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2023-TIOL-800-HC-MUM-ST
Rochem Separation Systems India Pvt Ltd Vs UoI
ST - Common ground raised in these petitions is that impugned SCNs raising demand of service tax issued to petitioners are not preceded by pre consultation which is mandatory as per circular issued by CBEC - Master circular 1053/02/2017-CX on SCNs states that consultation with noticee before issuance of SCN is mandatory for claim above fifty lakhs and it is an important step towards trade facilitation and promoting voluntary compliance and to reduce the necessity of issuing SCN - It is common ground that demands made in these petitions are all above fifty lakhs - From the limited argument advanced by Revenue and the issue being restricted to limitation aspect, mandatory nature of pre consultation is impliedly accepted by Revenue - It deems appropriate that since the issue is pending before Supreme Court and to avoid any further litigation, to list the petitions for hearing - Since the arguable questions are raised, Rule in these petitions - Respondents waive service - Rule made returnable - In the meanwhile, execution and operation of impugned SCNs is stayed: HC
- Petitions disposed of: BOMBAY HIGH COURT
2023-TIOL-604-CESTAT-HYD
Social Media India Ltd Vs CC, CE & ST
ST - Appellant has been providing services to Govt of Andhra Pradesh under a program called Integrated Mobile Publicity in Assembly Constituencies (IMPACT) - The allegation of department was that appellant was providing advertisement services and no Service Tax was discharged by appellant - It emerges that in July 2009, CAG Audit has taken a view that service would fall under category of 'Public Relation Services' - Keeping faith on this interpretation of CAG, Service Tax Department has raised demand for more than Rs. 4 crores wide their letter - They have also raised the issue based on CAG Audit and called for all the documents to be submitted - Appellants have replied making their stand clear - SCN fails to clarify as to what took them more than 1.5 years to issue SCN - In SCN there is absolutely no mention of any earlier demand raised by Department - The SCN also does not specify as to what made the Department change its mind from classifying the service as Advertisement Services when CAG Audit has pointed out that the service would fall under the category of 'Public Relations Management Services' - On an identical issue in case of another party Walia & Co who was also awarded the contract by Govt of A.P. in respect of same program, the Department has proceeded against them at Delhi on the ground that they were rendering the service of 'Public Relations Management' service which in fact has been confirmed by Delhi Tribunal - Tribunal is not in a position to agree with Department that there is a possibility of any suppression on the part of appellant - Matter of classification of service is purely a matter of interpretation - In such a case, demand for extended period does not sustain - Accordingly, confirmed demand for extended period is liable to be set aside: CESTAT
- Appeal allowed: HYDERABAD CESTAT
2023-TIOL-603-CESTAT-DEL
Madhya Pradesh Power Generating Company Ltd Vs CCGST, CE & C
ST - The appellant is a State Government undertaking and the issue relates to levy of service tax on the amount deducted by appellant from vendors towards liquidated damages as they failed to supply the goods/execute the work within the stipulated time - The order has confirmed demand of service tax both for period prior to 01.07.2012 and post 01.07.2012 - In South Eastern Coalfields 2020-TIOL-1711-CESTAT-DEL, Tribunal held that liquidated damages recovered on account of breach or non-performance of contract are not consideration in view of any service but are in nature of deterrent imposed so that such a breach or nonperformance is not repeated - The Circular dated 28.02.2023 issued by Central Board of Indirect Tax and Customs also provides that service tax cannot be levied on the amount collected for said purpose - It is, therefore, not possible to sustain the demand - Impugned order therefore, is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2023-TIOL-602-CESTAT-AHM
Nitin M Dhandhukia Vs CCE
CX - The officer of Central Excise Department visited the factory premises of M/s. Raipur Manufacturing Co. Ltd, Saraspur Gate, Ahmedabad on 13.04.1998 - After scrutiny of the Central Excise records for the previous financial year 1994-1995, 1995-1996 and 1996-1997 - The Department formed a view that assessee namely M/s. Raipur Manufacturing Co. Ltd has not valued the captively consumed yarn properly as they have failed to include the expenses such as bonus, gratuity , interest and marketing expenses and in the cost of yarn which has been used captively - A demand SCN was issued on 24.09.1999 demanding Central Excise duty of Rs. 1,02,68,913/- - The penal provision under 173 Q(1) has also been invoked - The penal provision under Rule 209 A of Central Excise Rules has also been invoked against the appellant Shri. Nitin M Dhandhukia and vide order-in-original dated 31.10.2000 the penalty of Rs. 5 Lacs has been imposed on the appellant under Rule 209 A of Central Excise Rules, 1944. Held - It can be seen from the plain reading of the Rule 209 A that the person who is to be penalized under this provision needs to have physically dealt with the dutiable goods and have done certain acts which have made the subject goods liable for confiscation - He is consciously in the know of this very fact that by acquiring possession of such goods by transporting such goods and dealing with in other manners, will be render the goods liable for confiscation - In the present matter, the appellant was only an accountant who was doing normal accountancy work - The issue of valuation of captively consumed yarn is a matter of the interpretation and therefore the penal provision of Rule 209 A of Central Excise Rules, 1944 cannot be invoked against the person who is only involved in maintaining the accounts of the company - I also find that the Order-In-Original has not followed the principle of natural justice, as no personal hearing was accorded to the appellant. It is also no where mentioned in the Order-in-Original as to what efforts had been made by the department to serve notice of personal hearing to the appellant - Thus the matter was decided against the appellant in gross violation of principle of natural justice - The Order-In-Original concerning the penalizing the appellant under Rule 209 A of the Central Excise Rules, 1944 is concerned, same is without any merit and therefore, I set aside the same: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
2023-TIOL-601-CESTAT-KOL
CC Vs Allied Export Corporation
Cus - Assessee imported old and used worn clothing, completely fumigated which were assessed after value enhancement, confiscation and imposition of redemption fine and penalty - Adjudicating Authority has imposed redemption fine and penalty at the rate of 19.5% & 7.8% of assessed value respectively - In some of the cases where goods are not available, no redemption fine is imposed - Revenue is before Tribunal for enhancement of redemption fine and penalty - Following the decision of Tribunal in Venus Traders, it is held that redemption fine and penalty imposed on the assessee by adjudicating authority is sufficient to meet the end of justice - Consequently, no infirmity found in impugned order and same are upheld: CESTAT
- Appeals dismissed: KOLKATA CESTAT
2023-TIOL-600-CESTAT-KOL
Suchis Shukla Vs CCE
Cus - Appeal filed against imposition of penalty under Section 112 (a) of Customs Act, 1962 - Officers of DRI were having a specific intelligence that M/s Garment Craft were mis-using the benefit of Notfn 21/2002-Cus by way of importing inputs without payment of Customs duty for utilizing the same for production of export goods but have deviated the same in local market without utilizing said inputs for intended purpose - The statement of appellant, who is the Vice President (Export) of M/s Garments Craft, was recorded wherein he stated that they have imported 100% Polyester Lining Cloth through Mumbai & Kolkata Ports without payment of duty on strength of Certificates issued by Apparel Export Promotion Council - Appellant filed a letter claiming that he was merely an employee and had nothing to do with either the omission or commission of any act, which are liable for confiscation and his job was only to look after the import and export affairs of firm - From the investigation, it is revealed that appellant was parter of M/s Garment Craft, which is contrary to claimed by appellant - Appellant is not required any leniency in a case where the goods have been imported without payment of duty and diverted into open market - Therefore, impugned order quo, imposing penalty on appellant is confirmed: CESTAT
- Appeal dismissed: KOLKATA CESTAT
2023-TIOL-599-CESTAT-KOL
Usha Martin Ltd Vs CCE & ST
CX - The service provider, M/s Maa Engineering ('service provider'), was not registered with the Department during the period 2005-06 to 2007-08 - It provided certain taxable services such as erection, commissioning, crushing of iron ores to the Appellant - Invoices were raised on the appellant without charging any service tax - Subsequently, an investigation was carried on at the premises of the service provider pursuant to which,it got itself registered and raised supplementary tax invoices dated 06.08.2008 charging service tax on earlier invoices with cross reference to the earlier invoices during the period when it was unregistered - The Appellant paid the service tax amount to the said service provider and availed Cenvat Credit - The Commissioner disallowed the CENVAT credit on such invoices on the ground that the said invoices have been raised by the service provider much later than 14days from the date of the completion of service/ receipt of amount in violation of Rule 4A(1) of the Service Tax Rules, 1994 (STR 1994) and Rule 9(2) of the CENVAT Credit Rules, 2004 (CCR, 2004) - He also observed that Rule 9(1)(f) of CCR 2004 specifies only 'invoice' and not 'supplementary invoice' on which CENVAT credit can be availed - Further, the Ld. Commissioner also imposed penalty under Rule 15(3) read with Section 11AC of the Central Excise Act, 1944, on the ground that the credit has been availed with a willful intention to evade payment of excise duty on the manufactured goods on the removal from factory in collusion with Noticee No 2 - The Commissioner has observed that the 14days time period prescribed in Rule 4A(1) is mandatory and non-compliance thereof would render the document void. Hence, the present appeal before this Tribunal. Held - On the first issue whether cenvat credit is admissible to a service recipient if an invoice has been issued by the service provider much later than 14 days after the date of completion of service/receipt of payment as prescribed in Rule 4A(1) of the ST Rules, the issue in dispute is no longer res integra as it stands settled in favour of the Appellant by decision of the Madras High Court in Commissioner of Central Excise, Salem vs. JSW Steels Ltd. - Following this judgment, it is held that cenvat credit cannot be disallowed in the hands of the service recipient by invoking Rule 4A (1) of the ST Rules even if the service provider issues such invoice beyond the prescribed period of 14 days from the date of completion of service/receipt of payment - The obligation to issue the invoice timely has been cast on the service provider and not the service recipient - Moreover, the period prescribed in the said Rule is directory and not mandatory as has been held by the High Court: CESTAT Held - Further, the issue as to whether the supplementary invoices are specified documents in terms of Rule 9(1)(f) of CCR 2004, this issue is also no longer res-integra as it is settled by the decision of the co-ordinate Bench of this Tribunal in Delphi Automotive Systems (P) Ltd. vs. Commissioner of C.EX., Noida, 2016 (46) S.T.R. 369 (Tri. Del.) - We also agree with the submission that during the period in dispute there was no restriction for availing cenvat credit and such credit would be admissible even assuming that the tax that has been paid by the service provider is due to deliberate evasion on his part for the period prior to 01.04.2011 - Therefore the orders in question are unsustainable and merit being set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT |
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