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Showing 321 to 340 of 1482 Records
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2023 (6) TMI 1162
Absolute Confiscation - gold biscuits - wallets - Owner of biscuits - Corroboration of statements or not - levy of penalty - HELD THAT:- There is no dispute that the gold biscuits were seized from the Appellants when they were being screened at Imphal Airport. If the Appellants have bought the gold through licit channel, they would have carried the Invoice copy towards the same, particularly taking into account that the value of gold was for Rs.15.7 Lakhs. While they were not in a position to show any document for purchasing these gold biscuits in India, in the Recorded statement, the Appellants have stated that they have travelled to Myanmar and bought the biscuits by way of cash payment. The recorded statements have not been retracted by them at any stage. The Test Report issue by Assam Hallmarking Centre dated 15 March 2019 also states that the golds were of 24 Carat with fineness of 998.4 to 998.5 purity.
If all these facts are viewed together, it is clear that the gold biscuits are of foreign origin only. In the absence of any plausible evidence brought in by the Appellant to the contrary, it gets established that the gold biscuits were of foreign origin and the Department was correct in absolutely confiscating the gold. Admittedly the Recorded statements did not specify that the same were being recorded in terms of Section 108 of Customs Act, 1962. However, the Appellants are required to support their claim by way of proper Invoices in the first place. They were not in a position to prove the same. Therefore, even the error pointed out about the Recorded Statement cannot come to the rescue of the Appellants.
Confiscation of gold biscuits and wallets are upheld - Considering the value of gold biscuits, penalty imposed on Shri Antony Philip is reduced to 1,00,000/- - Considering the fact that both the Appellants have admitted that the owner of the gold biscuits is Shri Antony Philip and taking the view that Shri Jochan Michael has acted as a carrier, the Penalty on him stands reduced to 25,000/-.
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2023 (6) TMI 1161
Levy of service tax - Business Support Services - receipt of the Appellant-assessee’s share in the Central Rights Income is consideration for the alleged services rendered to BCCI-IPL in organizing the IPL tournament or not - taxability of 10% of the payments made by Franchisee Company to the foreign players - reverse charge mechanism - payments made to foreign service provider for management consultancy services - costs incurred in marketing and PR activities outside India - 90% of payments made by Franchisee company to the foreign players - 100% of payments by the company to foreign coaches and support staff.
Whether receipt of the Appellant-assessee’s share in the Central Rights Income is consideration for the alleged services rendered to BCCI-IPL in organizing the IPL tournament, and taxable as Business Support Services (BSS)? - HELD THAT:- The Tribunal by relying upon the decision of the Tribunal in the case of MORMUGAO PORT TRUST VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, GOA- (VICE-VERSA) [2016 (11) TMI 520 - CESTAT MUMBAI] has set aside the demand holding that in case of joint venture contract, there is neither an intention to render a service to the other partner(s) nor is there any fixed consideration quid pro quo for any particular service of a partner. It has further been held that a contractor-contractee or the principal-client relationship, which is the essential element of any taxable service, is absent in the case of the partners or co-venturers in a joint venture agreement - In the present case, since the demand of Rs.16,71,71,797/- in respect of Central Rights Income arising out of the franchise agreement cannot be considered as provision of any service between the members to the franchise agreement, such demand cannot be confirmed on the assessee-appellants.
Whether 10% of the payments made by Franchisee Company to the foreign players is taxable under the reverse charge mechanism (RCM) as BSS on the basis that the players carry out promotional activities (incl. wearing uniforms with logos, etc.)? - HELD THAT:- The said issue has already been dealt with by the Co-ordinate Bench of this Tribunal, in the case of SOURAV GANGULY VERSUS COMMISSIONER OF SERVICE TAX, KOLKATA (NOW COMMISSIONER OF CENTRAL GOODS & SERVICE TAX & CENTRAL EXCISE, KOLKATA SOUTH) [2020 (12) TMI 534 - CESTAT KOLKATA], wherein it was held that the view taken by the commissioner is not correct as the players had received the fees for the purpose of playing cricket only and even otherwise, it is a settled principle of law that if no machinery provision exists to exclude non-taxable service (playing cricket) from a composite contract, the same is not taxable since law must provide a measure or value of the rate to be applied and any vagueness in the legislative scheme makes the levy fatal. Thus, the Tribunal held in this case that the confirmation of demand could not be sustained - Considering that the ratio of the above decision squarely applies to the present case in hand, it is held that the confirmation of demand Rs.47,55,082/- towards fees paid to foreign players on RCM basis and Rs. 20,13,565/- to the agents of foreign players are not sustainable.
Whether payments made to foreign service provider for management consultancy services are taxable under RCM under taxing entry for Management or Business Consultant’s Service? - HELD THAT:- The said issue has already been dealt with by the Hon’ble Supreme Court, in the case of UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT]. Upon consideration of such issue, the Hon’ble Apex Court while dismissing the Revenue’s appeal had observed only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax.
In the present case, the disputed period for which demands were raised relate to 2008-2009 and 2011-2012, much prior to the amendment to Section 67 introduced w.e.f. 14.05.2015. Hence, the confirmation of demand for Rs.38,31,865/- in respect of reimbursable expenses to foreign service provider on RCM basis cannot be considered as there exists no legal provision for charging to service tax on such reimbursement charges, we are of the view that such demand cannot be confirmed on the assessee-appellants.
Whether costs incurred in marketing and PR activities outside India is taxable under the taxable service for BSS, on RCM? - HELD THAT:- The identical issue was considered by the Co-ordinate Bench of this Tribunal, in the case of KPH DREAM CRICKET PVT. LTD. VERSUS CCE & ST, CHANDIGARH-I (VICE-VERSA) [2019 (5) TMI 1171 - CESTAT CHANDIGARH]. Upon consideration of such issue, the Tribunal had held that the main object of the appellant-assessee is to promote game of cricket in India through IPL tournaments. For obtaining service of organizing the said tournaments cannot be treated a service is in nature of Business Support Service. Therefore, no service tax is leviable under the category of Business Support Service as discussed hence the demand of service tax is not sustainable - As the present case is identical in the factual matrix to the above case already decided by the Tribunal, there exists no ground to deviate from the above stand - the confirmation of demand Rs.11,24,636/- towards service tax liability on marketing and Public Relations activities conducted outside India paid to foreign vendors on RCM basis is not sustainable.
Whether the appellants-assessee is required to reverse common CENVAT Credit availed for providing taxable and exempt output service? - HELD THAT:- The issue has already been examined by Co-ordinate Bench of this Tribunal, in the case of CCE & ST, CHENNAI VERSUS L. BALAJI, S. BADRINATH, DINESH KARTHICK, MURALI VIJAY, VIDYUT SIVARAMAKRISHNAN, ANIRUDA SRIKKANTH, SURESH KUMAR, YO MAHESH, HEMANG BADANI, ASHWIN R,C. GANAPATHY, ARUN KARTHIK KB, KAUSHIK GANDHI, PALANI AMARNATH C, ABHINAV MUKUND (VICE-VERSA) [2019 (5) TMI 377 - CESTAT CHENNAI]. Upon consideration of such issue, the Tribunal had held that no Cenvat credit is required to be reversed - the Tribunal held that the demand of service tax is not sustainable against the appellants.
The explanation 3 to Rule 6(1) of the Cenvat Credit Rules, 2004 was amended vide notification No. 13/2016-C.E. (NT) dated 01.03.2016, wherein the ‘exempted service’ was expanded to include ‘an activity which is not a service as defined under Section 65B (44) of the Finance Act, 1994’ w.e.f. 01.04.2016, for which reversal of cenvat credit is required. Hence, prior to this there was no legal requirement legally binding an assessee to reverse cenvat credit of inputs or inputs services taken on such activities which are not services under the scope of the said Finance Act, 1994 - the confirmation of demand Rs.2,13,57,472/- towards common Cenvat credit reversal is not sustainable.
Whether 90% of payments made by Franchisee company to the foreign players is taxable under RCM as BSS on the basis that they carry out promotional activities (incl. wearing uniforms with logos, etc.)? - HELD THAT:- The issue has been addressed in a number of cases earlier by Co-ordinate Benches of the Tribunal and in the case of M/s KPH Dream Cricket Pvt. Ltd. it was clearly held that the main activity of players, who were engaged under a contract by the appellants-assessee, is to play cricket apart from engagement of promotional activities which are ancillary to the main activity of playing cricket. On drawing support from various decisions held in favour of the appellants-assessee, the Tribunal held in this case that on player’s fee, no service tax is payable and upheld the decision of the Commissioner in rightly dropping the demand of service tax on player’s fees - the instant case is covered by the decision of the Tribunal in the above case, and thus there are no merit for interfering with the decision of the learned Principal Commissioner in dropping the demand of service tax in the impugned order.
Whether 100% of payments by the company to foreign coaches and support staff is taxable under RCM as BSS on the basis that they carry out promotional activities? - HELD THAT:- The issue has already been addressed in detail in the impugned order by the learned Principal Commissioner concluding that the activity of coaches and also support staff clearly stands out distinctly different as coaching service provided in relation to sports and is not covered Business Support Service; further he concluded there exists a specific category for levying such category of services, i.e., ‘commercial training or coaching centre’. However, as the coaching in the filed of sports has been specifically excluded from the applicability of service tax vide the definition of ‘commercial training or coaching centre’ under section 65(27) of the Finance Act, 1994, and as the service of coaching is not provided by an centre but an individual coach and support staff, he concluded that the service tax is not chargeable on such activity - there is no ground for interfering with the order of the learned Principal Commissioner. Thus the demand of service tax on this issue is not sustainable and appeal made by the Revenue does not survive.
Appeal disposed off.
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2023 (6) TMI 1160
Classification of services - Online Information and Data Base Access and / or Retrieval Services or not - setting up the network for transfer of data not provided by them - HELD THAT:- In the instant case, the Respondent has been providing ‘System Networking Services’. The said service involves linking of two or more computing devices together for the purpose of sharing data. Networks are built with a mixture of computer hardware and software. The work of the Respondent is to undertake inter-linking of computers through installations of required software and hardware.
It is the contention of the Respondent that they were nowhere concerned with supply / retrieval of any information or data through any network to any person whomsoever - There was no allegation in the notice also that they have supplied/ retrieved any information or data through any network to any person.
It is observed that the Respondent has provided solutions to their customers based on various network models, architectures etc, and thus they have provided service for making available telecommunication network through which data and information can reach from one place to another for the purpose of sharing data - this service will not be classifiable as ‘Online Information and Data Base Access and / or Retrieval Services’ liable to service tax.
From the activity of the Respondent, it is observed that they are neither involved in generation of data or information nor involved in providing the same to their clients. They are involved in setting up the network for transfer of data not provided by them. Thus, the Respondent has not provided the service of ‘Online Information and Data Base Access and / or Retrieval Services’ to their clients - the impugned order dropping the demands holding that the Respondents have not rendered ‘Online Information and Data Base Access and / or Retrieval Services’ is sustainable.
Appeal of Revenue dismissed.
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2023 (6) TMI 1159
Refund of service tax paid on gas transmission charges collected by them from their customers - refund claim arose due to differential price charges i.e. the difference between tariff already charged as per contract by the appellant and the tariff amount as received by PNGRB - it appeared to the Department that the said refund amount had already been adjusted / utilized by the appellant under Rule 6(3) of Service Tax Rules, 1994.
Whether the data entered in the ST-3 Returns will bind the appellant and the act of not correcting an error in time, will close the avenues for a claim of refund, filed subsequently by the appellant? - HELD THAT:- The ST-3 Returns filed by the appellant show that the appellant had adjusted an amount of Rs.11,47,41,041/- under Rule 6(3) of the Service Tax Rules, 1994 towards their service tax liability. The appellant on the other hand claimed that this was an inadvertent error and that in fact they had adjusted only an amount of Rs.66,24,847/-. In the normal course departmental officers have powers to correct an error of clerical or arithmetical nature, which are obvious, apparent or patent as do not admit of any debate or discussion. The original authority however felt that since the ST-3 Returns showed that an amount of Rs.11,47,41,041/- which was greater than the refund amount claimed, has been adjusted under Rule 6(3), no refund could be paid.
A question arises that if the appellant had inadvertently or otherwise entered a lesser figure as the value of taxable service and the amount of tax payable in Part B of the ST-3 Return, would the Original Authority be similarly bound? The answer lies in Section 72 of finance act, 1994 which gives power to central excise officer to make best judgment assessment if he finds that the Assessee has filed the service tax return but has failed to assess service tax as per provisions of Finance Act, 1994. Assessment in its broad sense means determination of tax liability. Since Revenue cannot retain any money deposited / collected without the authority of law, excess collection has to be refunded. Rule 6 of the Service Tax Rues, 1994 has been introduced as a part of the procedure to bring in a tax payer friendly regime - The CBIC has a scheme for the scrutiny of ST-3 Returns as in Circular No. 113/07/2009-St, dated 23.04.2009 and has brought out a ‘Return Scrutiny Manual for Scrutiny of ST-3 Returns’, for this very purpose. As per these instructions Division/Range offices should, among other things, at first carry out a preliminary online scrutiny of the ST-3 Returns filed. The purpose is to ensure the completeness of the information furnished in the Return, arithmetic correctness of the amount computed as tax and its timely payment, timely submission of the return etc.
The refund claim under 11B was rejected by the Original Authority on the ground that the claim cannot be modified by the appellant to include a totally new ground. While the Commissioner (Appeals) in the impugned order felt that the appellant was seeking a refund claim under section 11 B to derive a double benefit by also taking credit of the same amount - as per the appellant the total excess service tax paid by was Rs 11,47,41,041/- during the period April 2011 to July 2014. However, they have claimed a refund of Rs 10,54,78,124/- only as stated in para 2 of the impugned order. The balance of Rs 92,62,917/- which was not claimed was due to the fact that Rs 66,24,851/- was adjusted by the appellant under Rule (3) in the October 2014 to March 2015 ST 3 Returns and Rs 26,38,066/- that was not claimed due to being able to produce ‘certificates of non-availment of credit’ from 3 customers. (Rs 66,24,851/- + Rs 26,38,066/- = Rs 92,62,917/-). It is seen that as per the table the amount of Rs 66,24,851/- was not included in the refund claim of Rs 10,54,78,124/- and no double benefit was claimed.
The appellant has now in their appeal before us brought to notice that in a subsequent development the Hon’ble new Delhi Tribunal’s vide its Final Order [2017 (9) TMI 554 - CESTAT NEW DELHI] has held that there can be no levy of service tax on the activity of transportation of gas up to delivery point at customers premises as it pertains to self-service. Hence on this ground too they would be eligible for a refund under section 11B of the Central Excise Act, 1944. While this is a fresh legal issue which has not been examined by the Original Authority, it is no longer in dispute that claims for refund, even where tax has been paid under a mistake of service tax law are to be filed and decided upon under Section 11B of the Central Excise Act, 1944, subject to the claimant establishing that burden of duty has not been passed on to third parties.
The only issue for rejecting the refund claim is a data entry in the ST-3 Return, which when claimed to be erroneous by the appellant was not verified for its correctness just because the original authority mistakenly found himself ‘bound by the legal framework’ - the appellant’s claim was wrongly dismissed without examining the claim based on verifiable facts. Hence the impugned order merits to be set aside.
Revenue can however verify the mathematical accuracy in computing the refund claim before sanction - impugned order set aside - appeal allowed.
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2023 (6) TMI 1158
Consulting Engineering Service or not - Activity of supply of basic equipments as well as supervision and erection and commissioning of the manufacturing lines - valuation of such service - HELD THAT:- The Appellant raised consolidated bill to the client JUD, which include supply of materials and providing technical assistance for setting up the cement plant. Out of gross receipt of Rs.65,76,56,249/-, the Appellant has supplied machinery and equipments valued at Rs.13,68,01,000/-from their own manufacturing unit, which include an amount of Rs.2,42,91,584/- paid towards Central Excise duty.
The Appellant is not a consulting engineer firm. They are a manufacturing firm and whenever physical execution of erection and commissioning is sought along with supply of their own manufactured goods, they assist the buyer in procurement of bought out items. In the present case, JUD themselves undertook the erection and commissioning activity. Apart from the Appellant they have engaged various other service providers also to assist them in the erection and commissioning activities. Hence, the allegation of the department that the Appellant has rendered 'Consulting Engineer' service is not supported by any evidence - the Appellant has appropriately paid service tax on the services rendered towards supervision of erection and commissioning of the plant. The value of bought out items sold to JUD on a profit cannot be considered as ‘Consulting Engineer service’ for the purpose of demanding service tax.
A composite contract cannot be bifurcated to artificially arrive at the service value - the demand in the impugned order is not sustainable - Since the demand itself is not sustainable, the question of demanding interest and imposing penalty does not arise.
Appeal allowed.
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2023 (6) TMI 1157
Levy of Service Tax - construction of residential complex service - dispute in the present appeal relates to the period prior to July 01, 2010 and also post July 01, 2010 - HELD THAT:- If there was no liability of service tax prior July 01, 2010, all that is required to be seen is whether there was any delay in deposit of the amount so as to attract interest. For this period, penalty could not have been imposed as there was no liability to pay service tax.
For the period from July 01, 2010, onwards, the situation is different because the appellant is liable to pay service tax. Service tax should have been collected at the time each installment was paid by the purchaser and not when the last installment was paid. The Principal Commissioner has not examined this issue from this perspective and therefore, the matter would have to be remanded to enable him to examine when the liability to pay service tax arose and when service tax was actually deposited by the appellant and whether interest was liable to be paid by the appellant.
The matter is remitted to the Principal Commissioner to separately examine the factual position prior to July 01, 2010 and post July 01, 2010 after hearing the appellant - Appeal disposed off.
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2023 (6) TMI 1156
Levy of service tax - Arrangement Fee - Facility Agent Fee - Processing Fee - Facility Fee - Arrangement Fee - appellant is engaged in generation of electricity at various plants located at West Bengal - requirement to issue SCN.
Arrangement Fee - Facility Agent Fee - HELD THAT:- The demand pertain to the period prior to 18.04.2006 and as per CBEC Circular F.No.276/8/2009-CX8A dated 26th September, 2011, it has been clarified the service tax liability on any taxable service provided by a non-resident or a person located outside India, to a recipient in India, would arise w.e.f. 18.04.2006, i.e. the date of enactment of Section 66A of the Finance Act, 1994. The Board has accepted this position. Accordingly, the instruction F.No.275/7/2010-CX8A dated 30.06.2010 stands rescinded - thus, the appellant is not liable to pay service tax for the demand.
Processing Fee - Facility Fee of USD 15 million- Arrangement Fee - HELD THAT:- The appellant has already been paid service tax along with interest. Therefore, the demand against the appellant is not sustainable.
Facility Fee of USD 50 million - HELD THAT:- The demand has already been dropped by the Adjudicating Authority, accordingly, the same is not in dispute.
Requirement to issue SCN - HELD THAT:- As the appellant has already been paid service tax along with interest, the show-cause notice was not required to be issued to the appellant.
The show-cause notice issued to the appellant is bad in law. Accordingly, the impugned proceedings against the appellant are not sustainable, hence, the same are set aside - Appeal allowed.
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2023 (6) TMI 1155
CENVAT Credit - Input or not - Sponge Iron - Charging Report does not reflect the quantity of Sponge Iron charged in the Blast Furnace - officers were of the view that ‘Sponge Iron’ was not required for manufacture of Pig Iron and the Appellant has wrongly taken the credit on the ‘Sponge Iron’ as their input without using the same in the manufacture of Pig Iron - Penalty.
HELD THAT:- The allegations of the department are only on presumption basis and not supported by any evidence, in view of the explanations submitted by the Appellant against each of the allegations.
Allegation that RG-23 Register shows the availment of credit, but the Charge Report did not indicate the issue of Sponge Iron for the manufacture of Pig Iron - HELD THAT:- The officer visited the factory had taken possession of some documents but did not take the sample of Sponge Iron, which was stored at the store of the company for manufacturing of pig iron. It is observed that just because there was no issue of Sponge Iron on the day of visit of the officers, it cannot be concluded that the Appellant has not used it at all in the manufacturing of Pig Iron. It is a fact that Sponge Iron is not must for manufacturing Pig Iron. The Appellant stated that they have used it as a trial basis only to reduce the usage of Coke - the statement of Usha Martin (another Conversant Agent of TISCO) also agrees that the usage of Sponge Iron reduces the use of Coke. Since it is not an essential major input in the manufacturing of Pig Iron, we agree with the submission of the Appellant that on the basis of one day verification by the officers, it cannot be concluded that the Appellant has never used Sponge Iron in the manufacture of Pig Iron.
The officers found from the Costing Sheet, the cost of Sponge Iron was not taken into consideration - HELD THAT:- Appellant contended that the costing has no relevance to conclude whether Sponge Iron is an input or not and to decide the eligibility of availment of Cenvat credit- the Contention of the Appellant agreed upon, that on the basis of costing it cannot be decided whether the Appellant is eligible for Cenvat credit or not, since it was not their finished goods. They manufacture it for TISCO only for job charges.
The investigation has relied upon the literature ‘Making Shaping and Treating of Steel’ published by Association and Iron & Steel Engineers of United State Steel, to support of their allegation that Sponge Iron was not viable for use in the manufacture of Pig Iron - HELD THAT:- The Appellant stated that the Literature ‘Making Shaping and Treating of Steel’ published by Association and Iron & Steel Engineers of United State Steel, relied upon by the investigation in support of their allegation that Sponge Iron was not viable for use in the manufacture of Pig Iron, does not represent the correct picture. The theoretical application of the said book cannot be made in the present case, to deny Cenvat credit.
It is observed that the Appellant was also using the Sponge Iron only on trial basis with a view to reduce the cost by using less Coke. Hence, the contention of the Appellant is agreed upon that the Literature cannot be relied upon to deny the credit otherwise eligible to them.
In the Central Excise Registration, the Appellant has not mentioned Sponge Iron as one of their major ‘inputs’ - HELD THAT:- The receipt of the input Sponge Iron into the factory was not in dispute. The RG-23 Register maintained by the appellant ,the Gate Register and the Stores Register containing all the details about the transport details of the Sponge Iron and issue of the same for manufacture of Pig Iron. The duty paid nature of the Sponge Iron was also not in dispute. Since receipt, utilization and duty paid nature of the input Sponge Iron was not in dispute, the Appellant are eligible for the Cenvat credit of the input Sponge Iron, as the same has been utilized in the manufacturing of finished goods Pig Iron.
Penalty - HELD THAT:- There was no violation committed by the Director Shri Uday Singh. Thus, no penalty is imposable on the Director under Rule 15(1) of Cenvat Credit Rules, 2004.
Appeal allowed.
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2023 (6) TMI 1154
100% EOU - cross-examination not allowed - violation of principles of natural justice - inflation of weight of the consignments in the export/ deemed export documents with an objective to wrongly claim fulfilment of their export obligation - HELD THAT:- The impugned order-in-original has been passed without providing for cross-examination of the witnesses whose statements were recorded and relied upon by the authorities - it is necessary on the part of the Adjudicating Authority to accord opportunity of cross-examination of witnesses whose statements have been used as an evidence in the matter. It is mandatory for Adjudicating Authority to follow the principles of natural justice. The adjudication order passed without allowing cross-examination is an act of gross violation of natural justice.
On this issue, this Tribunal in the case of PATIDAR PRODUCTS, MAHASHAKTI SALES AGENCY, TULSIDAS & CO, RADHESHYAM TRANSPORT CO, KIRITBHAI BACHUBHAI FINAVA, BINTU STORES, SHIVAM MARKETING, MILAN TRANSPORT AND ASHWINBHAI PRAGJIBHAI AMBALIYA VERSUS C.C.E. & S.T. -BHAVNAGAR [2022 (10) TMI 874 - CESTAT AHMEDABAD] considering various High Court judgments and the Supreme Court judgment, held that Non-production of witnesses for cross-examination, it was held, is violative of principles of natural justice. All these judgments in the matter of cross-examination are at the stage of adjudication. The law, therefore, at that stage, need not be elaborated, as it is the right of an assessee in the event the Revenue seeks to rely on the statements of witnesses recorded by it and whose statements are sought to be relied upon at the stage of adjudication to make available the said witnesses for cross-examination so that it could be established whether the statements recorded from the said witnesses have been voluntarily given and/or are relevant for the issue or based on personal knowledge or hearsay and the like.
Matter remanded back to the original Adjudicating Authority for passing a fresh order after allowing opportunity of cross-examination of the witnesses - appeal allowed by way of remand.
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2023 (6) TMI 1153
CENVAT Credit - input services received at the captive coal & iron ore mines, either directly or on the strength of the ISD invoices issued by the Bokna Mines Office - alleged violation of Rule 7(b) read with Rule 15 of the Cenvat Credit Rules (CCR) - extended period of limitation - HELD THAT:- Ld. Commissioner entertained a view that coal and iron ore mines situated away from the factory were separate entities having their own financial transactions engaged in the manufacture of exempted goods and consequently the services rendered at the mines could not be said to have been received by the factory. However, no material has been placed on record by the revenue to substantiate that the mines were owned by separate entities. On the contrary, it is evident from the coal and iron ore mining leases dated 15.10.2007 and 16.08.2005 that these mines were allotted to the Company, Usha Martin Limited (UML), for its captive use. The contention of the Appellant that the factory and the mines were a part of UML holding a single PAN has also not been negated/refuted by the learned Commissioner.
It is not in dispute that coal and iron ore were essential raw materials for the Appellant and it is also not the case of the revenue that the Appellant had more than one factory or that the credit availed at the factory was in excess of the tax paid in respect of the services availed at the mines during the relevant period.
A similar issue in the context of availment of cenvat credit of service tax in the hands of the factory in respect of input services received at the Captive Mines had fallen for consideration of the Tribunal in the case of Hindalco Industries case [2012 (10) TMI 922 - CESTAT, NEW DELHI]. The period involved therein was March 2005 to October 2010 and the credit was availed by the assessee’s factory therein, directly as also on the strength of ISD invoices issued by the mines. The Tribunal allowed the credit of service tax to the assessee’s factory by treating the Captive Mines and the factory as one integrated unit - the ratio of the said decision is squarely applicable to the facts of the present case as well.
It is also found that the statutory ER-I returns were being filed along with a statement containing invoice-wise details of the credit taken and the ISD registration was obtained after disclosing all the relevant facts vide letter dated 25 April 2008 addressed to the Superintendent, Jharkhand Commissionerate. Therefore, the charge of suppression against the factory and the Bokna Mines also fails.
The appeals succeed on merits as well as limitation and the impugned orders are set aside, the penalties imposed are also set aside - Appeal allowed.
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2023 (6) TMI 1152
CENVAT Credit - capital goods - entire transaction between the Appellant and M/s.Saha Industries were based upon fake invoices issued by the said M/s.Saha Industries which were merely on paper with the ulterior motive of availing wrongful and irregular Cenvat credit - onus of proof - Rule 7(2) of the said Cenvat Credit Rules, 2002 / Rule 9(3) of the said Cenvat Credit Rules, 2004 - extended period of limitation - HELD THAT:- The Ld. Commissioner has nowhere observed that the Appellant had actually received the said capital goods from other alternate source. Therefore, the whole case of the department that the transactions with M/s. Saha Industries were fake transactions and the Appellant took credit without receipt of the capital goods or non receipt of the goods clearly falls down. Even in the show cause notice it was alleged that the Appellant had utterly failed to verify the antecedents of the supplier-manufacturer for the purpose of availing of Cenvat credit. This would also mean that the goods were actually received by the Appellant without verifying the antecedents of the supplier manufacturer. It is well settled law that onus of proof that the Appellant received the capital goods from some other source was squarely on the department which it failed to prove.
In the present case, the issue as to whether when a supplier was duly registered with the Central excise department and had paid Central excise duty on the capital goods and cleared the same from his factory and whether Cenvat credit on the same can be denied to the recipient unit - it is already taken note of the findings of the Ld. Commissioner rendered in para7.13 of his order wherein he had held that the capital goods were duly received by the Appellant. Therefore receipt of the capital goods is not in dispute as the department has not reviewed this portion of the order of the Ld. Commissioner which has attained finality.
That the Ld. Commissioner has tried to justify denial of Cenvat credit to the Appellant by rendering findings that M/s. Saha Industries was not an assessee of Central Excise & manufacturer of excisable goods and had no power to issue central excise invoice on which Cenvat credit could be availed - in the present case the statutory as well as financial records of M/s.Saha Industries as well as of the Appellant have not been alleged to be incorrect or false.
The main reason for denying the credit to the party was that two letters were received by the department one from the Municipal Commissioner and the other from the Postal authorities according to which the said party was not in existence at the said place. This Tribunal after analyzing the entire evidence held that the best evidence would have been for departmental officers to physically visit the place and draw a panchnama after making enquiries from the locality.
Extended period of Limitation - HELD THAT:- In the present case the period involved is March, 2007, May 2007, September 2007 & October 2007 and the show cause notice was issued on 10-03-2010 under extended period of limitation - In this regard Hon’ble Gujarat High Court in the case of Prayagraj Dyeing & Printing Mills Ltd [2013 (5) TMI 705 - GUJARAT HIGH COURT] has held in clear terms that where the credit was availed on the basis of invoices of a manufacturer who was duly registered with the department but could not be found subsequently it could not be said that the credit was availed on the basis of forged documents and it has been held that even if the original document was issued by the supplier of the inputs even by practicing fraud, a holder for valuable consideration unless shown to be a party to a fraud, could not be proceeded with by taking aid of a larger period of limitation as indicated in Section 11A(1) of the Act - In the present case also it is held that there is no evidence that even if the goods were not actually manufactured by M/s. Saha Industries the fact remained that the same were duly received by the Appellant and M/s. Saha Industries have duly discharged the central excise duty on the same. In such a case following the law laid down by the Hon’ble Gujarat High Court extended period of limitation could not be invoked against the Appellant.
The impugned Order cannot be sustained both on merits and on the point of limitation - Appeal allowed.
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2023 (6) TMI 1151
CENVAT credit on the customs duty paid through TR-6 challan on Greaves 1.51 Diesel Engine 77 KW which initially imported from China under the Scheme ‘ATA Carnet’ - rejection of credit on the grounds that not a capital good and that TR- 6 Challan is not the valid document as contemplated by Rule 9 of Cenvat Credit Rules, 2009 for establishing the payment of duty.
HELD THAT:- The engine in issue is undisputedly falls under Chapter 84 therefore one limb of Rule 2(a) ibid has been fulfilled, the another limb is that it must be used in the factory of the manufacturer of the final product. According to the learned Commissioner, the appellant has failed to submit any corroborative evidence to establish the use of the said engine for any research purpose in their factory whereas learned counsel submits that all relevant evidences were produced by them before this learned Commissioner - if the appellant wishes to avail credit then they have to fulfill the conditions laid down in the relevant provision. Learned counsel produced test data sheet in respect of LEAP 3 Cyl diesel engine variant indicating the use of imported engine in their factory. The test data sheet as produced herein may be a relevant document for their purpose but the authority below will be the appropriate authority to appreciate the same.
Without going into the other aspect viz. suppression by appellant, imposition of penalty etc., one more opportunity granted to the appellant to produce evidences including the test data sheet to establish the use of the said engine for any research purpose in their factory and for that purpose the matter is remanded back to the learned Commissioner (Appeal) for deciding the same afresh - The issue regarding TR-6 challan has already attained finality. The appellant is directed to produce all relevant documents/ evidences they wish to rely upon in support of their submission before the learned Commissioner (Appeals).
Appeal allowed by way of remand.
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2023 (6) TMI 1150
Rejection of request of the appellants/writ petitioners for waiver of tax arrears and penalty - HELD THAT:- As the Assessee has decided to go before the Authority, the Assessee, as a matter of right cannot demand that the entire waiver shall be granted. The Authority has the power either to waive or reject the waiver in its entirety and he also has the power to demand a higher perccentage as an interim measure till the issue is finally decided. In case, the Authority concerned accepts the case of the Assessee, the excess amount, if any collected will have to be refunded to the Assessee. The Authority, while passing a final order can either accept 4% or 12.5%, depending upon the acceptance of the contentions of the parties, but cannot increase the percentage from 4% or reduce it from 12.5%.
The order of the learned Single Judge need not be interfered with, since the entire issue is at large and the issue has to be decided on merits, in order to give a quietus to the entire issue and the matter being pending before the authorities, as an interim measure, the respective appellants can be directed to pay another 4% of the tax. Accordingly, the respective appellants are directed to pay 4% of the tax determined by the authorities, apart from 4% already remitted, i.e., Total 8% (4% + 4%) within a period of four weeks from the date of receipt of a copy of this order - the matter is remitted back to the authority concerned for passing appropriate orders on merits and in accordance with law.
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2023 (6) TMI 1149
Dishonour of Cheque - rebuttal of presumption under Section 139 of the Negotiable Instruments Act - HELD THAT:- The Defendant having voluntarily handed over the said cheque duly signed, even assuming the same was blank would necessarily be liable in respect thereof. There is no doubt that the practice of handing over blank cheques is one which is attended with risks.
The law is well settled that the presumption under Section 139 of the Negotiable Instruments Act would apply. Therefore, when a person voluntarily hands over a blank cheque he therefore accepts the risks of the consequences that may follow in doing so. The handing over of a blank cheque also presupposes (a) that the same was handed over for consideration and/or some benefit having been or to be received by the drawer and (b) the existence of a high level of faith and trust between the Parties. The Defendant therefore cannot be permitted to now raise defences that were not expressly taken at the time of the handing over of the said cheque, namely that the same was handed over only as security etc.
Had this been the case, it was incumbent for the Defendant to have made this clear in writing at the time the cheque was handed over. Presumably the Defendant did not do so as monies were being lent and accepted in cash as is the case of the Plaintiff.
While there is no doubt that the presumption under Section 139 of the Negotiable Instruments Act in this case arises, it is well settled that the same is a rebuttable presumption.
Leave to defend the present Suit is granted to the Defendant subject to depositing a sum of Rs. 50,00,000/- within a period of six weeks from today - If the aforesaid deposit is made within the stipulated period, this Suit shall be transferred to the list of Commercial Causes and the Defendant shall file written statement within a period of six weeks from the date of deposit - Application disposed off.
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2023 (6) TMI 1148
Dishonour of Cheque - Respondent/ Accused was acquitted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 - failure to disclose in statement of Account the amount which was due to him from the Accused for the year ending 31.03.2015 - failure to step into the witness box and the presumption under Section 139 of the N.I. Act has not at all been rebutted - error in shifting such burden on the Complainant or not - HELD THAT:- There are catena of decisions showing the settled proposition of law that once the signature on the cheque is not disputed and when conditions imposed under Section 138 of the N.I. Act are fulfilled while presenting the cheque and thereafter, by issuing legal notice, the Magistrate is duty bound to draw a presumption under Section 139 of the N.I. Act in favour of the Complainant that such cheque is issued towards legally enforceable debt.
The cheque in question was issued by the Accused, which is not at all disputed. The question which the Accused tried to raise is that such a cheque is not issued towards the supply of material. The burden of this aspect in order to rebut the presumption under Section 139 of the N.I. Act is certainly on the Accused.
The cross examination of the Complainant shows only suggestions given to the Complainant to that effect. The delivery challans are produced by the Complainant, which were disbelieved by the Trial Court on the precise ground that the signature on the said delivery challans are not matching with the signature of the Accused - The person who receives the material at the site normally signs such delivery challans. Therefore, comparing the signature of the Accused where there is no denial to show that he personally did not receive such material at the site was completely unwarranted.
The observations of the learned Magistrate in paragraph 36 of the impugned judgment are therefore clearly perverse and against the documents produced on record since there is no other material which has been brought on record on behalf of the Accused and of rebutting presumption under Section 139 of the N.I. Act, dismissal of the complainant and acquittal of the Accused by the Trial Court needs to be interfered - appeal allowed.
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2023 (6) TMI 1147
Valuation of supply - pure agent or not - Rate of tax on amount recovered from employees - scope of supply envisaged in the Manpower Supply Agreement - Composite supply or mixed supply - naturally bundled services or not - Output tax on food supply - Input tax on food supply - Electricity charges of hostel premises taken on rent - Diesel charges for back up gensets at hostel premises - Input tax on Rent, Security services and Housekeeping services.
HELD THAT:- The Manpower Supply Agreement, inter alia, provides that “Manpower” means male or female personnel of applicant aged not less than 18 years being engaged by applicant as casual labourers, permanent employees, contract employees, consultants or engaged in any other capacity by applicant and sent by applicant to M/s Rising Stars Mobile Private Limited (RSM), the service recipient, to undertake the task for RSM. RSM would provide task schedule as deemed fit by RSM and applicant shall supply Manpower to meet 100% of the needs of RSM based upon the said task schedule and applicant shall ensure that the Manpower has completed task assigned by RSM on a timely manner - Manpower shall exclusively be engaged by applicant; under no circumstances shall the relationship of employer and employee deem to arise between RSM and Manpower. Manpower arrangements made by applicant shall strictly be under the supervision of applicant. The applicant shall make payment to ESI, PF and other relevant authorities.
RSM shall pay applicant certain expenses which includes Security Deposit, Rent, Food cost, Maintenance and Security charges, etc, with effect from 01.10.2020 to 30.09.2022. If the Factory is not in operation or operating with the very lean work force, the service charges shall be reduced proportionately by RSM. If RSM is not in a position to utilize the services of applicant due to force majeure condition including epidemic diseases or due to reasons attributed to applicant, RSM shall have no obligation to pay for the services ordered but not utilized and also if the RSM is of the opinion that the possibility of the usage of the services of applicant is difficult to determine, RSM has the option to terminate this agreement at a shorter written notice of seven days.
From the invoices given by vendor to applicant for food supply, it is ascertained that the applicant is engaging more than 100 workers and therefore, the provisions of Section 16 of the Contract Labour (Regulation and Abolition) Act, 1970 (CLRA Act) read with Rules 42 to 50 of The Tamil Nadu Contract Labour (Regulation and Abolition) Rules, 1995 stipulates that labour contractor shall provide the canteen facility to the labour employed by the contractor. Thus, there is a mandate to the applicant to provide canteen facility to the contractual worker. We find that ITC on foods, beverages, outdoor catering is not blocked, provided it is obligatory for an employer to provide the same to its employees under any law for the time being in force as per proviso to Section 17 (5) (b) after its substitution with effect from 01.12.2019 based on the recommendations of GST Council in its 28th meeting and clarified by CBIC Circular No. 172/04/2022-GST dated 06.07.2022 - Section 17 (5) allows ITC on food, beverages and outdoor catering only in case it is obligatory under any law for the time being in force. Thus, applicant is eligible for ITC on the food supplied by food vendor to contractual worker and is not blocked under Section 17(5) (b) of the Act.
Similarly, the applicant is receiving, invoices with GST @ 18%, from vendors for supply of various other services, viz, Security service, Renting of Immovable Property for hostel accommodation, Building maintenance service, Housekeeping and maintenance service and consumed for supply of manpower service. As the input services are used by the applicant for supply of taxable service, the GST paid on such invoices qualify for claim of ITC subject to eligibility and conditions stipulated under Section 16 of the Act.
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2023 (6) TMI 1146
Validity of Revision order u/s 263 - scope of exercise of power u/s 263 - as per HC revisional order, to the extent that it did not provide any pre-decisional opportunity to address the issues it dealt with, could not be sustained and ITAT has granted relief of a limited nature on that score - Also not agreed that those issues were incapable of consideration as they were gone into by the AO. Accordingly, the CIT, in exercise of his power under Section 263 will proceed to consider the assessee’s submissions only on those two aspects, before making his order.
HELD THAT:- We are not inclined to interfere with the impugned judgment. However, we would like to clarify that the petitioner will be entitled to raise all pleas and contentions, including the contention that the preconditions for invoking jurisdiction under Section 263 of the Income Tax Act, 1961 are not satisfied before the Commissioner of Income Tax. We also clarify that while we have upheld the direction for remand for fresh hearing and decision, we have not made any observations/comments on the merits of the case.
SLP dismissed.
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2023 (6) TMI 1145
Waiver of interest charged u/s 220 (2A) rejected - as per HC no justification interference by this Court in this writ petition in exercise of jurisdiction under Article 226 of Constitution of India - HELD THAT:- No good ground and reason to interfere with the impugned judgment and hence, the special leave petition is dismissed.
At this stage, counsel appearing for the petitioner states that the petitioner may approach the authorities to pay the tax amount in installments. We make no comments in this regard.
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2023 (6) TMI 1144
Entitlement to deduction u/s 80P(2)(a) and (d) - Whether assessee, a co-operative credit society and is not a bank for the purpose of Section 80P(4) ? - HELD THAT:- Assessee cannot be termed as Banks/Cooperative Banks and that being a credit society, they are entitled to exemption under Section 80(P)(2)
In view of the order passed by this Court in M/S. ANNASAHEB PATIL MATHADI KAMGAR SAHAKARI PATHPEDI LIMITED [2023 (5) TMI 372 - SC ORDER] by which the issue involved in the present petition is held to be against the Revenue and in favour of the Assessee, the present Special Leave Petition deserves to be dismissed and is accordingly dismissed.
Pending applications shall stand disposed of.
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2023 (6) TMI 1143
Appropriation of profit or Business Expenditure - amount paid to the respective milk suppliers for the quantity of milk supplied and in terms of the quality supplied - Finding recorded by the ITAT as well as the High Court that the amount was paid, may be, at the end of the previous year only to the milk suppliers, which was for the quantity of milk supplied and in terms of the quality supplied and the amount was not paid to all the shareholders and not paid out of the profits ascertained at the Annual General Meeting, both the ITAT as well as the High Court have rightly deleted the addition made by the AO - HELD THAT:- In the facts and circumstances of the case, the amount paid to the milk suppliers and also to non-members cannot be said to be appropriation of profit. Therefore, no error has been committed by the High Court. We are in complete agreement with the view taken by the High Court taking into consideration the finding recorded by the ITAT as well as the High Court and the observations made by the High Court in para 14 of the impugned judgment and order.
In view of the above and for the reasons stated above, the present Appeal deserves to be dismissed
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