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2022-TIOL-756-HC-KERALA-ST
Nikunjam Constructions Pvt Ltd Vs UoI
ST - Petitioner is engaged in construction of residential buildings and complexes - Though petitioner was regularly filing its returns as well as discharging its service tax liability in respect of works contract, an audit was conducted for the period October 2016 to June 2017 - Alleging certain discrepancies, a SCN was issued proposing to demand service tax, allegedly short paid by petitioner - The contention regarding absence of DIN raised by petitioner is not significant and they did not persist with said argument and rightfully so - Revenue have pointed out that audit notes have been issued with DIN, but containing an extra digit by a mistake - The said extra digit does not ipso facto make the document null and void on the ground of absence of DIN - By master circular 1053/02/2017, issued by CBEC, it is mandatory to issue a pre-show cause notice for consultation, prior to issue of a SCN, in cases involving demand of duty above Rs.50,00,000/- - A master circular issued by department is binding upon its officers - The contention of revenue that the requirement of consultation contemplated therein is not binding upon Department as it is not a statutory requirement, cannot be countenanced - The issuance of SCN without following mandatory requirement of pre-show cause consultation is arbitrary and against the circulars - Therefore, SCN is set aside - However, liberty is granted to revenue to initiate fresh proceedings commencing from stage of pre show cause notice consultation: HC
- Writ petition allowed: KERALA HIGH COURT
2022-TIOL-451-CESTAT-HYD
Cubex Tubings Ltd Vs CCT
CX - The dispute relates to rejection of claim of interest made by appellant on the amount of refund of pre-deposit under section 35F of CEA, 1944 from the date of deposit till the date of sanction of amount - This interest was claimed under section 35FF of Excise Act - The amount towards pre-deposit was deposited on 30.08.2012 and the amount was sanctioned within three months from the date of communication of the order of Tribunal to the adjudicating authority - The appellant would, therefore, not be entitled to claim interest - This is what was observed by Deputy Commissioner as also the Commissioner (A) while rejecting the claim of appellant for payment of interest - Section 35F of Excise Act, as it stood prior to 06.08.2014, provides for payment of interest only if the pre-deposit amount is not refunded within a period of three months from the date of communication of the order to adjudicating authority - There is, therefore, no error in order passed by Commissioner (A): CESTAT
- Appeals dismissed: HYDERABAD CESTAT
2022-TIOL-450-CESTAT-HYD
Berry Alloys Ltd Vs CCT
CX - The Appellant has been availing Cenvat Credit on various inputs, capital goods and input services - Pursuant to an audit, a SCN was issued alleging that appellant had availed credit during period from September 2010 to July 2012 on various capital goods which appear to be not eligible for credit under definition of capital goods - The main ground for denying credit is that the appellant failed to furnish sufficient documentary evidence that impugned items were used in fabrication of capital goods/accessories/parts/components - The Chartered Engineer's Certificate though produced before both the authorities has not been considered at all - The said expert has given details regarding the manner and use of impugned items - Further, the fact of purchase of these items and their receipt in factory of production is not in dispute - Revenue does not have a case that such purchased items were diverted by appellant in any manner - The first and foremost point is when the Chartered Engineer's Certificate was produced before Adjudicating authority, it was incumbent on the authorities to either contradict Chartered Engineer's Certificate or accept the same - In the absence of any contradictory Certificates on record holding otherwise that the inputs were used for fabrication of machinery, non-consideration of Certificate issued by Chartered Engineer by Adjudicating authority seems to be not in consonance with law - Further, receipt of goods and thereafter use for fabrication as per Chartered Engineer's Certificate is not contested, but contested only on a point that the inputs do not fall under category of capital goods and hence not eligible for Cenvat credit, will not support the case of Revenue - Since the issue is no more res integra and is decided by higher Courts, impugned order is unsustainable and is liable to be set aside - Support drawn from the judgement in Rajasthan Spinning & Weaving Mills Ltd. , where the Supreme Court by relying on decision in Jawahar Mills Ltd. & Others has dismissed the appeal preferred by Revenue by applying user test: CESTAT
- Appeal allowed: HYDERABAD CESTAT
2022-TIOL-449-CESTAT-KOL
Brahmaputra Cracker And Polymer Ltd Vs CCGST & Excise
ST - The period involved in appeal is after 01.07.2012 and the case set out by Department is that the appellant had agreed to tolerate breach of timelines stipulated in contract, amount imposed for delay in delivery terms as per Price Reduction Schedule (PRS) are consideration for act of tolerating contractual default; and that appellant had rendered declared service of "agreeing to the obligation to refrain from an act, or to tolerate an act or a situation or to do an act" contemplated under section 66E(e) of FA, 1994 - No service tax is payable on amount collected towards delay in delivery as this issue has been decided by Tribunal in favour of appellant in South Eastern Coalfields 2020-TIOL-1711-CESTAT-DEL - It is not possible to sustain the view taken by Commissioner that since the delivery was not made within the time schedule, appellant agreed to tolerate the same for a consideration in form of delay in delivery charges, which would be subjected to service tax under section 66E(e) of the Finance Act - As service tax could not be levied, imposition of interest and penalty also cannot be sustained: CESTAT
- Appeal allowed: KOLKATA CESTAT
2022-TIOL-448-CESTAT-MAD
Ponnusamy Caterers Vs CST
ST - The issue involved is as to whether the appellant is liable to pay Service Tax under Outdoor Catering Services for period from October 2005 to December 2010 - As regards to issue prior to 01.04.2007, according to appellant, prior to 01.04.2007, they were only supplying food and the activity of serving food was undertaken by some other contractor - In SCN, the agreement dated 05.06.2006 entered into by appellant with M/s. Manali Petro Chemicals is extracted - The sole agreement of appellant with M/s. Manali Petro Chemicals has been relied by Department to hold that appellant has been undertaking the activity of serving food prior to April 2007 - As there is a separate agreement entered by company with another person viz. M/s. Shanmugasundaram for serving the food, on the probability of facts, argument put forward by appellant that the activity of serving food was done by another contractor, appears to be more tenable and acceptable - As regards to the period after 01.04.2007, admittedly, appellant has been filing returns and paying Service Tax after 2007 - Appellant has entered into two separate contracts and has been discharging Service Tax on income received under agreement for rendering services - They have been paying Sales Tax/VAT on amounts received for supply of food - Case of Department is that the value of these two contracts has to be clubbed together and after giving the abatement of 50% in terms of Notfn 01/2006-S.T. appellant has to discharge its Service Tax liability - The levy of Service Tax under Outdoor Catering Services would be attracted only if the activity involved serving of food and not mere sale of food - When Sales Tax/VAT has been discharged on the value of food items, the demand of Service Tax cannot be raised again by clubbing such value along with the service charges - The impugned order is therefore set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2022-TIOL-447-CESTAT-MAD
Akr Logistics India Pvt Ltd Vs CC
Cus - The appellant had only filed shipping bill and had not got registered or filed any KYC documents along with it to proceed with export of goods - It is submitted by appellant that after filing shipping bill, as they had not got documents from exporter, they did not pursue the matter so as to get shipping bill registered - Tribunal do not find any evidence established against appellant to show that they have abetted in attempt to export prohibited goods namely Star Tortoises - The original authority has stated that Shri P. Thirumoorthy, Manager of M/s. AKR Logistics India Pvt. Ltd. has failed to exercise due diligence and has not been able to furnish KYC documents - It is also stated that he has lend his Customs Broker card to one Shri Gokula Kannan who was not an employee of company to handle the export - All these allegations if any, would fall under Customs Broker Licensing Regulations - No evidence has been adduced to show that the appellant has connived with exporter in attempt to export goods - More importantly, on perusal of SCN, it is vaguely stated that the goods are liable for confiscation - However, from para 35 onwards, there is no proposal to confiscate the goods - This is a serious error in SCN as without proposing to confiscate goods, penalty under sec. 114(i) of Customs Act, 1962 is not sustainable - The original authority has tried to correct the error by issuing a Corrigendum to O-I-O - A Corrigendum to an O-I-O can be issued only for correcting typographical errors - A corrigendum cannot be used to cover up the main part or main issue that has to be adjudicated - Said Corrigendum cannot be accepted in eye of law - Penalty imposed under sec. 114(i) of Customs Act, 1962 on appellants cannot sustain: CESTAT
- Appeals allowed: CHENNAI CESTAT |
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