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2023-TIOL-1091-HC-MUM-ST
Venkateshwara Hatcheries Pvt Ltd Vs CCE
ST - Appellant challenges the final order dated 21 October 2016 [ = 2016-TIOL-2924-CESTAT-MUM ] passed by the CESTAT and the Order dated 05 May 2017 passed by CESTAT on the ROM application filed by the appellant - Facts are that the Appellant is engaged in business of production and marketing of chicks and other related activities on behalf of its clients/group companies - Appellant has been providing services as a Commission Agent to M/s. Venco Research & Breeding Farm Pvt. Ltd (Venco) and M/s. Venkateshwar Research & Breeding Farms Pvt. Ltd. (VRB) in the nature of promotion and marketing service, veterinary service, laboratory analysis and testing service - Commission for the aforesaid services is charged as per the total sales made by Venco and VRB -Department directed Appellant to pay service tax on commission received for testing and veterinary services, under the taxing entry of “Business auxiliary services" rendered since 1 July, 2003, on the basis that the said activities/services are covered by customer care services provided on behalf of the client - Commissioner confirmed the demand along with interest but no penalty was imposed by invoking s.80 of the FA, 1994 - Aggrieved, both the assessee and Revenue filed appeals before CESTAT and the Tribunal while confirming the demand along with penalty imposed under section 78 but no penalty was imposed under section 76 of the Finance Act, 1994 - ROM was disposed of by CESTAT confirming the demand and imposing penalty u/s 78 - Aggrieved, the present appeal before High Court.
Held : In the present proceeding Show Cause Notice dated 15 April, 2009, was issued for the period of 1 July, 2003 to September, 2004 - Thus, the Judgment of Padmini Products [ = 2002-TIOL-289-SC-CX ] squarely applies to the facts of the present proceedings - Respondent failed to prove that there was suppression on the part of Appellants as during the period from July 2003 to September 2004, the Appellant had claimed exemption under the Notification No.13/2003-ST - Hence, in the present proceedings, the extended period of limitation as per Section 73(1) proviso could not have been invoked and the demand vide Show Cause Notice dated 15 April 2009, for the period of 1 July 2003 to September 2004 was barred by limitation -In the order passed on the ROM, the CESTAT has not recorded any findings on the position in law as canvassed by the petitioner which had a material bearing on the orders passed by the tribunal - The tribunal thus has erred in not considering that the issue was covered by the decision of Chahabria Marketing ( 2016-TIOL-834-CESTAT-MUM . ) - For such reasons, the Question of Law is answered in favour of Appellant, and it is held that the exemption benefits as per Notification No.13/2003-ST, is available to the services provided under "Business Auxiliary Services" for the period in question -Once it is established that the Appellant is a commission agent of Venco/VRB, any service provided to them which falls under the definition of business auxiliary services will be exempt from Service Tax prior to 9 July, 2004 - Therefore, the Appellant is entitled to the benefit of the said notification no.13/2003-ST during the period in dispute and therefore the demand is unsustainable - Hence, the promotion and marketing services provided by Appellant was liable to Service Tax only with effect from 9 July, 2004, post which the Appellant has been paying Service Tax -If the main service as Commission agent of providing service of promotion and marketing is exempted, the incidental services in the nature of laboratory testing, analysis and veterinary services ought to be exempted as well - There cannot be a situation where the main service is exempt and all other services in relation to the same are excluded - Appellant carries out various laboratory analysis and tests in respect of the chicks and the services provided by them are in relation to the brooding, growing and laying of birds which includes routine diagnostic services, specialized laboratory examinations, analysis of feed and feed ingredients and water related tests - Services of testing and analysis in relation to animals are clearly excluded from the technical testing and analysis service as defined under Section 65(106) of the Finance Act, and, therefore, there will be no liability for payment of Service tax on them -Chicks being animals are specifically carved out of the ambit of Service tax in relation to technical testing and laboratory and analysis services - At the relevant time, the services in the nature of 'Veterinary Services" and 'Technical and Laboratory Testing Services" did not fall under taxable category of Business Auxiliary Services - Appellant was not liable to pay taxes, during the relevant time, there is no question of imposing penalty u/s. 78 of the Act - Impugned orders are quashed and appeals are allowed: High Court [para 16, 17.4, 18.6, 19.5, 19.7, 20.5, 20.8, 20.11, 21, 22]
- Appeals allowed: BOMBAY HIGH COURT 2023-TIOL-808-CESTAT-AHM
Varsha Polyproducts Pvt Ltd Vs CC
Cus - This is the case of misuse of advance license - The matter was posted for hearing repeatedly however, on some pretext or other the appellant did not respond neither for hearing nor by filing reply though they have themselves sought permission to file final reply - Consequently, the Commissioner decided to proceed without granting them additional final hearing as sought by them and without taking on record the final reply which the appellants were seeking to file - The Commissioner has shown tremendous patience and offered ample opportunity to appellant to present their case by appearing for personal hearing or by filing final reply as they had requested - No fault found with Commissioner proceeding in such circumstances to decide the case without further notice on the basis of available record - Tribunal in order dated 30 January, 2014 had observed that no reliance will be placed on statements of persons who have not been offered for cross-examination - It is noticed that reliance has been placed in statements of Shri Shantilal Jain, Shri Naresh Shah & Shri Mahesh Ganatra though they were not presented for cross-examination - As per directions of Tribunal in its order dated 30 January, 2014, no reliance could have been be placed on statements of Shri Shantilal Jain and Shri Naresh Shah & Shri Mahesh Ganatra - Matter is remanded back to original Adjudicating Authority to follow the directions of Tribunal order dated 30 January, 2014 and decide the matter fresh: CESTAT
- Matter remanded: AHMEDABAD CESTAT
2023-TIOL-807-CESTAT-BANG
Agarwal Sponge And Energy Pvt Ltd Vs CCE
CX - Appellants are engaged in manufacture of sponge iron falling under Chapter 72 of CETA, 1985 - During manufacture of sponge iron, waste heat is generated which is ultimately used in factory for generation of electricity - The electricity so generated consumed captively and portion of it also cleared outside the factory - SCNs were issued alleging violation of Rule 6(1) of CCR, 2004 since the inputs and input services were used for manufacture of both dutiable as well as exempted products, for recovery of 6% of value of clearance of finished goods under Rule 6(3) of CCR, 2004 - Same issue was examined in case of Trimula Industries Ltd. wherein Tribunal fail to accept that heat entrapped in flue gases which emerge during the process as waste or by-product can be regarded as a "final product" which is beneficially used by appellant for manufacture of electricity - In view of said judgment of Tribunal, demand confirmed in impugned orders cannot be sustained - Consequently, impugned orders are set aside: CESTAT
- Appeals allowed: BANGALORE CESTAT
2023-TIOL-806-CESTAT-MAD
S K Cars India Pvt Ltd Vs CGST & CE
ST - The issue is in regard to demand of service tax on incentives received by appellant from manufacturer for sale of cars - It is submitted that appellant buys/purchases the car from M/s. Maruti Udyog Ltd., and same is sold to local buyers - At the time of purchase of cars, appellant makes full payment to M/s. Maruti Udyog Ltd. and the cars are delivered to appellant by issuing Central Excise invoice wherein all Central Excise duties and sales tax are paid - Following the decisions in M/s. Rohan Motors Ltd. 2020-TIOL-1676-CESTAT-DEL and BM Autolink 2022-TIOL-1171-CESTAT-AHM , it is held that the incentives received by appellant cannot be subject to levy of service tax under category of Business Auxiliary Services - A further demand has been made under category of Business Auxiliary Services on reimbursable expenses received by appellant from M/s. Maruti Udyog Ltd. and M/s. Sundaram Finance Ltd. - As per annexure to SCN it is seen that these are nothing but reimbursement of expense for advertisement - The Supreme Court in case of Intercontinental Technocrats Ltd. 2018-TIOL-76-SC-ST has held that reimbursable expenses cannot be subject to levy of service tax - Demand cannot sustain and is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2023-TIOL-805-CESTAT-CHD
Syal And Associates Vs CCE
ST - Appellants are engaged in business of transportation of tractors by driving them from factory of M/s Punjab Tractors Ltd to premises of dealers - As per agreement, tractors were to be driven by drivers appointed by appellants; consideration was paid to appellants on the basis of rates fixed on per kilometer basis; appellants were required to ensure that tractors were delivered in proper and good condition - Department was of the opinion that service rendered by appellant was squarely covered by 'Manpower Supply Agency Service'; accordingly, SCNs were issued to appellants - A perusal of conditions indicates that terms of contract were not for supply of drivers - Appellant had to undertake transportation of tractors from premises of Punjab Tractors Ltd to their dealers and in bargain they may appoint drivers for work - Appellants were required to take all responsibilities on the way - Clear meaning is that even where wages of workers or employees supplied by agency are paid by agency, liability to pay service tax would be under said agency and not on clients - The Circular clarifies that mere payment of wages by manpower recruitment or supply agency does not take away their status - However, there are no reasons for applying the said circular; terms of the contract are very clear and appellant have rendered the job assigned by Punjab Tractors Ltd and did not at all supply any manpower - Tribunal have no hesitation whatsoever in concluding that job work undertaken by appellants does not fall under category of 'Manpower recruitment or supply agency service', therefore, demand confirmed therein are liable to be set aside - Once demand itself is set aside, penalty and the interest do not survive: CESTAT
- Appeals allowed: CHANDIGARH CESTAT |
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