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More Judgements

2018-VIL-351-CESTAT-DEL-ST  | CESTAT SERVICE TAX

Service Tax – SEZ Unit – Refund of service tax paid on the input services – denial of refund by placing reliance on N/No. 9/2009-ST dated 3.3.2009 – HELD - Since the SEZ Act and the rules have not provided any conditions for granting exemption from payment of service tax, the Central Government cannot issue the notification under a different statute i.e. Finance Act, 1994 in providing the conditions for grant of refund of service tax paid on the taxable services used for the authorised operations in the SEZ - by virtue of Section 51 of the SEZ Act, the provisions of the said Act and the Rules made there under are m... [Read more]

Service Tax – SEZ Unit – Refund of service tax paid on the input services – denial of refund by placing reliance on N/No. 9/2009-ST dated 3.3.2009 – HELD - Since the SEZ Act and the rules have not provided any conditions for granting exemption from payment of service tax, the Central Government cannot issue the notification under a different statute i.e. Finance Act, 1994 in providing the conditions for grant of refund of service tax paid on the taxable services used for the authorised operations in the SEZ - by virtue of Section 51 of the SEZ Act, the provisions of the said Act and the Rules made there under are mandated to have overriding effect over the provisions contained in any other statute. Therefore, all the activities relating to SEZ shall be guided and governed by the provisions contained in SEZ Act and the SEZ Rules. Since, such statutory provisions governing the SEZ are silent about any condition or restriction for claiming the refund of service tax, the notification issued by the Central Govt. in terms of Finance Act, 1994 cannot prescribe any conditions, which are contrary to the SEZ provisions. Therefore, rejection of refund application by the authorities by placing reliance on the N/No. 9/2009-ST cannot be sustained - the impugned order, so far as it rejected the refund application filed by the appellant, is set aside and the assessee appeal is allowed [Read less]

2018-VIL-355-CESTAT-DEL-ST  | CESTAT SERVICE TAX

Service Tax – Denial of Cenvat Credit – Revenue stand that the total value of taxable output service was only a very small fraction of the total cost incurred by the appellant in providing such service and that the cenvat credit accumulated was disproportionately high in relation to total service tax liability payable for the output service – HELD - Revenue has adopted a thumb rule in determining what would be the allowable amount of input service credit. The Department worked out the ratio of the value of total output service in relation to the total amount of expenditure incurred during the year and proceeded to re... [Read more]

Service Tax – Denial of Cenvat Credit – Revenue stand that the total value of taxable output service was only a very small fraction of the total cost incurred by the appellant in providing such service and that the cenvat credit accumulated was disproportionately high in relation to total service tax liability payable for the output service – HELD - Revenue has adopted a thumb rule in determining what would be the allowable amount of input service credit. The Department worked out the ratio of the value of total output service in relation to the total amount of expenditure incurred during the year and proceeded to restrict the cenvat credit allowable in the same ratio - The restriction/ reversal of cenvat credit on the basis of the thumb rule / formula adopted by the Revenue has no legal basis. Once the cenvat credit has been availed in respect of input services the same cannot be disallowed by taking recourse to any thumb Rule or formula - Revenue has not brought on record any ground to allege that the credit availed is in respect of ineligible input services. In the absence of any such ground, the cenvat credit availed cannot be denied to the appellant - the impugned order is set aside except the demand admitted by the appellant – answered in favour of assessee [Read less]

2018-VIL-354-CESTAT-CHD-CU  | CESTAT Case CUSTOMS

Customs – Majority Order - Appellant imported Heavy Melting Scrap on High Sea Sale basis claiming of exemption under Notification No. 12/2012 dated 17.03.2012 - on examination the consignment was found to also contain re-rollable materials, apart from the Heavy Melting scrap – Whether when the goods imported contained 50% or more of re-rollable scrap against the declaration of HMS in the bill of entry, the goods are to be held as mis-declared and liable to confiscation and penalty – HELD – if the goods booked by the importer are heavy melting scrap and on receipt of the goods it is found that some re-rollable scrap... [Read more]

Customs – Majority Order - Appellant imported Heavy Melting Scrap on High Sea Sale basis claiming of exemption under Notification No. 12/2012 dated 17.03.2012 - on examination the consignment was found to also contain re-rollable materials, apart from the Heavy Melting scrap – Whether when the goods imported contained 50% or more of re-rollable scrap against the declaration of HMS in the bill of entry, the goods are to be held as mis-declared and liable to confiscation and penalty – HELD – if the goods booked by the importer are heavy melting scrap and on receipt of the goods it is found that some re-rollable scrap is included in the same, it cannot be treated as mis-declaration – the goods are not liable to confiscation and no penalty is imposable – assessee appeal is allowed [Read less]

2018-VIL-352-CESTAT-MUM-CE  | CESTAT CENTRAL EXCISE

Central Excise - respondents have cleared the same goods partly to various customers on sale basis and partly on their own unit for repacking - The case of the Department is that since the goods are not cleared for sale from the factory, the valuation should be done under Rule 8 of the Central Excise Valuation Rules, 2000 - the Commissioner (Appeals) allowed the assessee appeal, therefore, the Revenue filed the present appeal – HELD - as per Section 4(ii)(b) and rules made thereunder, if the price is not ascertainable under Section 4(1)(a) then the value should be arrived at on the basis of Central Excise Valuation Rules... [Read more]

Central Excise - respondents have cleared the same goods partly to various customers on sale basis and partly on their own unit for repacking - The case of the Department is that since the goods are not cleared for sale from the factory, the valuation should be done under Rule 8 of the Central Excise Valuation Rules, 2000 - the Commissioner (Appeals) allowed the assessee appeal, therefore, the Revenue filed the present appeal – HELD - as per Section 4(ii)(b) and rules made thereunder, if the price is not ascertainable under Section 4(1)(a) then the value should be arrived at on the basis of Central Excise Valuation Rules, 2000. In the present case, in respect of the same goods since part of the said goods was sold independently to unrelated buyer, the transaction value of the said goods is available. Therefore, the said transaction value will prevail over the value in terms of Rule 8 of Central Excise Valuation Rules, 2000 - the valuation adopted by the respondent i.e. the transaction value of the same goods sold to independent buyer is a correct value. Hence, the valuation under Rule 8 of Central Excise Valuation Rules, 2000 is not applicable in the facts of the present case - the impugned order is upheld and Revenue’s appeal is dismissed [Read less]

2018-VIL-350-CESTAT-CHE-CE  | CESTAT CENTRAL EXCISE

Central Excise - Appellant cleared PVC pipes for use in drinking water supply project without payment of duty in terms of N/No. 6/2006-CE - SCN proposing to deny the benefit of notification on the ground that appellant has not produced sufficient evidence to establish the fulfilment of condition of exemption notification – HELD - In the notification, Sl. No. 2 does not prescribe any diameter for the pipes that is to be used whereas Sl. No. 3 prescribes that the pipes of outer diameter exceeding 20cm will be eligible for exemption when such pipes are integral part of the water supply project – from the certificate issue... [Read more]

Central Excise - Appellant cleared PVC pipes for use in drinking water supply project without payment of duty in terms of N/No. 6/2006-CE - SCN proposing to deny the benefit of notification on the ground that appellant has not produced sufficient evidence to establish the fulfilment of condition of exemption notification – HELD - In the notification, Sl. No. 2 does not prescribe any diameter for the pipes that is to be used whereas Sl. No. 3 prescribes that the pipes of outer diameter exceeding 20cm will be eligible for exemption when such pipes are integral part of the water supply project – from the certificate issued by the District Magistrate, it is clear that the pipes are used for carrying water from the source to treatment plant and to the reservoirs in various villages - it is established that the pipes are used as integral part of water project and also for drawing water from the original source to the reservoir - the appellant having fulfilled the condition in the notification is eligible for the benefit of exemption from payment of duty - The impugned order is set aside and the appeals are allowed [Read less]

2018-VIL-229-GUJ  | High Court SGST

GST - Transmission and distribution of electricity including other incidental services – relying on GST Circular dated 1.3.2018, Department issued notice calling for information and documents including the petitioner's balance-sheet for the financial years 2012-2013 to 2016-2017, bifurcation of income from various services besides other information - the petitioner submitted that when the exemption granted to the electricity companies under the earlier service tax regime has been continued under GST regime, the Government's clarification in connection with the incidental services cannot be changed. In any case, the clari... [Read more]

GST - Transmission and distribution of electricity including other incidental services – relying on GST Circular dated 1.3.2018, Department issued notice calling for information and documents including the petitioner's balance-sheet for the financial years 2012-2013 to 2016-2017, bifurcation of income from various services besides other information - the petitioner submitted that when the exemption granted to the electricity companies under the earlier service tax regime has been continued under GST regime, the Government's clarification in connection with the incidental services cannot be changed. In any case, the clarification cannot operate retrospectively and at any rate cannot apply to a period prior to introduction of GST. The action of the authority to call for information for the period as far back as the financial year 2012-2013 is therefore, wholly unjustified - Notice returnable on 3.5.2018. Till further orders, the petitioners shall not have to reply to such summons [Read less]

2018-VIL-228-GUJ  | High Court VAT

Gujarat Sales Tax Act, 1969 - Section 59 - Interest on delayed refund of amount recovered by the Department pursuant to the order of assessment – whether the interest would be payable from the date of appellate order or from the date of order of assessment – applicable rate of interest on delayed refund – HELD - When the appellate authority allows the appeal of an assessee, it only corrects the order of assessment, which in any case the Assessing Officer should have adopted. In terms of Section 54 [1] of the Gujarat Sales Tax Act, therefore, it cannot be stated that the refund claim of the assessee arises out of an o... [Read more]

Gujarat Sales Tax Act, 1969 - Section 59 - Interest on delayed refund of amount recovered by the Department pursuant to the order of assessment – whether the interest would be payable from the date of appellate order or from the date of order of assessment – applicable rate of interest on delayed refund – HELD - When the appellate authority allows the appeal of an assessee, it only corrects the order of assessment, which in any case the Assessing Officer should have adopted. In terms of Section 54 [1] of the Gujarat Sales Tax Act, therefore, it cannot be stated that the refund claim of the assessee arises out of an order other than an order of assessment. The appellate authority while allowing the appeal merely corrects the assessment. It is such corrected assessment which would prevail. The refund claim of the assessee, therefore, cannot be stated to have arisen other than from the order of assessment - the petitioner is required to be refunded the recovered amount, pursuant to the order of assessment from the date of its refund till the actual payment - with the repeal of the Gujarat Sales Tax Act, 1969 and its substitution by the Gujarat VAT Act, 2003 the petitioner would be covered by the provisions of the VAT Act concerning the assessment, recovery and refund of the tax; including the prescribed rate of interest for refund - The petitioner cannot seek interest on the refund at the rate prescribed under the repealed Gujarat Sales Tax Act merely because the amount involved was in relation to a period when the Gujarat Sales Tax Act was in force. To this extent, the petitioner’s contention is negative - the petitioner would be entitled to interest from the date amounts in question were recovered till the actual payment was made with simple interest @ 6% per annum – assessee petition is partly allowed [Read less]

2018-VIL-353-CESTAT-DEL-CE  | CESTAT CENTRAL EXCISE

Central Excise – SCN alleging that the appellants had not manufactured any Copper Ingots and had only showed bogus production of Copper Ingots and had passed on cenvat credit issuing bogus invoices for Copper Ingots to various buyers and hence they are not eligible for the refund by the way of self credit under Notification No. 56/02-CE – HELD - In course of manufacture of copper ingots from copper scrap, copper waste called keeth arises. The appellant during the period of dispute classified “copper keeth” under heading 2620 and were clearing the same on payment of duty and were claiming refund of the duty paid thr... [Read more]

Central Excise – SCN alleging that the appellants had not manufactured any Copper Ingots and had only showed bogus production of Copper Ingots and had passed on cenvat credit issuing bogus invoices for Copper Ingots to various buyers and hence they are not eligible for the refund by the way of self credit under Notification No. 56/02-CE – HELD - In course of manufacture of copper ingots from copper scrap, copper waste called keeth arises. The appellant during the period of dispute classified “copper keeth” under heading 2620 and were clearing the same on payment of duty and were claiming refund of the duty paid through PLA - Show Cause Notice was issued to them for denying the refund in respect of copper keeth on the ground that the same is not excisable and hence, no duty was required to be paid. The issue of SCN indicates that the Department acknowledges that there was manufacture of Copper Ingots from copper scrap, as once the Department accepts that appellants were clearing copper keeth, the Department cannot take the stand that there was no manufacturing activity - while the present SCN alleges that during the period from December 2004 to November 2006 there was no manufacturing activity and on this basis seeks to recover the refund from the appellant, for subsequent months, that is, for the period from December 2006 to August 2008, the Department has sanctioned the refund by different orders - the Department cannot take contradictory stand for the period from December 2004 to November 2006 and for period from Dec 2006 to Aug 2008 when the machinery installed and the staff employed was the same - all the impugned orders are set aside by allowing all the appeals [Read less]

2018-VIL-227-JHR-ST  | High Court SERVICE TAX

Service Tax - Confirmation of demand towards Service Tax along with demand of interest - writ petition on the ground of alleged breach of or violation of principles of natural justice – HELD - though opportunity of being heard was given to this petitioner, the same was never availed by this petitioner and hence, there is no violation of principles of natural justice - Thus, opportunity of being heard was not availed by the petitioner and we do not want to give premium to such an action of the petitioner by entertaining this writ petition also in the light of the fact that there is an alternative efficacious remedy availa... [Read more]

Service Tax - Confirmation of demand towards Service Tax along with demand of interest - writ petition on the ground of alleged breach of or violation of principles of natural justice – HELD - though opportunity of being heard was given to this petitioner, the same was never availed by this petitioner and hence, there is no violation of principles of natural justice - Thus, opportunity of being heard was not availed by the petitioner and we do not want to give premium to such an action of the petitioner by entertaining this writ petition also in the light of the fact that there is an alternative efficacious remedy available with this petitioner to challenge the impugned order before the Tribunal – The writ petition is dismissed [Read less]

2018-VIL-348-CESTAT-MUM-ST  | CESTAT SERVICE TAX

Service Tax - Rejection of refund claim on the ground of time bar – whether refund claim filed online through ACES portal of CBEC website can be taken as date of filing of refund – HELD – on one hand the Revenue has allowed to file refund claim online through ACES and in other hand, they are disputing such refund claim on the ground of time bar - there was no provision for filing the documents online, therefore, appellants have filed a physical copy of the refund claim along with all the documents. In this case there is no substance in the dispute raised by the Revenue. The date of filing of refund through ACES shoul... [Read more]

Service Tax - Rejection of refund claim on the ground of time bar – whether refund claim filed online through ACES portal of CBEC website can be taken as date of filing of refund – HELD – on one hand the Revenue has allowed to file refund claim online through ACES and in other hand, they are disputing such refund claim on the ground of time bar - there was no provision for filing the documents online, therefore, appellants have filed a physical copy of the refund claim along with all the documents. In this case there is no substance in the dispute raised by the Revenue. The date of filing of refund through ACES should be reckoned as date of filing of refund claim - the refund claim was filed by the appellant well within the time, accordingly, the impugned order is set aside and the appeal is allowed [Read less]

2018-VIL-347-CESTAT-CHE-ST  | CESTAT SERVICE TAX

Service Tax – demand of service tax on amount received excess charges in suspense account of the appellant - the department of the view that the amounts are in the nature of advances and the appellant is liable to pay service tax on the same - notice demanding service tax towards royalty charges collected from the assayers for Hallmarking – HELD - whenever any amount is received at the first instance from any client, appellant discharges the tax liability on that amount on cum tax basis. There is no allegation that higher amount than what is charged to customer in respect of marking charges has been collected. We are i... [Read more]

Service Tax – demand of service tax on amount received excess charges in suspense account of the appellant - the department of the view that the amounts are in the nature of advances and the appellant is liable to pay service tax on the same - notice demanding service tax towards royalty charges collected from the assayers for Hallmarking – HELD - whenever any amount is received at the first instance from any client, appellant discharges the tax liability on that amount on cum tax basis. There is no allegation that higher amount than what is charged to customer in respect of marking charges has been collected. We are inclined to accept the averment that this is only an accounting convenience that has been adopted by the appellant and that raising of credit notes by the appellant on the customer who has made excess payment will not have the effect of nullifying the service tax already paid by them to the Government on the total amount received earlier - the issue of credit notes is therefore only an accounting transaction to recognize the liability of the appellant towards their customer to know the excess payment lying with them – the demand is set aside and appeal is allowed [Read less]

2018-VIL-349-CESTAT-CHE-CU  | CESTAT Case CUSTOMS

Customs - Import of Heavy Melting Scrap and Re-rollable scrap classifying them under CTH 72044900 and claiming exemption under Notification No.21/2002-Cus - Proceeding for reclassifying the goods, denying exemption notification, rejecting the declared price and confiscation of the goods with option to redeem – HELD - Section 124 of the Customs Act, 1962 mandates that no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the goods or such person is given a notice informing of the grounds on which it is proposed to confiscate the goods or to impose a penalty - To recover du... [Read more]

Customs - Import of Heavy Melting Scrap and Re-rollable scrap classifying them under CTH 72044900 and claiming exemption under Notification No.21/2002-Cus - Proceeding for reclassifying the goods, denying exemption notification, rejecting the declared price and confiscation of the goods with option to redeem – HELD - Section 124 of the Customs Act, 1962 mandates that no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the goods or such person is given a notice informing of the grounds on which it is proposed to confiscate the goods or to impose a penalty - To recover duties not levied /not paid/ short paid / short levied / erroneously refunded, a notice has to be served on the person chargeable with duty or interest etc. under Section 28 of the Act. In a situation where it is intended to recover or demand duty and at the same time it is intended to confiscate any offending goods related to such proposed demand of duty along with imposition of penalties, such a combined notice will necessarily have to be issued invoking provisions of both Section 28 and Section 124 of the Act. On perusal of the SCN though the section under which it is issued is under Section 124, the allegations made out as well as the proposal is for recovery of duty short paid – on merit also, there is no basis for concluding that the goods are not HMS as there is no cogent reason for discarding the pre-inspection certificate in toto - the impugned goods are Heavy Melting Scrap only. Thus, the impugned order is set aside and appeal appeals are allowed [Read less]

2018-VIL-346-CESTAT-MUM-CE  | CESTAT CENTRAL EXCISE

Central Excise – the appellant reversed CENVAT credit pertaining to the period 2004-08 in 2008 – demand of interest and penalty invoking extended period – HELD - though the appellant had availed the credit during the period 2004-08 but they reversed the same suo-motu in 2008 and declared the said reversal in their ST-3 return, therefore, no show-cause notice should have been issued under Section 73(1) for demand of CENVAT credit which was admittedly paid by the appellant - As regard the demand of interest, since the extended period was not available for the revenue for the reason that there is no suppression of fact ... [Read more]

Central Excise – the appellant reversed CENVAT credit pertaining to the period 2004-08 in 2008 – demand of interest and penalty invoking extended period – HELD - though the appellant had availed the credit during the period 2004-08 but they reversed the same suo-motu in 2008 and declared the said reversal in their ST-3 return, therefore, no show-cause notice should have been issued under Section 73(1) for demand of CENVAT credit which was admittedly paid by the appellant - As regard the demand of interest, since the extended period was not available for the revenue for the reason that there is no suppression of fact on the part of the appellant, the extended period should have not been invoked - for demand of interest the SCN should have been issued within the normal period of one year from the date of reversal of CENVAT credit. Accordingly, the demand of interest is hit by limitation, therefore the same is not sustainable being time bar. As regard the penalty, the SCN for demand under Section 73(1) should not have been issued, if that be so there is no question of invoking the penal provision - the demand of interest and penalty are set aside, the amount of CENVAT credit reversed by the appellant stand maintained. The appeal is allowed [Read less]

2018-VIL-345-CESTAT-KOL-CE  | CESTAT CENTRAL EXCISE

Central Excise - Valuation of goods cleared to subsidiary - The duty on such clearances was paid by the appellant on the basis of mutually agreed price - The department of the view that since the subsidiary has further sold the goods at higher price, excise duty was required to be paid at the price at the selling the goods to independent buyers - applicability of Rule 10 of the Central Excise Valuation Rules, 2000 – HELD - when goods are partly sold to related persons and partly to independent buyers, there will be no applicability of Rule 10. The Rule 10 will be applicable only in those cases where 100% of the goods are... [Read more]

Central Excise - Valuation of goods cleared to subsidiary - The duty on such clearances was paid by the appellant on the basis of mutually agreed price - The department of the view that since the subsidiary has further sold the goods at higher price, excise duty was required to be paid at the price at the selling the goods to independent buyers - applicability of Rule 10 of the Central Excise Valuation Rules, 2000 – HELD - when goods are partly sold to related persons and partly to independent buyers, there will be no applicability of Rule 10. The Rule 10 will be applicable only in those cases where 100% of the goods are sold through related persons - there is no justification for insistance on payment of duty at the price at which the goods are sold by the related persons – it is submission of the appellant that the mutually agreed price at which goods are sold to the related persons is at par with the price of such goods sold to independent buyers - the Adjudicating Authority is directed to consider the submission made by the appellant and accept the mutually agreed price if it is on par with the selling price to independent buyers – the impugned order is set aside and appeal is allowed by remand [Read less]

2018-VIL-225-CHG  | High Court SGST

Central Goods and Services Tax Act, 2017 - Section 174 - Repeal and saving of CST Act, 1956 - whether the petitioner-company is entitled to be issued C-Form under the CST Act, 1956 in respect of High Speed Diesel purchased by it in the course of inter-State trade and used by it in the course of manufacturing of cement, after the promulgation of the Central Goods and Services Tax Act, 2017 with effect from 1-7-2017 – Entry 54 of the State List of the Seventh Schedule to the Constitution - HELD – the Section 174 of the CGST Act, 2017 does not include the CST Act, 1956 for the purpose of repealing and as such, the operati... [Read more]

Central Goods and Services Tax Act, 2017 - Section 174 - Repeal and saving of CST Act, 1956 - whether the petitioner-company is entitled to be issued C-Form under the CST Act, 1956 in respect of High Speed Diesel purchased by it in the course of inter-State trade and used by it in the course of manufacturing of cement, after the promulgation of the Central Goods and Services Tax Act, 2017 with effect from 1-7-2017 – Entry 54 of the State List of the Seventh Schedule to the Constitution - HELD – the Section 174 of the CGST Act, 2017 does not include the CST Act, 1956 for the purpose of repealing and as such, the operation of the CST Act, 1956 is kept intact even after the enactment of the CGST Act, 2017 with effect from 1-7-2017 – likewise, provision of the State Act provides that the Chhattisgarh VAT Act, 2005 shall apply only in respect of goods included in Entry 54 of the State List of the Seventh Schedule to the Constitution - Thus, the Chhattisgarh VAT Act, 2005 has not been repealed qua the items specified under the amended Entry 54 of the State List of the Seventh Schedule to the Constitution, whereby high speed diesel is included - the CGST Act, 2017 has kept the crude oil, high speed diesel, aviation turbine, motor spirit (petrol) outside the ambit of the CGST Act, 2017 and no notification has been issued by the Central Government on the recommendation of the GST Council imposing GST on high speed diesel. Therefore, the inter-State trade of high speed diesel continued to governed by the CST Act, 1956 and the petitioner is entitled to make inter-State purchases of high speed diesel from other States as before and his registration certificate under the CST Act, 1956 still holds the field and is valid - the respondents shall be liable and are directed to issue C-Form to the petitioner in respect of high speed diesel to be purchased by the petitioner and used in the course of manufacture of cement and for that, it is further directed to rectify and remove the error on their official website and entertain the petitioner's application submitted on-line on the official website seeking issuance of C Form to the petitioner for said goods - The writ petition is allowed [Read less]

2018-VIL-226-KAR  | High Court VAT

Karnataka VAT Act, 2003 - order of reassessment - reasonable opportunity of hearing – HELD - principles of natural justice has to be complied with by quasi judicial authority while concluding the assessment/ reassessment - The proposed tax is based on fresh grounds which were not adverted to, by the prescribed authority in the earlier proposition notice. If so, providing three days time to the assessee cannot be construed as reasonable opportunity at any stretch of imagination. It is, in order to conclude the reassessment as the limitation may come in the way of the prescribed authority to conclude the reassessment, requ... [Read more]

Karnataka VAT Act, 2003 - order of reassessment - reasonable opportunity of hearing – HELD - principles of natural justice has to be complied with by quasi judicial authority while concluding the assessment/ reassessment - The proposed tax is based on fresh grounds which were not adverted to, by the prescribed authority in the earlier proposition notice. If so, providing three days time to the assessee cannot be construed as reasonable opportunity at any stretch of imagination. It is, in order to conclude the reassessment as the limitation may come in the way of the prescribed authority to conclude the reassessment, request of the assessee to grant time is also rejected. In the circumstances, the order of reassessment impugned herein cannot be held to be legal, providing of reasonable opportunity being lacking, contrary to the fundamental principles of justice delivery system - the reassessment order as well as demand notice are quashed. The matter is remitted to the prescribed authority to reconsider the matter after providing reasonable opportunity to the petitioner in accordance with law [Read less]

2018-VIL-224-RAJ-ST  | High Court SERVICE TAX

Service Tax - Revenue appeal against Tribunal order limiting the demand of Service Tax to the normal period in respect of Retention Charges, Unauthorized Construction Charges and Restoration Charges and dropping the demand of Service Tax for extended period – HELD - there is no justification to allege fraud, collusion, willful mis-statement on the part of the appellant with an intention to evade payment of service tax. In fact, substantial service tax liability of the appellant (and similarly placed Industrial Development Corporations of the States) has been exempted by a special legislative provision, introduced in Fina... [Read more]

Service Tax - Revenue appeal against Tribunal order limiting the demand of Service Tax to the normal period in respect of Retention Charges, Unauthorized Construction Charges and Restoration Charges and dropping the demand of Service Tax for extended period – HELD - there is no justification to allege fraud, collusion, willful mis-statement on the part of the appellant with an intention to evade payment of service tax. In fact, substantial service tax liability of the appellant (and similarly placed Industrial Development Corporations of the States) has been exempted by a special legislative provision, introduced in Finance Act, 2017 but made effective from 1.6.2007. As such, the demands for extended period are not sustainable against the appellant. On the same reasoning the penalties imposed on the appellant are also liable to be set aside - We are in complete agreement with the view taken by the tribunal. Hence, no substantial question of law arises – the Revenue appeal is dismissed [Read less]

2018-VIL-35-AAR  | Advance Ruling Authority SGST

GST – Gujarat AAR - applicant is caterer and engaged in the activity of supply food, beverages and other eatables, complete services at various places of their customers who have in house canteens at their factories - whether rate of tax on supplies made to the recipient would be 12% or 18% - whether the activity undertaken by the applicant is in the nature of supply of service provided by a restaurant, eating joint including mess, canteen or in the nature of supply of service as a part of outdoor catering – service Heading 9963 - HELD - the service recipient has engaged the applicant for running of the canteen for the... [Read more]

GST – Gujarat AAR - applicant is caterer and engaged in the activity of supply food, beverages and other eatables, complete services at various places of their customers who have in house canteens at their factories - whether rate of tax on supplies made to the recipient would be 12% or 18% - whether the activity undertaken by the applicant is in the nature of supply of service provided by a restaurant, eating joint including mess, canteen or in the nature of supply of service as a part of outdoor catering – service Heading 9963 - HELD - the service recipient has engaged the applicant for running of the canteen for their workers / employees. The rates for the meal, snacks, tea have been fixed and payable by the recipient, menu is required to be decided by the canteen committee of the recipient. It is, therefore evident that the applicant, who is caterer, is providing service from other than his own premises to the recipient. Therefore, the nature of service provided by the applicant is that of outdoor catering service - Even though the meal, snacks, teas are provided to and consumed by the workers/ employees of the recipient, the applicant is providing service to the recipient and not to workers / employees of the recipient. From the nature of service provided by the applicant, it is clear that it is not in the nature of service provided by a restaurant, eating joint including mess, canteen - The supply of services by the applicant is covered by Sr. No. 7(v) of the Notification No. 11/2017-Central Tax (Rate) as outdoor catering, attracting GST @ 18% [Read less]

2018-VIL-19-SC  | Supreme Court SGST

M/s VARDH PAPER PRODUCTS PVT LTD Vs COMMISSIONER OF COMMERCIAL TAX/GST: 21.05.2018 - U.P. GST Act, 2017 - appellant prayer for quashing the seizure order passed under Section 129(1) of the U.P. GST Act, 2017 – HELD – the Court is not inclined to interfere with the impugned order passed by the High Court - However, it will be open to the petitioner to assail the final order passed in the proceedings under Section 130 of the Uttar Pradesh Goods and Service Tax Act, 2017, which will be decided on its own merits in accordance with law - The special leave petition is dismissed

2018-VIL-344-CESTAT-MUM-CU  | CESTAT Case CUSTOMS

Customs - Classification of ‘calcium nitrate’ and ‘mono potassium phosphate’ - under heading 3105 or under heading 2834/2835 of the First Schedule to the CTA, 1975 – HELD - the Revenue is correct in asserting that the end use should not, unless specially mandated, determine classification. Nonetheless, when the grouping of products and their description very obviously connotes end-use such disassociation cannot be said to be intended. Chapter 31 of the First Schedule to the Customs Tariff Act, 1975 deals entirely with fertilisers - The explanatory notes to the HSN for chapter 31 excludes ‘separate chemically de... [Read more]

Customs - Classification of ‘calcium nitrate’ and ‘mono potassium phosphate’ - under heading 3105 or under heading 2834/2835 of the First Schedule to the CTA, 1975 – HELD - the Revenue is correct in asserting that the end use should not, unless specially mandated, determine classification. Nonetheless, when the grouping of products and their description very obviously connotes end-use such disassociation cannot be said to be intended. Chapter 31 of the First Schedule to the Customs Tariff Act, 1975 deals entirely with fertilisers - The explanatory notes to the HSN for chapter 31 excludes ‘separate chemically defined compound’ but does not exclude those answering to descriptions in note 2A, 3A, 4A or 5. A common feature of these negative exclusions is that they should not be put up in forms and packages described in heading 3105. In other words, as long as they answer to the description and are in bulk, these including mixtures of nitrates, phosphates and potassium would be classifiable as fertilizer - The Fertilizer (Control) Order, 1985 makes it very clear that the items under import are fertilisers for which licences have been issued by the Government - therefore, no substance in the revenue’s argument that end-use should not determine classification under Chapter 31 - With the acknowledgement to use as fertilizer by the competent authorities, it ceases to be separately defined chemical compound for the purpose of classification. Hence, the claim of Revenue for classification under chapter 28 fails - Appeals of Revenue are dismissed [Read less]

2018-VIL-342-CESTAT-CHD-ST  | CESTAT SERVICE TAX

Service Tax - appellant received certain amounts from the manufacturer under ‘Serve to Win’ reward scheme for the free services provided by them - The department view that such amount is liable to service tax as the same has been received in lieu of free service and as such taxable under the Authorised Service Station category – HELD - the appellant are providing three free services during the warranty period. Admittedly, the entire cost of free service is borne by the appellant and no reimbursement is being received from the manufacturers or is being charged to the customers. The free services are being provided in ... [Read more]

Service Tax - appellant received certain amounts from the manufacturer under ‘Serve to Win’ reward scheme for the free services provided by them - The department view that such amount is liable to service tax as the same has been received in lieu of free service and as such taxable under the Authorised Service Station category – HELD - the appellant are providing three free services during the warranty period. Admittedly, the entire cost of free service is borne by the appellant and no reimbursement is being received from the manufacturers or is being charged to the customers. The free services are being provided in pursuance to the obligation cast on the appellant by the manufacturer of the vehicles. The department while accepting this position has alleged that amount received by the appellant under STW scheme is a compensation for the services provided and was thus liable to pay service tax - it is not clear on what basis the ld. Commissioner (Appeals) has concluded that what is being received under STW scheme is actually against the taxable service - It is not disputed by the revenue that the scheme is discretionary in nature and is in the form of incentive to improve the quality of pre-delivery inspection. Hence, it is not correct to conclude that it is reimbursement for three free warranty services provided by the appellant to the buyers of the vehicles - the SCN itself mentions that no reimbursement is being received by the appellant for the free warranty services - the law on the issue of leviability of service tax on the free warranty service is settled in favour of assessee by numerous judgments - the impugned order is set aside and appeal is allowed [Read less]

2018-VIL-341-CESTAT-MUM-CE  | CESTAT CENTRAL EXCISE

Central Excise - The appellants cleared samples of Galvanized Cold Roll Coils in the form of white strips for testing purpose - the sample were then cleared on payment of duty as scrap - the department stand that the samples drawn is a finished goods and the same was used captively, hence, the valuation must be in terms of Rule 4 Valuation Rules – HELD - the appellant have drawn the sample captively within the factory for testing purpose, since the goods were not cleared from the factory, no duty was required to be paid and as and when the sample was cleared, the same was cleared in the form of waste and scrap and excise... [Read more]

Central Excise - The appellants cleared samples of Galvanized Cold Roll Coils in the form of white strips for testing purpose - the sample were then cleared on payment of duty as scrap - the department stand that the samples drawn is a finished goods and the same was used captively, hence, the valuation must be in terms of Rule 4 Valuation Rules – HELD - the appellant have drawn the sample captively within the factory for testing purpose, since the goods were not cleared from the factory, no duty was required to be paid and as and when the sample was cleared, the same was cleared in the form of waste and scrap and excise duty was paid on the transaction value of such waste and scrap. In this fact, there is no question of demanding duty on the captive consumption of sample for testing – since the sample was drawn by the appellant for the purpose of testing in accordance with the requirement of ISO 2000, the duty on the sample drawn for testing is not sustainable - the impugned orders are set aside and appeals are allowed [Read less]

2018-VIL-222-ALH  | High Court VAT

U.P. VAT Act, 2008 - Section 50 - Import of goods into the State - Levy of penalty for certain deficiencies in Form-38 being carried along with the telecommunication equipments which had been imported into India and were being transported into the State by road against declaration – HELD - In the present case the destination of delivery of the telecommunication equipments which was imported from China was Delhi, as such, once the goods were delivered to the assessee it is only up to this stage that no tax was leviable under the UPVAT Act, 2008 and the CST Act, 1956. Once it was being transported further to other parts of... [Read more]

U.P. VAT Act, 2008 - Section 50 - Import of goods into the State - Levy of penalty for certain deficiencies in Form-38 being carried along with the telecommunication equipments which had been imported into India and were being transported into the State by road against declaration – HELD - In the present case the destination of delivery of the telecommunication equipments which was imported from China was Delhi, as such, once the goods were delivered to the assessee it is only up to this stage that no tax was leviable under the UPVAT Act, 2008 and the CST Act, 1956. Once it was being transported further to other parts of the country and was being imported in the State of U.P., then the relevant taxation provisions would apply. The fact that the assessee was not transporting the goods for sale is not material - Different forms are prescribed for being carried during the course of import into the State by road for business purpose or otherwise than in the course of business. In both eventualities Section 50 had to be complied as adherence to this provision ensures against evasion of Tax - it is on record that not only Column 6 but even Column 8 of the original copy of Form 38 as also other relevant columns were unfilled. Thus, one of the two prerequisites for imposition of penalty under Section 54(1)(14) was satisfied - a finding based on material on record that there was intent to evade tax does not require interference in exercise of revisional powers of this Court – the Tribunal order is upheld and assessee revision is dismissed [Read less]

2018-VIL-339-CESTAT-DEL-ST  | CESTAT SERVICE TAX

Service Tax – use of Brand name - demand on royalty income – HELD - the entire case of revenue has been made on the basis of the data retrieved from laptops, CPUs and pen drives seized from the secret office. During the course of argument, the appellant has doubted the veracity of the retrieved data - the Department had instituted separate proceedings against the appellant under the Central Excise Act alleging evasion of central excise duty. The present proceedings relating to demand of service tax also stands initiated on the basis of the same search such proceedings and the documents recovered - The Adjudication Orde... [Read more]

Service Tax – use of Brand name - demand on royalty income – HELD - the entire case of revenue has been made on the basis of the data retrieved from laptops, CPUs and pen drives seized from the secret office. During the course of argument, the appellant has doubted the veracity of the retrieved data - the Department had instituted separate proceedings against the appellant under the Central Excise Act alleging evasion of central excise duty. The present proceedings relating to demand of service tax also stands initiated on the basis of the same search such proceedings and the documents recovered - The Adjudication Order in the Central Excise case was challenged before this Tribunal and the said O-in-O was set aside and the matter was remanded for de novo adjudication - Since the findings of the Commissioner in the Central Excise proceedings will have a direct bearing on the present case, also the present matter also needs to be remanded with similar directions, since the demand of service tax is entirely based on the GEQD report - the impugned order is set aside and the matter is remanded for de novo decision [Read less]

2018-VIL-343-CESTAT-HYD-ST  | CESTAT SERVICE TAX

Service Tax - Appellant entered into joint development agreement for construction of houses and residential premises with different land owners, in respect of one joint development agreement - service tax demand towards the amount received from land owners towards allotted share of developed property – Section 67 of the Finance Act, 1994 and rule 3 of the Service Tax (Determination of the Value) Rules, 2006 - HELD - It is not a case that appellant has not discharged the service tax liability on the value received for the villas from prospective customers - if the consideration towards the acquisition of the land has been... [Read more]

Service Tax - Appellant entered into joint development agreement for construction of houses and residential premises with different land owners, in respect of one joint development agreement - service tax demand towards the amount received from land owners towards allotted share of developed property – Section 67 of the Finance Act, 1994 and rule 3 of the Service Tax (Determination of the Value) Rules, 2006 - HELD - It is not a case that appellant has not discharged the service tax liability on the value received for the villas from prospective customers - if the consideration towards the acquisition of the land has been included in the value of the villas sold to prospective customers and appropriate service tax liability has been discharged the same value, it cannot be again made liable to service tax under the premise that sale value of the villas given to land owners is a consideration on which service tax liability was not discharged - service tax is liable to be paid on gross amount charged i.e. to say consideration received from land owners in kind and consideration received from prospective customers i.e. total gross amount. In the case in hand, the amount attributable to the consideration received by appellant in the form of land rights from the land owner stands included in the value of villas sold to prospective customer which would mean that whatever consideration was received by the appellant in form of developmental right was considered in assessable value - appellant has complied the service tax liability on the construction undertaken on joint development basis on the value of construction which is mandated in Section 67 of Finance Act, 1994, r/w rules made thereunder - if once the service tax liability has been discharged on the gross amount, demand of service tax on the same amount again would amount to double taxation - demands are also hit by limitation and extended period cannot be invoked for the demands received - demand is not sustainable on merits as well as on limitation - the impugned order is set aside and appeals is allowed [Read less]

2018-VIL-223-ALH  | High Court SGST

M/s VARDH PAPER PRODUCTS PVT LTD Vs COMMISSIONER OF COMMERCIAL TAX/GST, LUCKNOW: 04.05.2018 - U.P. GST Act, 2017 – appellant prayer for quashing the seizure under Section 129(1) of the U.P. GST Act, 2017 – HELD – there is no reason, prima facie, to disbelieve that the Assistant Commissioner had sufficient reasons at the time of inception to pass the impugned orders. However, we are not giving any definite opinion on the subject, but, this Court declines to interfere with the impugned order - The writ petition being misconceived is, accordingly, dismissed

2018-VIL-221-MAD  | High Court VAT

Tamil Nadu VAT Act, 2006 - pre-revision order – HELD - pre-revision order, under Section 27 of the VAT Act, is appealable, and when the matter requires adjudication, Section 84 of TANVAT Act, which confers power on the assessing authority to rectify any error apparent on the face of the Court, cannot be invoked. Filing of an appeal is the only alternate and efficacious remedy - order impugned directing the appellant to file rectification petition, under Section 84 of the VACT Act, is set aside - Appellant is granted time, to file a statutory appeal, to the competent authority – the Writ Appeal is allowed... [Read more]

Tamil Nadu VAT Act, 2006 - pre-revision order – HELD - pre-revision order, under Section 27 of the VAT Act, is appealable, and when the matter requires adjudication, Section 84 of TANVAT Act, which confers power on the assessing authority to rectify any error apparent on the face of the Court, cannot be invoked. Filing of an appeal is the only alternate and efficacious remedy - order impugned directing the appellant to file rectification petition, under Section 84 of the VACT Act, is set aside - Appellant is granted time, to file a statutory appeal, to the competent authority – the Writ Appeal is allowed [Read less]

2018-VIL-336-CESTAT-DEL-CE  | CESTAT CENTRAL EXCISE

Central Excise – demand of differential excise duty by including the amount received by the appellant from the State Govt. of MP under the MPIIPAS, 2004 Scheme - Department view that deduction from Transaction Value is not admissible for the above amount since such amounts cannot be considered as the amount of tax actually paid or payable – HELD - The Government of MP notified the MPIIPAS, 2004 for providing financial assistance to units located in backward areas. The amount of finance assistance was a portion of the amount of VAT deposit by a unit and was restricted to a maximum of 75% of the VAT paid - the VAT charge... [Read more]

Central Excise – demand of differential excise duty by including the amount received by the appellant from the State Govt. of MP under the MPIIPAS, 2004 Scheme - Department view that deduction from Transaction Value is not admissible for the above amount since such amounts cannot be considered as the amount of tax actually paid or payable – HELD - The Government of MP notified the MPIIPAS, 2004 for providing financial assistance to units located in backward areas. The amount of finance assistance was a portion of the amount of VAT deposit by a unit and was restricted to a maximum of 75% of the VAT paid - the VAT charged and collected by the appellant stands immediately credited to the State Government. Subsequently, the financial assistance is sanctioned by MP Trade and Investment Facilitation Corporation Limited and paid in favour of Commercial Tax Office. Such amount is to be considered as advanced tax deposited by the assessee and the balance is required to be paid by the assessee – similar was decided in favour of assessee by the Tribunal in the case of Shree Cement Ltd wherein the Schemes under the Rajasthan Government, the subsidy amount is paid in the form of VAT Challan whereas in the case of the Scheme of the MP Government, the same is allowed by way of book adjustment against the VAT payable for the subsequent period - Following the decision of the Tribunal, the impugned order is set aside and the appeal is allowed [Read less]

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