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2023-TIOL-384-CESTAT-MAD
Servocraft Hr Solutions Pvt Ltd Vs CCE & ST
ST - The issue to be analysed is whether penalties imposed under Sections 77 and 78 of Finance Act, 1994 on assessee are legal and proper - Section 73(3) of Finance Act, 1994 provides that no SCN is to be issued when assessee has paid Service Tax along with interest - Assessee has submitted that delay in paying Service Tax was due to financial hardships - On being pointed out by internal audit group, assessee has immediately paid Service Tax along with interest - Appellant has accounted amounts received by them as well as the details of transactions - To such extent, there has been no suppression of facts on their part - Delay in payment of Service Tax due to financial hardships cannot always be considered to be 'suppression of facts' - Loss in business, cancellation of contracts, death or resignation of person handling accounts are some of situations by which an organization may be put into difficulties - An assessee who has suppressed figures in their account or issued parallel invoices so as to evade payment of tax will not be covered under sub-section (3) of Section 73 of Finance Act, 1994 - Apart from a vague allegation, there is no evidence that appellant has suppressed facts with intent to evade payment of tax - Penalties imposed are unwarranted and are set aside: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
2023-TIOL-383-CESTAT-MAD
BCD Travels India Pvt Ltd Vs CST
ST - The appellant is in the business of rendering Air Travel Agent Service and it appears that the appellant has been discharging Service Tax on the 'basic fare' in terms of Rule 6(7) of the Service Tax Rules, 1994 - It is a matter of record that the appellant had received commission from Air India–Indian Airlines, Kingfisher and Jet Airways @ 3% on the basic fare and on surcharges levied and retained by such airlines on all tickets sold in India, which included fuel surcharge - The Revenue had a doubt that the appellant did not include the amount of fuel surcharge received by it in the 'basic fare', an SCN dated 19.06.2009 came to be issued thereby proposing to demand Service Tax on the commission received on the fuel surcharge for the period from December 2008 to February 2009, along with applicable interest and penalty - Such demands were confirmed via Order-In-Original - The O-i-O was later sustained vide the Order-in-Appeal.
Held - Rule 6 (7) of Service Tax Rules 1994, clearly gives an option to the taxpayer, specifically an Air Travel Agent, to pay an amount calculated at the rate of 0.6% of the basic fare in the case of domestic bookings and at the rate of 1.2% of the basic fare in the case of international bookings instead of paying Service Tax at the rate specified in Section 66 of the Finance Act, 1994, and as per Section 66, the rate of Service Tax was a flat 12% of the value of taxable services - Section 67 of the Finance Act 1994 provides for the assessable value to be the gross amount charged by the service provider for such service - What is relevant from the above is that the option is given to the taxpayer to remit the Service Tax either in terms of Rule 6(7) or Section 67 and once an option is exercised by the taxpayer, the Revenue cannot find fault with the option so exercised - Admittedly, the appellant has chosen to pay Service Tax in terms of Rule 6(7) and therefore, tax cannot be demanded by applying the provisions of Section 67 - Hence, the ratio in M/s. Japan Airlines International Company Ltd. is not applicable - An airline may pay commission on various items, apart from the basic fare, which are indicated clearly in the ticket issued to a traveller - The basic fare is clearly indicated, followed by various other charges in such ticket - Hence, when the basic fare is so specifically indicated, the authorities cannot add or delete anything to the same to say that the basic fare should also include those other things - Rule 6(7) has to be read, therefore, in the context of the break-ups given in the ticket wherein the basic fare stands clearly indicated and viewed thus, the interpretation drawn by the lower authorities to include the commission on fuel surcharge in the basic fare cannot hold any water, for which reason the impugned order cannot sustain: CESTAT
- Appeal allowed: CHENNAI CESTAT
2023-TIOL-382-CESTAT-KOL
CCE & ST Vs Maithan Alloys Ltd
CX - The assessee is a manufacturer of ferro alloys - The Department observed that during the period from January 2005 to November 2007 the assessee had availed CENVAT Credit on the input services - The two more Show Cause Notices involving similar issues of irregular availment of CENVAT Credit against Service Tax paid on the same manufacturer but relates to subsequent period are also involved in the impugned order-in-Original - In all the SCNs, the issue is whether the moot point of the issue is whether 'Input Service' on which Service Tax paid and credit availed by the assessee are eligible services for taking credit in terms of CENVAT Credit Rules, 2004 - On adjudication, the demand and recovery of an amount of Rs. 65,66,475/- from the said assessee under proviso to Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944, demand of interest at the appropriate rate under proviso to Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1994 against the said assessee is confirmed, penalty of Rs. 10,000/- (Rupees Ten thousand) in respect of Show cause Notice dated 03-10-2007 and Rs. 2000/- (Rupees Two Thousand) each in respect of Show cause Notice dated 19.03.2009 and dated 30.12.2009, totaling to Rs. 14,000/- (Ruees Fourteen Thousand ony) is imposed on the said assessee in terms of Rule 15(3) of the Cenvat Credit Rules, 2004.
Held - On a careful reading of the definition of input service, it can be observed that it was never the intent of the legislature to give it a restricted meaning - Master Circular was issued clarifying the procedural issues relating to Service Tax being Circular No. 97/8/2007-S.T., dated 23-Aug-2007 wherein it was stated that for a manufacture/consignor, the eligibility to avail credit of the service tax paid on the transportation during removal of excisable goods would depend upon the place of removal as per the definition - In case of a factory gate sale, sale from a non-duty paid warehouse, or from a duty paid depot (from where the excisable goods are sold, after their clearance from the factory), the determination of the 'place of removal' does not pose much problem - Hence the demand merits being set aside: CESTAT
- Appeal rejected: KOLKATA CESTAT
2023-TIOL-381-CESTAT-AHM
Renuka Sugars Ltd Vs CCE & ST
CX - Issue involved is that whether assessee being a sugar industry is entitled for Cenvat Credit in respect of Sugar Cess and Education Cess paid on such Sugar Cess levied under Sugar Cess Act, 1982, cess was paid as additional duty on import of raw sugar - There is no specific mention of Sugar Cess And Education Cess paid on such Sugar Cess under Rule 3 of Cenvat Credit Rules, 2004 - However, Karnataka High Court decided the matter in favour of assessee - On perusal of said judgment, it is observed that Cenvat Credit was allowed on the ground that sugar cess is nothing but duty of excise on the ground that levy of such cess is under levy and collection of sugar cess under Central Excise Act, 1944 - However, Supreme Court in a recent judgment of Unicorn Industies 2019-TIOL-528-SC-CX-LB held that the education cess is not a duty of excise - As regard the Sugar Cess same is not a levy of Central Excise duty, whereas cess is levied under sugar cess Act, 1982 - Therefore, the issue is that whether such cess and education cess paid thereon is duty of Central Excise or otherwise needs to be re-considered in light of recent judgment of Supreme Court - Accordingly, matter remanded to Adjudicating Authority for passing a fresh order: CESTAT
- Matter remanded: AHMEDABAD CESTAT |
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