TIOL-DDT 2020 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 2020 </font><br> 09.01.2013 <br> Wednesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Pilgrims' Progress - No Service Tax on Ropeway to Maa Mansa Devi! </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>temples of Maa Mansa Devi and Maa Chandi Devi are located on the hills around Hardwar. The abode of Lord Shiva is far away and above at Badrinath. Usha Breco Ltd operates several ropeways from Hardwar to both Mansa Devi and Chandi Devi temples. The boarding points for the two ropeways are located at a distance of about 4kms. The pilgrims visit the temples by using ropeways. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Service Tax Department believes that this service will come within the meaning of ‘tour' and, accordingly, service tax is payable thereon. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The matter is before the High Court of Uttarakhand in appeal by the Revenue. Though in terms of the definition provided in the appropriate law ‘tour' means ‘journey from one place to another, irrespective of the distance between such places', but in order to levy tax, holding out that the service is tour, it is to be shown that the service has been provided by a tour operator. The question, therefore, was, whether the assessee was a tour operator or not? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal held that it was not. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court observed, "the fact remains that the assessee provides transportation facility from one of its establishments to another establishment of the assessee. This facility is not the main business of the assessee, but is an ancillary to its main business of providing ropeway service. By providing the facility of transportation from Mansa Devi to Chandi Devi and vice versa, assessee did not carry out tour operation. It facilitated journey of its clients from one place to the other as is being done by the passenger transporters while carrying out their transportation business."</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the High Court found no scope for interference with the Tribunal's Order and dismissed the Revenue Appeal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, in a similar issue, in the Delhi bench of the CESTAT, there was a difference of opinion and the matter is referred to the Third Member. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2012/2012-TIOL-751-CESTAT-DEL.htm" target="_blank"><font size="1">(2012-TIOL-751-CESTAT-DEL)</font></a></strong></font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2013/2013-TIOL-20-HC-UKHAND-ST.htm" target="_blank"><font size="1">2013-TIOL-20-HC-UKHAND-ST </font></a></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue vociferously arguing that assessee has not paid duty but lower authorities disagreeing - CESTAT too shuns Revenue Appeal </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>CESTAT vide Order dated 25/05/2011 passed the following directions: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Accordingly, the impugned order with regard to penalty is set aside and the matter is remanded to the original adjudicating authority for quantification of the penalty under Section 11AC in accordance with law, as discussed above, after ascertaining as to whether the duty demand as upheld by Commissioner (Appeals) had been paid within the stipulated period as per the provisions of Section 11AC in which case the benefit of the same would have to be extended to the respondent."</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Pursuant to this order, the adjudicating authority passed an order on 27/12/2011 wherein he determined the penalty under Section 11AC as Rs.1,04,181/-. However, he gave an option to the assessee to pay the reduced amount of 25% of the penalty amounting to Rs.26,045/- within 30 days from the receipt of the order. <font color="#FF0000">The original adjudicating authority had also given a finding that the assessee had made the payment of the duty within 30 days from the date of receipt of the order-in-appeal</font> as mentioned in the Tribunal's order. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The department went in appeal before the Commissioner (Appeals) arguing that the order is bad in law as the appellant had not paid the duty within 30 days from the date of order-in-appeal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the appellate authority caused a verification of this fact and came to the conclusion that there was no merit in the submission made by the department. As such, he dismissed the Revenue appeal as being devoid of merits. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue has taken the matter further pursuant to the order passed by the learned Committee of Commissioners. Inasmuch as they have filed an appeal before the CESTAT and are again chanting the same - the appellant has not paid the duty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bench observed - </font></p> <blockquote> <p align="justify"><em><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">"4. …, there is no evidence produced before me in support of the department's claim that the respondents herein had not paid the dues within the time-limit specified in the earlier orders. In the absence of any such evidence, it is very difficult to uphold the contentions made by the department. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue appeal was, therefore, dismissed as being bereft of any merits. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Interestingly, the respondent was not represented before the CESTAT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And why is a simple task like whether the duty has been paid or not not ascertained all these years -<strong> as if the assessee lives on some other planet? </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2013/2013-TIOL-59-CESTAT-MUM.htm" target="_blank"><font size="1">2013-TIOL-59-CESTAT-MUM</font></a></strong></font></p> <p align="center"><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399"></font></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_2020.jpg" alt="" width="500" height="54" hspace="5" border="0" align="middle"></font></strong><br> </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> – Thursday's cases</font></strong></font></strong></font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left">Central Excise</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">CENVAT - Conclusion by the CESTAT that claim of department in demanding reversal of CENVAT credit is premature since inputs were damaged in transit is erroneous as it is vital fact that on account of damage caused, inputs cannot be used in manufacture of final product - moreover, assessee had claimed insurance on damaged inputs - Tribunal directed to reconsider matter afresh: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>respondent availed CENVAT credit on imported capital goods. It is the case of the Revenue that the credit availed in respect of the goods damaged during transit is not in order since the respondents claimed the money from the Insurance Company. On the ground that the inputs were not at all used in the manufacture of final product a demand was raised to recover Rs.46,56,143/- for the period from January 1997 to November 2000. The case was adjudicated by confirming the demand and a penalty of Rs.8,43,509/- was also imposed u/s 11AC of the CEA, 1944 and a penalty of Rs.50,000/- u/r 173Q of CER, 1944. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CESTAT had allowed the appeal on the ground that even though the goods are damaged such goods were still in the factory and it cannot be concluded that the damaged goods cannot be repaired and the possibility of using the inputs for manufacturing the final product cannot be ruled out. Holding that the claim made by the Revenue was premature, the Bench set aside the order and allowed the appeal. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether activities of assessee engaged in certifying standards for seeds to be used by farmers are to be construed as in relation to any trade, commerce or business and thus not body for charitable purpose - YES: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> petitioner is the Andhra Pradesh State Seed Certification Agency, a society registered in 1976 under the AP (Telangana Areas) Public Societies Registration Act, 1350 Fasli with registration No.334 of 1976 as per Certificate of Registration dated 22-04-1976. The petitioner is established to act as a certification agency u/s 8 of the Seeds Act, 1966 and it certifies seeds which meet the minimum seed certification standards as per the Indian Minimum Seeds Certification Standards, 1988. It is asserted by the petitioner that its basic duty is to see that quality seeds are supplied to agriculturists; that it is a non profit, self sustaining organization created by the Government and is surviving on the certification charges levied for the technical and scientific services rendered by it to the seed producers/growers and agriculturists. The issues before the Bench are - Whether the activities of the assessee engaged in certifying standards for seeds are to be construed as in relation to any trade, commerce or business and thus not a body for charitable purpose - Whether the proviso to the section 2(15) would come into operation in such a case and Whether, therefore, the CIT is justified in rejecting the application of the petitioner for approval u/s 10 (23C) (iv) of the Act. And the verdict goes against the assessee. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Commercial Coaching Service - Benefit of Exemption under Notification No.12/2003-S.T for sale of study material to students - Appellant providing coaching classes to prepare students to take entrance examinations for medical and engineering colleges as well selling study material for such examinations - Prima facie, argument that scope of exemption under Notification 12/2003-ST cannot be whittled down by clarification, appears to be legal - The Appellants seems to be having proof enough to contest that value of services was not transferred to cost of books sold - The amount of Rs.8,98,512/- already deposited in this case is adequate to admit appeal - Waived pre-deposit of balance dues: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Appellants were registered with service tax authorities and paying Service Tax under the head for Commercial Coaching and Training. But it was found by Revenue that they were not paying service tax on the full amounts received from students but were paying tax on part of the amounts received. Revenue took the total receipts as per their Profit and Loss account and demanded service tax of Rs.1,58,99,518/- on the receipts for which service tax was not paid. The adjudicating authority gave relief on account of many items like value of school fees, kit, blazers, bags etc sold to students, fee deposits which were returned, franchisee deposits returned etc. and confirmed the demand of Rs.47,16,921/- along with interest and penalties. Aggrieved by the above order, the appellants filed appeal. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements </font></strong></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more<strong> DDT </strong></font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day </font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p> </body> </html>