is no question of further waiver of the amount which is required to be deposited under Section 129E of the Customs Act, 1962 - Search engine Google was used from where Bench found out that the annual turnover of the petitioner for the Financial Year 2018-19 was approximately Rs.6000 Crores and this figure is now confirmed by the counsel for the petitioner - In view of these facts, the amount to be deposited by the petitioner before CESTAT, New Delhi in their statutory appeal under the Customs Act, 1962 comes to Rs.4.23 Crores for one appeal, which is 0.0705% of the total turnover - Hence, Bench sees no reason to entertain this writ petition looking to the total turnover of the petitioner as well - As the appeals preferred by the petitioner under Section 129A of the Customs Act, 1962 are pending before CESTAT, Bench is not at all inclined to observe anything on the merits of the case - Suffice it to say that the statutory appeals preferred by the petitioner shall be decided on their own merits, in accordance with law, rules, and regulations and on the basis of the evidence on record - The decision shall be taken by CESTAT only after deposit of the pre-deposit as required under Section 129E of the Customs Act, 1962 within the timeframe given by the law - Writ petition dismissed: High Court [para 10, 13, 15 to 17, 18]
- Petition dismissed: DELHI HIGH COURT
2020-TIOL-1177-CESTAT-ALL
Shiva Exports Vs CC
Cus - Penalty - Assessee has submitted that Commissioner (A) has reduced the penalties imposed under Section 114 of Customs Act, 1962 - The whole basis for imposition of penalties were test report submitted by Silk Testing Laboratory, Varanasi - He has further submitted that copies of said two test reports are available and perusal of the same reveals that the laboratory has provided a footnote with test report stating that the said test report cannot be used as evidence in the court of Law - The laboratory has not accepted the onus to use the said test report as evidence in the court of Law - Commissioner (A) has relied on the said two reports for imposition of penalties - Therefore, there is no basis for imposition of penalties, same are set aside: CESTAT
- Appeals allowed: ALLAHABAD CESTAT |
