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Showing 241 to 260 of 420205 Records
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2024 (11) TMI 1238
Enhancement of value and additional duty - re-determine the value of the goods - appellant had imported Fuel Filters and other filters from China - consignment was ordered for examination and thereafter, it was found that the goods were of a much better quality i.e., made in Germany, South Korea, etc. - HELD THAT:- We find that there is no dispute as to the fact that the filters carried the brand names of reputed parties such Komatsu, Deutz, Volvo, etc., along with the countries of origin embossed as ‘Germany’, ‘Korea’, etc. This basically would allow the importer to sell these filters to buyers who want to replace these filters with the original branded filters. Hence, we find that the value as shown in the invoice of the Chinese exporter cannot be accepted prima facie.
The importer himself had volunteered to pay the differential Customs Duty as per the enhanced value arrived at by the Customs officials, but subsequently appears to have changed their stand and sought re-examination of the goods by the Chartered Engineer. There is nothing on record to indicate that the Chartered Engineer, who was also duly approved by the DGFT, has committed any mistake in examining the subject consignment and arriving at the value. Therefore, we do not find any merit in the arguments adduced by the appellant that the Revenue has not followed the proper procedure while enhancing the value.
Therefore, we hold that the lower authorities have correctly arrived at the value as per which the appellant would be required to pay Rs.25,23,360/- (as per the original estimate of the Customs officials).
Since it was not a very serious contravention by the appellant and initially, they were even ready to pay the differential duty arising thereon and further were also ready to re-export the consignment for which they had given a written request, we find that confiscation of the goods is not warranted. Accordingly, we set aside the said order of confiscation and consequently, the redemption fine imposed also stands set aside. We also set aside the penalty of Rs.2,50,000/- imposed on the appellant.
We give an option to the appellant to pay the differential Customs duty along with interest, to clear the consignment.
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2024 (11) TMI 1237
Enhancement of Composite penalty - appellant did not submit the documents with regard to 6 Bills of Entry - penalty of Rs. 40000/- has been enhanced to Rs. 3,00,000/- - Adjudicating Authority imposed a penalty under Regulation 5 of Customs (Provisional Duty Assessment) Regulations, 2011 - appellant submits that although they have not filed the documents in time but later on the documents were filed - HELD THAT:- As relying on the decision of Shyam Steel Industries Ltd. [2024 (1) TMI 473 - CESTAT KOLKATA] wherein held reduced penalty can be imposed for such procedural violations.
Thus penalty of Rs. 40,000/- imposed by the Adjudicating Authority shall meet the end of justice.
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2024 (11) TMI 1236
Dismissal of Company Appeal against the order admitting an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 - existence of pre-existing dispute has not been proved - HELD THAT:- The appellants have not placed on record even the proof of dispatch of the letters and the Notice referred above, leave apart, the proof of service. More pertinently, while replying to the Demand Notice dated 26th April, 2017 issued by the respondent under Section 8 of the IBC, none of the letters and the Notice referred above have been referred to and relied upon. In the absence of the proof of dispatch and/or service of the letters and the Show Cause cum Demand Notice dated 11th December, 2012, it is impossible to come to the conclusion that there was a pre-existing dispute. A contention regarding pre-existing dispute has to be supported by the evidence. In this case, it is wholly unsupported by the evidence.
The view taken by the NCLAT is agreed upon - appeal dismissed.
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2024 (11) TMI 1235
Condonation of delay of 4486 days in filing the appeal to assail money recovery decree - benefit under Section 14 of the Limitation Act - professional misconduct of the counsel of appellant.
HELD THAT:- The delay in filing the appeal is not for an insignificant period; it is an inordinate delay of 4486 days. The impugned judgment and decree being dated 18.09.2012, the period of limitation prescribed for filing appeal expired on 17.12.2012. The delay till 29.11.2019 (the date of filing of application under Order IX Rule 13 CPC) has been attributed by the appellant company to the professional misconduct of their erstwhile counsel. The appellant is not an individual litigant, much less an illiterate lay person. The appellant is a limited company. Admittedly, the appellant was being represented through an employee of theirs, who left job. That being so, the appellant cannot claim no duty to be diligent in keeping track of the lis. Further, during arguments learned counsel for appellant submitted that no action has been taken against the erstwhile counsel for his alleged misconduct - no satisfactory explanation is set up by the appellant to explain their having not filed the appeal during the period from 17.12.2012 to 29.11.2019.
The period from 29.11.2019 to 20.09.2024 has been explained by the appellant, pleading that they filed application under Order IX Rule 13 CPC, which got dismissed, so they filed the present appeal on 08.10.2024. The appellant has claimed benefit under Section 14 of the Limitation Act for the said period of almost five years - The expression “good faith” is defined under Section 2(h) of the Limitation Act, stipulating that nothing shall be deemed to be done in good faith which is not done with due care and attention. What is to be seen is as to whether the institution and prosecution of the other proceeding in wrong forum was done with due care and attention, thereby in good faith. Another requirement of Section 14 of the Act is that the applicant must have been prosecuting the previously instituted proceedings with due diligence. Due diligence is a measure of prudence or activity expected from and ordinarily exercised by reasonable and prudent person under the particular circumstances.
In the present case, complete lack of due care and attention is writ large on the face of record. According to the appellant’s own case, for the first time they became aware of the impugned judgment and decree upon receipt of demand notice on 27.09.2019 and filed application under Order IX Rule 13 CPC on 29.11.2019, which application was dismissed by the trial court vide order dated 27.05.2024 - There is not even a whisper in the impugned judgment that it was being passed ex-parte. Even counsel for the appellant was conscious that the impugned judgment and decree was not ex-parte and that is the reason, the appeal FAO 300/2024 was withdrawn on 20.09.2024. Evidently, the appellant first filed the application under Order IX Rule 13 CPC without there being ex-parte judgment and decree, and thereafter, continued to prolong the application from 29.11.2019 to 20.09.2024 i.e., almost five years. By any liberal standards, it cannot be treated as proceedings pursued by the appellant in good faith.
Therefore, for the period from 29.11.2019 to 20.09.2024, benefit of Section 14 of the Act cannot be granted to the appellant. In any case, since for the first part of delay period of almost seven years no sufficient cause has been shown, thereby disentitling the appellant benefit under Section 5 of the Act, for the subsequent part of delay period of more than five years, no benefit under Section 14 of the Act can be granted.
This is not a fit case to condone the colossal delay of 4486 days in filing the present appeal. Therefore, the delay condonation application is dismissed.
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2024 (11) TMI 1234
Dismissal of Section 7 application filed by the Appellant - financial debt or not - share application money in respect of the shares not allotted - whether in the facts of the present case, the share application money which was deposited with the Corporate Debtor by the Appellant fell in the category of Section 5(8) of the IBC? - HELD THAT:- The basic ingredients which are required to be met for a debt to become ‘financial debt’ are that there must be a disbursal against the consideration for time value of money. Further sub clauses (a) to (i) of Section 5(8) delineates the various transactions which are included in the ambit of ‘financial debt’. Prima-facie, amounts raised by way of share application money is not expressly covered in the transactions covered by sub clauses (a) to (i) of Section 5(8) of the IBC.
On looking at Rule 2(c)(vii) of the CADR Rules, 2014 and the explanatory clause appended thereto, it becomes clear that it refers to any amount received and held pursuant to an offer made in accordance with the provisions of the Companies Act, 2013 towards subscription to any securities, including share application money. It flows therefrom that for the aforementioned CADR Rules to be attracted in respect of share application money, there has to be a clear nexus to show that the share application money amount was advanced in conformity with the relevant provisions of the Companies Act, 2013 - There is no evidence of any valid concluded agreement between the two parties with respect to allotment of shares. Hence, the amount which was advanced by the Appellant cannot be treated to be amount in response to the private placement offer. Rule 2 of CADR Rules envisages that only if any amount is received pursuant to any private placement offer made in accordance with the provisions of the Companies Act, 2013 and no shares are allotted qua that amount, only then the sum becomes a deposit. When no proof of any private placement offer made in accordance with the provisions of the Companies Act, 2013 has been placed on record by the Appellant, the CADR Rules cannot be held to be applicable. Since the amount advanced cannot be related to Section 42 of the Companies Act, the applicability of Section 42(6) cannot be pressed as is being sought by the Appellant in the present case.
There are no infirmity in the order of the Adjudicating Authority rejecting the Section 7 application of the Appellant - there is no merit in the appeals - appeal dismissed.
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2024 (11) TMI 1233
Dismissal of appeal as filed belatedly and beyond the time permitted by the statute - petitioner vehemently submits that this is a case where certain events peculiar to the petitioner have to be noticed while this Court considers the question as to whether the appeal filed by the petitioner must be restored to file for the purposes of disposal on the merits of the matter - HELD THAT:- As in normal circumstances, this Court will not restore an appeal which has been rejected on the ground that it was filed beyond the period of limitation if it has found that such rejection was justified by the statutory provisions governing the filing of such appeal. However, if this Court comes to the conclusion that there are some special and extraordinary circumstances which could have prevented the person filing the appeal from presenting the appeal within time, this Court cannot be denuded of the authority to issue a writ of mandamus commanding the Appellate Authority to consider the appeal on the merits and to take a decision in the matter.
Taking cue from the observations of the Supreme Court in B.C. Chaturvedi [1995 (11) TMI 379 - SUPREME COURT] in the extraordinary and special circumstances of this case, the order of the Appellate Authority can be set aside and the appeal filed by the petitioner against Ext. P3 order can be restored to file with a direction to the Appellate Authority to hear and dispose of the appeal on merits and in accordance with the law.
This writ petition is allowed, setting aside Ext. P5 order of the Appellate Authority and directing that the appeal filed by the petitioner against Ext. P3 order-in-original shall be heard and disposed of in accordance with the law.
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2024 (11) TMI 1232
Refund of pre-deposit - dispute over inclusion of certain reimbursement expenses such as freight, stationery, printing charges, telephone charges, asset hire, courier, insurance and other taxes while providing Clearing and Forwarding agency services.
HELD THAT:- Revenue has accepted that once the appeal is decided in favour of the assessee, he shall be entitled to refund of the amount deposited along with interest at the prescribed rate from the date of making the deposit to the date of refund, irrespective whether the order of the Appellate Authority is proposed to be challenged by the Department or not.
The amount of 10% of the tax amount deposited by the appellant had become refundable as with the passing of the final order dated 1.5.2019 in their favour by the Tribunal, the entire demand had become annulled. Therefore, conclude that the deposit made by the appellant is not a payment of duty but only a pre-deposit for availing the right of appeal and such amount is bound to be refunded when the appeal is allowed with consequential relief.
The impugned order is unsustainable and is hereby set aside. The appellant is entitled to refund of Rs.70,400/- along with interest @6% from the date of deposit till the date of actual refund is made. The Department is directed to release the amount within a period of 4 weeks.
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2024 (11) TMI 1231
Demand of service tax was confirmed under “Cargo Handling Service” along with interest and penalty - whether the services provided by the appellant to WCL are taxable under the category of “Cargo Handling Service” or “Transportation of Goods by road service”? - HELD THAT:- The primary nature of work awarded to the appellant was transportation as is evident from the valuation of the work, which is attributable mainly to the transportation activities and the very limited portion is towards mechanical loading of coal. The work orders of WCL shows the combined rate for loading and transportation of coal as well as work orders for only loading coal in the wagons.
It has been pointed out that the element of loading in combined contract is merely 5% and the remaining 95% of valuation is attributable towards transportation activities. Therefore, logically the primary and the dominant nature of work is transportation within the mining area and would, therefore, not fall under “Cargo Handing Service”.
We are of the view that the Commissioner was not justified in holding that the appellant had undertaken the activity of “Cargo Handling Service”. In fact, the Commissioner while passing the impugned order had not adjudicated the issue within the four corners of the remand order passed by the Tribunal. In view of the issue having been settled as referred above, the impugned order is unsustainable and is hereby set aside. The appeal is accordingly allowed.
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2024 (11) TMI 1230
Refund claim - appellants plea that the service receiver had already paid an amount - appellant’s claim is that the entire amount of service tax paid by them was to be considered as deposit u/s 35FF of the Central Excise Act, 1944 and claimed refund of the same - HELD THAT:- In the present case, the refund arose only after the passing of the de novo order wherein the duty amount of Rs.12,99,411/- was dropped. The provisions of Section 11B Clause (ec), the relevant date for filing a refund claim is stated as follows: ‘in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction’. Therefore, the appellant should have filed a refund claim on or before 20.03.2021, however, admittedly the appellant has filed a refund claim under Section 35FF of Central Excise Act, 1944 only on 07.05.2021 which has been received by the Revenue on 15.06.2021, therefore, the claim is barred by limitation as per the provisions of the Section 11B of the Central Excise Act, 1944. Hence, the Commissioner (Appeals) has rightly held that pre-deposit amount of 7.5% of Rs.16,97,430/- is only eligible as refund.
Whether notice is to be issued before rejecting any refund claim as claimed by the appellant? - In the instant case, the appellant had made his claim only on the ground that the entire amount is to be considered as pre-deposit under 35FF of the Central Excise Act 1944. The appellant appeared before the Original Authority for the personal hearing held on 18.08.2021 and had filed written submissions 18.08.2021 which was taken on record. The order was passed taking into consideration the submissions made by the appellant. As rightly observed the Commissioner (Appeals), there is no violation of principles of natural justice as claimed by the appellant.
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2024 (11) TMI 1229
Demand on account of irregular availment of cenvat credit on exempted services needs - period under dispute from 2013-14 to 2017-18 (upto June 2017) - levy of penalty for non-filing of ST-3 returns, thus, contravening the provisions of Rule 7 of Service Tax Rules, 2004 read with Section 70 of the Finance Act, 1994.
HELD THAT:- The Cenvat Credit Rules, 2004 read with Section 66D of the Finance Act, 1994 clearly states that trading activity is an exempted service and therefore, cenvat credit is not available for the exempted services.
Taking of irregular credit on the trading activity was known to the appellant and from 01.03.2011 they were not liable to avail cenvat credit on the trading activities - after the amendment with effect from 01.04.2011 wherein trading activity was specifically included in the negative list, clearly establishes that trading activities are to be considered as exempted services and any credit taken on the exempted service needs to be reversed. From the above Final Order, it is also seen that the demand was confirmed for the period 01.04.2011 to 31.03.2012 which was dropped only on limitation. The appellant being aware of this fact, continued to take credit even after the amendment and after confirmation from department on merits in their own unit at Bangalore South for the period 01.04.2011 to 31.03.2012. This clearly establishes that appellant had suppressed this fact and continued to avail the credit, the fact that they have filed the returns regularly does not absolve them from their liability. As clearly held by the Commissioner (Appeals), the appellant working under self-assessment procedure had to comply with the relevant Act and Rules especially when the issue was already known to them. Hence, the credit on the exempted product both on merits and limitation is upheld.
Amendment allowed reversal of proportional credit along with interest, in the cases where common credit was being availed on both dutiable and exempted goods, the demand of 6% / 7% on the exempted value cannot be sustained, the matter stands remanded for calculating the proportionate cenvat credit to be reversed along with interest. Penalty imposed under Section 78 of the Finance Act, 1994 is set aside.
Penalty for non-filing of returns, it is noticed that the appellant had filed the returns but uploaded returns were rejected by the portal due to some unspecified technical error from the records placed before us and hence, as rightly claimed by the appellant they cannot be penalised for non-filing of returns. Accordingly, the penalty imposed under Section 77(2) of the Finance Act, 1994 is set aside.
Demand under Rule 6(3) of the Cenvat Credit Rules, 2004 the matter is remanded for re-determining the proportionate cenvat credit along with interest on the trading activities that are considered to be exempted.
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2024 (11) TMI 1228
Method of calculation of taxable value - Differential value and service tax demand - Appellant has received the rent in excess of the rent booked in the books of accounts on the basis of four tenants' statements out of total tenants of 238 - revenue calculated the rent value on the basis of statements of persons - HELD THAT:- We find that, it is settled law that though the admission is an important piece of evidence but it cannot be said to be conclusive and it is open to the person who has made the admission to show that this is incorrect. Admission of persons, cannot be considered to be conclusive evidence to establish the guilt of the assessee. Burden of proof is on the Revenue and same is required to be discharged effectively.
In the present matter tenant nowhere produced any records/piece of paper in support of their statement. The only oral statements of service recipient cannot be accepted as admissible piece of evidence. No cash receipts has been relied upon by the department, no financial flow back has been relied upon by the department for the collection of rent in cash, no rent agreement has been found by the department for the support of excess rent , no ledger entry in the books of accounts of the appellant found for so called excess collected rent. Moreover, none of the persons on whose statement reliance was placed by the department were cross-examined by the Ld. Commissioner in the present matter. Clearly, the Adjudicating Authority had failed to follow the requirement of Section 9D of the Central Excise Act 1944, which is applicable in Service Tax matters, regarding examination in chief of witness, therefore quantification of demand of service tax on the basis of statement of persons not sustainable.
Before fastening the service tax demand, it was incumbent on the revenue to come up with tangible evidence to prove the suppression of taxable value and quantify the demand on the basis of documentary evidences. We also find that in the present matter appellant also produced the details of rent received from each tenant and shops during the disputed period before revenue and Ld. Commissioner.
Department has calculated the demand of service tax on all the shops for whole periods without verifying the details that whether the said shops have been given on rent during the whole disputed period or not; whether shops have been given on rent or sale basis; what is the actual rent recoverable or received by the appellant; how many month occupant’s have been holding the shops as a tenant. We noticed that in the present matter revenue has not considered the proper facts while calculating the liabilities against the department.
As per details of quantification of rent produced by the appellant before us, we, therefore, reduce the demand of Service tax from Rs. 72,61,747 to Rs. 17,82,992/- together with interest.
Penalty imposed - As we find that the appellant in the present matter not disputed the liability of services tax and has admittedly paid the service tax well before the issuance of show cause notice. In these circumstances, we do not find that there was any mala fide on the part of the appellant. Therefore, benefit of Section 80 should be extended for the appellant and penalties imposed by the Ld. Commissioner are set aside.
Penalty imposed under Section 76 and 78 - We are of the view that simultaneous penalty under Section 76 and 78 cannot be imposed as held in the case of Rawal Trading Company [2016 (2) TMI 172 - GUJARAT HIGH COURT]
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2024 (11) TMI 1227
Short payment of service tax - Demand of service tax worked out after comparing the income declared in Form 26AS/ITR vis-à-vis- taxable value disclosed in ST-3 return - Appellant had declared less/not declared any taxable value in their ST-3 return for F.Y. 2015-16 and 2016-17 as compared to the value declared in their form 26AS - appellant have provided Manpower Recruitment Service to various companies.
HELD THAT:- Appellant basically provided the Labours to the pharmaceutical companies as may be required to provide for packing, loading/unloading, cleaning and maintenance etc. works at factory.
Appellant is responsible for deducting and remitting provident fund and ESIC contributions and also for payment of wages to labours and other dues, and also shall require to maintain records and registers, obtain any license or registration required by law for supply of workmen/labour. Further conditions of agreements clearly indicate that the Appellant is supplying Labour/manpower to the pharmaceutical companies.
We find that the tenor of the agreements clearly indicate that the Agreement entered into by the appellant is a “Labour Supply Contract” and so the services rendered would fall under “Manpower Recruitment or Supply Agency” service.
Notification No. 30/2012-ST dtd. 20.06.2012 amended vide Notification No. 7/2015 -ST dtd. 01.03.2015 provides, in case of Manpower Supply Service 100% service tax is payable by the Service recipient w.e.f. 01.03.2015. Before this amendment Service provider was required to pay 25% service tax and 75% service tax was required to be paid by the Service recipient.
In the present matter Appellant provided the manpower supply service to above pharma companies on which as per the above provisions service recipient is required to pay 100% Service tax. We also noticed that in the present matter on the Appellant’s service aforesaid pharma companies have paid the service tax. The Appellant also produced before us the copies of Challans and certificate issued by said pharma companies regarding the payment of service tax on the appellant’s activity. In the present disputed matter service recipient itself considered the nature of service of Appellant as Labour Supply/ Manpower Supply and discharged the service tax liability on said activity. Therefore, it is clear that the Ld. Commissioner have committed an apparent error in confirming service tax demand in the present matter.
Since the service tax on entire value has been discharged there cannot be double taxation. In the present matter undisputedly the service tax has been paid by the Pharma companies on Appellant’s activity. The demand of service tax from the Appellant would be double taxation on same amount which itself is erroneous. Hence the demand is not sustainable for this reason as held in case of Dinesh M. Kotian -[2016 (1) TMI 973 - CESTAT MUMBAI]
We find that tribunal in the case of Navyug Alloys Pvt. Ltd. [2008 (8) TMI 100 - CESTAT AHEMDABAD] has held that “once tax already paid on the services, it was not open to the Department to confirm the same against the appellant, in respect of the same services”. Allow the appeal of appellant with consequential relief.
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2024 (11) TMI 1226
Cenvat credit of service tax paid on deposit insurance premium to ‘Deposit Insurance and Credit Guarantee Corporation’ - HELD THAT:- Since there are conflicting views of various benches of the Tribunal, a Larger Bench of the Tribunal has been constituted in the matter of South Indian Bank [2020 (6) TMI 278 - CESTAT BANGALORE - LB] in order to resolve the issue whether the insurance service received by the banks from DICGC can be considered as an ‘input service’?
Larger Bench of the Tribunal after examining various provisions of Finance Act, Cenvat Credit Rules, Deposit Insurance Act and the Regulations has answered the reference in the following terms:
“The insurance service provided by the Deposit Insurance Corporation to the banks is an “input service” and Cenvat Credit of service tax paid for this service received by the banks from the Deposit Insurance Corporation can be availed by the banks for rendering ‘output services’.”
Following the Interim Order of the Larger Bench, the Tribunal [2020 (6) TMI 278 - CESTAT BANGALORE - LB] allowed the appeal of South Indian Bank. The said order of the Tribunal was thereafter challenged by the Revenue before the Hon’ble High Court of Kerala at Ernakulum by way of filing Central Excise Appeal No.1/2021 in the matter of Principal Commissioner of Service Tax and Central Excise, Kochi vs. South Indian Bank alongwith other connected appeals and the Hon’ble High Court [2022 (12) TMI 1479 - KERALA HIGH COURT] dismissed the appeal filed by Revenue and upheld the decision of the Tribunal in South Indian Bank (supra). Nothing has been brought to our notice to show that any appeal has been filed by the Revenue against the aforesaid decision of Hon’ble Kerala High Court, therefore, it attained attained finality.
The view taken by the Larger Bench in the matter of South Indian Bank Ltd. (supra) has further been affirmed by another Larger Bench of the Tribunal in the matter of Bank of America, National Association vs. Principal Commissioner, CGST & Central Excise, Mumbai [2024 (4) TMI 1149 - CESTAT MUMBAI]
Allegation against the appellant that they have violated the provisions of Rule 4 (7) and 9(1) ibid by availing cenvat credit even before issuance of two invoices by DICGC - We do not see any irregularity in availment of cenvat credit by the appellant against invoices dated 20.9.2012 and 03.06.2013 respectively and there is no violation of Rule 4(7) or Rule 9 (1) ibid and therefore no interest can be imposed on the appellant.
We are of the view that the registration of the banks with DICGC is not optional but compulsory. All Banks have to obtain a licence from Reserve Bank of India u/s 22 of the Banking Regulation Act without which no bank can function and all of them have also to compulsorily obtain registration with the DICGC in order to protect the interest of depositors.
The registration can be obtained by the banks only on payment of premium to DICGC. If a Bank fails to pay premium to DICGC, its registration would be cancelled, which ultimately would result in cancellation of licence granted to the Bank by Reserve Bank of India. Which means without payment of insurance premium to DICGC, the Bank will not be able to function or provide any ‘banking and other financial services.’ Therefore payment of insurance premium to DICGC is an integral part of ‘banking and other financial services’ and is an input service for which Cenvat Credit can be availed by the banks. Accordingly the impugned orders are set aside and the appeals filed by the Appellant are allowed.
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2024 (11) TMI 1225
Invoking the extended period of limitation alleging suppression and the period of dispute is 2015-16 - HELD THAT:- Original Authority after considering all the documents provided by the appellant has come to the conclusion that there is no service involved and it pertains to sale of goods. Further, find that the learned Commissioner (Appeals) in the impugned order has observed that the appellant has failed to provide various documents, which is factually incorrect.
Consultant appearing for the appellant has also brought to my notice that the appellant has explained the discrepancy regarding the invoice dated 18.04.2015 but the learned Commissioner has wrongly interpreted the said invoice in order to confirm the demand.
Thus, find this Tribunal in the case of M/s Girdhari Lal Construction Private Limited [2024 (9) TMI 241 - CESTAT CHANDIGARH] has considered the issue of invoking the extended period of limitation and has held that when the show cause notice is issued on the basis of third party data, in that case, extended period of limitation cannot be invoked.
Appellant’s appeal succeeds on limitation without going into the merits of the case.
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2024 (11) TMI 1224
Service tax demand - taxable services under the category Security Agency Services - as per department appellants not registered themselves and have not discharged the applicable service tax - HELD THAT:- As decided in Principal Bench of the CESTAT [2016 (12) TMI 289 - CESTAT NEW DELHI] the lower authorities have, however, taken the view that the activity undertaken is not in the nature of statutory duty, but an activity undertaken for a consideration which is not a statutory fee. We find ourselves unable to agree to this stand taken by the lower authorities. The police department has the mandatory duty to maintain public peace and order. For such duty, which is in the nature of sovereign function, no charges are recoverable from the citizens. In the present case, the police department has recovered fees for deploying additional police personnel on request.
The statutory functions of the police of the State Govt. make it explicit that such activity, even at request of the other person, is to be carried out only for the purpose of public security or for the maintenance of public peace or order. The charge for deployment of such additional force is also prescribed by the statutory notification issued by the State Govt. We are of the view that the activity of deploying police personnel on payment basis is to be considered as part of statutory function of the State Govt. and the fees recovered are to be considered as statutory. It is also not disputed that such amounts recovered have been deposited into the Govt. treasury.
On the basis of the above discussion, we conclude that police department, which is an agency of the State Govt., cannot be considered to be a “person” engaged in the business of running security services. Consequently, the activity undertaken by the police is not covered by the definition of Security Agency under Section 64(94) of the Act. We also find that in terms of C.B.E. & C.”s circular on this subject, the fees collected by the police department is in the nature of fee prescribed for performing statutory function, which has been deposited into the Govt. treasury. In the light of the C.B.E. & C.”s circular also, there can be no levy of service tax on such activities carried out by the police department.
Also as per State of Punjab and others vs. Union of India and others [2018 (9) TMI 2001 - PUNJAB & HARYANA HIGH COURT] where this issue has been examined and writ petition against the similar show cause notices demanding service tax for providing security guards to the public sector Banks and General Post Office has been set aside and the writ petition was allowed. While allowing the writ petition, it has seen observed that under Article 289 of the Constitution of India that the property and income of a State shall be exempted from Union taxation.
We are of the considered opinion that the issue stands decided in favor of the Home Guards.
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2024 (11) TMI 1223
Service tax under ‘Commercial or Industrial Construction Service’ by invoking the extended period of limitation - HELD THAT:- This issue is no more res integra and has been held by various benches of the Tribunal that if the service rendered by the assessee is ‘works contract service’, even then it cannot be taxed under any other category even after 01.06.2007.
As decided in Bajrang Lal Gupra vs. CCE, Gurgaon [2023 (6) TMI 246 - CESTAT CHANDIGARH] held composite contract or works contract service even after 01.06.2007 cannot be taxed under Construction of Complex Service under Section 65 (105) (zzh) read with Section 65 (30a) of the Finance Act, 1994 - The fact that there was no proposal in the show cause notice to include the income as auxiliary business service is indisputable in view of the contents of the show cause notice and therefore in the absence of any notice issued to the respondent in view of the provisions of Section 73, it is clear that imposition of tax and consequently interest and penalty cannot be sustained and the same has been rightly set aside by the Tribunal. As no order to treat the income as Business Auxiliary Service had been passed without proposing the same to the respondent in the show cause notice, the order passed by the Tribunal is justified and substantial question of law has to be answered against the revenue.
Alsoin the case of Srishti Construction [2017 (12) TMI 172 - CESTAT CHANDIGARH] the Division Bench of this Tribunal has also set-aside the demand of service tax under ‘Works Contract Service’ and has also held that the extended period of limitation is not invokable and allowed the appeal of the appellant with consequential relief, if any, as per law.
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2024 (11) TMI 1222
Demand of Service Tax on sale of books provided for training and coaching of students, under the category of ‘commercial training and coaching service’ - HELD THAT:- We observe that the Appellant has been rendering commercial training and coaching services. As a part of this service, they were also selling books/study materials to the students. The prices of the books were printed on the said books. We also find that these books were available for sale not only to students enrolled with the Appellant, but also to other students who were not enrolled. The only difference is that the books are being sold at a concessional rate to the enrolled students.
We find that the Appellant is liable for payment of VAT for the sale of such books. However, as the sale of books was exempt from levy of VAT in the State of West Bengal during the impugned period, they were not paying VAT thereon. Accordingly, we find that the Appellant is eligible for the benefit of Notification No.12/2003-S.T. dated 20.06.2003 which excludes the value of books/study materials sold from the taxable value.
As per Notification No. 12/2003-S.T., dated 20-6-2003 we observe that the value of materials supplied on which VAT is paid or payable, is not includable in the assessable value for the purpose of computing the service tax liability. In this case, it is not in dispute that VAT is payable on the books sold by the appellant, even though it is exempted in the state of West Bengal. Accordingly, as per the Notification 12/2003-ST dated 20.06.2003, we hold that the value of books sold is not includable in the assessable value for the purpose of computing the service tax liability of the appellant.
We also find that the issue is no longer res integra as the Tribunal, New Delhi has already decided the issue in favour of the Appellant in the case of FIITJEE Ltd. [2017 (1) TMI 1602 - CESTAT, NEW DELHI]
Thus we hold that the Appellant is not liable to pay Service Tax on the sale value of the books/study materials sold, under the category of ‘commercial training and coaching service’.
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2024 (11) TMI 1221
Disallowance of CENVAT Credit availed on DG set and tower dismantling services - inward supplies of Services of transportation, procurement and filling of diesel and DG set and tower dismantling services.
CENVAT Credit on the services of transportation, procurement and filling of diesel by the appellant - HELD THAT:- We observe that that the DG sets are necessary for running of the cell sites and providing the telecommunication service by the appellant. For continuous running of the DG sets, diesel should always be available. Thus, as a part of providing operations & maintenance services, the service providers procured, transported and filled diesel in the DG sets to ensure their continuous operation and sustenance of the cell sites.
On such activity of procurement, transportation and filling, the service providers charged service tax to the Appellant under the head Business Support Services. We observe that the ‘means’ clause of the definition of ‘input service’ includes those services which are used by the service provider for providing output services. Given the wide ambit of the said definition, we hold that the CENVAT credit availed by the appellant on the business support services qualifies as 'input services'. Accordingly, we hold that the Appellant is eligible for the credit as 'input service'.
The issue is no more res integra as this Tribunal has already decided the same issue of the appellant for the prior period April 2011 to December 2011 and allowed the Cenvat Credit on such services as reported in M/s. Bharti Hexacom Limited [2024 (10) TMI 1064 - CESTAT KOLKATA]
We find that the appellant is eligible for the CENVAT credit availed on the business support services, which qualifies as 'input services' and accordingly, we set aside the disallowance of the credit in the impugned order.
CENVAT Credit on DG sets and tower dismantling services - We observe that the DG sets needs to be dismantled when they stop working due to wear and tear or due to various administrative reasons. When they are dismantled and a new DG set needs to be installed in its place, the appellant availed the services of some service providers for the dismantling work. We observe that such services which are used to dismantle the DG sets or Towers, are used by the Appellant only in the course or furtherance of the telecommunication business. Accordingly, we hold that the Appellant are eligible for the credit of service tax paid on such services, as 'input service' and accordingly, we set aside the disallowance of the credit in the impugned order.
We also observe that that the Appellant has not suppressed any information from the Department. In the absence of any suppression of facts or mala fide intent on the part of the Appellant, extended period of limitation is not invokable. We agree with the submission of the Appellant that extended period cannot be invoked when the issue involves interpretation of statute. Thus, we hold that the demands confirmed in the impugned order by invoking the extended period of limitation are not sustainable.
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2024 (11) TMI 1220
Clandestine manufacture and removal - substantial electricity consumption - no other corroborative evidences - Revenue faied to rebut the claims made by the appellant - penalty imposed on the Director Mahabir Prasad Rungta - HELD THAT:- Since the search had commenced suddenly without any notice, there would be no chance for the appellant to hide these factual evidences. But no evidence towards stock of raw materials, consumables, in-process stock or finished goods stocks have been found or recorded in the Panchanama. The panchnama nowhere indicates anything to suggest that manufacturing activities were noticed by the investigating team at the time of their surprise visit. Even in the six trucks loaded with materials, while it is being claimed by Revenue that they are finished goods by nature, the appellants have countered the same stating that these trucks were carrying scrap arising out of Kilns being fabricated and installed in the factory.
Coming to the evidence on account of the data of sales said to be obtained from the CPU and based on the emails [forensically inspected], there is no clarity as to when the CPU was seized, and if seized, whether Panchanama was prepared towards the same is not coming out anywhere - The date of signing and date of printing gives raise to serious doubt towards the very veracity of the Revenue’s claim. Added to this is the fact is the issue of retraction of the initially recorded statement of the officers of the appellant.
The Electricity consumption used for arriving at the clandestine manufacture has been countered by the appellant to make their submission that since Kilns were being fabricated and installed in the factory premises, the electricity was being used. The Dept has not come out with any detailed analysis to negate the claim of the appellant.
The proceedings are purely based on presumptions and assumptions without proper back up corroborative evidence.
The issues raised by the Revenue have been answered satisfactorily by the appellant, thereby shifting the onus to prove the clandestine manufacture / clearance on to the Revenue. But neither corroborative evidence, nor any counterpoint have been brought in by the Revenue to fortify their claim - Appeal allowed on merits.
Penalty on Director Mahabir Prasad Rungta - HELD THAT:- Since the confirmed demand is not sustainable against the main appellant Shriram Power & Steel Pvt. Ltd., on merits the penalty imposed on the Director Mahabir Prasad Rungta also does not legally sustain. Accordingly, the penalty imposed on him is set aside.
The impugned order is set aside - appeal allowed.
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2024 (11) TMI 1219
Denial of CENVAT credit - input services - godown rent - loading, unloading, freight, painting and other miscellaneous expenses - HELD THAT:- The present demand is a statement of demand subsequent to a show cause notice dated 04.10.2016. It is noted that the said show cause notice dated 04.10.2016 culminated in M/S. WHEELS INDIA LTD. VERSUS COMMISSIONER OF CGST & CE, PUNE-I [2022 (9) TMI 735 - CESTAT MUMBAI].
On going through the said final order, it is noted that cenvat credit availed by the appellant on input services such as godown rent, unloading, loading etc. were held to be eligible input services for the appellant and cenvat credit was allowed to the appellant.
The impugned order is set aside - appeal allowed.
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