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CCE & ST Vs Kerala State Electricity Board
ST - The Assessee have filed a refund claim in the relevant period - The Assessee had entered into a contract with M/s SNC Lavalin, Canada to implement a project work and received 'Consulting Engineer Service' from the said overseas firm and paid consultancy charges to them - Two show cause notices were issued to the Assessee on 28.04.2003 and 19.08.2003 demanding service tax of Rs.1,38,21,517/- and Rs.5,03,247/- respectively. On adjudication, the said demand was confirmed on 08.10.2003. Consequently, the said amount was paid by the Assessee - Aggrieved by the Order of the adjudicating authority, they filed appeal before the Commissioner (Appeals), who vide order upheld the order of adjudicating authority - Aggrieved by the order of the Commissioner (Appeals), the Assessee preferred appeal before this Tribunal and this Tribunal vide order, set aside the order of the Commissioner (Appeals) - Against the order of the Tribunal, the Revenue filed an appeal before the High Court of Kerala, which vide order allowed the appeal filed by the Revenue and restored the order of the adjudicating authority after setting aside the order of the Tribunal - Thereafter, the Assessee filed an appeal against the order of the High Court of Kerala before the Supreme Court, which vide its order dated 12.12.2007, dismissed the appeal filed by the Assessee - A review application thereafter filed by the Assessee before the Supreme Court, which was also dismissed by the Supreme Court - Since the issue of applicability of service tax on the part of the Assessee was confirmed by the Apex Court by rejecting their review petition, Show Cause Notice dated 05.03.2010 was issued to the Assessee for rejection of the said refund claim filed on 08.01.2010 - On adjudication, the refund claim was rejected by the adjudicating authority - However, on appeal by the Assessee, the Commissioner (Appeals) allowed their appeal by setting aside the order of rejection of refund - Hence the Revenue's appeal.
Held - The Commissioner (Appeals) in the impugned Order-in-Appeal has completely ignored the order of the Supreme Court and by following the judgment of the Larger Bench of the Tribunal in the case of Hindustan Zinc Ltd Vs. CCE, Jaipur de hors the records of the case, opined that the Assessee is not liable to pay service tax during the said period - Such an approach of the Commissioner (Appeals) could be sustained in view of the principle of judicial discipline laid down by the Supreme Court in Kamalakshi Finance Corporation Ltd.' s - The order of the lower authority got merged with that of the order of the Supreme Court and is binding on the concerned parties to the dispute irrespective of subsequent development of law on the issues involved, unless the Final Order is varied/modified by the Apex Court - In the present case, no such order has been obtained from the Supreme Court modifying its earlier order rejecting the Appeal filed by the Assessee, thereby confirming the demand of Service Tax for the disputed period against the Assessee - On the contrary, rejection of the review petition filed before the Supreme Court lends finality to the dispute - Hence the order passed by the Commr.(A) is not sustainable, as it runs contrary to the judgment of the Supreme Court: CESTAT
- Revenue's appeal allowed: BANGALORE CESTAT
M Somu Vs CGST & CE
ST - Both the appellants are co-owners of joint property and are receiving rent separately - They are also showing income received as rent in their IT returns filed by them - In such circumstances, rent received by each appellant individually has to be taken separately to calculate whether each appellant falls beyond threshold limit for payment of service tax - Department has clubbed rent amount received by both the appellants together to demand service tax amount which is erroneous - The matter requires to be remanded to adjudicating authority who is directed to verify and quantify the demand separately for each appellant - In such quantification, if amount of rent received by each appellant falls below the threshold limit, appellant would not be liable to pay service tax - The advance received by them as deposit which is to be returned to lessee cannot be included in taxable value - The demand in this regard on advance is set aside - The appellant has also prayed for cum tax benefit in quantification of demand, which is tenable and acceptable - Appellant is eligible for cum-tax benefit - Appellant has already discharged service tax as calculated by them much before issuance of SCN - Therefore, penalties imposed are not justified - Sub-section (3) of Section 73 of Finance Act, 1994 states that no SCN has to be issued when assessee pays service tax along with interest - This provision is made to avoid unnecessary litigations when an assessee comes forward to pay the tax - For this reason, penalties imposed require to be set aside - Impugned order is modified to the extent of setting aside the demand, interest and remanding the same to adjudicating authority to verify and quantify the liability of service tax separately on rent received by each appellant - The appellant shall be given benefit of cum tax value also - The penalties imposed are entirely set aside: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
Sri Gugan Mills Vs CGST & CE
CX - Assessee, a 100% EOU is manufacturing terry towels / terry fabrics of cotton - As assessee failed to adopt 8% ad valorem as per Central Excise Tariff Act, 1985 while calculating CVD in respect of clearances effected to DTA as provided in notfn 23/2003 CE read with section 3 of CEA, 1944, SCN was issued to assessee for period from January 2010 to December 2010, proposing to demand excise duty along with interest and for imposing penalties - Issue stands squarely covered by decision of Tribunal in assessee's own case - The argument of department is that as per Section 5 A unless a notification specifically mentions that same is applicable to EOU, assessee can not avail the benefit of such notification - Section 5A has to be read along with notification 23/2013 which grants exemption to DTA clearances made by EOU - As per proviso stated inSl.No.2, of said Notfn the duty payable in accordance with this notification shall not be less than the duty of excise leviable on the like goods produced or manufactured outside the EOU, which is specified in said Schedule read with any other relevant notification issued under subsection (1) of Section 5A of Central Excise Act, ibid - Thus for calculating duty of excise for the purpose of discharging CVD liability, any notification issued in respect of goods cleared by EOU also has to be taken into consideration - The respondents have thus calculated the CVD on the basis of the concessional rate of duty as in notification 29/2004 or 30/2004 - They have not directly claimed the benefit of concessional rate of duty of 29/2004 or 30/2004, instead they have adopted the concessional rate for the purpose of calculation of CVD for claiming exemption for clearances to DTA as per notification 23/2003 - Demand cannot be sustained, impugned order is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2023-TIOL-1122-CESTAT-AHM
Air Liquide India Holding Pvt Ltd Vs CCE & ST
ST - The Appellant-company is engaged in providing customised gas production units (floxal unit) and cryogenic vacuum insulated storage tanks with all accessories such as vaporizer for storage of gas (storage tank) with all accessories such as vaporizer for storage of gas, on rental / lease basis - A Floxal unit is the registered trade mark of the appellant group company Air Liquide - The Appellant purchase the equipment of FLOXAL Unit, storage tank, cylinder and toners at their own cost and lease out to the customers on rent, at the end of the lease period the Appellants are required to dismantle and take away the equipment - For the said purpose the appellants have entered in to lease agreement with its customers to give the FLOXAL Unit, storage tanks, cylinder, toners along with vaporizer on lease for which the rent is recovered from the customers - The FLOXAL Unit, storage tank, cylinder and toners were installed by the Appellant free of charge and after installation the unit would be at the disposal of the customers throughout the duration of the contract - The customers were required to bear the expenses of goods and supplies required for functioning of FLOXAL Unit, storage tanks, cylinders, toners - The appellant would be responsible for the operation of the FLOXAL Unit - The use of gas is a complete responsibility of the customer - also customer being keeper and user of FLOXAL Unit, storage tanks, cylinders, toners would be held responsible for claim made due to injury or damage to 3rd parties for leasing of the FLOXAL unit, storage tank, cylinder, toners - A fixed monthly amount is to be paid by the customers to the Appellants - On the amount collected by the Appellant under the lease agreement the VAT/ CST is discharged by the Appellant being transfer of right to use -deemed sale under Gujarat Value Added Tax, 2003 - Central Sales Tax Act, 1946 - The Appellant had been discharging VAT since the year 1996 - The Appellant were under bona fide belief that since the activity of the Appellant with their customers is in the nature of sale as define in section 2(23) of Gujarat Value Added Tax Act, 2003 and Section 2(g) (iv) of the Central Sales Tax Act, 1946,and the Appellant have discharged the VAT as may be applicable to the customers, they did not discharge the service tax - The Department claimed that w.e.f. 16-05-2008 a new category of service was introduced in the Finance Act, 1994 namely "supply of tangible goods services" under Section 65 (105) (ZZZZJ) which was included under the of service tax accordingly the appellant?s activity is covered under the service of supply of tangible goods service - Hence, the periodical show cause notices dated 26.06.2013, 09.10.2014, 29.03.2016, 05.10.2018 were issued - The said Show Cause Notices were adjudicated by the adjudicating authority vide orders-in-original dated 30.01.2014, 08.02.2016, 27.01.2017, 30.10.2017 and 27.03.2019 - In some of the order in support of appeals bearing No. ST-111-55-4-2018 and ST-10223-2019 and 12757-2019, the orders-in-original were further appealed by the Appellants before the first Appellate Authority wherein the same were upheld - Hence the present appeals.
Held - From a reading of the definition of SOTG service, it is clear that the service under supply of tangible goods service will qualify not only by supply of the tangible goods for use simplicitor but with that the important rider attached is the said supply should be without transferring right of possession and effective control of machinery, equipment and appliances - In the fact of the present case though the machinery equipments were supplied for use by the customer but right to possession and effective control has been transferred - The Appellant have supplied and installed the equipments in the premises of the customers thereafter the customer was at full liberty to possess and use the equipments for production of gas which is further used in their production activity during the lease period the possession of equipment and effective control is undoubtedly with the customers as the same was operated and used by the customer only during the lease period - This fact also gets reinforced on the basis that the Appellant for such supply registered under VAT Act and discharging the VAT on the same transactions on which the revenue has demanded the service tax - The present nature of the transaction has been included as a deemed sale under Article 366 (29A) of the constitution of India - From the above Article of the Constitution particularly under clause (d), the transfer of the right to use any goods for any purpose for cash, deferred payment or other valuable consideration is qualified as sale of goods and there is a liability of sales tax - Therefore, the transaction of the appellant since clearly falls under 366(29A) of the Constitution of India the State Government correctly levied the sales tax and collected the same - It is a settled position that when the transaction is in the nature of sale no service tax can be demanded - This issue has been considered by the board and clarified under circular No. 334/01/2008-TRU dated 29 February 2008 - Accordingly the demand under supply of tangible goods service in the present case is not sustainable. Hence, the impugned orders are set aside appeals are allowed: CESTAT
- Appeals allowed: AHMEDABAD CESTAT
Mohak Enterprise Vs CC
Cus - The present appeal was filed by the Appellant to challenge an Order-in-Original wherein the Commissioner dropped the proceeding initiated for revocation of the Customs Broker License against the Customs Broker which is the present Appellant under Regulation 17 of the CBLR 2018 and also dropped the proceeding of forfeiture of the part or whole security deposit furnished by the Customs Broker for issue of Customs Broker License - However, a penalty of Rs.50,000/- was imposed in terms of Regulation, 18 of CBLR 2018 - The Appellant against the imposition of the penalty of Rs.50,000/- filed the present appeal - The penalty was imposed against the Appellant under Regulation 18 of CBLR, 2018 for the violation of regulation 10(o) and Regulation 10(b) of CBLR 2018 in as much as the G Card holder of the Appellant firm did not obtain the KYC documents as mandated by Circular no. 9/2010-Customs dated 08.04.2010 - It was also alleged that the Appellant have not verified the correct value of the goods attempted to be exported for availing excess for refund of GST.
Held - The penalty was imposed on the allegation that the Appellant has not complied with the condition of KYC of the exporter and the exporter was not properly advised about the valuation of the goods - I find that as submitted by the Appellant and which is undisputed fact that the Appellant have obtained IEC, GST registration, PAN card, Bank verification certificate therefore, there is a sufficient compliance of KYC verification and in case of any wrong doing on the part of exporter by such compliance no allegations can be made against the Custom Broker - As regard the allegation that the Appellant have not verified the value of the goods which was found in excess in case of the export of goods, it is found that the valuation of the goods is not the responsibility of the Custom Broker - The Custom Broker has limited responsibility of documentation on behalf of the exporter and of course the verification of KYC which is not disputed in present case - Therefore, both the allegations are not sustainable - There is no case of the Department that the Appellant have colluded with the exporter knowingly about fraudulent export of goods with intension to avail the refund of GST, therefore in absence of any such evidence merely because some fraud was committed by the exporter the Custom Broker cannot be implicated automatically even though he has no role in the offence of fraudulent export - The judgment relied upon by the Counsel directly supports the case of the Appellant - Therefore, there is no reason in the present case to penalise the Appellant under CBLR 2018: CESTAT
- Appeals allowed: AHMEDABAD CESTAT
CC Vs Patna Offset Press
Cus - The Respondent-Assessee obtained Zero Duty EPCG Authorization No.2130000128 dated 12.05.2011 which was issued by the Asstt.Director General of Foreign Trade, under the Office of Jt. Director General of Foreign Trade, Patna along with the condition sheet in which the terms and conditions of the said Authorization was incorporated - Para 5.8 of the Hand Book of Procedures (2009-14) Volume-I, has stipulated that License under the Zero duty EPCG scheme shall fulfill the export obligation over the specified period - Para 5.8.3 of the Hand Book of Procedures (2009-14), Volume-I, stipulates that where export obligation of any particular block of years is not fulfilled in terms of the above proportions, except in such cases where the export obligation prescribed for a particular block of the year is extended by the regional Authority subject to payment of composition fee of 2% on duty saved amount equal to unfulfilled portion of EO, such Authorization holder shall within 3 months from the expiry of the block of years, pay duties of customs (along with applicable interest as notified by DoR) of an amount equal to the proportion of the duty leviable on the goods which bears the same proportion as the unfulfilled portion of the export obligation bears to be total export obligation - Condition (8) of the Notification No.102/2009-Cus dated 11.09.2009, as amended, provides that the importer produces within 30 days from the expiry of each block from the date of issue of authorization or within such extended period as the Deputy/Asstt. Commissioner of Customs may allow evidence to the satisfaction of the Deputy/Asstt - The Commissioner of Customs showing the extent of export obligation fulfilled, and where the export obligation of any particular block is not fulfilled in terms of preceding condition, the importer shall within three months from the expiry of the said block pay duties of Customs equal to an amount bears the same proportion to the duties leviable on the goods, but for the exemption contained herein, which the unfulfilled portion of the export obligation bears to the total export obligation, together with interest rate at the rate of 15% per annum from the date of clearance of the goods - As the Assessee could not fulfill their export obligation in terms of the condition No.6 of the Notification, therefore, DRI investigated the case and on pointing out by the DRI the Assessee paid the duty payable along with interest - But, the proceedings were initiated against the Assessee by issuance of the show cause notice to impose redemption fine and penalty along with demand of duty and interest - The matter was adjudicated - The adjudicating authority after recording the fact that on pointing out, the Assessee paid duty and interest and refrained from imposing redemption fine and penalty on the respondent.
Held - In this case, there is no doubt the Assessee in terms of Notification, has failed to fulfill the export obligation within a block of 4 years, and so the Assessee is required to pay 50% of duty along with interest @ 15% within 30 days from the expiry of each block, but the Assessee was not aware of this condition as they were under an impression that they were required to fulfill the export obligation within a period of 6 years - But, as and when investigation started the Assessee immediately paid duty and interest - Further, as per the condition of the Notification, the Assessee is required to pay duty along with interest - In that circumstances, the adjudicating authority has rightly refrained from imposing redemption fine and penalty on the Assessee - As the Assessee has complied with the condition of the Notification, therefore, we do not find any infirmity in the subject order - The same is upheld and appeal filed by the Revenue is dismissed: CESTAT
- Revenue's appeal dismissed: KOLKATA CESTAT |
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