i High Court
39.
[2018-TIOL-1361-HC-AHM-CX] Commissioner, Central GST and CX vs. Ishan
Copper Pvt. Ltd. Dated 06th July, 2018
Dealer is entitled to input tax credit on closure of
factory.
Facts
The Assessee is registered under Central Excise and avails
input credit on inputs. Due to a disproportionate rate of inputs and final
product, the credit was accumulated and the assessee applied for refund of such
credit at the time of surrender of registration. The Tribunal allowed the
refund and accordingly the revenue is in appeal.
Held
The Hon’ble High Court relying on the decision of the
Karnataka High Court in the case of Slovak India Trading Co. Pvt. Ltd confirmed
by the Supreme Court reported at 2008 (223) ELT A 170 and the decision of the
Bombay High Court in the case of Commissioner vs. C.Ex. Nasik vs. Jain
Vanguard Polybutlene Ltd. [2010] 256 ELT 523 (Bom) held that it is specifically
observed in all the decisions that the dealer is entitled to the refund of
unutilised input credit on closure of factory.
II. Tribunal
40.
[2018-TIOL-2137-CESTAT-AHM] Kalpataru Power Transmissions Ltd vs.
Commissioner of Central Excise and Service Tax Ahmedabad-III. Dated 11th
April, 2018
Service of Outdoor Catering availed for the employees
pursuant to the requirement under a law cannot be considered as meant for
personal use and therefore the credit is allowable.
Facts
The Appellants availed CENVAT credit of service tax paid on
Outdoor Catering Service provided to the employees pursuant to the provisions
of the Building and other Construction Workers (Regulation of Employment and
Conditions of Service) Act, 1996. The revenue denied the CENVAT credit.
Accordingly, the present appeal is filed before the Tribunal.
Held
The Tribunal relying on
the decision in the case of Reliance Industries Ltd vs. CCE & ST, LTU,
Mumbai [2016 (45) STR 383 (Tri.-Mum)] noted that the credit is allowable
provided the service is not used for personal use. In the present case, since
the service is provided pursuant to the Building and Other Construction Workers
Act, it is not meant for personal use. Therefore credit is allowed.
41. [2018] 94
taxmann.com 5 (New Delhi – CESTAT) Additional Police Deputy Commissioner vs.
Commissioner of Central Excise, Jaipur. Dated 23rd April, 2018
Tribunal held that the state police department cannot be
regarded as person engaged in running security business and thus, deployment of
police personnel on payment basis, being statutory function of State
Government, cannot be said to be supply of “security agency services”.
Facts
The issue in present appeal was whether the activities
undertaken by police department such as deployment of police personnel on
payment basis are covered under “security agency services”.
Held
The Hon’ble Tribunal held that the issue is no more res-integra
in view of its Final Order No. ST/A/55321-55348/2016-CU (DB) dated 25.11.2016
wherein it was held that Police Department, being an agency of the State
Government, cannot be considered to be a ‘person’ engaged in the business of
running security services. It was further observed that the charge of
deployment of additional force is also prescribed by the statutory
notification, issued by the State Government. Therefore, in the said decision,
Tribunal held that the deployment of police personnel on payment basis be
considered as part of statutory function of State Government and thus, such
activity would not get covered under scope of “security agency services”.
Consequently, Tribunal dismissed present appeal.
Note: In [2018] 94 taxmann.com 307 (SC) Commissioner of
Central Excise And Service Tax, Jaipur-I vs. Superintendent of Police,
Hanumangarh, Hon’ble Supreme Court has dismissed revenue’s appeal against
decision of Hon’ble New Delhi Tribunal vide Dy. Commissioner of Police vs.
CCE&ST [2018] 93 taxmann.com 236 wherein it was held that the charges
collected by State police department for various activities such as providing
security personnel to various organizations and sending police personnel for
character verification of candidates selected for various jobs would not be
liable to service tax under category of “security agency services”.
42. [2018] 94 taxmann.com 217 (New Delhi-CESTAT) Theme
Exports (P.) Ltd. vs. Commissioner of Service Tax, Delhi dated 09th
April, 2018
When the exporter
realised sale proceeds through banking channels and foreign bank remitted
proceeds to exporter after deducting certain charges, the exporter cannot be
treated as recipient of banking and other financial services.
Facts
The appellant is engaged in export of garments and realised
the sale proceeds of such exported items, through proper and approved banking
channel. Against the bills issued, the foreign buyer instructed their banker to
remit the amount as indicated in the invoice.
The transaction between foreign bank and the appellant’s bank
is either direct or facilitated by an intermediary bank. For providing such
services, either the intermediary bank located abroad or foreign bank deduct
certain amount and remit the balance amount to the appellant’s bank account.
Such modus operandi of the transactions was interpreted by the
department that the same should fall under the taxable category of service
under “Banking and other Financial Services” and accordingly, department
alleged that being recipient of said services, would be liable to pay service
tax under reverse charge mechanism.
Held
Hon’ble Tribunal set aside the order, relying upon the
decision of this Tribunal in the case of Dileep Industries (P.) Ltd. vs. CCE
[Order No. ST/A/56726/2017-CU[DB], dated 15-9-2017]. In said decision, Hon’ble
Tribunal referring to Greenply Industries Ltd. vs. CCE, Jaipur (Final
Order No. 50149/2014 dated 03-01-2014) held that in absence of documents
establishing that foreign bank has charged any amount from the appellant
directly, the appellant therein cannot be treated as service recipient and no
service tax can be charged u/s. 66A read with Rule 2(1)(2)(iv) of the Service
Tax Rules, 1994.
43. [2018] 94
taxmann.com 306 (New Delhi-CESTAT) Rishi Enterprises vs. Commissioner of
Central Excise, Indore dated 08th May, 2018
The different contracts between assessee and railways
involving different activities such as collection of bed rolls, napkins,
blankets, washing/dry cleaning of same and ironing and distribution of same to
passengers during their journey in train by deploying assessee’s personnel cannot be taxed as independent
activities and would be chargeable to service tax as composite service under ‘business
auxiliary services’.
Facts
The appellant entered into different contracts with railway
department wherein appellant was required to undertake cleaning of bed rolls,
towels, pillow covers and blankets, pick-up the dirty clothes from the AC
coaches of the nominated trains and carry out the work of cleaning, washing/dry
cleaning, ironing and also distribution of items to passengers on board.
Appellant was also required to provide service of personnel for distribution of
bed rolls to on board passengers of AC coaches. Revenue alleged that appellant
provided “business auxiliary services” to railways and thus, liable to pay
service tax. It was contended that all the three activities could be classified
differently and considering threshold limit and exemption to cleaning linen, no
service tax liability would arise. The first appellate authority upheld
impugned demand. Being aggrieved the present appeal is filed.
Held
Hon’ble Tribunal observed that services rendered comprise of
collection of bed rolls, napkins, blankets, washing/dry cleaning of the same
and ironing and distribution of the same to the passengers during their journey
in the train by deploying their own personnel. Thus, Tribunal held that the
activities carried out are required to be considered as a composite service and
it will not be proper to vivisect the services into the various components even
though the contract specified the different components and separate charges for
the same. Further, Tribunal noted that the services were provided to passengers
who are customers of railways.
Since the responsibility of providing said services is that
of railways and appellant has provided services on behalf of railways, Hon’ble
Tribunal held that the activities undertaken are correctly taxable under
“business auxiliary services” as held by lower adjudicating authorities. Also,
Tribunal relied upon its decision in R.C. Goel vs. CCE, New Delhi – 2017 (5)
G.S.T.L. 324 (CESTAT – New Delhi). Accordingly, demand was sustained.
44. 2018 (12) GSTL 39
(Tri. Del.) Commissioner of Service Tax, Delhi vs. DLF Golf Resorts Ltd. Dated
20th November, 2017
Services provided by a club to its members not taxable under
Club Association Services.
Facts
Appellant assessee was providing services of Mandap Keeper,
Health Club & Fitness Centre, BAS, Membership of Clubs, Maintenance or
Repair Services, Manpower Recruitment services, Renting of Immovable Property
and Sponsorship services. Department observed that assessee was collecting
charges from members of the club for various services but not paying service
tax on amount collected for these services. SCN was issued and demand was
confirmed with a view that such collected amount would fall within the ambit of
“any other amount” as defined u/s. 65(105)(zzze) read with Section 65(25a) of
the Finance Act, 1994. Appellant challenged the order before Hon’ble
Commissioner (Appeals), wherein demand was dropped. Revenue being aggrieved
filed appeal before Hon’ble Tribunal.
Held
Hon’ble Tribunal observed that the issue is no longer pending
to be examined as having been decided by Hon’ble Jharkhand High Court in Ranchi
Club Ltd. vs. Chief Commr. of C. Ex. & S.T., Ranchi Zone 2012 (26) S.T.R.
401 (Jhar.), Gujarat High Court in Sports Club of Gujarat Ltd. vs. Union
of India 2013 (31) S.T.R. 645 (Guj.) and CESTAT in Federation Of Indian
Chambers Of Commerce & Industry vs. C.S.T., Delhi 2015 (38) S.T.R. 529
(Tribunal). Thus, various services provided by Club to its members not
taxable under aforesaid service. Revenue’s appeal is dismissed.
