2022-TIOL-677-CESTAT-DEL
Vardhman Developers Vs CCGST
ST - Appellant is engaged in construction and sale of residential house property (Flats) - Based on price list, it appeared to Revenue that appellant is liable to pay service tax on Preferential Location service, Car parking service, Club Membership service, Security deposit, Interest Free Maintenance Security service (IFMS), Internal or External Development service, Electrical service and Power Back up service provided by party to their prospective buyers - Although the appellant may have prepared a price list showing preferential location charges, car parking charges separately, but it is evident from buyer-agreements that the appellant have charged negotiated sales price per sq. ft. and in addition have charged IFMS and EDC/IDC per sq. ft. basis - In addition, there is power back up charges in some of the cases - Evidently, Revenue have calculated preferential location charges, IFMS charges, EDC/IDC, power back up charges based on price list - There is no such mention in buyer agreement, nor there is any amount collected towards such heads in books of accounts maintained by appellant, as is evident from their balance sheet/ P&L account/ trial balance - Thus, service tax is not payable on such hypothetical calculation, there being no actual consideration towards these, which is an admitted fact - Service tax levied in this manner based on price list is wrong, when there is no actual receipt of consideration under these heads - So far the demand with respect to short payment of tax in respect of advance received from customer for buying flats, appellant has paid service tax on full consideration received at the time of finalisation of sale or execution of sale deed, on total consideration received - However, in view of tax liability which arises on the event of receipt of advance consideration, there is only case of deferment in deposit of tax - Thus, appellant is only liable for interest on the delay deposit of tax in respect of advance received - All the penalties imposed are set aside: CESTAT
- Appeal partly allowed: DELHI CESTAT
2022-TIOL-676-CESTAT-DEL
MEC Shot Blasting Equipment Ltd Vs CCGST
ST - The appellant deposits service tax regularly, maintained proper books of accounts and also filed their periodical returns - Pursuant to audit, SCN was issued, invoking extended period of limitation - So far the demand of Rs. 70,140/- is concerned, admitted fact is that the appellant company have taken on rent residential premises from Director and such premises have been used by appellant as residence for its director - No service tax is chargeable, unless the premises are taken and used for commercial purpose - Thus service tax is not chargeable - So far, the demand of Rs. 29,209/- is concerned, it is stated that said service tax was not paid due to over site, as there are several transactions and when appellant has been regularly paying service tax and such receipts are properly declared in books of accounts which have been subjected to audit, both by tax auditor and statutory auditor under provisions of various tax laws - Further, such demand is raised on basis of records maintained by appellant - Thus, there is no element of suppression or contumacious conduct - Further, appellant registered as manufacturer, was entitled to Cenvat credit of such service tax paid and now due to implementation of GST, said amount becomes refundable after payment of service tax and hence, situation is revenue neutral - Accordingly, invocation of extended period of limitation is not available to Revenue - Demand alongwith penalty is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2022-TIOL-675-CESTAT-DEL
S D Overseas Vs JCC
Cus - The appellant had imported a consignment of Food Supplements and filed a Bill of Entry - Thereafter, receiving intelligence that the goods cleared by said bill of entry were highly undervalued, officers initiated an enquiry and details of goods such as description, quantity, contemporary value covered by bill of entry were retrieved from National Import Database (NIDB) of Electronic Data Interchange System - The value of imported goods is determined under Section 14 of Customs Act, 1962 r/w Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - Duties of customs are levied on goods imported into and exported from India at the rates specified in Schedules to Customs Tariff Act, 1975 - On some goods, levy is based on quantity (specific duty), and other goods it is based on value ( ad valorem ) - If the duty is to be levied based on value, valuation for the purpose has to be done as per Section 14 ibid - As regards to next question as to whether the officer has correctly rejected the transaction value under Rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and re-determined the value, when the prices declared by appellant were compared with value of contemporaneous imports as per data available in NIDB and also as per manufacturer's price list, there was a vast difference and in some items the declared price was half or less of manufactured price/contemporaneous import prices - Now such a vast difference between prices of same commodity by same manufacturer provided the officer a reason to doubt - Revenue points out that poor quality goods which are due to expire could not have been imported into India without a valid license/no objection certificate from Food Safety and Standards Authority of India (FSSAI) - The importer has not produced any license or no objection certificate from FSSAI regarding quality and expiry date of imported goods - Mere assertion of appellant that they have imported inferior quality goods with short shelf life cannot be accepted - Had the appellant made a declaration to this effect the goods should have been examined and necessary licenses from the FSSAI could have been called for from appellant - The goods declared transaction value was correctly rejected under Rule 12 ibid by the original authority and such rejection were upheld by impugned order - As duty short levied was correctly demanded under Section 28, penalty imposed under Section 114A ibid is upheld - As far as penalty under Section 114AA ibid is concerned, appellant has mis-declared the value of imported goods which were only a fraction of a price the goods as per manufacturer's price lists and, therefore, no reason found to interfere with penalty imposed under Section 114AA ibid : CESTAT
- Appeal rejected: DELHI CESTAT
2022-TIOL-674-CESTAT-MAD
Naam Exports Vs CC
Cus - The appellant is not contesting the redetermination of value of goods - Consequently, order of confiscation requires no interference - The contest is confined to redemption fine and the penalties imposed - Appellant has misdeclared almost 11 MTs of goods - The explanation given is that onion being a perishable commodity, they have loaded excess quantity to compensate the weight loss on account of drying of cargo - Though such an explanation cannot be accepted when the excess quantity is so huge, it has to be seen that the redemption fine for the excess value of Rs. 4,76,400/- is too high - The authorities below have imposed a redemption fine of Rs. 3,35,750/- - Since the cargo is of perishable in nature, profit margin would be very less - The redemption can be reduced to Rs. One lakh - As regards to penalty imposed under sec. 114(iii) of Customs Act, 1962, said section states that the penalty imposed is not to exceed the value of goods as declared by exporter or the value as determined under the Act whichever is greater - Thus, penalty imposed under sec. 114(iii) ibid does not require any interference - As regard to equal penalty imposed under sec. 114AA ibid, nothing is brought out to prove and establish that the appellant has knowingly and intentionally made any false documents - Penalty imposed under sec. 114AA ibid is set aside: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
2022-TIOL-673-CESTAT-AHM
Shaniyal Dyeing Printing Pvt Ltd Vs CCE & ST
CX - Assessee gave factory plot to M/s. Roma Industries and applied to cancel Central Excise Registration with the undertaking if M/s. Roma Industries did not pay central excise dues, assessee would pay them - Unpaid government dues plus interest arose against M/s. Roma Industries and the same was sought from assessee - When assessee did not comply, their property was attached against the said dues - Assessee made payment and then applied for refund claim stating they only paid to save their property and they were not otherwise liable for dues pending against M/s. Roma Industries - Adjudicating authority rejected the refund claim and the Commissioner (Appeals) rejected the appeal in the impugned order.
Held : Undertaking was given by assessee in respect of its own dues only - It stated that if dues related to assesee arise after surrender of registration certificate, the same will be paid by assessee in case M/s. Roma Industries does not pay them - It does not make assessee responsible for dues of M/s. Roma Industries - Undertaking cannot ipso facto bind the assessee with liability which is otherwise not present - Something illegal cannot convert itself into something legal by act of a third person - Section 11 Central Excise Act, 1944 will not apply in this case as assessee have not acquired the business of the arrears holder (M/s. Roma Industries) or purchased their property - They have relationship of lessor and lessee and dues against lessee cannot be recovered from owner of property - Revenue has wrongly collected dues from assessee and same is required to be refunded with interest - Impugned order set aside - Appeal allowed: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
2022-TIOL-672-CESTAT-HYD
IBC Ltd Vs CCT
CX - Appellant had filed an application seeking refund which has been rejected by Original Authority on the ground that proper documents were not submitted - It has categorically been recorded by Original Authority as well as Commissioner (Appeals) that the only reason for rejection of refund is that proper documents were not submitted - Matter remanded to Original Authority to give appellant an opportunity to produce all relevant documents and also explain the apparent mismatches in invoice details: CESTAT
- Matter remanded: HYDERABAD CESTAT
