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2020-TIOL-1593-CESTAT-DEL
E-Connect Solutions Pvt Ltd Vs CCE & CGST
CX - The assessee has been rendering taxable services under category of "management, maintenance or repair" services and "information technology software" services - The issue arises for consideration is regarding the manner of computation of proportionate reversal of credit determined under rule 6(3A) of the Rules - The contention of Department is that for the purpose of reversal, the total CENVAT credit taken on input services, including the common input services should be considered while the contention of assessee is that "total CENVAT credit taken on input services" should include only common input services and services used in exempted services and not the services used exclusively in rendering taxable output services - It would be clear from conjoint reading of sub-rule (1), (2) and (3) of rule 6 that the total CENVAT credit for the purpose of formula under rule 6(3A) is only total CENVAT credit of common input service and cannot include CENVAT credit on input service exclusively used for the manufacture of dutiable goods - This position is also clear from the underlying object of amendment made in rule 6(3A) of the Rules by Notfn dated March 1, 2016, to consider only common input services and not total input service credit, for the purpose of computing the amount of reversal - Such amendment was also clarified by Tax Research Unit Circular dated February 29, 2016 to apply retrospectively in as much as the clarification clearly mentions that the provisions of rule 6 providing for reversal of credit in respect of input services used in exempted services, is being redrafted with the objective to simplify and rationalize the same without altering the established principles of reversal of such credit - It has been further clarified at paragraph (iv) of the Circular that the purpose of the rule is to deny credit of such part of the total credit taken, as is attributable to the exempted services and under no circumstances this part can be greater than the whole credit - In this connection, reference can be made to the decision of Tribunal in Reliance Industries 2019-TIOL-1593-CESTAT-AHM , wherein while dealing with a similar issue, the Tribunal held that the term total CENVAT credit taken on input services in the pre-amended rule is only total CENVAT credit of common service and will not include the CENVAT credit on input/input services exclusively used for the manufacture of dutiable goods - The confirmation of demand, therefore, cannot be sustained - It is, therefore, not necessary to examine the remaining contentions advanced by assessee: CESTAT
- Appeal allowed: DELHI CESTAT
2020-TIOL-1592-CESTAT-MUM
Hamlet Construction India Pvt Ltd Vs Commissioner of CGST
ST - Refund - Renting of immovable property service - appellant had filed a refund application claiming refund on the ground that one of its licensees is a member of Retailer's Association of India and was granted interim relief for payment of service tax in the Writ Petition no. 2238 of 2010 - claim rejected by Commissioner(A) on the ground that the constitutional validity of levy of service tax is sub judice before the Apex Court and thus the refund cannot be decided at this juncture - appeal to CESTAT.
Held: Since the constitutional validity of the issue of levy of service tax on the disputed service is sub-judice before the Hon'ble Apex Court, Bench is of the considered view that the present appeal filed by the appellant cannot be taken up for a decision on merits at this juncture and the matter should be remanded to the original authority for deciding the issue of leviability of service tax on the disputed taxable service along with other issues, after disposal of the Special Leave Petitions (SLPs) pending before the Constitutional Bench of Hon'ble Supreme Court in the case of Mineral Area Development Authority & ors. (2011) 4 SCC 450 - impugned order is set aside and matter is remanded to the original authority for re-adjudication: CESTAT [para 4, 5]
- Matter remanded: MUMBAI CESTAT
2020-TIOL-1591-CESTAT-BANG
Powercon Electricals Vs CC
Cus - The assessee is a partnership company engaged in importing consumer electrical goods like light fittings, chandeliers, garden lights etc., from the Peoples Republic of China - The DRI gathered intelligence that the assessee had under-valued goods and had evaded payment of duty - Search operations were conducted at the assesee's premises and certain files were seized - Data relating to all imports from China made by the importer, saved in the system was retrieved and printouts were taken - Emails involving the partners of the assessee-company reflected cash transfer of two amounts in US Dollars to a foreign company - Statements of such persons who managed the company's affairs, were recorded - On completion of investigation, it appeared that the assessee had evaded payment of duty in respect of goods imported vide two BoEs - SCN was issued proposing to reject the declared value and to re-determine the value of imported goods, and raising duty demand with imposition of penalty - Personal penalties were also imposed on the partners of the company - On adjudication, the proposals in the SCN were upheld - The goods in question were confiscated with option of redemption fine - Hence the present appeals.
Held - The allegation of undervaluation has been established by the documentary evidence brought on record and corroborated by the oral evidence of the appellants - Such oral evidences were given not once but on many occasions - Thus, the oral evidence is reliable as it corroborates whatever documentary evidence is available on record - Moreover, there is no allegation that the statements were given under threat or coercion or undue influence - The appellants admitted to undervaluing, based on the invoice and packing list, received through courier, whereas the actual import /transaction value (higher value) was contained in the 'order list' sent by the supplier via email - Such email and order lists were downloaded and saved by the appellants on their computer(s) for future reference - Such data was retrieved at the time of search and is undisputed - Thus, revaluation made on the basis of the actual transaction value contained in the order list or by loading 33.3% for some of the items, based on the undervaluation as per the statements of the Manager, is just and reasonable - The Department need not prove the undervaluation by arithmetical precision as held by various judicial pronouncements - The Department also need not prove what is accepted - To that extent, the charge of undervaluation of imports is proved to a reasonable and acceptable level - There is no violation of the Customs Valuation Rules and the price actually paid or payable for the imported goods is adapted for valuation - So far as the reliance placed by the appellant on their Income Tax and Sales Tax record is concerned, the same are not of much relevance for the purpose of customs duty, in the facts and circumstances - Similarly, Revenue was not required to look into the value of the similar goods as per contemporaneous import, in view of the actual transaction value found in the documentary evidence retrieved from the appellants - Accordingly, rejection of the declared value and the re-valuation of the goods are upheld - So far as the penalties are concerned with respect to the 13 past bills of entries, the same were subject to assessment by the Customs Department - In some cases, the values were loaded, which were accepted by the appellant and duty paid accordingly - Hence the penalty with respect to the past imports, imposed under Section 112(a) is set aside - The penalty under Section 114AA is reduced - The penalty imposed on the second appellant can be reduced - As for the penalty imposed under Section 112 (a) on the third appellant, the same is liable to be set aside as she has been working as an employee on a meagre salary and there is no allegation on her having made any personal pecuniary gain from the illegality being committed by the firm: CESTAT (Para 2-4,9)
- Appeals partly allowed: BANGALORE CESTAT | |
