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2023-TIOL-414-CESTAT-DEL
Bharti Reality Ltd Vs Pr.CCGST & CE
ST - The appellant, during the relevant period, constructed buildings using various input services and thereafter, rented out the space therein - According to the appellant this would fall under 'renting of immovable property' service and it has, accordingly, paid service tax on this service - The issue raised in this appeal relates to denial of CENVAT credit availed on 'input services' used for construction of buildings, from where 'renting of immovable property' service is provided by the appellant for the reason that the same would result in creation of immovable property which is neither 'goods' nor 'services' - During the period in dispute from 2010-11 to 2013-14, the appellant availed CENVAT credit on such input services used in the construction of the buildings which were rented afterwards - Earlier, a SCN dated 17.04.2012 was issued to the appellant for the period from 01.04.2008 to 31.03.2011 for denial and recovery of CENVAT credit availed on various input, inputs services and capital good for the reason that such input, input services and capital goods result in creation of immovable property which would neither be goods nor services - It is in continuation of the said show cause notice dated 17.04.2012 that the present SCN dated 16.10.2015 was issued to the appellant under section 73(1)A of the Finance Act, 1994 the Finance Act - The SCN specifically mentions that the allegations would be same as contained in the earlier show cause notice - The order dated 20.06.2017 has confirmed the denial of CENVAT credit on grounds similar to the allegations made in the earlier SCN - In fact, the order dated 20.06.2017 is to a large extent similar to the order dated 31.03.2016 that adjudicated the earlier show cause notice dated 17.04.2012. Held - The counsel for the Appellant mentioned that for commercial or industrial consideration, erection commissioning or installation and works contract service, the appellant availed CENVAT credit of service tax paid on works contract service prior to 01.04.2011 as the services were used for construction of buildings specifically given on rent, but the appellant, in view of the amendment made in rule 2(l) of the 2004 rules on 01.04.2022, did not avail CENVAT credit as these are services covered under the inclusive clause - The Revenue relied on the Larger Bench decision in the case of Vandana Global Vs. Commissioner of Central Excise and Customs, Raipur which decision was set aside by the High Court of Chhattisgarh and the decision of the Larger Bench of the Tribunal - Hence the order passed by the Commissioner merits being set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2023-TIOL-413-CESTAT-MUM
Tata Power Company Ltd Vs CCGST & CE
ST - The short point impugning the order is finding of ineligibility on account of lack of 'nexus' with 'output service', to credit of Rs. 57,38,354 availed for 2007-08 to 2010-11 and disallowance of credit of Rs. 11,01,38,756 for having been availed, and long after service had been received for 2004-05 to 2010-11, in June 2012 - Rule 3 of CCR, 2004 is devoid of any time limit for availment of credit - There is also, no doubt, that credit availed and unutilised, continues in account for all time to come - Eligibility for credit of tax included in invoices raised by M/s Tata Sons Ltd on appellant, is not in dispute - It also does not require to be stated that it is only with advent of Point of Taxation Rules, 2011 that significance was attached to time for eligibility to take credit and that, prior to its notification, service was deemed to have been rendered only upon payment - The case laws cited by both sides were not examined by adjudicating authority for relevance in facts of dispute impugned before Tribunal - Neither is there any exposition of circumstances of cases relied upon in impugned order that would justify fitment to dispute to be resolved by Tribunal - Surprisingly, too, appellant has also merely cited legal precedent without offering any justification for delay in availing credit that, notwithstanding the position in law, devolves upon appellant - In absence of justification for rendering a finding of liability that does not take into account provisions of law or judicial determination, Tribunal is unable to come to conclusion on upholding of impugned order, rejection thereof or any modifications therein - To enable disposal of SCN in a manner that could be subjected to test of law, as enacted and judiciary determined, impugned order is set aside and matter is remanded back to original authority for a fresh disposal ensuring that principles of natural justice are adhered to: CESTAT
- Matter remanded: MUMBAI CESTAT
2023-TIOL-412-CESTAT-MAD
Namakkal Agricultural Producers Cooperative Marketing Society Ltd Vs CCE
ST - the appellant herein is a society formed by Agriculturists and as the name suggests is registered as a Co-operative Society under the Tamil Nadu Co-operative Societies Act, 1983 - The main aim of the society is to provide services to the agriculturists who are members of the society for marketing of the agriculture produce at remunerative prices, distribution of farm inputs, provision of produce pledge loans and processing and other value addition measures as possible - The society is involved in arranging facilities for storing, processing and marketing of the agricultural products like cotton, groundnuts, banana and turmeric - Besides, the society is providing marketing facilities such as auction yards, Drying place and short term storage facilities in the open yard and also rendering jewel loans to its members - The contention of the Department is that the society is engaged in conducting auction of goods for monetary consideration, collecting appraising charges for sanction of jewel loans to its members and also making payment of freight for transport of goods - As the society is involved in rendering taxable services for consideration falling under (i) Auctioneer's service, ii) GTA service and iii) Business Support Service of the Finance Act, 1994, without obtaining registration, without payment of appropriate service tax and without filing ST-3 returns as mandated, a Show Cause Notice dated 21.10.2011 for the period from 2006-2007 to 2010-2011 for demanding service tax of an amount of Rs. 17,12,985/- under Auctioneer's Service, an amount of Rs. 40,530/- under BSS and an amount of Rs. 7,26,770/- under GTA service invoking extended period, apart from demanding interest under Section 75 of the Finance Act, 1994 and proposing levy of penalties under Section 76, 77 and 78 of the Finance Act, 1994 was issued to the appellants and a statement of Demand No. 4/2013 dated 03.04.2013 had followed on similar charges demanding service tax of Rs. 7,11,066/- under Auctioneer's service and BSS along with interest and also proposing penal action for non-payment of tax and for contravention of various provisions of the Finance Act, 1994, for the period from April, 2011 to June, 2012 - After due process of law, these were adjudicated confirming the demand of tax plus interest and imposing penalties vide OIO No. 31/2012-ST dated 28.09.2012 and OIO No. 31/2012-ST dated 28.04.2014 - On filing appeals to the Commissioner (Appeals), Salem, impugned Order-in-Appeal No.61/2013-ST dated 23.03.2013 and OIA No. 187/2014-ST dated 08.10.2014 came to be passed rejecting the appeals and hence the appellants came before this forum. Held - The main issue which requires consideration in the instant case is as to whether the appellants are rendering "Auctioneer's Service" in respect of marketing and other services rendered for selling agricultural produce of its farmer members - The other issues are demand of service tax under BSS and GTA services - Regarding the taxability of appellant's services under "Auctioneer's Service", a numerous judicial decisions have already gone into the differences between Auction and Tender - The facts for our consideration in these two appeals are identical - The marketing and other services rendered by the appellant to their farmer members in selling their agricultural produce through tender process would not be coming under "Auctioneer's Service under Section 65 (105)(zzzr) of the Finance Act, 1994: CESTAT Held - On the issue of BSS, the facts indicate that the appellants are taking loans from M/s. Salem District Central Co-operative Finance Bank and utilizing this money in providing jewel loans to their farmer members - Thus, the appellant is borrowing the money from the bank on its account and in turn lending it to their farmer members on interest - The services rendered by the appellant are relatable only to its members and not to the bank and the charges collected for appraising jewels before sanctioning of loans are in the nature of cost incurred by the appellant for sanctioning of loans - As such, there is no BSS rendered in the instant case - As such, we hold that the demands raised under the impugned orders demanding service tax under "Auctioneer Service" and BAS are not maintainable: CESTAT Held - Regarding non-payment of service tax on transport of goods by road, the appellants have undertaken the work of lifting and delivering of goods to the ration shops under the Public Distribution System - The service is covered under GTA and in terms of Rule 2(1)(d)(v) of STR,1994, read with Notification No. 36/2004-ST dated 31.12.2004, the liability to pay service tax is on the person who pays the freight where the consignor or consignee of goods is any co-operative society - As such, the appellant is covered under the provisions of Section 65 (50b) of the Finance Act, 1994 - The period of dispute in this appeal is from April,2006 to March,2011 and reportedly the appellant has undertaken transportation of not only food grains and pulses but also sugar and other articles - The exemption for transport of food grains and pulses is available only with effect from 29th February, 2010 - We note that there is a finding in the Order-in-Original that the appellant has failed to give any evidence in order to claim exemption under Notification No. 32/2004-ST which provides for 75% abatement if the transporter has certified as to non-availment of cenvat benefit and also the benefit of Notification No. 34/2004-ST where freight paid on individual consignment upto Rs. 750/- and multi-consignment freight upto Rs. 1500/- exempted from payment of tax - The appellants have failed to submit consignment notes, freight vouchers, ledger account details etc. in order to substantiate their claim for these exemptions: CESTAT
- Appeals partly allowed: CHENNAI CESTAT
2023-TIOL-411-CESTAT-MAD
Vasan Engineering Industries Pvt Ltd Vs CGST & CE
CX - The issue involved is, whether the scrap generated during manufacture is liable for payment of excise duty - Issue stands decided by decision of Bombay High Court in case of Hindalco Industries Ltd. 2014-TIOL-2266-HC-MUM-CX - Said decision was maintained by Apex Court by dismissing the appeal filed by Department - No excise duty is leviable on scrap generated in course of manufacture - Impugned order is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2023-TIOL-410-CESTAT-KOL
Techmens Chemical Pvt Ltd Vs CCGST & CE
CX - It is the appellant's case that remand order however remains non-complied with till date, and in absence thereof, confirmation of demand by Adjudicating Authority as also its subsequent decision in appeal is bad in law and cannot be upheld - It is noted that in given factual backdrop, confirmation of protective demand raised, pursuant to rejection of remission application, howsoever authorized is a nullity in law, as Tribunal has remitted back the matter of a decision on remission application to Adjudicating Authority - It is imperative that due consideration is given and a speaking order is pronounced in matter of remission application afresh by lower authority - Any decision on protective demand SCN issued to appellants can only be an outcome of decision in remission application, outcome of which under present circumstances is yet pending decision - Order passed by Commissioner (A) is set aside and original authority is directed to first comply with orders of this Tribunal: CESTAT
- Appeals disposed of: KOLKATA CESTAT
2023-TIOL-409-CESTAT-KOL
B K Clearing Agency Vs CC
Cus - The Appellant is a holder of Custom Broker License and have been functioning at Air Cargo Complex, Kolkata. - Arup Ghosh, a G-Card Holder was the Authorized signatory of the Appellant - Shri Arup Ghosh has attended export of several consignments of Human Hair of M/s. S.S.Impex, Hyderabad, at Kolkata Cargo Complex during the period June 2019 to December 2020 - M/s. Arup Ghosh himself obtained a separate CB Licensee in the name of M/s. Just Logistic-1 at Air Cargo Complex Kolkata, in November 2020 - In the relevant period, shipping bill was filed for export of human hair, by one M/s SS Impex, Hyd - The consignment was detained by the SIB (Airport) on account of undervaluation - On verification, it was observed that M/s SS Impex, Hyd., was not available at the address mentioned in the IE Code & GSTIN certificate - Thereafter, based on probe by SIB (Airport), proceedings under Regulation 17 of CBLR were commenced against the appellant - SCN was issued for contravention of Regulations 1(4), 10(d), 10(m), 10(n) & 13(12) of the CBLR 2018 - Penalty of Rs. 50000/- was also imposed under Regulation 18 of the CBLR and security deposit was ordered to be forfeited. Held - Having considered the facts and circumstances, the Principal Commissioner was not correct in holding that the appellant Customs Broker has violated Regulations 1(4),10(d),10(m),10(n and13(12) of CBLR, 2018: CESTAT + The Appellant has been clearing the export consignments of their client M/s S.S Impex, Hyderabad, from June 2019 to December 2020. Mr. Arup Ghosh has been attending the clearance work in his capacity as a G-card holder and Authorized Representative of the Appellant for more than a year. So, it cannot be said that the Appellant has transferred their license to Mr. Arup Ghosh. Receipt of payment by the Appellant from L G Enterprises cannot be a ground to conclude that the Appellant has transferred their license to Mr. Arup Ghosh. It is an internal arrangement between them. Thus, we hold that there is no merit in the allegation of violation of Regulation 1 (4) by the Appellant; + Regarding the allegations of violation of Regulations 10 (d) of CBLR 2018, we find that this Regulation obliges a Customs Broker to advise his clients to comply with the provisions of Customs Act, 1962. In case of failure by his clients, it is the responsibility of a Customs Broker to immediately bring this non-compliance to the notice of DC or AC of Customs. Shri Arup Ghosh, G-card Holder of the Appellant has been advising them for clearance of export of human hair for more than a year. 81 shipping bills have been cleared during the period June 2019 to December 2020. No objection was raised by the Department about these clearances. In fact, the present shipping bill in question was filed by Just Logistic-1 and not by the Appellant. For any violation in this shipping bill, only Arup Ghosh and the CB Just Logistic-1 need to answer and not the Appellant. We find that there is no evidence available on record to substantiate the allegation that the Appellant has not advised their client properly. Thus, we find that the allegation of violation of Regulations 10 (d) is not sustainable; + Regarding violation of Regulation 10(m), we find that it obliges a Customs Broker to perform his duties with efficiency and utmost speed. There is nothing on record to prove the allegation that the Appellant has not performed their duties with speed and efficiency. They have cleared 81 shipping bills of S S Impex, Hyderabad during the period June 2019 to December 2020. There was no objection raised by the Department during the clearance of these consignments. Thus, we hold that the allegation of violation of Regulation 10 (m) by the Appellant is not substantiated; + Regarding violation of Regulation 13(12), we find that it obliges a Customs Broker to exercise such supervision as may be necessary to ensure proper conduct of his employees in the transaction of business and he shall be held responsible for all acts or omissions of his employees during their employment. In this case, initially Arup Ghosh, the G-card holder and Authorized representative of the Appellant attended the clearance work of Human Hair of M/s S S Impex, Hyderabad. No objection was raised by the Department. For the present consignment, the shipping bill was filed by Just Lofistic-1, not the Appellant. The Appellant cannot be held responsible of the violation if any committed by Just Logistic-1. For the past 81 shipping bills also, no objection was raised during their clearance. Now, the objection has been raised because the exporter S S Impex Hyderabad was not found to be existing at the address mentioned in the IE Code and GSTIN. If they are not existing at the designated address, the Appellant cannot be held responsible. Thus, we hold that the allegation of violation of Regulation 13(12) is not proved; + Paragraph 6 of the Circular 9/2010-Cus dated 8.4.2010 requires the client to furnish to the CHA, a photograph of himself / herself, in the case of an individual and those of the authorized signatory in respect of other forms of organization such as company/trusts, etc. and any two of the listed documents in the annexure to the said Circular. Thus, it is evident that even as per the Circular, obtaining a photograph and any two of the documents listed in the Annexure to the circular is sufficient compliance of Regulation 10(n) of CBLR, 2018. The most important documents in these cases are the IEC and the GSTIN – one issued by the same department and the other by the DGFT. The IEC issued by the DGFT has not been disputed at all without which the goods could not have been exported . The Appellant has obtained these documents as prescribed in the said Circular; + In the present case also, the appellant has collected the documents such as IEC, GSTIN etc. submitted by the exporter S S Impex, Hyderabad before processing their shipping bills. Later if they were not found to be existing in the said addresses, the appellant cannot be held responsible for their non existence at the address specified, as held by the Tribunal, New Delhi in the case of Anax Air Services. Thus we find that the allegation against the appellant in the impugned order that they have violated Regulation 10 (n) is not sustainable.
- Appeal allowed: KOLKATA CESTAT |
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