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2023-TIOL-68-SC-ST
Central GST Delhi - III Vs Delhi International Airport Ltd
ST - CESTAT had held that User Development Fee (UDF) levied and collected by the airport operation, maintenance and development entities (i.e., the Mumbai International Airport Pvt. Ltd., the Delhi International Airport Pvt. Ltd., and the Hyderabad International Airport Pvt. Ltd., is not liable to service tax levy, under the provisions of the Finance Act, 1994 - Aggrieved, Revenue is in appeal before the Supreme Court.
Held:
+ The UDF collected by the assessee is to bridge the funding gap of project cost for the development of future establishment at the airports. There is nothing on record to show that any additional benefit has accrued to passengers, visitors, traders, airlines etc., upon levy of UDF during the period in question in the present case. [para 34]
+ There is a distinction between the charges, fee and rent etc. collected under Section 22 of the AAI Act and the UDF levied and collected under Section 22A of the AAI Act. It is that the UDF is in the form of 'tax or cess' collected for financing the cost of future projects and there was no consideration for services provided by the assessee to the customer, visitors, passengers, vendors etc. The aggregate of collections in the bank accounts do not form part of profit and loss account. [para 35]
+ By a circular issued by the CBEC Circular No. 89/7/2006- ST dated 18.12.2006, on 18.12.2006, it was clarified that collection of amounts, by way of taxes, sovereign or statutory dues, would not be subjected to service tax levy. [para 36]
+ In the present case, undoubtedly, neither is there any compulsion to levy development fee nor is the collection conditional upon its deposit in the government treasury. However, the absence of these features in this court's opinion, does not render UDF any less a statutory levy.
+ Firstly, the ruling in Consumer Online Foundation (2011) 5 SCC 360 ) is conclusive that UDF is a statutory levy. Secondly, the collection is not premised on rendering of any service. Thirdly, the amounts collected are deposited in an escrow account, not within the control of the assessees. Fourthly, the utilization of funds, is monitored and regulated by law. In this regard, the fact that the amount is not deposited in a government treasury, per se , does not make it any less a statutory levy or compulsory exaction. Nor does its discretionary nature render it any less a statutory levy.
+ As part of the Union's economic policies, the upgradation and renovation of airports are funded through UDF, which is a statutory levy. However, the public nature of these funds does not in any manner get undermined, merely because they are kept in an escrow account, and their utilization is monitored separately. [para 39]
+ In view of the foregoing reasons, this court is of opinion that the impugned orders cannot be faulted.
+ The revenue's appeals, therefore, fail and are dismissed. [para 40] - Appeals dismissed : SUPREME COURT OF INDIA 2023-TIOL-370-CESTAT-KOL
Khatau Narbheram And Company Vs CC
Cus - One M/s Khatau Narbheram & Company filed shipping bill bearing No.4771942 dated 29th July, 2011 for export of 12000 MTs of Iron Ore Fines for export to China - Shipping Bill was provisionally assessed at the Customs enhanced FOB value of USD 167 per MT and duty paid accordingly - However, for constraints of space of draft only 4167 MT of Iron Ore Fines was exported. The exporter, therefore, filed refund claim under Section 27 of the Customs Act, 1962 for refund of duty paid and quantity short-shipped - Vide order dated 8th August, 2012, the appellants were sanctioned export duty refund of Rs.1,16,94,512/- - It is the appellants' case that they have not been refunded an amount of Rs.21,32,941/- that ought to have been paid to them in terms of contractual/obligations entered into with the importers. It is their case that according to the contract No.KNR/BVG/006/11-12 dated 22nd July, 2011, M/s BVG Resources PTE Ltd., Singapore, the export realization of Iron Ore Fines were dependant on variety of factors including chemical composition (on dry basis, percentage by weight) and the moisture content at 105 degree centigrade apart from physical specification of the export product - As against the declared quantity of 12000 MTS only 4167 MTS of iron ore fines got to be exported - The exporter (appellant herein) thus filed a refund claim for the excess payment of Customs duty at the time of provisional assessment, as the said goods were short shipped and 7833 MTs of iron ore fines could not be exported - This refund claim for 7833 MTS or short shipped quantity of iron ore fines, was sanctioned and refund of Rs.1,16,94,512/- under Section 27 of the Customs Act, 1962 was ordered.
Held - It is undisputed that the impugned quantity of 7833 MT did not leave the shores of this country and were not exported - Therefore, to impute realization in terms of contractual obligation for the said quantity not exported per se does not arise - It may be pointed out that the importer paid export duty at a specified rate for the specified quantity of goods under export, and at that very specified rate for the imputed short shipped quantity, they have been refunded the amount of duty, which otherwise was recovered from them at the time of provisional assessment - Since the goods under question were not exported, there is no relevance in bringing into consideration the contractual obligations towards realization of export proceeds, as there are no export proceeds realized for the said 7833 MTs of goods not exported: CESTAT
- Appeal dismissed: KOLKATA CESTAT
2023-TIOL-369-CESTAT-CHD
General Manager Telecom, BSNL Vs CCE & ST
ST - The appellant M/s Bharat Sanchar Nigam Limited, Bhatinda is a public sector undertaking engaged in providing taxable services as defined under Section 65 (105) of the Finance Act, 1994 such as telephones, leased circuits, teleprinter/speech circuits, PBX, VCC etc, and is duly registered with the Central Excise Department - The appellant is providing telecommunication service from its 133 telephone exchanges located in various villages/town falling within the jurisdiction of Bhatinda SSA Mansa District and the telephone bills are issued from the General Manager Office centrally even prior to 1994 which means that the assessee is already having the centralized billing and accounting system from the very beginning - The collection of the telephone bills are made through post offices, collection centers, banks etc., and therefore, the information regarding payment are generally delayed and the assessee is unable to correctly estimate, on the date of deposit, actual amount payable for any particular month or quarter, therefore, the BSNL had made the request to the Central Excise Authority for provisional payment of service tax - The permission for provisional assessment was granted by the Central Excise vide their letter dated 03.06.2005 for the period upto 31.03.2006 which was further extended for the month of March 2007 - The BSNL had further applied for payment of service tax on provisional basis vide its letter dated 24.06.2008 for the year 2008-09 for which no reply was given by the Central Excise Department - An SCN was issued to the appellant by the Commissioner of Central Excise, Ludhiana dated 05.06.2008 alleging short payment of Rs. 52,13,251/- under Section 73 of the Finance Act and interest under Section 75, penalty under Section 76 and 78 - The appellant filed a detailed reply to the show cause notice, explaining the entire procedure being followed by the appellant in depositing the service tax month wise - On adjudication, the demands were confirmed.
Held - the appellant has centralized billing and accounting system even prior to the introduction of the service tax in 1994 and they were registered with the Department - Further, the appellant have taken permission from the department for provisional payment of service tax which was granted by the Department upto the month of March 2007 - It is an admitted fact that when the payment is made on provisional basis the amount sometime is paid in excess and sometime it may be less - The appellant has submitted the copy of the chart showing the payment made in excess during the relevant period which clearly shows that the appellant had adjusted the excess amount paid in a particular month against the liability of the subsequent month - Further, we find that it is not the case of short payment in any case but it is only an adjustment of excess amount already paid by the BSNL and hence there is no revenue loss to the Department by way of adjustment nor the BSNL got undue advantage - Further, we find that the Revenue has neither objected over the adjustment made from time to time nor advised the appellant any requirement of the rules - The Department itself advised to the appellant that there is no need of having centralized registration when they already have centralized billing and accounting of payment system - Further, we find that in the Appellant's own case for the subsequent period, the Commissioner (appeals) has allowed the appeal of the appellant by setting aside the order passed by the lower authorities on the same facts and the Department has not filed any appeal against the same and the orders of the Commissioner in the appellant's own case has attainted finality - Where the primary demands have been set aside, the demands for interest and penalty do not sustain as well: CESTAT
- Appeal allowed: CHANDIGARH CESTAT
2023-TIOL-368-CESTAT-CHD
CC Vs Black Gold Rubber
CX - The assessee is engaged in manufacture of Tread Rubber, Cushion, Solution falling under Chapter 4006.10 and 4005.90 of the First Schedule to the Central Excise Tariff Act, 1985 - The assessee filed letter declaring intention to avail area-based exemption under Notfn No 49/50/2003 dated 10.06.2003 - The appellant claimed to have made substantial expansion of plant & machinery & to have increased installed capacity by above 25% which made them entitled to exemption - The appellant submitted certificates from Chartered Engineer and Chartered Accountant indicating value of addition of plant and machinery installed for substantial expansion has been shown in their books of accounts - On examination of documents, the Department concluded that the unit is not entitied to exemption under Notfn No 50/2003 since the unit is not located in the relevant Khasra No - SCN was issued proposing to deny the exemption sought for - O-i-O was passed wherein the assessee was held entitled to avail exemption under Notfn No 50/2003 from the date of filing of the declaration - Such findings in the O-i-O were upheld in the O-i-A.
Held - Considering both the notifications produced on records, it is seen that the Khasra Nos., on which the assessee's unit is located, have been substituted by Notification No. 34/2005-CE dated 30.09.2005 and in the said notification Hadbast & Khasra Nos. 110 (1 to 418) have been substituted in place of the original Hadbast & Khasra Nos. 110 (1 to 41) - Since these Khasra Nos. have only been substituted and as per the settled principle of legal interpretation, substitution leads back to be original notification by which the assessee was entitled to the benefit of these notifications - The settled principle cannot be disputed that exemption notification has to be construed strictly - But in the present case, Notification No. 34/2005 dated 30.09.2005 which was issued by way of a substitution and the respondent's unit which was located in the said Hadbast and Khasra Nos. 110 (1 to 418) have been substituted and the Revenue Authority of the State has also clarified that the respondent is entitled to benefit of said notification - Hence the present appeal has no force: CESTAT
- Appeal dismissed: CHANDIGARH CESTAT |
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