Indirect Tax Weekly Flashback for the period 6 To 12 October 2024.
Table of Contents
Kerala High Court
12.5% VAT APPLICABLE ON SALE OF TREAD RUBBER FOR AY 2011-12: KERALA HIGH COURT
Case Title: The State Of Kerala Versus M/S. Vasava Tyre Remoulding Works
The Kerala High Court has held that the appropriate rate of tax on the sale of tread rubber by the assessee would have to be taken as 12.5% for the assessment year 2011-12 and 14.5% for the assessment year 2013-14.
The bench of Justice A.K. Jayasankaran Nambiar has observed that the processes undertaken by the assessee were sufficient to rob the tread rubber strips manufactured by it of their original identity and shape while being incorporated into the works contract of retreading the old tyre. The transfer of goods involved in the execution of the works contract in the instant cases was not in the form of goods but in some other form.
CESTAT
PENALTY CAN’T BE IMPOSED IN ABSENCE OF CONFISCATION OF GOODS: CESTAT
Case Title: Pankaj Tekriwal Versus Commissioner Of Central Excise
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that penalty cannot be imposed in absence of confiscation of goods.
The bench of Justice Dilip Gupta (President) and P. V. Subba Rao (Technical Member) has observed that the pre-requisite for imposing penalty under Rule 26 is confiscation of the goods and the person being concerned in any manner with such goods.
SERVICE TAX CAN’T BE LEVIED MERELY ON AMOUNTS REPORTED IN FINANCIAL STATEMENTS: CESTAT
Case Title: Calcutta Ahmedabad Roadlines Private Limited Versus Commissioner of Service Tax
The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax cannot be levied merely on amounts reported in financial statements.
The bench of Ramesh Nair (Judicial Member) and C L Mahar (Technical Member) has observed that when the revenue has not disputed the classification of services as transportation of goods by road, it was imperative to provide proof through contemporaneous evidence that the revenue could have collected during the investigation and used in the show cause notice. Therefore, while the turnover reported in the balance sheet may hold persuasive value, it is not conclusive and cannot replace the contemporaneous evidence required by statute.
SERVICE TAX ON LETTING OUT SHOPS APPLICABLE ON KRISHI UTPADAN MANDI SAMITI: CESTAT
Case Title: Krishi Utpadan Mandi Samiti Versus Commissioner of Central Goods & Service Tax and Central Excise
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax on letting out shops and other premises for shops, canteen, and banks is applicable on Krishi Utpadan Mandi Samiti.
The bench of Binu Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that as per Notification No.33/2012-ST dated 20.06.2012 the appellant is claiming exemption it is mandatory to follow the conditions for evaluating the threshold limit by arriving at the “aggregate value” of one or more taxable services provided by the service provider from one or more of the premises and not separately for each premises or each services.
SSI EXEMPTION BENEFIT AVAILABLE TO FACTORY IS LOCATED IN RURAL AREA: CESTAT
Case Title: M/s.Shreenathji Polyplast Versus Commissioner of Central Excise and Central Goods & Service Tax
The Delhi Bench of Customs Excise and Service Tax Appellate Tribunal (CESTAT) has held that the assessee is entitled to avail the SSI exemption benefit as their factory is located in a rural area and the benefit cannot be denied for the reason that they have been manufacturing the goods bearing the brand name which belong to Nootan Polymers.
The bench of Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) has observed that Exemption Notifications have to be strictly construed. Neither in clause 4 of the Notification nor in Explanation IX is it provided that the specified goods must be the same or similar to the goods for which the brand name or trade name is registered. The Tribunal has in adopting the above reasoning effectively added to the Notification words to the effect “brand name or trade name in respect of the same goods”. It is clearly impermissible.
NO SERVICE TAX ON SHARING CAT SCORE BY IIM WITH NON-IIM INSTITUTION: CESTAT
Case Title: IIM Versus Commissioner of Central Excise, Customs & Service Tax
The Banglore Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the activity of sharing CAT score by IIM with the non-IIM institution does not fall under the service category of ‘Mailing List Compilation and Mailing Service’ and no service tax is payable.
The bench of P.A. Augustian (Judicial Member) and Pullela Nageswara Rao, Member (Technical) has observed that the appellant, IIM does not compile any information for the non-IIM institutions, the appellant only shares the CAT score obtained by the candidate in the examination conducted by them and only shares this information available with them and they do not compile any information from any other source.
INPUT CREDIT AVAILABLE ON SERVICE TAX PAID ON INSURANCE PREMIUM FOR MEDICLAIM INSURANCE: CESTAT
Case Title: Ashok Leyland Ltd. Versus Commissioner of GST & Central Excise
The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the appellant/assessee was eligible for input credit on Service Tax paid on insurance premium for mediclaim insurance services.
The bench of M. Ajit Kumar (Technical Member) observed that Service Tax paid on insurance premium for personal insurance services was not excluded from the definition of ‘input service’ till 01/04/2011, from which date it was specifically excluded as per Notification No. 3/2011-CE(NT), when used primarily for personal use or consumption of any employee.
PACKAGING ACTIVITY AMOUNTS TO ‘MANUFACTURING’, NO SERVICE TAX PAYABLE: CESTAT
Case Title: M/s. Deepak & Co. Versus Commissioner of Central Excise and Service Tax
The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the no service tax is payable on packaging activity as it is covered under the category of ‘manufacturing’.
The bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) has observed that the packaging activity undertaken by the appellant falls squarely within the ambit of the definition of ‘manufacture’ as defined under Section 2(f) of the Central Excise Act. Once the activity is held as amounting to ‘manufacture’, it is excluded from the purview of Service Tax as per the definition of ‘business auxiliary service’. Thus, we hold that the demand of Service Tax under the category of ‘business auxiliary service’ is not sustainable.
RELIEF TO HONDA MOTORS | CENVAT CREDIT NOT REQUIRED TO BE INCLUDED IN ‘TOTAL CENVAT CREDIT’ FOR APPORTIONMENT BETWEEN EXEMPTED SERVICES AND DUTIABLE GOODS: CESTAT
Case Title: M/s Honda Motor India Pvt. Ltd. Versus Commissioner, GST & Central Excise, Gautam Budh Nagar
In a major relief to Honda Motors, the Allahabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the CENVAT Credit, which pertains to input services exclusively used in dutiable goods, is not required to be included in the “total CENVAT Credit” for apportionment between exempted services and dutiable goods.
The bench of P.K. Choudhary (Judicial Member) and Sanjiv Srivastava (Technical Member) has observed that the Department has raised the dispute interpreting the term “total Cenvat credit” provided in the formula under Rule 6(3A)(b)(ii) to include even that credit which pertains to those services which has been exclusively used in manufacture of dutiable goods. Such an approach by the Department is incorrect and is violative of the principles of Rule 6(1) of the Cenvat credit Rules, 2004 (C.C.R.2004).
NO SERVICE TAX PAYABLE ON CONSIDERATION RECEIVED FOR TECHNICAL KNOW-HOW TRANSFER: CESTAT
Case Title: M/s Max Financial Services Ltd. Versus Commissioner of C E & S T, Chandigarh I
The Chandigarh bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no service tax payable on consideration received for technical know-how transfer.
The bench of S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that consideration received towards the transfer of technical know- how cannot be held to be consideration for the services rendered as Consulting Engineer.
LAW DOESN’T MANDATE OBTAINING REGISTRATION PRIOR TO AVAILING OF CENVAT CREDIT: CESTAT
Case Title: Optum Global Solutions India Pvt Ltd Versus Commissioner of Central Goods & Service Tax
The Chandigarh bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that law does not mandate obtaining registration prior to availing of cenvat credit.
The bench of S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that the credit cannot be denied even if availed prior to registration as held in various cases cited above. In the absence of any demand for recovery of alleged incorrectly availed cenvat credit and confirmation, imposition of penalty equal to credit amount is not justified in law.
