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2023-TIOL-1129-CESTAT-DEL
Bharat Aluminium Company Ltd Vs CC, CE & ST
ST - The appellant holds service tax registration for providing services of consulting engineers, business auxiliary, manpower recruitment or supply and goods transport agency - Its records were audited and it was felt that appellant had short paid service tax during year 2008-2009 in respect of services received by it from foreign companies in capacity of recipient of services - Similar short payments were noticed during subsequent three financial years also - Accordingly, a SCN was issued to appellant demanding service tax under proviso to section 73 (1) of Finance Act, 1994 along with interest under section 75 - Penalties were proposed to be imposed under section 77 and 78 of Finance Act - Tribunal is not inclined to remand the matter as it is evident from impugned order that the only reason the Principal Commissioner confirmed the demand on payment made to Pual is that the employment contract and other evidence were not produced before him - The letters of appointment and termination letter make it amply clear that Pual was appointed as Chief Operating Officer - Therefore, relationship between appellant and Pual was that of an employer and employee - It is undisputed that the services rendered by an employee to its employer are out of ambit of service tax - The demand of service tax, therefore, needs to be set aside - The penalty under section 77 was imposed for the reason that appellant had not correctly reflected the total amount of service tax due from it - This fact is evident as an amount of Rs. 6,24,074/- was admittedly short paid by appellant - Therefore, no reason found to interfere with penalty - As regards penalty under section 78, this penalty can be imposed only if there is non-payment or short payment by reason of fraud or collusion or willful mis-statement or suppression of facts with an intent to evade payment of duty - In absence of evidence of such an intent, no penalty under section 78 can be imposed - Not only is there "no evidence" of such an intent but entire payment is revenue neutral at the hands of appellant - The services, in question on which the appellant had short paid the service tax were its input services and appellant would have been entitled to take Cenvat credit of entire amount of service tax immediately after paying such tax - Appellant had to pay with one hand and could take credit with the other - Such being the case, it is unthinkable that the appellant would have had an intention to evade payment of service tax because by not paying such service tax appellant would gain nothing - Imposition of penalty under section 78 of Finance Act cannot be sustained: CESTAT
- Appeal partly allowed: DELHI CESTAT
2023-TIOL-1128-CESTAT-CHD
Ravi Crop Science Vs CCE
CX - The Assessee is engaged in manufacture and clearance of herbicides, insecticides and fungicide - The Assessee availed the benefit of area-based exemption Notification No. 56/2002 - Revenue alleged that the Assessee was clearing goods under Section 4 and Section 4A of Central Excise Act, 1944 - The Assessee were issuing invoices as per Rule 11 of Central Excise Rules, 1944 and also commercial invoices - The price shown in commercial invoices was lower than the price shown in excise invoices and thus, the Assessee have fraudulently availed excess refund under the said Notification by over-valuing the goods cleared - A show-cause notice dated 09.06.2011 was issued seeking to recover the erroneous refund of Rs.92,61,591/- under Section 11A of the Central Excise Act, 1944 along with interest under Section 11AB and penalty under Section 11AC and proposing to levy penalty on Shri Dinesh Garg - The show-cause notice was confirmed vide Order dated 11.06.2012, passed by the Commissioner of Central Excise, J&K - Hence the present appeal.
Held - The issue is no longer res integra - The jurisdictional High Court of J&K has gone into the very same issue in the case of Krishi Rasayan Exports Pvt. Ltd. and decided the matter in favour of the Assessee in which it was held that "... the refund sanctioned by the adjudicating authority in favour of the respondent was after proper application of mind and by passing of speaking orders and therefore, cannot be termed as 'erroneous refund' for the purposes of section 11A of the Act. The extended period of limitation provided under proviso to sub section 1 of section 11A is not attracted as we find no material on record to demonstrate 18 that the purported erroneous refund was sanctioned in favour of the respondent-assessee on the basis of some fraud, collusion or misstatement /misrepresentation of facts and, that too, with an intention to evade payment of excise duty. The revenue has also failed to make out a case of unjust enrichment having failed to show as to how the respondent has been benefited by such purported erroneous refund sanctioned in its favour by the Competent Authority..." - The impugned order is not legally sustainable and is liable to be set aside - When the impugned order is not maintainable on merits, the question of penalty on the company or Shri Dinesh Garg would not arise: CESTAT
- Appeals allowed: CHANDIGARH CESTAT
2023-TIOL-1127-CESTAT-AHM
Kunjal Synergies Pvt Ltd Vs CC
Cus - Appellant filed bills of entry for clearance of white spirit which is a petro oil/hydrocarbon solvent, claiming classification under CTH 27101990 and therefore same being freely importable - After examination of said cargo, samples were drawn against said bills of entry and sent to CRCL, Kandla vide test memos - Appellant has seriously challenged the report of CRCL, and not only has it backed up its proposition of goods being as per its classification with various technical literature, only which are a part of paper book, but has done so on the basis of various material mentioned in findings of CRCL to indicate that impugned products are devoid of getting fitted into requirement of statutory notes, under Tariff Heading 271012 - The coordinate Bench while dealing with similar imports of item which were claimed to be Low White Spirit has thoroughly analysed various parameters, statutory notes as well as findings of CRCL on various parameters, and more particularly Chapter Note 4 of Chapter 27, which indicates that to be included in Sub Heading 271012, as low white oil in the matter, atleast 90% or more by volume should distil at 210° according to ISO - This aspect during course of its finding, coordinate Bench has gone into at length, to indicate based on earlier decision of M/s. Krishna Technochem Pvt Ltd., which was confirmed by Supreme Court, in which Supreme Court upheld the decision of Bench of Tribunal with the finding that expression "at" in chapter Note 4 of Chapter 27 cannot be construed as "upto" and therefore 90% or more by volume (including losses must get distil "at" 210 degree Celsius and not earlier or later to quality the product as such - As per reports available 95% of volume is recovered at approximately 184°, and final boiling point is maximum was 202.4 in one case and 196.2 in another case which was not as per requirement approved of by Apex Court of 90% distilled taking place at 210 degree Celsius as per statutory note and as per the decision of Krishna Technochem Pvt Ltd - No merits found in impugned order - Classification of party is upheld: CESTAT
- Appeals allowed: AHMEDABAD CESTAT
2023-TIOL-1126-CESTAT-AHM
H K Ramani Vs CCE & ST
ST - The issue at hand in the present appeal is whether the Assessee is liable to pay tax on the Construction of Residential Complex in respect of Works Contract for construction of residential complex under JnnRUM Scheme for Surat Municipal Corporation.
Held - The works contract service of construction of residential complex for JawaharLal Nehru Urban Renewal Mission (JnRUM) is not liable to service tax being not a commercial in nature - This issue has been considered by this Tribunal in various judgments - One of the judgment of Rjp Infrastructure Private Limited Final Order No. 11880/2023 dated 05.09.2023, this Tribunal considering various earlier judgments held that the service in question is not liable for Service Tax - Similar issue has been discussed vide the order passed in DH Patel vs. C.C.E. & S.T. -Surat-I - Considering the above decisions by this Tribunal, it is settled that construction of residential complex under GnRUM Scheme is not liable to service tax. Accordingly, the demand in the present case is not sustainable. Hence, the impugned order is set aside: CESTAT
- Appeal allowed: AHMEDABAD CESTAT |
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