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Showing 261 to 280 of 2056 Records
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2019 (7) TMI 1797
CENVAT Credit - variance in the inventory of Cenvat Input Credit - shortage of inputs - Rule 3(5B) of CCR - extended period of limitation - HELD THAT:- Rule 3(5B) ibid specifically provides that If the value of any input or capital goods before being put to use, on which CENVAT credit has been taken is written of fully or where any provision to write off fully has been made in the books of accounts, then the manufacturer or service provider, as the case may be, shall pay an amount equivalent to the CENVAT credit taken in respect of the said input or capital goods. A plain reading of the said rule makes it clear that it is applicable only in cases where goods are available in the factory and only a book entry has been made to write off the value of the said goods, which is not the allegation of the department against the Appellant.
It is not the case that the inputs which were found short were not received or were clandestinely removed. We also cannot lose sight of the fact that there were excesses also in inputs which were brought to the notice of the department but these excesses were ignored by the department. This fact itself establishes the bonafide of the appellants in claiming CENVAT credit on the basis of figures disclosed by them in respect of inputs which were used by them. Although there is a finding that the appellants have suppressed the facts with intent to wrongfully avail and utilize the inadmissible Cenvat credit, but the same has not been substantiated by producing any evidence. Merely making allegations of suppression or intention is not sufficient unless the same is established beyond reasonable doubt. The inputs were undisputedly received in the factory of the appellants and upon receipt they were properly accounted for - rule 3(5B) ibid cannot be applied on the facts of this case as the entire case of the department is that the goods are not available in the factor whereas for the application of the said rule the goods have to be available in the factory and only a book entry is to be made to write off the value of the said goods.
Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 1796
Refund of service tax - services procured for rendering of ‘authorised operations’ - exempt goods or not - denial of refund on the ground of non-compliance with the conditions of the N/N. 40/2012-ST dated 20 June 2012 at serial no. 3(f)(ii) therein inasmuch as the debit notes are not acceptable as valid substitutes for invoice and that these were not serially numbered - HELD THAT:- Objections may be raised to protect the interest of revenue but not at the cost of statutory entitlement and, in the absence of any evidence of ineligibility, there is no conflict with interest of revenue insofar as the claim for refund is concerned.
In CUMMINS TECHNOLOGIES INDIA LTD. VERSUS CCE & ST, MEERUT [2018 (5) TMI 565 - CESTAT NEW DELHI] where it was held that rejection of refund application by the authorities below by placing reliance on the notification dated 3.3.2009 cannot be sustained and is liable to be set aside.
On perusal of notification no. 40/2012-ST dated 20 June 2012 it is seen that the structure is split into two paragraphs. Both are independent components with compliance of the latter not a condition enumerated in the former - the substantive compliance of the latter will not in any way dilute the several decisions on strict compliance. Debit notes are frequently used in commercial transactions especially when the contractual arrangements are spread over longer periods and adjustments between the two parties are occasioned at regular intervals. Mere non-enumeration in rule 4A of Service Tax Rules, 1994, or within the procedure of the notification, will not detract from the entitlement to be sanctioned with the refund.
Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 1795
Valuation - inclusion of landed cost of the raw materials and conversion charges, which includes the margin of profit of job-worker in the assessable value - job-work - arm's length price - HELD THAT:- In analyzing the facts in de novo proceedings, learned Commissioner (Appeals) though accepted the facts that there is no evidence to establish that the relation between the appellant and M/s Marico Industries Ltd. are not at arm’s length and on principal to principal basis as alleged by the Revenue and also the activities carried out by the appellants in manufacturing the goods are on job-work basis, but failed to determine the assessable value of job-worked goods correctly.
The principles of law laid down in UJAGAR PRINTS ETC. ETC. VERSUS UNION OF INDIA & OTHERS [1989 (1) TMI 124 - SUPREME COURT] is squarely applicable to the present case inasmuch as the landed cost of the raw materials and conversion charges, which includes the margin of profit of job-worker, is the basis for arriving at the assessable value of the job worked goods in the hands of the job worker. Therefore, the proposal to include the overheads of the supplier of raw materials purchased from the open market and delivered directly at the premises of the appellant, cannot form part of the assessable value.
Inclusion of Landed cost of the raw material in assessable value - HELD THAT:- The same includes the element of freight as well as transit insurance being evident from the sample copies of the invoices placed by the appellant in the paper book. Therefore, the method of assessment of job worked goods arrived at by the adjudicating authority on the basis of C.A. certificate is correct and in accordance with the law.
For the limited purpose of verification of the sample invoices submitted before this forum, the matter is remanded to the adjudicating authority - appeal allowed by way of remand.
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2019 (7) TMI 1794
Valuation of goods - Deemed CENVAT Credit - job-work - related party or not - Mutuality of interest - N/N. 6/2002-CE (MT) dated 01.03.2002 - Revenue’s argument is that since the appellants and the other two Units for whom they undertake the processing of fabrics on job work basis being related to them, the principles of job work valuation laid down by the Hon’ble Supreme Court in UJAGAR PRINTS ETC. ETC. VERSUS UNION OF INDIA & OTHERS [1989 (1) TMI 124 - SUPREME COURT] is inapplicable - time limitation - HELD THAT:- In the impugned order, learned Commissioner while analyzing the evidence on record held that since all Units belongs to the same management and separate Balance Sheets are not prepared for individual units, the transactions between the appellant and other two Units are not on principal to principle basis and price is not the sole consideration, they are inter-connected undertakings and accordingly are related within the meaning and definition of related persons prescribed under Section 4(3)(b) of Central Excise Act, 1944. The appellants in the course of argument have fairly submitted that all these three Units could be termed as interconnected undertakings. However, there is no mutuality of interest and hence the definition of related person as prescribed under Section 4(3)(b)(iv) of Central Excise Act, 1944 is not satisfied.
Related persons or not - HELD THAT:- It is difficult to appreciate the arguments of the appellant in as much as the Profit & Loss Accounts maintained by all the three Units are not separate but common and also the Balance Sheets prepared is common for all these Units. Besides, all these three Units are particularly functioning as single Unit and hence cannot be called as independent to each other and the transactions between them are on principal to principal basis. Therefore, the findings of the learned Commissioner that three Units are related persons within the Section 4 (3) (b) of Central Excise Act, 1944 is correct and sustainable.
Extended period of limitation - HELD THAT:- The department was fully aware of the fact that M/s Mandhana Dyeing, the Appellant is a Division of MIPL who undertake processing of goods for MIPL on job work basis and supplied the same to the said after completion of the processing of fabrics supplied to them. The communications between the Appellant and the department commencing from 04.06.1998 clearly indicate that while responding to the objections on valuation of job work of fabrics for their other units, the appellant had clearly mentioned that M/s Mandhana Dyeing is a Division of MIPL. In these circumstances, invoking the extended period of limitation cannot be sustained.
Thus, even though on merit, it is found that M/s Mandhana Dyeing, the Appellant are related to MIPL and MFP (Export Division) and the valuation of processed goods on job work cannot be determined. However, the demand confirmed invoking the extended period of limitation cannot be sustained - appeal allowed - decided in favor of appellant.
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2019 (7) TMI 1793
Levy of service tax - Works Contract Service - composite contracts involving supply of goods/ materials during execution of civil constructions prior to 1 June 2007 - demand under a category not specified in SCN - benefit of the Composition Scheme, post 1 June 2007 - inclusion of value of free of cost material in the total assessable value - Levy of Service Tax on renting of immovable property.
Levy of service tax - composite contracts involving supply of goods/ materials during execution of civil constructions prior to 1 June 2007 - HELD THAT:- The Supreme Court in COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] noticed that it is only w.e.f 01 June, 2007 that Section 65(105)(zzzza) of the Act was introduced to cover composite works contract and so service rendered in a works contract cannot be covered under any other category of service prior to 01 June, 2007.
The position that emerges is that prior to 1 June 2007, Service Tax could not be levied on a composite works contract involving supply of goods/ materials for execution of Civil Construction. Thus, levy of Service Tax for a service provided prior to 1 June 2007 under “Commercial and Industrial Service” or under “Construction of Complex Service” cannot be sustained.
Demand under a category not specified in the SCN - HELD THAT:- A Division Bench of the Tribunal in M/S GURJAR CONSTRUCTION VERSUS COMMISSIONER CENTRAL EXCISE, JAIPUR-II [2019 (5) TMI 717 - CESTAT NEW DELHI] examined such a position and after placing reliance on the decisions of the Supreme Court in HINDUSTAN POLYMERS CO. LTD. VERSUS COLLECTOR OF C. EX., GUNTUR [1996 (12) TMI 84 - SUPREME COURT] and RECKITT & COLMAN OF INDIA LTD. VERSUS COLLECTOR OF CENTRAL EXCISE [1996 (10) TMI 100 - SUPREME COURT] observed that a demand made under a particular category cannot be sustained under a different category - The Commissioner, therefore, committed an illegality in confirming the demand under a category not proposed in the show cause notice.
Benefit of the Composition Scheme, post 1 June 2007 - HELD THAT:- The Composition Scheme cannot be treated as an exemption Notification under any circumstance. The Department does not dispute that the Appellant discharged the Service Tax liability by payment of an amount equivalent to a certain percentage of the gross amount charged for the works contract as stipulated in Rule 3 of the Composition Scheme since the only reasons given by the Department are that the Appellant did not submit the option in writing to the Department before payment of Service Tax and the tax paid did not include the cost of the material supplied free of cost to the Appellant.
The Constitution Bench of the Supreme Court in COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY & ORS. [2018 (7) TMI 1826 - SUPREME COURT] was constituted to examine what would be the interpretative rule to be applied while interpreting a tax exemption provision/ notification when there is an ambiguity as to its applicability with reference to the entitlement of the assessee or the rate of tax to be applied. The Supreme Court observed that the core issue to be examined in the event of any ambiguity in an exemption notification is whether the benefit of such an ambiguity should go to the assessee or should be considered in favour of the revenue by denying the benefit of the exemption to the assessee. The Supreme Court concluded that every taxing statue including, charging, computation and exemption clause (at the threshold stage) should be interpreted strictly - the impugned order in, so far as it denies the benefit of the Composition Scheme to the Appellant for the reason that option was not exercised by the Appellant in writing before the Department cannot be sustained.
Inclusion of value of free of cost material in the total assessable value in the Composition Scheme - HELD THAT:- The Supreme Court in COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT] observed that the value of taxable services cannot be dependent on the value of goods supplied free of cost by the service recipient and such a value has no bearing on the value of services provided by the service recipient - The Commissioner, therefore, could not have denied the benefit of the Composition Scheme for the reason that the appellant had not included the cost of material supplied free of cost to the Appellant in the gross value of services.
Levy of Service Tax on renting of immovable property - HELD THAT:- The Appellant has deposited the demand of ₹ 5562/- with interest and, therefore, the issue is not required to be examined - Such being the position the demand of Service Tax in the impugned order except under renting of immovable property cannot be sustained.
Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 1792
Valuation - inclusion of freight charges for the period September 2012 to June 2017 - interpretation of Rule 5 of Central Excise valuation (Determination of Price of Excisable Goods) Rules 2000 - HELD THAT:- The said rule has already been held ultra vires. Though, reliance has also been placed upon COMMISSIONER, CUSTOMS AND CENTRAL EXCISE, AURANGABAD VERSUS M/S ROOFIT INDUSTRIES LTD. [2015 (4) TMI 857 - SUPREME COURT], but it is observed that the Hon’ble Apex Court recently in the case of COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, NAGPUR VERSUS M/S ISPAT INDUSTRIES LTD. [2015 (10) TMI 613 - SUPREME COURT] has held that freight charges and transit insurance should not be included in the assessable value for the purpose of payment of excise duty and that the term “any other place” under the definition of “place of removal” has reference only to the place from which goods are to be sold by manufacturer and has no reference to the place of delivery, which may be a buyer’s location.
It is not the case of Department that the invoice were not prepared at the time of goods leaving the factory which means property in goods passed from the appellant to its buyer at the time when he removed his goods from the factory. As a result circular no. 999/6/2015-CEX dated 28.2.2015 also becomes applicable to the given facts where it has been clarified that “In most of the cases, therefore, it would appear that handing over of the goods to the carrier / transporter for further delivery of the goods to the buyer, with the seller not reserving the right of disposal of the goods, would lead to passing on of the property in goods from the seller to the buyer and it is the factory gate or the warehouse or the depot of the manufacturer which would be the place of removal since it is here that the goods are handed over to the transporter for the purpose of transmission to the buyer. It is in this backdrop that the eligibility to Cenvat Credit on related input services has to be determined.”
Appeal dismissed - decided against Revenue.
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2019 (7) TMI 1791
Short payment of Central Excise Duty - Clearance of Cement - basic ground taken by the Department while raising the demand is that the duty applicable in respect of Non-Trade Sales is self assessed by the appellant on MRP basis that the direct sales (Non Trade Sales) were earlier assessed by the appellant on the specific rate as applicable under Sl.No. 1C of the Notification No. 4/2007 CE dated 01.03.2007 - HELD THAT:- The adjudicating authority need to examine the claim made by the learned advocate for the appellant whereunder they have submitted nearly two dozen invoices covering the period of demand i.e. 1.1.2008 to 28.2.2011 from which it has been shown that the clearances were actually made to the Institutional buyers who fall under the category of Non Trade buyers and they have rightly paid Central Excise duty as applicable under Sl. No. 1C of Notification No. 4/2007 dated 01.03.2007. Since the basic ground of show cause notice is that the appellants have made clearance to the Institutional buyers under Sl. No. 1 A rather than 1 C of the Notification No. 04/2007, same can be verified from the claim made by the appellant that the clearances have been actually made under Sl. No. 1 C of Notification No. 4/2007 and not under Sl. No. 1 A.
As it is already explained with regard to Universal Cables that if Universal Cable fall under the category of Non Trade Sales (Institutional buyer), they need to pay Central Excise duty under Sl. No. 1C and if they are not actual Institutional user of the cement, the Central Excise duty can be paid by them under Sl. No. 1A of the Notification No. 4/2007. This aspect also need to be verified at the Commissionerate level.
The matter needs a detailed verification and examination of claims made by the appellant at the field level, the appeal is remanded back to the original adjudicating authority for necessary verification.
Time limitation of Show cause notice - HELD THAT:- There is a substance in the claim made by the advocate that the extended period of demand under section 11 A of the Central Excise Act, 1944 is not invokable in the facts and circumstances of this case. However, since the entire matter is being remanded back, it is expected that the learned adjudicating authority will examine the issue of limitation also in detail.
Appeal allowed by way of remand.
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2019 (7) TMI 1790
Non-payment of service tax - by-product/captive consumption - cream paste - marketable goods or not - HELD THAT:- It is apparent from appellant’s contention that each biscuit manufacturer while manufacturing a cream biscuit has to prepare a cream to be sandwitched between two shells of the biscuit. This cream is prepared from few ingredient, as already mentioned above, and can be prepared by simply mixing those ingredients. No doubt since a different product then those ingredients is coming into existence, the process of mixing herein amounts to manufacture. But it is also simultaneous truth with this cream is specific to each manufacturer who customises it to maintain a particular taste of his brand of biscuit. Hence the cream as such has no marketability as no other manufacturer in the given circumstances would like to purchase the cream of other manufacturer. That cream/flavoured cream, intermediately, manufactured and captively used for manufacture of biscuits have now been exempted from 12.9.2011, in view of insertion of entry No. 19 in Notification No. 10/96-CE dated 23.7.96 vide Notification No. 39/2011-CE dated 12.9.2011.
The cream which is produced captively is having unique flavour, colour and taste and the cream biscuits manufactured by different manufacturers have different flavours and taste. The Department has not been able to bring any evidence of marketability of creams so manufactured by the appellant. In the present case also the appellant is the job worker of M/s Parle Biscuits. The reliance placed on some cream sold in bakeries without reference to their ingredients like colour, flavour and taste cannot be relied on to fasten duty liability on the appellant.
Hon’ble Supreme Court in UNION OF INDIA VERSUS SONIC ELECTROCHEM (P) LTD. [2002 (9) TMI 104 - SUPREME COURT], has laid down the test that the product which is specially manufactured and captively consumed in the factory should be shown to be available in the market so as to fasten any duty on the same. By following the ratio of the law laid down by the Apex Court, it is held that the cream captively produced and consumed in the factory is not marketable as there is no evidence to that effect.
Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 1789
Refund of Service Tax - proportionate service tax credit paid and distributed, as Inputs Service Distributer (ISD) on invoices, by the Head Office of the appellant - refund rejected on the ground of non approval of the list of service in terms of SEZ Act by the Development Committee - HELD THAT:- The Notification No. 9/2009, 15/2009 and 17/2011 are preceding notifications to Notification No. 40/2012 dated 2.06.2012, under which the present refund claims have been filed. All these notifications pertains to SEZ and have identical provisions.
For the denial of refund on account of “Business Exhibition Service” to the appellant for displaying of their goods in exhibition, the issue is decided by the Chandigarh Bench of this Tribunal in NEW SWAN ENTERPRISES VERSUS COMMISSIONER OF C. EX., LUDHIANA [2016 (9) TMI 1486 - CESTAT CHANDIGARH], wherein it has been held that the “Business Exhibition Service” is for the display of goods in the exhibition, which is ultimately for the business promotion activities and therefore, the activity is having nexus with the manufacturing business of the appellant - Similar is the case of the appellant, who has consumed the business exhibition service for conducting display of their product in exhibition at Chicago, through Trident Exhibiters, Noida. It is also evident from the invoice of Trident, dated 09.11.2012, that the service pertained to the Appellant’s unit only. In view of above, the Appellant has rightly availed the Cenvat Credit on “Business Exhibition Service”, and it is refundable to it in terms of the Notification. The impugned order is therefore, not sustainable.
Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 1788
Recovery of the outstanding cost recovery charges for the posting of the Custom Officers at ICD/CSF/ACC - contention of the Appellants is that they were entitled to waiver of the cost of the Custom Officers posted by the Commissioner in terms of the Notification dated 12 September 2005 issued by the Board - Regulations 5(2) and 6(1)(o) of Handling of Cargo in Customs Areas Regulations 2009 - HELD THAT:- The show cause notices dated 9 January, 2013 and 11 December, 2012 were issued to the Appellants under Regulation 12 of the 2009 Regulations. What was stated was that the Appellant has rendered themselves liable for suspension/ revocation of approval of the Custodianship in terms of the provisions contained in Regulation 11(1) of the 2009 Regulations and also forfeiture of security and imposition of penalty under Regulation 12(8) of the 2009 Regulations. The Commissioner under the impugned order did not either revoke the approval of the Custodianship or was the security forfeited. The Commissioner ordered that the outstanding cost recovery charges should be covered from the Appellant and the Regulations 5(2) and 6(1)(o) of the 2009 Regulations and also imposed penalty.
This about the issue as to whether the recovery of outstanding cost recovery charges could have been confirmed was examined by a Division Bench of the Tribunal in Container Corporation of India. The Tribunal after examining the various provisions of the regulation observed that the Adjudicating Authority could not have order for recovery of the outstanding cost recovery charges - The penalty is imposed under Section 12(8) of the 2009 Regulations if a Customs Cargo Service provider contravenes any of the provisions of the Regulation or fails to comply with any provision of the Regulation with which it was its duty to comply. As it was held that cost recovery charges could not have been recovered under the aforesaid provisions of the Regulations, the penalty also could not have been imposed as there is no contravention of the Regulations.
The impugned orders dated 26 February 2019 and 29 March, 2019 passed by the Commissioner to the extent that the demand of outstanding cost recovery charges has been confirmed and penalty has also been imposed are liable to be set aside and are set aside - Appeal allowed.
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2019 (7) TMI 1787
Club and Association services - amount received for corporate membership - amounts received by the Appellant prior to the introduction of the levy of service tax under Club and Association services w.e.f. 16/06/2005 - interest and penalty - HELD THAT:- The issue involved in this appeal is no more res-integra in view of the decision of the Hon’ble High Court of Rajasthan in the case of CARRIER POINT VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR [2018 (3) TMI 1288 - RAJASTHAN HIGH COURT] where it was held that Any payment of contract which are entered after 1-7-2003 will invite Service Tax and any contract which is concluded prior to 1-7-2003 will not invite imposition of Service Tax.
In the present case also, it is not in dispute that the department has sought to tax the amounts received as corporate membership prior to 16/06/2005 on proportionate basis after the introduction of the levy of service tax on club and association services - the levy on such amounts cannot be sustained and hence the demand to that extent is set aside.
Levy of service tax - Junior and NRI Membership as also on account of Corporate membership from Greaves Cotton Limited - HELD THAT:- The Appellants have already paid the service tax on the said amounts, however interest on the same has not been paid by the Appellant. Thus, interest on the said amount is payable by the Appellant for delayed payment of service tax.
Penalty - HELD THAT:- The levy was itself introduced w.e.f. 16/06/2005 and the major demand itself not being sustainable, the question of invoking suppression cannot be upheld in the current case - penalty under section 78 cannot be imposed on the Appellant.
The demand of service tax of ₹ 40,53,468/- along with penalty of ₹ 83,00,000/- is set aside - Interest on the amount of ₹ 1,00,577/- on amount received for Junior and NRI membership and corporate membership of Greaves Cotton limited is to be paid by the Appellant - appeal allowed in part.
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2019 (7) TMI 1786
100% EOU - short realisation in positive Net Foreign Exchange (NFE) - eligibility of breakage loss in transit (normal loss) - HELD THAT:- As per Notification No. 52/2003-Cus., a 100% EOU is required to achieve positive NFE. It is further provided that in case of failure to achieve the said positive NFE, the duty equal to the portion of the duty leviable on the said goods but for the exemption contained in this notification, and the duty so payable, shall bear the same proportion as the unachieved portion of NFE, alongwith interest. Further, admittedly the appellant have produced BRC’s in support of full realisation of the export proceeds after allowing discount for brokerage in transit or genuine quality dispute, raised by the buyer. Further, appellant has demonstrated in the course of hearing that they have achieved positive NFE for each of the financial year during the period 2011-12 to 2015-16, the period under dispute. Thus, the finding of the Commissioner (Appeals) that as per Notification No. 52/2003-Cus, the proportionate benefit is recoverable if export proceeds are not realised is erroneous.
Allowing of discount for damage in transit or quality dispute is normal loss in the facts and circumstances. Normal loss does not require any special treatment nor is required to be booked as a loss. Thus, there is no case of short realisation of export proceeds in the facts and circumstances - Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 1785
Non-imposition of penalty by the adjudicating authority - works contract service - construction of complex service or a contract which involved both rendition of service and transfer/deemed transfer of the materials used in the construction - HELD THAT:- The Hon’ble Apex Court in COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] held that “works contract” is a separate specie of contract known in the commercial parlance and it cannot be equated with sales of goods or with the services. Therefore, it can be charged to service tax only when the charge has been created on “works contract services” and not before. Accordingly, no service tax can be levied on works contract service prior to 01.06.2007 on any service rendered along with transfer/deemed transfer of goods - The legal position, which is now well settled is that if the services are rendered along with transfer/deemed transfer of goods, such contract can only be charged as “works contract service” under Section 65 (105) (zzzza) with effect from 01.06.2007 if such contract falls within this clause. They cannot be charged the service tax under any other Head either prior to 01.06.2007 or thereafter.
It could not be able to make out in this case from the records whether in the contract in question, there was deemed/transferred of materials also along with rendition of services. If so, the contract squarely falls under works contract services and can be charged under this Head only. If it does not fall under “Works Contract Service”, then no tax can be levied under this or any other head. On the other hand, if the contract pertains to service simplicitor and involves no transfer/deemed transfer of materials, then it can be charged to service tax under construction of complex services. Consequently, the demand needs to be re-worked along with interest and penalty also needs to be re-calculated.
Matter remanded back to the original authority to decide the issue afresh after examining the nature of contract in the case and following the ratio laid down by the Hon’ble Supreme Court in the case of Larsen & Toubro Ltd. - appeal allowed by way of remand.
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2019 (7) TMI 1784
Business Auxiliary Services - Appellant engaged in rendering services to their clients in connection with sale and purchase of goods produced by the clients for which they earn commission, apart from manufacturing business - eligibility for benefit under N/N. 13/2003 - Exemption denied on the sole ground that the appellant would be paid commission for the ‘services rendered’ and that in the agreement, it has not been mentioned that the appellant has been appointed as ‘commission agent’ - HELD THAT:- The Ld. Commissioner has committed a serious error in denying the exemption. The agreements entered by the appellant, in substance, is for procuring orders on behalf of the clients for which the appellant would be paid commission to be calculated at the rate on sales amount. It is, therefore, not in dispute that the appellant has to cause sale of products on behalf of the client. Mere fact that in the subject agreements, the appellant has not been specifically addressed as ‘commission agent’ will not dis-entitle the appellant from availing the benefit of exemption provided in the notification.
Reliance can be placed in the case of CHAHABRIA MARKETING LTD. VERSUS COMMISSIONER OF SERVICE TAX MUMBAI [2016 (3) TMI 1050 - CESTAT MUMBAI] where it was held that Once it is held that the assessee is a ‘commission agent’ by virtue of being engaged in the activity of causing sale or purchase for a consideration which is linked to the quantum of sale or purchase, the benefit of this Notification will cover all business auxiliary services rendered by such a ‘commission agent’.
The impugned demand of service tax, interest and penalty cannot sustain and hence, the same are set aside - Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 1783
Revision u/s 263 - loss on revaluation foreign currency loan claimed by the assessee - HELD THAT:- AO has examined this complete profile filed by the assessee before him and taken a view for allowing the claim after verifying all the details. Now, the Assessing Officer has taken a positive view in favour of the assessee which does not mean that view is a erroneous and prejudicial to the interest of the Revenue and also does not mean that the Assessing Officer has not done any enquiry before allowing the claim of the assessee. The loss exclusively being revenue in nature, since it is to safeguard the potential loss is allowable as expenditure. Therefore, the view taken by the Assessing Officer is not erroneous.
Thus we are of the considered view that the Assessing Officer has examined all the details filed by the assessee and fully satisfied on the proposition of loss of the assessee and allowed the same and taken the one possible view. Therefore, the ld.Pr.CIT, Surat-1 has taken a different view in the in the matter by passing the impugned order dated 26.03.2018 u/s.263 of the Income Tax Act, 1961 which is not sustainable in the eye of law. Therefore, we cancel the impugned order passed by the ld.Pr.CIT, Surat-1 by accepting the appeal filed by the assessee. - Decided in favour of assessee.
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2019 (7) TMI 1782
Valuation of imported goods - inclusion of ship demurrage for ‘Voyage Chartered Vessels’ incurred before vessels reach the Port in the assessable value - Rule 10(2)(a) of the Customs Valuation Rules, 2007 - HELD THAT:- The issue herein is no longer res integra and have been impliedly decided in favour of the appellant by Hon’ble Orissa High Court in Writ Petition filed by TATA STEEL LTD. AND ORS. VERSUS UNION OF INDIA AND ORS. [2019 (10) TMI 226 - ORISSA HIGH COURT]. The Hon’ble High Court was please to hold Explanation to sub-rule 2 of Rule 10 of Customs Valuation Rules, 2007 is bad and further declared it ultra vires the provision of Section 14 of the Customs Act and hence struck it down.
Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 1781
Area Based Exemption - benefit under N/N. 49/2003-CE dated 10.06.2003 denied to the appellant for want of the declaration about availing the said exemption to be filed with the jurisdictional Assistant Commissioner - precedent decisions on the issue not considered - HELD THAT:- The admitted fact of the case is that the requisite declaration was given by the Appellant vide letter dated 18.08.2009, to not to the Deputy Commissioner, Dehradun, who is the Jurisdictional Commissioner but to the Superintendent of Central Excise, Kotdwar - It is also an admitted fact that all requisite documents as required in the said notification have also been forwarded by the Appellant to the department. However, instead of forwarding to the Jurisdictional Assistant Deputy Commissioner, same were forwarded to the Commissioner of Commercial Tax, Kotdwar, DGM, Dehradun and also to the Fire Station Officer. It is also no-where been disputed that the hand held computers as are manufactured by the Appellant are covered by the impugned exemption notification. The Appellant unit is also admittedly located in the Sigaddi Growth Centre (SIDCUL) near Kotdwar, District Pauri Garhwal, Uttar Pradesh, i.e. the area as notified in the impugned notification.
It becomes clear that despite the same issue stands already decided by this Tribunal in favour of the appellant, department continued issuing notices for the subsequent periods in sheer violation of the findings arrived by this Tribunal in the previous appeals. This is observed as an act against the judicial protocol, hence, cannot be allowed to sustain. The department is rather warned to be careful about the decision of this Tribunal and of superior courts to be followed and applied in the similar facts and circumstances. Due consideration must be given to Judicial pronouncement unless & until the genuine reasons distinguishing these pronouncements from the case in hand are duly recorded.
Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 1780
Levy of service tax - Cargo handling service - renting of immovable property service - site formation and clearance, excavation and earthmoving and demolition service - benefit of N/N. 12/2003-ST dated 20th June 2003 - HELD THAT:- The decision of the Hon’ble Supreme Court in COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] has altered the contours of tax liability arising from the several activities that existed earlier independently and now enumerated in ‘works contract service’ in Finance Act, 1994. The adjudicating authority had arrived at the conclusions in the impugned order without the benefit of that wisdom. On the clear finding of the adjudicating authority of the error in computation for inclusion in the proposed demand pertaining to ‘transport of goods by road’ service, we find no contrary evidence to overrule the decision therein.
The matter is, therefore, remanded to the original authority for compliance with the directions - appeal allowed by way of remand.
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2019 (7) TMI 1779
Reopening of the assessment under section 147/148 - addition on account of unexplained deposit in bank account and addition on account of unexplained other deposits - Reopening based on AIR information assessee made cash deposit in his S.B. Account - HELD THAT:- Since the assessee did not respond to the query letter of the A.O, A.O. presumed that there is escapement of income. It is an admitted fact that no return of income was filed for the assessment year under appeal and at the time of issue of query letter by the A.O. no proceedings were pending before A.O, therefore, there was no justification for the A.O. to issue query letter to the assessee asking the explanation of assessee. Since query letter was illegal, therefore, assessee was not bound to reply to the same.
Cash deposit per se would not be income of the assessee. An identical issue have been decided in the case of SHRI MAHAVIR PARSAD VERSUS THE I.T.O, REWARI [2017 (10) TMI 1377 - ITAT DELHI] Thus, the A.O. in the absence of reply from the side of the assessee which assessee was not bound to reply, merely presumed that there is escapement of income. There is, thus, no application of mind on the part of the A.O. to record reasons as per Law. The initiation of re-assessment proceedings are beyond the jurisdiction of the A.O. into the matter. We, therefore, do not subscribe to the view of the Ld. D.R. that reopening of the assessment is valid into the matter - Decided in favour of assessee.
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2019 (7) TMI 1778
CENVAT Credit - input services - Banking and other Financial Services - credit denied on a new ground that the appellant is not registered as an ISD for availing the cenvat credit at their Head Office - HELD THAT:- Similar issue arose before this Tribunal in appellant’s own case regarding cenvat credit with respect to ‘Banking and other Financial Services’ in M/S SECURE METERS LTD. VERSUS CCE, JAIPUR-II [2017 (5) TMI 44 - CESTAT NEW DELHI], where a coordinate Bench of this Tribunal has held that the appellant have rightly availed the cenvat credit in the similar facts and circumstances, allowing their appeal.
Further, the impugned order-in-appeal is also not sustainable as the Commissioner (Appeals) have erred in not taking notice of the admitted fact on record of the Department that the appellant is registered as an ISD, and hence entitled to cenvat credit of common input services.
Appeal allowed - decided in favor of appellant.
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