HIGH COURT RULING (SERVICE TAX) 2013-TIOL-1114-HC-AP -ST G A Rama Rao Vs UoI and Another (Dated : September 19, 2013) Service matter - Department of Personnel and Training - Writ - promotion - Whether in case the Departmental Promotion Committee has given a clean chit to an officer for promotion, disciplinary action can be initiated against him. 2013-TIOL-1059-HC-ALL-ST M/s Globe Pvt Detective Bureau Vs CCE & ST (Dated : October 3, 2013) ST - Section 35F of CEA, 1944 is not a condition precedent for filing an appeal, but it is certainly a condition precedent for hearing the appeal on merits - Statutory right of appeal subject to condition of deposit shall be treated as a valuable right of the assessee and the Tribunal should not be very harsh on the appellant while exercising the discretionary powers under Section 35-F – non-presence of appella nt before the Tribunal was because of the reason that the train reached late to New Delhi – Tribunal ordering pre -deposit of Rs.39 lakhs - modification application also rejected by Bench and later appeal on the ground of non-compliance with the order of pre -deposit – in the interest of justice, appeal is restored before the Tribunal on appellant depositing Rs.29 lakhs within 3 weeks as Rs.10 lakhs already paid – in case amount is not deposited within stipulated time order of dismissal of appeal by Tribunal would operate – Appeal disposed of : High Court [ paras 14 & 16] Jurisdiction - Rule 31-A of CESTAT (Procedure) Rules, 1982 makes it abundantly clear that application for rectification of a mistake is to be heard by the same bench which had heard the appeal - In the instant case, the order of which modification has been sought, has disposed of the application and not the appeal - Thus, the order has been passed by the Bench presided over by the President is fully within its competence and it is incorrect to say that it travelled beyond its jurisdiction: High Court [ para 12] 2013-TIOL-1038-HC-KOL-ST CCE Vs M/s Vesuvious India Ltd (Dated : November 28, 2013) CENVAT - Rule 2(l) of CCR, 2004 - Whether Outward transportation of finished goods from place of removal is covered by definition of "Input Service" before 01.04.2008 Calcutta High Court refuses to accept Karnataka HC decision in ABB Ltd. allowing credit on GTA service - CESTAT order set aside - Appeal allowed. Effect of the Circular cannot be to amend the Rules - Rules remain what they were On the basis of the Circular issued by the Board, it cannot be said that under the Rules, 'input service' includes the transportation service made available to the customer for the purpose of delivering the goods at the destination. By the amendment made with effect from 1st April, 2008 substituting the word "from" by the word "upto" all that has been done is to clarify the issue - Neither the services rendered to the customer for the purpose of delivering the goods at the destination was covered by the definition of input service prior to 1st April, 2008, nor is the same covered after 1st April, 2008 - CESTAT order set aside - Prayer of respondent for stay of the operation of the order for six weeks allowed by Calcutta High Court. Also see analysis of the Order 2013-TIOL-1037-HC-P&H -ST M/s Hoshiarpur Automobiles Vs CESTAT (Dated : October 22, 2013) Service Tax - Demand under ‘BAS' on incentives received - Waiver of pre -deposit under Section 35F of the Central Excise Act, 1944 partly allowed by Tribunal and challenged in the instant appeal, contending that full waiver is merited. Held: expression "undue hardship" lies within the special knowledge of an applicant and has to be established as a matter of fact, relates not only to the economic wellbeing of the appellant but also to the merits of the case - Appellate forum is required to balance the two e xpressions, prima-facie appraise the merits while recording its opinion - appellate forum while considering legality of an order is confined to ascertaining errors of jurisdiction, a perverse or arbitrary exercise of power and whether any error has led to a miscarriage of justice - where impugned order does not suffer from the aforesaid defects, appellate forum cannot impose its own perception of the merits of the case whatever be the nature of "undue hardship" appellant focused on merits and not undue ha rdship, needing detailed appraisal of the contract between the appellant and M/s Maruti Suzuki India Limited, the nature of the incentives etc. - no reason to interfere with the order to grant any further relief appeal dismissed, Tribunal order to be complied with, within one month of receipt of certified copy of instant order 2013-TIOL-1016-HC-P&H -ST M/s Barnala Builders & Property Consultant Vs Deputy Commissioner Of Central Excise & Service Tax (Dated: December 9, 2013) ST VCES, 2013 – Board Circular 8/8/2013 goes for a toss - Order passed by designated authority is appealable, holds P&H High Court As the ST, VCES, 2013 is a part and parcel of the Finance Act, 1994, by virtue of the Finance Act, 2013, order of rejection by the designated authority viz. Deputy Commissioner of CE & ST is appealable under section 86 of the FA, 1994 – Writ Petition dismissed as withdrawn with liberty to file appeal: High Court. Also see analysis of the Order 2013-TIOL-1003-HC-MUM-ST M/s Shri Krishna Chaitanya Enterprises Vs UoI(Dated: December 5, 2013) ST collected from clients but not deposited with the government – Dy. Commissioner instructing bank to freeze account of the service provider – petitioner submitting that they have paid Service Tax of Rs.1 ,32,50,497 / -in two parts and which includes the amount sought to be frozen by department – Revenue informing that the total dues are Rs.1,87,34,068/- and since the petitioner still owes the revenue the balance amount of Rs.54,83,571/ -, directions for freezing amount is justified - In lieu of freezing of bank account, Bank guarantee allowed to be furnished of Rs.54,83,571/- – HC directing Revenue to issue SCN by 28 February 2014 and to complete the adjudication proceedings as expeditiously as possible and preferably by 30 June 2014 – Petition disposed of: High Court 2013-TIOL-997-HC -AP-ST M/s Patel Engineering Ltd Vs CE, CC & ST(Dated: November 13, 2013) Service Tax - Appellate remedy against interlocutory order passed by the Tribunal in terms of Section 35F of the Central Excise Act, 1944 - Writ under Article 226/227 of the Constitution of India or Appeal under Section 35 G of the Central Excise Act, 1944 - From the words "every order passed in appeal" appearing in Section 35G, it is to be seen that the Section contemplates number of orders, not one or singular, and passing of the same is possible on several issues and problems in connection with appeal - Order passed under Section 35F is appealable under Section 35G - Writ Petition is not maintainable - The petitioner would be entitled to prefer appeal in accordance with law. 2013-TIOL-922-HC -KAR-ST CCE Vs M/s First Flight Couriers Ltd (Dated: September 12, 2013) ST - Penalty - sections 76 & 77 of FA, 1994 - Reduction of penalty of Rs.5,20,000/ - to Rs.1,00,000/- by CESTAT by holding that there was an all India Strike of the employees and they had prevented the management from functioning and thus resulted in delayed payment of Service tax - Inasmuch as for the period which the Service Tax and returns are to be filed, undisputedly there was no unrest of workmen in the factory - Therefore, the Assessing Authority rightly recorded a finding of fact stating that reason assigned by the respondent for non-payment of Service Tax and non-submission of quarterly returns to the Assessing Authority, is not tenable in law Moreover, t he order of the High Court in CEA No.19/2005 dated 25.07.2007 was not available/passed on the date of impugned order dated 20.12.2005 passed by CESTAT - Revenue appeal allowed: High Court [ paras 7 & 11] 2013-TIOL-917-HC -MUM-ST Yashwant Narayan Manjrekar Vs UoI (Dated: October 7, 2013) Service Tax - Writ Petition against the equal penalty imposed by the Adjudicating Authority - Subject to payment of service tax along with interest, ad interim stay granted against execution of the order in original only in so far as imposition of penalty is concerned. 2013-TIOL-908-HC -DEL-ST G D Builders Vs UoI (Dated: November 13, 2013) Service Tax - Service Tax on works contract/construction service – Section 65(105) zzq and zzzh - abatement – Notification No. 1/2006 – S.T - Composite contracts can be vivisected - service portion of composite contracts can be subjected to Service Tax – Abatement notifications optional, but once opted, have to be complied with fully. Service Tax on works contract – the explanation that the gross amount charged shall include the value of goods and materials, in computing the abatement given to construction services by various notifications at different points of time - is under challenge. Also see analysis of the Order 2013-TIOL-907-HC -DEL-ST Nr Management Consultants India Pvt Ltd Vs CST (Dated: October 30, 2013) Service Tax - Repeated issue of demand -cum-show cause notice for the same period leads to inconvenience and in some cases harassment of assesse: Repeated issue of demand-cum-show cause notice for the same period, leads to inconvenience and in some cases harassment of assessee as the for the same period they have to engage professionals and furnish accounts, documents etc. all over again. It also duplicates the work of the officers. The CBEC will examine the said aspect. If required and necessary, appropriate directions or orders may be issued to ensure that repeated show cause notices are only issued when circumstances justify and are permitted under the law. 2013-TIOL-904-HC -SIKKIM-ST M/s Future Gaming Solutions India Pvt Ltd Vs UoI (Dated : September 24, 2013) Service Tax - Negative List - transactions in lottery tickets are not liable to service tax; Superintendent' s Letter quashed: The moot question that calls for determination by the High Court is as to whether or not the activity of the Petitioner of promoting, organising or assisting in arranging the sale of lottery tickets of the Government of Sikkim is a taxable service falling within the purview of the Finance Act, 1994, as amended by the Finance Act, 2012. The cognate question that would then arise in the determination of this question would be as to whether there is an element of service in the activity of the Petitioner. Also see analysis of the Order 2013-TIOL-899-HC -SIKKIM-ST M/s Summit Online Trade Solutions Pvt Ltd Vs UoI (Dated : May 10, 2013) Service Tax - Sale of Lottery Tickets "Since the levy wa s struck down as unconstitutional, petitioners entitled for refund of Service Tax paid - Earlier Order reviewed: Since the Petitioners secured registration and paid service tax under the impugned provision under protest and that this Court by its Order dated 07-06-2011 in WP(C) No.23 of 2011 had made clear" that any levy or payments made under the Legislation under challenge shall be subject to the outcome of this writ petition , the Petitioners shall be entitled to refund of the amount of service tax paid by them under the impugned Clause with effect from 01 -07-2010 as prayed for in paragraph (c) of WP(C) No.23 of 2011 and paragraph (iii) of WP(C) No.36 of 2011. 2013-TIOL-898-HC -MUM-ST The Saswad Mali Sugar Factory Ltd Vs CCE (Dated : August 14, 2013) ST - Condition for invocation of the extended period of limitation as provided under Section 73 of the Act and the condition precedent for imposing penalty under Section 78 of the Act are identical - Once the Commissioner (Appeals) has come to a finding that for the relevant period, there was genuine cause for confusion regarding the corre ct legal position and also scope for doubt about the service tax liability on GTA as the 'Commercial concern' for non-imposition of penalty then the same cause is also to be factored in to conclude that extended period of limitation cannot be invoked – Revenue has also accepted the order of the Commissioner (A) regarding setting aside of penalty imposed u/s 78 of FA, 1994 – Prima facie, the appeal should be heard by the Tribunal without requiring any pre -deposit of Service Tax – Order of Tribunal requiring appellant to make pre -deposit and order dismissing appeal for non -payment of pre-deposit set aside - Appeals disposed of: High Court [ paras 9 & 10] Also see analysis of the Order 2013-TIOL-892-HC -DEL-ST M/s Olam Agro India Limited Vs CCE (Dated : October 29, 2013) Service Tax – Interim order of CESTAT directing the Appellant to deposit Service Tax with interest in respect of Corporate Guarantee – It is clear from the order of Tribunal that they were persuaded to follow the interim order granting complete waiver in similar case – Yet, the Tribunal ordered pre -deposit in the last para – In view of the findings recorded by the Tribunal, the appellant is entitled to complete waiver of pre - deposit. 2013-TIOL-863-HC -MAD-ST M/s Winwind Power Energy Pvt Ltd Vs CCE (Dated : September 5, 2013) Service tax - Appeal to Commissioner (Appeals) - Amendment of Section 85 of Finance Act, 1994 - Time for filing appeal reduced to two months - Whether provision applicable for orders passed prior to May 28, 2012?: Commissioner (Appeals) proceeded as if the date on which the appeal was preferred should be taken as the crucial date since appeal was preferred after 28.05.2012 when amendment to Section 85 of Finance Act, 1994, came into force. Commissioner (Appeals) rejected the appeal as time barred by applying the amended provision of Section 85. The materials available on record showed that order was passed by the original authority on 27.03.2012 and that the amendment came into force on 28.05.2012. Therefore the petitioner is justified in its contention that the appeal should have been taken up on file in accordance with the regulations in force prior to 28.05.2012. The Commissioner (Appeals) is not justified in rejecting the appeal on the ground of limitation. Accordingly the order set aside and the Commissioner (Appeals) directed to register the appeal and decide the case on merits and as per law. Also see analysis of the Order