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2013 (8) TMI 863 - KERALA HIGH COURT
Interpretation of the term "luxury" - appellants contend that the laundry charges, charges received for boating and ayurvedic treatment charges do not come within the purview of "luxury provided in a hotel" as defined in section 2(f) of the Kerala Tax on Luxuries Act, 1976 - Held that:- Single judge has rightly concluded that all what the charging section says is that the rate of tax will have to be determined by taking into account the total charges recovered and tax will be payable only on such amount irrespective of whether rent, amenities and services are separately charged or not. The learned single judge was justified in holding that the Act does not make any difference as to whether charges for services and amenities are combined with rent or such charges are separately collected in addition to rent. The finding that the services rendered in a hotel need not necessarily mean services provided in the hotel building, but include services arranged by the hotel to its customers, though the service is rendered outside the hotel premises cannot also be found fault with. - Decided against assessee.
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2013 (8) TMI 862 - ANDHRA PRADESH HIGH COURT
Transfer of right to use goods - Turnover was exempted from tax on the alternative ground of same falling within section 5(2) of the CST Act as sale in the course of import - Held that:- original assessment order was passed on June 19, 2007 and the order dated February 26, 2008 passed by the Deputy Commissioner, which was served on the CTO in the month of February, 2008. The Joint Commissioner who is the third respondent made the revised order on October 16, 2008 and the revision order finally was passed on February 25, 2012. The disputed turnover of ₹ 9,19,98,100 was not the subject matter in the revision order passed by the third respondent on February 25, 2012. The second respondent in its order dated February 25, 2008 had remanded the case for reassessment with respect to the turnover of ₹ 9,19,98,100 and after remand there was no consequential order passed. For the first time, the consequential order was sought to be passed on March 15, 2012 which was appealed to the second respondent who rejected the submission that the assessment as barred on the ground of limitation by order dated March 19, 2013. In this case also in the counter-affidavit, there was no denial with respect to the impugned order having become time-barred. - with respect to the assessment year 200405 under the APGST Act even with respect to orders passed under section 37 of A.P. VAT Act as the prescribed period of limitation is three years, the order dated March 19, 2013 passed under A.P. VAT Act also is liable to be set aside. - Decided in favour of assessee.
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2013 (8) TMI 861 - KARNATAKA HIGH COURT
Exemption of payment of Central cess tax - assessee filed its return on turnover claiming exemption in respect of the manufactured goods on job-work basis - Deputy Commissioner of Commercial Taxes (Transition) passed an order under section 12C of the KST Act in terms of the notification dated March 31, 2006 determining the tax liability under the Central Sales Tax Act, 1956 on the ground that the assessee has effected the stock transfer of medicine without F declaration form - Whether the revisional authority was justified in setting aside the order of the appellate authority holding that the transaction in question is a stock transfer - Held that:- The material on record discloses that, while filing the returns, by mistake the transaction in question was shown as stock transfer. It is on that basis, the assessing authority levied the tax, as admittedly form F had not been filed. However, throughout the case of the assessee is it is a case of jobwork and not a case of stock transfer. The appellate authority did accept the case of the assessee and set aside the order of assessment. The revisional authority has set aside the said order without proper foundation. In fact, he proceeds on the assumption that it is a case of stock transfer. Admittedly form F is not filed and therefore, the appellate authority was in error in setting aside the order of the assessing authority. - Matter remanded back - Decided in favour of assessee.
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2013 (8) TMI 860 - RAJASTHAN HIGH COURT
Penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 - Both the appellate authorities below held that the penalty under section 78(5) of the Rajasthan Sales Tax Act, 1994 could not be imposed on the respondent-assessee, if the declaration form ST 18-A prescribed under rule 53 of the RST Rules read with section 81 of the Act was found blank or not completely filled up, if other supporting bills, vouchers, documents found at the time of checking of the goods like sales book, transport, etc., were found in order - Held that:- court, considering all the facts and circumstances and the judgments, has expressed that principles of natural justice have to be followed and accordingly this court in the previous cases and so also the judgment of this court passed in the case of Assistant Commercial Taxes Officer v. Madhusudan Soap Udyog [2013 (5) TMI 763 - RAJASTHAN HIGH COURT], has remanded the matter back to the assessing officer to provide an opportunity afresh and consequently, the respondent herein also deserves to be allowed opportunity of fresh hearing in the light of the law enunciated by the honourable apex court in the case of Guljag Industries [2007 (8) TMI 344 - SUPREME Court].
Orders impugned passed by the authorities below namely, the Tax Board, Deputy Commissioner (Appeal) as well as the assessing authority are quashed and the matter is restored back to the assessing authority for deciding the penalty proceedings afresh and de novo in the light of the law enunciated by the honourable apex court in the case of Guljag Industries [2007 (8) TMI 344 - SUPREME Court] and after examining the material particulars filled in the declaration form 18A/18C and afford adequate opportunity of being heard to the dealer/assessee. - Decided in favour of Revenue.
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2013 (8) TMI 859 - ALLAHABAD HIGH COURT
Reassessment proceedings on the ground that one Form 3-B filed by the assesse claiming concessional rate of tax on the turnover of raw material i.e. liquid detergent supplied by it to selling dealer holding recognition certificate for an amount exceeds Rs.5 Lakhs in view of Rule 25B (4) of the Rules framed under the U.P. Trade Tax Act is invalid - Held that:- There was sufficient force in the argument of the learned counsel for the assesse that it was not a case of escapement of turnover as contemplated u/s 21 of the Act or under assessment or the like - Allied Motors Private Limited Versus Commissioner of Income-Tax [1997 (3) TMI 9 - SUPREME Court] - the amended Sub-rule (4) of Rule 25-B which includes (ii) of second proviso as it stood on the date of issuance of form 3B will be available to the assesse.
The irregularity, if any, was form 3-B curable and it will not in any manner invalidate the form 3-B which had been found valid otherwise - The assesse had fulfilled the conditions of section 4-B (i) (b) of the U.P. Trade Tax Act at least in the spirit of law - Filing of required form was the only mode to prove the existence of certain facts which had been done and if such form was not a forged or fabricated document and there was no element of fraud or suppression of facts, the defect, if any, was more in the domain of procedural part - procedural law lays emphasis on the spirit of law and not on form - The approach in such fact situation of courts should be justice oriented and not to find some fault here or there – Order set aside – Decided in favor of assesse.
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2013 (8) TMI 858 - CESTAT BANGALORE
Supply of Tangible Goods - Department treated the Service provided by the assessee into the category of supply of tangible goods - Held that:- Prima facie it cannot be concluded that it had completely gone to Port Trust - the payment of VAT alone cannot be a conclusive evidence as to whether the appellant rendered the SOTG service or not - The tug had been hired on a monthly basis and the calculation of the number of days on which the tug was used is made by deducting 24 hours for maintenance which is to be accumulated on a monthly basis and after availing more than 24 hours the Trust can deduct proportionate amount - MPT was not liable to third party because of the use of tug on the contract and the contractor was required to take third party liability insurance - The points as urged by the learned AR create a doubt about the case of the appellant in their favour.
Waiver of Pre-deposit – Prima facie assessee was not able to made out a prima facie case in their favour - having regard to the fact that the amount involved in respect of the normal period is only Rs.44 lakhs only Rs.10 lakhs would be sufficient for the purpose – after such submission rest of the duty to be waived till the disposal of the case – Conditional stay granted.
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2013 (8) TMI 857 - CESTAT MUMBAI
Business Auxiliary service (BAS) - import as well as export of these items on behalf of various traders/merchants - sale of goods on high sea basis - mark-up ranging from 1% to 1.5% of the value of the goods - The Revenue was of the view that the applicants are rendering services of import and export to the customers and, therefore, they are liable to Service Tax under the category of “Business Auxiliary Services”. - Held that:- The transaction was one of the Sale and Service Tax liability was not - Following INDIAN OIL CORPORATION LTD Versus COMMISSIONER OF CENTRAL EXCISE, GOA [2012 (2) TMI 319 - CESTAT, MUMBAI] - From perusal of the import documents as well as invoices it was evident that the transaction was one of trading or sale - The mark-up/trade margin charged by the appellant was also subject to customs duty as part of the transaction value - there was no reason why the same part of the transaction value should be taken out of the customs transaction and subjected to Service Tax under the guise of Business Auxiliary Services - The Board's Circular dated 11.05.2004 also clarified that the customs duty liability was to be discharged on the value inclusive of trade margin in the case of High Seas Sales transaction - pre-deposit of the dues was waived adjudged against the appellant and stay recovery thereof during the pendency of the appeal – stay granted.
Condonation of Delay - The delay occurred due to fact that the appellant was directed to file separate appeals instead of a composite appeal which was filed in time - Considering the reason stated as satisfactory the COD application was allowed.
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2013 (8) TMI 856 - CESTAT AHMEDABAD
Export of services - Technical Testing and Analysis Section 65(106) r.w. Section 65(zzh) - whether the service conducting clinical trials provided by the assessee are taxable service - assessee provided services to the foreign clients as export of service – Held that:- Assessee satisfied the conditions of Rule 3(2) and accordingly eligible for the exemption under Notification No. 11/2007-S.T. dated 1-3-2007 - when reports were delivered to the clients outside India it amounts to taxable service partly performed outside India - performance of testing and analysing has no value unless and until it is delivered to its client - service is to be complete when such report is delivered to its client - performance of the taxable service has no validity/sanctity unless its report is submitted to the service receiver/client - delivery of report to its client is an essential part of the service report was delivered outside India and same was used outside India – relying on the decision of M/s. B.A. Research India Ltd. Versus CST Ahmedabad (2010 (5) TMI 89 - CESTAT, AHMEDABAD) – appeal decided against the revenue.
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2013 (8) TMI 855 - CESTAT, NEW DELHI
Export of Goods - Credit of Input Services - Refund Claim – Benefit of Notification No. 41/2007-S.T. - The appellants were manufacturers of excisable goods and also exported goods manufactured by them and take benefit of credit of input services - Revenue rejected the claim - Held that:- The appellants were eligible for refunds of the credit - The amounts were refundable to them as per provisions of the Notification No. 41/2007-S.T. - Government had amended by Finance Act, 2010 the definitions in Section 65(105)(zn) to cover any service rendered in port area which shows the intention of the Government in this regard - While such amendments may operate only prospectively to cause liabilities to assessees, in the case of a beneficial Notification like 41/2007-S.T. for granting refund of tax incidence on goods exported, the matter needed to be interpreted more liberally.
Revenue cannot be allowed to approbate and reprobate on the same issue though with reference to different parties - The first argument that classification of service cannot be changed in the hands of the recipient by itself was good enough to allow the appeal - there was no reference to the classification in the notification - This appears to be a serious lacuna - But such missing words cannot be supplied by anyone interpreting the provisions - The expression “port services” was known to the persons drafting the notification because such expression was used in taxable entry – Decided in favour of Assessees.
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2013 (8) TMI 854 - CESTAT BANGALORE
Cenvat Credit - Input services - Nexus Between Input Services and Manufacturing Activity - Online journal subscription - Outdoor Catering Service - The appeal was on the ground that the lower appellate authority had not discussed the nexus between the input services and the manufacturing activity of drugs undertaken by the assesse - Held that:- the payment of service tax for electronic subscription of research journals, periodicals, etc., on which service tax had been paid under the category of ‘online information and data base retrieval service’ was definitely an ‘input service’ as defined in Rule 2(l) of the CENVAT Credit Rules - the nexus between the two can be reasonably established - The service was an ‘input service’ and CENVAT credit of service tax paid can be taken except on the portion relating to the cost recovered by the manufacturer from the workers in respect of such service.
CCE, Nagpur Versus Ultratech Cement Ltd., [2010 (10) TMI 13 - BOMBAY HIGH COURT] - The invoices clearly indicated the category of service supplied as a category of “online information and data base retrieval services - The assesse being a drug manufacturing company had subscribed to international research journals - The research activity in drug manufacturing industry was well known and without research, no new drug can be developed and such research activity was inherent and integral to the manufacturing activity - The credit entitlement was limited to the amount borne by the assesse -company and service tax on that portion of service charges recovered from the employees was not permissible - If the respondent had availed any such impermissible credit, the same should be reversed forthwith along with interest.
Rent-a-Cab Service - Maintenance and Repair Service - Held that:- Service tax paid on Rent-a-Cab Service’ can be allowed as CENVAT credit in respect of cab rented for transportation of employees - Commissioner of Central Excise, Bangalore-III v. Stanzen Toyotetsu India (P) Ltd.[ 2011 (4) TMI 201 - KARNATAKA HIGH COURT] - it was seen that the service tax credit had been availed in respect of ‘Annual Maintenance Contract’ for the Xerox machine installed in the factory premises - So long as service tax has been paid under the said category of service, the respondent can rightly avail the CENVAT credit – Decided against Revenue.
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2013 (8) TMI 853 - CESTAT AHMEDABAD
Export of non – standard goods - The issue involved in this case was regarding the export of non-standard goods as received from an EOU by an SEZ – Held that:- The issue involved in the case needs to be gone into detail - It was to be appreciated that as to whether the duty liability on the SEZ would be customs duty or Central Excise duty and also how the poor quality of consignment entered into SEZ.
Waiver of pre deposit of Penalty u/s 112 and 114 - applications for the waiver of pre-deposit of the balance amounts involved were allowed and recovery stayed – decided in favour of assessee.
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2013 (8) TMI 852 - CESTAT NEW DELHI
Mis – declaration - Whether there was mis declaration on the part of the assessee – department was of the view that there was mis declaration on the appellant and they impose the custom duty – Held that:- Prima facie it was case of mis-declaration in the appeal - upon reading of adjudication order the act of the appellant caused prejudice to the Revenue - But court did not express any opinion on such mis-declaration.
Stay application - Waiver of Pre deposit – Held that:- pre-deposit has become condition in respect of stay application – 25% of the duty was ordered to be submitted – on such submission rest of the duty to be waived – decided in favour of assessee with conditions.
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2013 (8) TMI 851 - CESTAT AHMEDABAD
Classification of goods – Benefit of notification - Assesse classified the product under CTSH 3901 2000 of Customs Tariff Act and claimed the benefit of concessional rate of duty of 5% available for High Density Polyethylene (HDPE) under Sr.No.477 of exemption Notification No.2/2002-Cus - Held that:- In the absence of any support for the conclusion that the product imported by the appellant had been chemically modified or it was not known as HDPE in the market - the benefit of exemption under Sr.No.477 had to be extended to the assesse - Revenue had not applied even the trade parlance test - The Revenue had not got even the test certificate from the Government laboratory which was essential in the case – Whether the product was a chemically modified HDPE or not and whether it was known as HDPE in the market, had not been considered at all – the lower authorities had not been fair – decided in favor of assesse.
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2013 (8) TMI 850 - CESTAT NEW DELHI
Benefit of Notification No. 21/2002 – Opportunity to Cross Examination - Assesse imported Crude Palm Oil at concessional rate of duty in terms of Notification No. 21/2002-Cus - Held that:- - the assesse should be given an opportunity to cross examine - The cross examination and the important witnesses of the Revenue should have been extended by the Adjudicating Authority - reasons adopted by the Adjudicating Authority for denial of cross examination were neither legal nor convincing - After the conclusion of the cross examination the assesse would file the reply to the notice within a period of 15 days therefrom and after affording an opportunity of personal hearing, the Commissioner would pass the order as soon as possible - the entire case of the Revenue was mainly based upon the records of assesse and the statement as regards the non-sale of the Caustic Soda, one of the main raw materials, to be used in the manufacture of laundry soap along with Crude Palm Oil – Decided in favor of assesse.
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2013 (8) TMI 849 - CESTAT AHMEDABAD
Origin of Goods – Demand of Anti-Dumping Duty - Confiscation of Goods - The importers explained that origin of goods to be Malaysia but on verification, it showed that the certificate of origin showing Malaysia as country of origin was false. - Appellant contended that he is not importer - The Commissioner vide his Order-in-Original primarily basing on the various statements of Shri Nalin Bakul Zaverilal Mehta has come to the conclusion that the real owner of the imported vitrified tiles was Shri Nalin Bakul Zaverilal Mehta and the names of three companies/firms were used by him to shield himself for future liabilities.
Held that:- A statute to be construed according “to the intent of them that make it” and “the duty of judicature is to act upon the true, intention of the Legislature - the mens or sententia legis” - The expression, ‘intention of the Legislature was a shorthand reference to the meaning of the words used by the legislature objectively determined with the guidance furnished by the accepted principles of interpretation - State of Himachal Pradesh v. Kailash Chand Mahajan[1992 (2) TMI 322 - SUPREME COURT] - The true or legal meaning of an enactment as derived by considering the meaning of the words used in the enactment in the light of any discernible purpose or object which comprehends the mischief and its remedy to which the enactment is directed - The wording used in Section 129E is infallible as it reads as “the person desirous of appealing against such decision or order shall pending appeal, deposit with the proper officer the [duty and interest] demanded or the penalty levied”.
Appellant cannot be absolved of the liabilities and responsibilities only on the basis of certain commissions and omissions - Prima facie the adjudicating authority cannot be faulted at this juncture.
Waiver of Pre-deposit - No strong prima facie case was made out for complete waiver of the amounts involved – 2 crores were ordered to be submitted as pre-deposit – stay granted partly.
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2013 (8) TMI 848 - DELHI HIGH COURT
Recall of Order - There was no objection raised by the counsel for the petitioner that such an order could not have been passed - Pursuant to the order the DRT disposed of T.A. No.3/2005; the application seeking review of the orders was filed several months later - No satisfactory explanation was furnished in the said application and this was evident from the perusal of the same - These applications were dismissed by the DRAT - It was noted that the OTS was with regard to both the accounts i.e. O.A. and T.A. - The review application seeking recall of the order was dismissed - this was in terms of the provisions of Order XLVII Rule 9 of the Code - admittedly a second review was not maintainable.
It was only the last two aforenoted orders which were the subject matter of challenge before the Court – The challenge was limited and confined only to the parameters and guidelines to be followed by the court while dealing with a review application - There was no fault in either of these orders - Unless and until there was an error apparent on the face of the record or there was a discovery of a new fact which after exercise of due diligence was within the knowledge of the petitioner at the time when the impugned order was passed - no ground for review was made out - Within these parameters the orders suffer from no infirmity - That apart the Court had gone on to examine all the averments made by the petitioner on merits and the earlier order passed by the DRT as also the order of the DRAT also with-stand the test of fairness - On no count does the petitioner deserve any relief – Decided against petitioner.
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2013 (8) TMI 847 - CESTAT NEW DELHI
Penalty u/s 11AC - Held that:- in case of confirmation of demand of duty on the allegations of suppression, etc, the authorities have no discretion to impose less penalty and the penalty is required to be enhanced to 100% of the duty confirmed - original adjudicating authority had imposed penalty of Rs.96,211/- on Unit No. II, which is almost 25% of the duty confirmed against the assessee - Decided in favour of Revenue.
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2013 (8) TMI 846 - CESTAT NEW DELHI
Valuation - Inclusion of Installation and commissioning charges - Held that:- contract entered between the appellant and M/s BSNL is relatable to two separate activities one for supply of the goods and the other for installation. The activity of installation and commissioning could have been got done by M/s BSNL from an independent third person. Merely because the said activity is being undertaken by the supplier of the goods does not mean that the consideration for the same has to be added in the assessable value of the goods. In any case, the appellant has already discharged their service tax liability in respect of the said consideration, in which case the same cannot be taxed to Central Excise duty - Following decision of Ericsson India Pvt. Ltd. vs. CCE, Pondicherry [2007 (2) TMI 26 - CESTAT, CHENNAI] - Decided in favour of assessee.
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2013 (8) TMI 845 - CESTAT NEW DELHI
Cenvat Credit - Authorities denied benefit in respect of MS fabricated structure - Held that:- such credit availed by the appellant was being reflected in their monthly returns as there is no allegation to the contrary. As such, where the demand for the period February 2001 to April 2001 having been raised by show cause notice dated 26/6/02 is barred by limitation - Following decision of Vandana Global Ltd. vs. CCE, Raipur [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] - Decided in favour of assessee.
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2013 (8) TMI 844 - CESTAT MUMBAI
Activity Manufacture or Not - Assesse was importing Chassis from their Principals in Japan - The Assesse was taking the credit of CVD and SAD - A Show Cause Notice was issued to the assesse for denial of the Cenvat Credit availed and utilized by them during the period - revenue contended that there was no factory at the premises and it was only a parking slot/warehouse/godown - Whether the activity was being carried out by the assesse will amount to manufacture - Held that:- Activities undertaken by the assesse will not amount to manufacture - assesse cannot be considered as a manufacturer and therefore not eligible to take the Cenvat Credit under Rule 3 of Cenvat Credit Rules 2004 - The activities undertaken by the assesse alone will not constitute manufacturing the vehicle, the final product - These activities were very minor in nature and would not entitle the assesses to be considered as manufacturer of motor vehicle - These activities may be needed to satisfy the requirements of Central Motor Vehicles Act or some other law but that will not amount to manufacture for excise purpose.
Activities carried out by them was inspection of the same and fixing of some parts, if required and thereafter sending it to the job worker who undertakes the body building activities - The goods received form job workers were vehicles - Again inspection was carried out by the assesse and certain parts like kits etc. were fixed in order to comply with the Central Motor Vehicles Acts and Rules thereof.
CENVAT credit - Interest and Penalty – Whether Cenvat Credit can be demanded when they have utilized the same for payment of duty on final products – Held that:-There was no dispute that the duty on the final product had been paid by the assesses by utilizing the Cenvat Credit being demanded and department had not disputed payment of duty on vehicles - ASHOK ENTERPRISES Versus COMMISSIONER OF CENTRAL EXCISE, CHENNAI [2007 (11) TMI 67 - CESTAT, CHENNAI] - The Cenvat Credit availed cannot be demanded in spite of the fact that the activity undertaken by the appellant does not amount to manufacture – appeal allowed.
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