Others Category:

State :

Sr No. Order No. & Date Name Category Breif Issue
1 GIB/TN/Steel Authority of India Ltd./26.07.2021/OTHERS-26 Steel Authority of India Ltd. Classification CESTAT Chennai - Steel Authority of India Ltd. Vs. Commissioner of GST & Central Excise, Salem, SERVICE TAX APPEAL NO. 40052 OF 2019, Final Order no. 41707/2021

Facts of the Case:

1.  Appellant is engaged in Manufacturing of carbon steel, carbon steel sheet, coin blanks and alloy steel.

2. There are some conditions in the contract entered by the appellant with their customers which are as follows:

a. Whenever the supplier defaulted in adhering to the time schedule prescribed by the appellant, appellant recovered liquidated damage @ 1%.

b. The appellant also sold goods through Online Forward Auction (OFV). The bidder who intent to purchase goods through OFV has to pay EMD as prescribed in the notice A permanent customer as well as temporary customer is required to pay certain amount as EMD for every auction they intend to participate. The successful bidder has to pay 10% of the bid value towards Additional Security Deposit (ASD) and Full Sale Value (FSV) as per sale order. In the event of failure on the part of the successful bidder to make ASD/FSV payments within the due date as stipulated in the Sale Order, (ii) the EMD shall forfeited. In the OFA transaction, the appellant permits extension of time for payment of the FSV for a period not exceeding 3 days on payment of specified amount for every day of extension. This amount is termed as (iii) Ground Rent.

3. On the basis of these transactions Assistant Commissioner issued SCN dated 17.04.2017 by invoking section 73(1), 75 of the Finance Act, 1994 considering the recovery of these amount as consideration for tolerating an act of their customers or a situation and hence considering the activity as “Declared Service” as stated under section 66( E)e of the Finance Act,1994. Appellant filed reply to SCN on 18.07.2017 with a request that the proceedings may be dropped for the reason that no service tax was payable on liquidated damage and penalties recovered under the contract.

Assistant Commissioner, however did not accept the contentions of the appellant and confirmed the demand of service tax by invoking the provision of section 73(1) of the Finance Act with interest and penalty. Feeling aggrieved, the appellant filed an appeal before the commissioner (Appeals) who by order dated 4-10-2018 upheld the order passed by the Assistant Commissioner and dismissed the appeal.


Whether the amount recovered by the appellant for Non-fulfilment of obligation in terms of the agreement can be treated as “Declared Services” as stated under Section 66 (E)e of the Finance Act, 1994 ?

Views of the Tribunel:

Section 65B(44) defines service to mean any activity carried out by a person for another for consideration and includes a declared service. One of the declared services contemplated under 

1. section 66E is a service contemplated under clause (e) which service is agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act.

There has, therefore, to be a flow of consideration from one person to another when one person agrees to the obligation to refrain from an act, or to tolerate an act, or a situation, or to do an act. In other words, the agreement should not only specify the activity to be carried out by a person for another person but should specify the consideration for Agreeing to the obligation to refrain from an act/Agreeing to tolerate an act or a situation/ consideration to do an act.

2. An agreement has to be read as whole so as to gather the intention of the parties. The intentions of the appellant and the parties was for supply of coal, for supply of goods and for availing various type of services and not for flouting the terms of the agreement so that the penal clauses get attracted.

3. It also needs to be noted that section 65B(44) defines "service" to mean any activity carried out by a person for another for consideration. Explanation (a) to section 67 provides that "consideration" includes any amount that is payable for the taxable services provided or to be provided.

The recovery of liquidated damages/penalty from other party cannot be said to be towards any service per se, since neither the appellant is carrying on any activity to receive compensation nor can there be any intention of the other party to breach or violate the contract and suffer a loss.

In this case the appellant M/s Cadila Health Care ltd. is a public limited company engaged in the business of manufacturing of pharmaceutical products as well as providing various services, i.e., Maintenance & Repair Services, Advertising Agency, Intellectual Property Services, Consulting Engineer, Management Consultants, Manpower Recruitment Agency, Business Auxiliary Services and IPR services, Scientific & Technical Consulting Services, Online information and Database Retrieval Services, Market Research Agency, Business Support Services, Clearing and Forwarding Services, Renting Of Immovable Property Services, Recovery Agents, Technical Inspection and Certification services, Banking&Financial Services which are classifiable under taxable services definition under section 65 of the Finance Act, 1994, for which they are registered with Service tax department.

The appellant entered into a partnership agreement with a partnership firm M/s Zydus Healthcare  As per the terms of the addendum of the partnership agreement, appellant agreed to provide certain services to firm partnership M/s Zydus Healthcare related to promotion and marketing of firm‘s product and various related services. The appellant towards the said services received remuneration from M/s Zydus Healthcare on which they have paid the service tax and also paid interest whenever there is a delay in paying the service tax. Subsequently, when they realised on the basis of their consultant‘s advice that the services provided by a partner to a partnership firm does not fall under the ambit of services as per Finance Act, 1994, they had filed for refund claims. The said refund claims were rejected by the Assistant Commissioner of Service Tax, Ahmedabad. Being aggrieved by the rejection of refund claim, the appellant filed appeals before the Commissioner (Appeals) which came to be rejected. Therefore, the present appeals filed by the appellant.


Whether the appellant is liable to pay the Service Tax when the appellant is a partner and the service recipient is a partnership firm?


If the appellant is not liable to pay the Service Tax, whether the Service Tax so paid by the appellant along with interest, is refundable, even when the assessment of payment of service tax was not challenged?


Whether the appellant is a service provider and the recipient M/s Zydus Healthcare is a service recipient having relationship of partner and partnership firm can be categorised as service provider and service recipient?

The facts of the case are that the appellant is located in the state of Jammu & Kashmir and was availing the benefit of exemption Notification No. 01/10-CE dated 06.02.2010. The appellant procured certain inputs and availed credit of duty paid on these inputs. The case of the Revenue is that during the relevant period i.e. July 2012 to January 2014, the appellant was not entitled to avail cenvat credit against the inputs procured by the units, who are availing exemption under Notification No. 01/10-CE dt. 06.02.2010 and after introduction of Notification No. 02/14-CE (N.T.) dt. 20.01.2014 on which the Notification No. 01.10-CE dt. 06.02.2010 was amended thereafter the credit was available to the appellant. The matter was adjudicated, the credit availed by the appellant was denied.

The appellant is in appeal against the impugned order wherein the credit has been denied to them on the premise as per Notification No. 02/14-CE (N.T) dt. 20.01.2014, the appellant was not entitled to avail credit prior to the Notification No. 02/14 (N.T) dt. 20.01.2014 in terms of Notification No. 01/10-CE dt. 06.02.2010.

The appellant, M/s NCR Corporation India Private Limited was issued a Show cause Notice alleging non-payment of service tax on various grounds and sought to recover the same from the appellant along with interest and penalty. The SCN proposed to demand the tax on the ground that on review of the Balance Sheet of the Company it was observed that the Company had incurred certain expenses in foreign exchange, categorized as “Travel and Others” in the balance sheet, which was related to the “Professional Services‟ received under the ISA.

As per provisions of Section 67 of the Finance Act, 1994 read with Rule 5 of the Service Tax (Determination of Value) Rules, 2006, all expenses incurred in relation to the provision of main services were includible in the gross value charged for the provision of such service, and thereafter, leviable to Service Tax. Accordingly, such expenses incurred are to be included in the value of service referred to supra, and chargeable to service tax under the Reverse Charge Mechanism, under the taxable category of Business Support Services. Similar observations were made for the period FY 2007-08 to 2010-11 as well. The Authorities proposed to demand service tax to the tune of INR 15,20,96,837/- on this account, along with the applicable interest.

In this case the appellant Popular Vehicles and Services Ltd is an Authorized Service Station and on verification of the appellant’s financial record, the Department entertained the view that the appellant is rendering free service and warranty labour charges which is a taxable service but the appellant has not paid any service tax on the said taxable service and the appellant has also not maintained separate accounts of input services utilized for providing exempted services as required under Cenvat Credit Rules, 2004 and has not complied with the conditions prescribed under Rule 6(3) of the Cenvat Credit Rules, 2004. On these allegations, 4 show-cause notices were issued and after following the due process, the demand to the extent of Rs. 23,725/- (Rupees Twenty Three Thousand Seven Hundred and Twenty Five only) was confirmed along with interest under Section 75 and the original authority has also imposed penalty of Rs. 2,000/- (Rupees Two Thousand only) in terms of Rule 15(1) of Cenvat Credit Rules, 2004 read with Section 76 of the Act. Aggrieved by the said order, appellant filed appeal before the Commissioner who rejected the same.


Whether the appellant is liable to pay service tax on free service and warranty labour provided to customers without any consideration

In this case the appellant had filed the refund claims with the period of one year prescribed under section 11B of Central Excise Act, 1944. However, after scrutiny of the refund claims, the department reiterated the same, requesting the appellant to rectify certain discrepancies and also furnish documents. As per these directions, the refund claims were re-submitted on different dates. The authority below has considered the date of re-submission as date of filing the refund claim, which is erroneous. He argued that date of filing of refund claim originally has to be taken into consideration for computing the limitation.

The issue in Appeal No.ST/41298/2019 is with regard to non-compliance 2(g) of Notification No.07/2012-CE(NT), dated 18.06.2012. As per this clause, balance in Cenvat account should be below the claim for quarter. The appellant has to debit in the Cenvat account the amount that is claimed as refund. He adverted to page no.246 of the appeal paper book and submitted that the appellant has furnished the ST-3 returns for the relevant quarter, which would evidence the debit of the Cenvat credit for which refund claims have been submitted.

The above appeals have been filed by the appellant aggrieved by the rejection of refund claim filed under Rule5 of Cenvat Credit Rules, 2004.

The assessee, M/s. Trimble Information Technologies India Pvt. Ltd. being aggrieved by the Orders passed by the Commissioner of Central Tax has filed these appeals and the common issue to be decided is the denial of refund claim under Rule 5 of the CENVAT Credit Rules, 2004 of the unutilized credit on the inputs and input services used for providing output services.

Mr. L. Nandakumar, Learned Authorized Representative/Assistant Commissioner appearing for the Revenue, relied on the findings in the impugned order. He also contended specifically that the appellant did not file any details with regard to the following services and hence, the authorities below have rightly denied the refund on Plant Rental Charges, Freight Charges, Installation Charges, Auditorium Charges, and Event Management Charges.

In this case the appellant has filed refund of ₹ 6,24,440/- on 27.3.2018 for the quarter ending June, 2017 of the refund lying unutilized in their Cevant Credit Account of input/input service used for exportation of service in terms of Rule 5 of Cenvat Credit Rules, 2004. In terms of Notification No.27/2012-CE (NT) dated 18.6.2012, the appellant was required to debit the amount of refund claimed in Cenvat Credit account at the time of filing refund claim. The appellant has complied with the said notification but both the authorities below held that on 1.7.2017 on introduction of GST regime, they were required to reverse the deemed credit to be claimed as refund under Rule 5 of Cenvat Credit Rules, 2004 and they have not done so on the said date, therefore, the refund claim was rejected.

The appellant is in appeal against the impugned order wherein the refund claim of Rs.6,24,440/- has been denied on the ground that on 30.6.2017while shifting to GST regime, they have not debited the refund amount from the Cenvat Credit account in terms of Notification No.27/2012-CE (NT) dated 18.6.2012.

The appellant General Motors Technical Centre India Pvt. is registered with the Service Tax Department and is engaged in providing Consulting Engineer Services to their clients/customers located outside India and are availing the facility of cenvat credit of service tax paid on input services which are required for providing the resultant output service as per the provision of Cenvat Credit Rules, 2004. Appellant filed a refund claim for Rs. 4,26,79,323/- (Rupees Four Crore Twenty Six Lakhs Seventy Nine Thousand Three Hundred and Twenty Three only) on 20/09/2016 for refund of unutilized cenvat credit in respect of service tax paid on various input services said to have been used for providing output services exported outside India relating to the period October 2015 to December 2015 as per the provisions of Notification No. 27/2012-CE (NT) dated 18/06/2012 read with Rule 5 of Cenvat Credit Rules, 2004.

After following the due process, the original adjudicating authority vide Order-in-Original dated 21/06/2018 granted refund of Rs. 4,15,49,358/- (Rupees Four Crore Fifteen Lakhs Forty Nine Thousand Three Hundred and Fifty Eight only) and rejected the balance claim amounting to Rs. 11,29,965/-(Rupees Eleven Lakhs Twenty Nine Thousand Nine Hundred and Sixty Five only) considering it to be ineligible cenvat credit on certain services. Aggrieved by the said order, appellant filed appeal before the Commissioner who upheld the order of the original authority except allowing cenvat credit of Rs. 34,250/- (Rupees Thirty Four Thousand Two Hundred and Fifty only) availed in respect of Technical Consultancy Services and for the remaining amount of Rs. 10,95,715/- (Rupees Ten Lakhs Ninety Five Thousand Seven Hundred and Fifteen only), the refund claim was rejected mainly on the ground of lack of nexus and for certain services copy of invoice is not produced.
10 GIB/DL/SOUTH EASTERN/22.12.2020/OTHERS-16 South Eastern Coalfields Ltd. Vs Commissioner of Central Excise and Service Tax CESTAT The appellant is a public sector undertaking and is a subsidiary of Coal India Ltd. It is primarily engaged in the business of mining and selling of coal, which is an excisable good. It operates from 18 different mines/offices. In commercial contracts entered during the course of business, certain clauses providing penalty for non-observance/breach of the terms of contract have been stipulated. According to the appellant, these clauses have been provided to safeguard the interest of the appellant.

The Appellant is engaged in the business of manufacture and sale of M.S. Billets and M.S. Rods, TMT bars etc., classifiable under tariff item 72 to the First schedule of Central Excise Tariff Act, 1985, for which they are duly registered under the Central Excise Act, 1944 and also under the service tax with provisions of Finance Act.


As per the Development Agreement, the Appellant was to be provided by the companies a contiguous piece of land for the development. However, the same could not materialize. Hence, the Appellant could not get the land as agreed upon and as per the agreements were entitled for a liquidated damage or compensation.


The owners of the land has terminated Development Agreement due to some other technical reasons also and confirmed that they were not in a position to meet the ‘Development Agreements’ and agreed for the settlement with the Appellant. Ultimately, the Development Agreement with the Appellant was cancelled and the land owners agreed to pay the Appellant a sum of Rs. 21,90,00,000/- towards full and final settlement amount for terminating the said Development Agreement. In addition to this, the Appellant also received an amount of Rs. 1,97,50,000/- as compensation from M/s Amit Mines Limited towards the non supply of agreed manganese ore.


Issue involved was, whether the amount paid to the Appellant as per ‘Settlement Agreement’ and the compensation received from M/s Amit Mines Limited for non supply of manganese ore on account of rate difference are liable for service tax under ‘Declared Service’ under Section 66 E of the Finance Act or otherwise.
12 GIB/GUJ/Sem Construction/27.09.2020/OTHERS-15 SEM CONSTRUCTION vs CCE & ST- Rajkot CESTAT Facts & Issue of  Case:

The appellant had been awarded a contract under agreement dated 01.04.2011 by M/s. Archelean Chemical Private Limited at Rann of Kutch for job of “metal spreading for supply un-course black Trap Rubble stone” and its spreading/dressing along the outer edge of bund for formation of toe wall land filling the trenched with stones above ground level, constructing the pitching above toe line, using stones or filling at various cuts in bunds and dressing of entire bund slope, before metal spreading.


The service provided by the appellant is the supply of various materials and construction of bunds. With the said material bunds were created by the appellant for the Service recipient viz. M/s. Archelean Chemical Private Limited. The said bunds are used for production of Salt from the sea water.


In the present case since the appellant have admittedly supplied the material there is a transfer of property of the said material. The overall construction job subjected to payment of VAT which was paid by their service recipient under Reverse Charge mechanism.


The appellant in this regard submitted various documents which shows that the job undertaken by the appellant has suffered VAT liability. The overall work is of construction of bunds which falls under Industrial & Commercial Construction Service. The said construction is undisputedly of an immovable property.

With this fulfilment of the criteria, the service is squarely covered under the category of Works Contract Service.
13 GIB/KN/Anonymous/24.08.2020/OTHERS-13 Anonymous Vs Aryan Hometec Pvt. Ltd. (NAA) Input Tax Credit Facts&Issue of The Case:

Applicant No. 1, who has sought anonymity, had filed an application under Rule 128 (1) of the CGST Rules, 2017 against the Respondent alleging profiteering in respect of construction service supplied by him.

The Applicant No. 1 had stated that he had purchased a flat in the Respondent’s project “Aryan Founttain Square”, Attiblele-Surajpura Road. Bengaluru and had alleged that the Respondent had included VAT and Service Tax in the MRP of the flat at the time of booking and demanded 12% GST on the pending amount which had resulted in double taxation, whereas the Respondent was actually required to pass on the benefit of ITC for the construction done after the GST implementation which he had not passed on.

It is revealed from the plain reading of Section 171 (1) that it deals with two situations one relating to the passing on the benefit of reduction in the rate of tax and the second pertaining to the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the DGAP’s Report that there has been no reduction in the rate of tax in the post GST period; hence the only issue to be examined is as to whether there was any additional benefit of ITC with the introduction of GST availed by the Respondent or not.
14 GIB/DL/DAI ICHI/11-01-1996/OTHERS-9 Dai Ichi Karkaria Ltd. vs Collector Of Central Excise Others Facts  & Issue Of The Case :

The Applicant used to manufacture surface active agents and emulsifiers from purchased raw materials, the surface active agents being used in the manufacture of final products such as emulsifiers, wetting out agents, softners etc., .Assistant Collector issued notice to the appellant to show cause why excise duty paid on the input raw materials and in regard to which Modvat credit was availed should not be included while arriving at the cost of intermediate product used for captive consumption under Section 4(l)(b) of Central Excises & Salt Act, 1944 (for short, the Act). The appellant took the stand that since the duty paid on raw materials was "set off", it was not liable to be included in the cost of raw materials for the purpose of valuing the captively consumed product for the purpose of excise duty.

A manufacturer who purchases raw materials paying excise duty directly or indirectly is allowed credit of such duty. It is credited in the credit account in form under RG-23A. Credit can be taken on filing declaration under Rule 57G(1). Such credit shall be utilised towards payment of duty on the final products. That should also be entered in the form RG-23A account. Manufacturer has to maintain an account-current with adequate balance to cover the duty payable on the final products cleared at any time.

The appellants are engaged in providing Information Technology Software Services and Business Auxiliary Services and are registered under the Service Tax. The appellant filed refund claims for different quarters as stated in the table under Notification No.27/2012-CE dated 18.06.2012 read with Rule 5 of CENVAT Credit Rules 2004 and Service Tax Rules 1994 for refund of unutilized CENVAT credit of Service Tax said to have been paid by them on the input services availed by them for providing output services viz. Information Technology Software Services and Business Auxiliary Services which are exported during the relevant periods.

After following the due process of law, the Original Authority or Sanctioning Authority sanctioned certain portion of the refund of CENVAT credit of service tax availed on input service said to have been used for provision of export services, which have been exported during the various quarters and rejected the CENVAT credit on certain other input services on various grounds. Aggrieved by the said order, the appellant filed appeal before the Commissioner (Appeals) to the extent of rejection of CENVAT credit by the Sanctioning Authority on various grounds and the Commissioner (Appeals) has also rejected the refund claimed by the appellant on certain services but allowed the refund on certain input services which were denied by the Original Authority
16 GIB/HR/Paramjeet/25.02.2020/OTHERS-14 Paramjeet Rathee Vs Supertech Limited (NAA) Input Tax Credit Facts&Issue of The Case:

Applicant No. 1 had filed an application dated 03.07.2018 (Annexure-1) before the Standing Committee on Anti-Profiteering under Rule 128 of the Central Goods & Services Tax (CGST) Rules, 2017. 

The Applicant No. 1 had stated in his application that the Respondent had resorted to profiteering in respect of the supply of construction services related to the purchase of Flat J-66C, in the Respondent’s project “Officer Enclave”, Sector-2, Sohna Road, Gurugram. 

The Applicant No. 1 had also alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the price of the apartment purchased by him, on implementation of GST w.e.f. 01.07.2017.

The Applicant No. 1 has further contended that while calculating profiteering, the DGAP has not considered the type of sale consideration i.e. Subvention Plan or CLP Plan, pre- GST impact of ITC on cost, Cost Sheet Proforma for Goods/Services pre-GST and post-GST, Summary of purchased materials/imputs versus Construction Stages and the Project report submitted to RERA.
17 GIB/DL/MINISTRY OF FINANCE/12-02-2020/Other-1 Ministry of Finance Others Issue Involved:

Central Government notifies the Tribunal, Appellate Tribunal and other Authorities (Qualification, Experience and Other Conditions of Members) Rules 2017- Is this a Blatant Attempt to Curb the Functioning of the National Green Tribunal?


A petition has been filed before the Supreme Court challenging the constitutionality of amendments that have been made in the NGT Act, 2010 through the Finance Act, 2017 with the petitioner, Social Action for Forest and Environment arguing that the amendments will weaken the functioning of the NGT and curtail its powers. The Supreme Court in its order dated July 28, 2017 has given the Central Government a period of two weeks to provide its response to the petition.
18 GIB/HP/ GODREJ CONSUMER/11-02-2020/OTHERS-03 GODREJ CONSUMER PRODUCT LTD. E-way Bill Fact & Issues Involved – Validity of E - Way bill expired?

Appellant engaged in the manufacture and sale of various personal care and home insecticide products.
Appellant had placed a purchase order for one of raw materials and the supplier had issued invoice No. PY0322001529, Further supplier had handed over said goods to Transporter for transporting the same from Puducherry to Himachal Pradesh by truck no. TN29BV9831. The supplier also generated-way Bill No. PY0322001529 from online portal on 07-09-2018.
The inspection team intercepted and detained the vehicle by alleging that, the aforementioned consignment was accompanied with expired e-way Bill.
Respondent passed detention order on the same and seized the goods along with vehicle.
The appellant representative explained that, the consignment was accompanied with proper invoices along with e-way bill, however due to typographical error while generating the E-way bill, it had mentioned approx. distance 20KM instead of 2000 KM, as a result, the validity of e-way bill are perfectly correct and consistent with the invoice and the consignment.

19 GIB/HP/ BHUSHAN POWER/11-02-2020/OTHERS-04 BHUSHAN POWER & STEEL LTD. E-way Bill Fact & Issues Involved – Validity of E - Way bill expired.

Appellant is a registered company having its manufacturing plant at Village Thelkoli.
purchaser, generated the Invoice No. DS2101028708, DS2101028684 & DS2101028710 and accordingly consigned the goods to Irrigation & Public Health, delivery at Anni, Himachal Pradesh through vehicle no. PB 23K 8947, PB 65AT 9888 & PB 23K 9159
The goods reached at Chandigarh on 20-11-2018 and transshipment took place at Chandigarh and new vehicles HP 21B 3210, HP 63 4038 & HP 11C 4691, were arranged by the branch of appellant for further movement of goods from Chandigarh to Anni, Himachal Pradesh and updated PART B of EWB accordingly.
The Respondent Authority on 21-11-2018 checked the stationery vehicle loaded with steel tubes Galvanized pipe (Round) at Khalini examined the documents and found the E-way Bill with expired validity.
The Respondent officer created the tax demand of Rs. 3,80,272/- in Appeal No. 007/2019, Rs. 3,61,778/- in Appeal No. 08/2019 and Rs. 2,85,506/- in Appeal No 009/2019 respectively.



Whether the commission earned by the Managing Director of the appellant company, apart from his fixed salary, is in lieu of the services provided by him for promotion of the sales in the market, liable to service tax?


Relevance with GST:


This ruling may have an impact on GST also as, as salary is covered under Schedule I of GST Act and no GST is payable on salary.
There may be situation where it will be difficult to decide if something paid to employee is covered under salary or not under GST Act.
This ruling has given an important benchmark that Income Tax Act will be primary source of determination whether something is salary or not.

21 GIB/DL/Bharat Heavy /26.04.2019/OTHERS-12 Bharat Heavy Electricals Ltd. Vs Commissioner CGST, Central Excise & Customs CESTAT Facts & Issues of Case:

The appellant is engaged in the manufacture of Electrical and Mechanical Equipment, besides transmission, utilization, conservation and generation of power and as such are supplying equipment for generation at and transmission of electrical energy ex-Thermal, Hydro, and Nuclear Power Stations. 

There is no dispute that on 01/07/2017, the cesses credit validly stood in the accounts of the assessee and very much utilizable under the existing provisions. The appellants could not carry over the same under the GST regime. Thus the appellants were in a position where they could not utilize the same.

We agree with learned Counsel of the appellant that the credits earned were a vested right in terms of the Hon’ble Apex Court judgement in Eicher Motors case and will not extinguish with the change of law unless there was a specific provision which would debar such refund. It is also not rebutted by the revenue that the appellants had earned these credits and could not utilize the same due to substantial physical or deemed exports where no Central Excise duty was payable and under the existing provisions, had the appellants chosen to do so they could have availed refunds/rebates under the existing provisions. There is no provision in the newly enacted law that such credits would lapse. Thus merely by change of legislation suddenly the appellants could not be put in a position to lose this valuable right. Thus we find that the ratio of Apex courts judgment is applicable as decided in cases where the assessee could not utilize the credit due to closure of factory or shifting of factory to a non dutiable area where it became impossibly to use these credits. Accordingly the ratio of such cases would be squarely applicable to the appellant’s case.
22 GIB/DL/Premium Real Estate Developers/27.11.2018/OTHERS-27 Premium Real Estate Developers Classification  

Facts of the case are as under:


1. Sahara India Commercial Corporation Ltd. ('Sahara India' for short) was interested in acquiring large parcels of land for setting up townships. Accordingly, Sahara India entered into three separate but similar memorandum of understanding with the appellant firm for acquiring three large parcels of land at three different locations as follows;

Name of Place/Sites Date of the Area of the Average the MOU land(in acre rate per Associate intended to acre (in acquire Rs.) M/s Kanpur 09.08.2003 100 8,50,000/-


         Real Estate


                     Lalitpur         15.11.2003       100             5,75,000/-

                     Raeberalli       16.05.2005       125             7,50,000/-


2. Under the MOU, Sahara India, had agreed to pay an average rate per acre of land to be purchased by Sahara India, which land would be identified, divided and demarcated by the appellant firm together with necessary documents and other formalities. The MOU for each site specifically provided the obligations of both the parties. It specifies that Sahara India had agreed to procure land at the aformentioned locations, at the fixed average rate per acre, which included all the cost of land, development expenses (items). The obligations of the appellant under the MOU were- (a) divide and demarcate the entire land into the blocks of 20 to 30 acres, (b) purchase the land in contiguity block wise, (c) furnish title papers and other necessary documents for the land to be purchased (d) obtain the permission and approval from the concerned authority for transfer of land and the expenses incurred in this regard, would be borne by the appellant firm,(e)bring the owners of the land for the purposes of negotiating, registration, etc , to the relevant places and bear all the expenses involved on these. The MOU further provided that the other expenses like stamp duty/registration charges, mutation charges would be borne by Sahara India. On satisfaction by Sahara India about the fitness of deal(s) for the land, appellant firm shall organise the registration in the name of Sahara India, after making the payment to the owners of land, from the advance amount given to them for the purchase of land. The difference, if any, between the amount actually paid to the owners of land and the average rate per acre settled between the parties as indicated, would be payable to the appellant firm, as their margin or profit. Further Sahara India had reserved its right to withhold 50 per cent of the amount (out of margin) to ensure that the obligations on the developer/appellant are fully discharged in terms of the MOU, and in case there was any serious default on the part of the appellant, the same could be made good by way of forfeiture of such amount, so withheld.


3. Pursuant to the MOU, the appellant firm received advance amount from Sahara India for each site. Substantial part of such amount was used by the appellant to pay to the seller or the prospective seller of the land, for agreeing tosell land to Sahara India. The details of such amount based on the payment made by Sahara India, are as follows;


Place/Site Amount paid Area of land Amount as per Amount under land transferred in sale deeds in under purchase head the name of Rs. development to appellant Sahara (in head acres) Kanpur 8,98,00,000/- 38.85 2,66,99,800/- NIL Lalitpur 5,50,00,000/- 77.96 4,22,01,779/- NIL Raebarelli 6,75,00,000/- 89.91 1,69,20,822/- NIL


4. For the purpose of reference we refer to Memorandum of Understanding (MOU) dated 15th November 1983, related to Lalitpur town, entered between Sahara India and the appellant, wherein Sahara India was interested to purchase 100 acres of land for developing residential township in and around the city of Lalitpur. The appellant assured to make available 100 acres of land situated in the village Rora, Distt. Lalitpur U.P.,with direct opening or acess of at least 1000 feet on the National highway. The salient features of the agreement are;


(a) The process of land purchase shall be in a compact contiguous, adjacent and plot wise or block wise manner starting from the roadside.


(b) The appellant shall furnish the title papers and all other necessary documents with reference to the land proposed, within 15 days from the date of signing of the MOU.


(c) Thereafter the appellant shall obtain and furnish, each and every other necessary permission/ approval from the Government body/competent authority, or other regulatory authority, required for transfer of the land proposed, and further arrange for the purchase of land proposed under the MOU, at the average agreed rate per acre, within two months or within such further time at the discretion of Sahara India.


(d) All expenses for obtaining proof of title and approval (except for ULC clearance) required for the transfer of title in the land shall be borne by second party, that is the appellant, and all the supporting documents furnished in respect thereof shall reflect the latest position of the ownership of land.


(e) Thereafter scrutinising the papers relating to title, the first party- Sahara India shall enter into an agreement of sale with the owners of the land, after payment of advance/signing amount, in favour of the cultivators/owner of the land.


(f) Thereafter having completed and covered the entire land(area) under the MOU through agreement(s) to sell, the appellant shall thereafter get the sale deed(s) executed by the cultivators/ownersof land in favour of Sahara India or its nominees, after payment of remaining amount towards purchase. Where there are several coowners in a 'Khata' (entry in the land record) the second party/appellant shall ensure that all the co owners execute the document (sale deed) at one time. In no case shall any document be executed by part co owners. That in the case the land is owned by minor, lunatic or an insane person, appellant will get appropriate guardianship certificate from the competent court/authority and agreement to sell shall be executed only with such guardian. In case any dispute is pending before any civil court or revenue Court, regarding title, share or for partition of the property, the appellant will try its best to get the settlement arrived among the co sharers/co owners and agreement to sell shall be executed accordingly.


(g) That it is the responsibility of the appellant for bringing the cultivators/land owners to the Registrar office along with the necessary documents and photograph and to witness execution/registration of the documents.


(h) That all payments to the Kashtkar/land owners, shall be made through pay orders/demand drafts/account payee cheques. That the difference, if any, of the amount being actually paid to the cultivators /owner of land and the average rate, shall be payable to the appellant. Such payment of difference to the appellant shall be regulated in such amanner so as to ensure the performance of the terms and conditions of the MOU. The first party Sahara India may under discretion withhold maximum up to 10 per cent of the amount payable to the second party/appellant to ensure peaceful/proper demarcation and possession, mutation and construction of the boundary wall of the entire land. In case, the appellant fails to fulfil its obligations as stipulated in the terms of the contract/MOU, the same can be terminated by Sahara India and the withheld amount is liable to be forfeited. All expenses for registration of documents relating to the transfer or agreement of sale, etc., shall be borne by Sahara India. Further all expenses of mutation of land in the office of the concerned Revenue authority shall be borne by Sahara India and the appellant shall be required to coordinate and to do the work of Pairvi in respect thereof in the concerned offices and shall provide to Sahara India all necessary help so as to get the work of mutation completed.


23 GIB/MB/ESSEL PROPACK/31.08.2018/OTHERS-11 Essel Propack Ltd. CESTAT Facts & Issue of the case:

CESTAT observed that CSR is not in the nature of charity as it has got a direct bearing on the manufacturing activity of the company which is largely dependent on smooth supply of raw materials. Further, it augments the credit rating of the company and its standing in the corporate world. The Tribunal thus held that such expenses are incurred to win the confidence of the stakeholders and shareholders.

It also noted that CSR which was a mandatory requirement for the public sector undertakings, has been made obligatory also for the private sector and unless the same is to be treated as input service in respect of activities relating to business, production and sustainability of the company itself would be at stake.

Hence, Cenvat credit was allowed to the appellant.
24 GIB/MH/KINETIC/24-05-2018/OTHERS-6 KINETIC ADVERTISING (I) PVT. LTD. CESTAT Issue & Fact of the Case:

The appeal has been filed against Order-in-Original dt. 15.06.2006 passed by the Commissioner of Service Tax, Mumbai in terms of which the Cenvat Credit stands denied to the Appellant on the ground that they have availed Service Tax credit of Input Services invoices which were addressed to their branch offices.

25 GIB/BL/INDIA TELEPHONE/13.10.2017/OTHERS-9 M/s. India Telephone Industries Others Custom, Excise & Service Tax Tribunal

M/S. India Telephone Industries ... vs Commissioner Of Central Excise ... on 13 October, 2017




Appeal(s) Involved:


[Arising out of Order-in-Original No.CAL-EXCUS-000-COM-031-15-16 dt. 30/11/2015 passed by Commissioner M/s. India Telephone Industries Ltd.



Commissioner of Central Excise and Service Tax, Calicut



Shri B.V. Kumar, Advocate For the Appellant Dr. J. Harish, Dy. Commissioner(AR) For the

Respondent Date of Hearing: 18/07/2017 Date of Decision: ..................



Final Order No. / 2017


Per : S.S GARG


The present appeal is directed against the impugned order dt. 30-11-2015 / 03-12-2015 passed by the CCE&C, Calicut whereby the Commissioner has confirmed the demand of Rs.76,77,017/- and appropriated the said amount. Further the Commissioner has demanded an amount of Rs.3,86,490/- being the interest payable under Rule 14 of CENVAT Credit Rules, 2003 read with Section 78 of the Finance Act for wrongly availing the CENVAT credit.


2. Briefly the facts of the case as made out in the show-cause notice is that while auditing the records

of the appellant, the internal audit party noticed that the appellant has availed CENVAT credit amounting to Rs.1,23,96,927/- based on the service tax invoices received from input service providers. However the value of the service and service tax paid or payable as indicated in the invoice / bill was not made within three months from the date of invoice/bill. Further the service tax availed on the basis of the said invoices of the service provider was not reversed as required under Rule 4(7) of the CENVAT Credit Rules, 2004. Further allegation against the appellant is that the appellant has taken the service tax credit of Rs.3,817/- on rent-a-cab scheme and health services which were not input services during the relevant time. Further the appellant accepted the audit objection and reversed the entire ineligible credit of Rs.1,24,00,744/- in their CENVAT credit account of August 2012 and intimated the Department vide letter dt. 22/09/2012. But the appellant had not paid any interest on the ineligible CENVAT credit availed by them. It was also found on verification of ER return for the month of March, 2012 and April, 2012 and the statement of CENVAT credit availment and utilisation, it was found that ITI had availed an ineligible input service tax credit of Rs.1,21,57,322/-, out of which an amount of Rs.74,33,595/- was utilised for payment of service tax on certain services during the period March 2012 and July, 2012. The appellant filed the reply to the show-cause notice and after following the due process of law, the learned Commissioner vide the impugned order dt. 30/11/2015 confirmed the demand and appropriated the amount reversed and the Commissioner has also demanded interest and also imposed penalty which is under challenge by the appellant.


3. Heard both the parties and perused records.


4. The learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without considering the provisions of Rule 4(7) of CCR. The impugned order is also contrary to the binding judicial precedent on the same issue. He further submitted that the CENVAT credit amounting to Rs.1,29,96,927/- availed by the appellant during the period February 2012 to April 2012 and Rs.3,817/- availed during the period September 2011 and January 2012 was reversed by the appellant in August 2012 i.e. much before the issuance of the show-cause notice dt. 28/08/2013 which is an admitted fact in the show-cause notice and the impugned order dt. 30/11/2015. He further submitted that Rule 4(7) of the CCR provides for reversal of CENVAT credit availed by the assessee on the basis of invoice, bill or challan given by the service provider, when the payments are not made by the assessee to the input service providers. Further Rule 4(7) also permits the assessee to take recredit of the CENVAT credit so reversed as and when the payments are made to the input service provider. He also submits that Rule 4(7) does not lay down the time limit before which ineligible CENVAT credit is required to be reversed. On the contrary, the said rule provides for retaking of the CENVAT credit which has been reversed by the assessee as and when the payments are made. He also submitted that in view of the fact that the appellant has reversed the CENVAT credit in August 2012 itself before the issue of show-cause notice, they are not liable to pay interest or penalty under Rule 15 of CCR. He also submitted that the demand of interest on the alleged ineligible CENVAT credit is not sustainable in law, particularly when the appellants were having sufficient credit balance in their CENVAT credit account. In support of his submissions, he relied upon the following decisions:-

i. CCE, Allahabad Vs. Blrampur Chini Mills Ltd. [2014(300) ELT 449 (Tr Del.)]

ii. CCE, Raipur Vs.Sharda Energy & Minerals Ltd. [2013(291) ELT 404 (Tri. Del.)]

iii. CCE, Chandigarh Vs. Rama

Industries [2013(291) ELT 372 (Tri. Del.)]

 iv. CCE, Ghaziabad Vs. Ashoka Metal Decor (P) Ltd.

[2010(256) ELT 524 (All.)]


He also submitted that the appellants have been regularly filing their monthly returns in ER2 and ST3 and there was no suppression of facts on their part with an intention to evade payment of duty. Therefore penalty under Rule 15(3) is not sustainable in law.


5. On the other hand, the learned AR defended the impugned order and submitted that the appellant has violated the provisions of Rule 4(7) of CCR and has taken ineligible CENVAT credit and when it was pointed out by the audit, the appellant reversed the same before the issue of show-cause notice. He further submitted that the verification of ER2 return for the month of March 2012 and April 2012 and the statement of CENVAT credit account, it was found that the appellant had taken the ineligible input service credit of Rs.1,21,57,322/- out of which an amount of Rs.74,33,595/- was utilised for payment of service tax on certain services during the period March 2012 and July 2012. He also submitted that since the appellant has utilised the ineligible CENVAT credit, therefore, he is liable to pay the interest and penalty and the decisions relied upon by the appellant cited supra are not applicable in the facts and circumstances of the present case.


6. After considering the submissions of both the parties and perusal of the material on record, I find that the appellants have taken the ineligible CENVAT credit in violation of the provisions of Rule 4(7) of the CCR, 2004 in respect of the input service for which they have not made payment within three months from the date of receipt of invoices. I also find that this aspect of availment of CENVAT credit was detected during the audit conducted by the Revenue and thereafter the appellant reversed the entire ineligible credit in their CENVAT credit account in August 2012 and intimated the Department on 22/09/2012. Further I find that the appellants have utilised an amount of Rs.74,33,595/- for payment of service tax on certain services during the period March 2012 to July 2012. For which they are liable to pay interest as demanded in the impugned order.


Further I also find that the decisions cited supra are not applicable in the facts and circumstances of this case because in the present case a part of the ineligible CENVAT credit was used for payment of service tax during the relevant period. Further as for as imposition of penalty under Rule 15(3) of CCR is concerned I am of the considered view that appellants are not liable to penalty because they have been regularly filing their monthly returns in Form ER2 and ST3 and there is no suppression on their part nor Revenue has brought any evidence on record to show that they had any intention to evade payment of tax.


7. In view of my discussion above, I partly allow the appeal of the appellant and uphold the demand of interest under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 75 of the Finance Act, 1994 and drop the penalty imposed under Rule 15(3) of the CENVAT Credit Rules, 2004 read with Section 78 of the Finance Act.

(Order pronounced on .......................) S.S GARG JUDICIAL MEMBER Raja...
26 GIB/DL/GAIL INDIA/21-08-2015/OTHERS-8 GAIL INDIA LTD CESTAT Issue & Fact of the Case:

The appellant is an instrumentality of the Union and is in the business inter alia of supply of natural gas to industrial and other consumers. During 1.10.09 to 24.2.10, audit of the appellant revealed that the appellant's Hazira unit was providing the taxable output service of supply of goods through pipeline to local consumers and others from other destinations through the Hazira, Vijaypur, Jagdishpur (HVJ), pipeline. The appellant had a compressor unit at Hazira to pump natural gas and another compressor station at Vaghodia, Vadodara. The natural gas was conveyed through pipeline to Hazira, Vijayapur, Jagdishpur and thereafter to appellant's Vaghodia plant from where it is vended to industrial and other consumers. The appellant's Hazira unit purchased gas from ONGC and thereafter conveyed it through Hazira, Vijaypur, Jagdishpur pipeline.

The appellant obtained Centralised Registration under Section 69 of the Finance Act 1994 on 25.2.2010 whereunder its head office at New Delhi its Hazira, branch as well as Vaghodia compressor station were itemized as falling under the Centralised Registration

Audit revealed that the appellant had taken cenvat credit on the basis of invoices raised by its Vaghodia unit. On enquiry, the appellant informed the process of conveyance of gas from Hazira to its Vaghodia plant through intermediary stations viz. Vijaypur, Jagdishpur where a further process of compression and conversion into LPG occurred. On the premise that the appellant's Vaghodia pumping station has given output service provided by that station to local Hazira consumers, proceedings were initiated by the show cause notice dated 4.2.2011 proposing denial of cenvat credit along with interest and penalties and directing recovery thereof. The appellant submitted its reply dated 8.3.2011 which however did not find favour with the adjudicating authority and resulted in the impugned order.
27 GIB/UP/ALLSPHERES/10-07-2015/OTHERS-5 Allspheres Entertainment Pvt. Ltd CESTAT Issue & Fact of the Case:

Allspheres Entertainment Pvt. Ltd. (“the Appellant”) is registered with the Service Tax Department in the category of ‘Event Management Services’ (“EMS Services”) with its premise at Nainital (“Nainital Office”) registered with the Service Tax Department. During 2011-12, the Appellant was, inter alia, engaged in rendering the EMS Services in Delhi – NCR, for which the Company maintains a temporary “Field office” at Delhi (“Delhi Office”) to facilitate rendering of the EMS Services.

The Appellant received various Input Services (“the Impugned Services”) in Delhi, which were used by them for rendering taxable Output Services. Accordingly, the Appellant availed Cenvat credit of the Service tax paid on the Impugned Services used for rendering taxable Output Services at Delhi.

The Department raised the Show Cause Notice dated April 16, 2014 alleging that the Appellant had availed inadmissible Cenvat credit without having proper documents as prescribed under Rule 9 of the Cenvat Credit Rules, 2004 (“the Credit Rules”) read with Rule 4A of the Service Tax Rules, 1994 (“the Service Tax Rules”), since the invoices were containing address of Delhi Office instead of Nainital Office.

Later on, the Ld. Adjudicating Authority as well as the Ld. Commissioner (Appeals) upheld disallowance of Cenvat credit to the tune of Rs. 1,87,391/- along with imposition of interest and penalty. In addition, penalty of Rs. 20,000/- was imposed for late filing of ST-3 Returns under Section 70 of Finance Act, 1994 (“the Finance Act”) read with Rule 7 of the Service Tax Rules. Further, penalty of Rs. 10,000/- under Section 77 of the Finance Act was also imposed. Being aggrieved, the Appellant preferred an appeal before the Hon’ble CESTAT, Delhi.
28 GIB/KN/MANIPAL/18-10-2009/OTHERS-7 Manipal Advertising Services Pvt Ltd. CESTAT Issue & Fact of the Case:

The appellants are having Service tax registration and are registered as providers of advertisement services. It appeared appellants had contravened the previsions of Rule 9 of Cenvat Credit Rules, 2004 in as much as they have availed credit during the period 1-4-2005 to 31-5-2005 on the documents which are not addressed to the appellants but addressed to the other premises of the appellants at Bangalore, New Delhi, Chennai etc. Hence a show cause notice dated 26-9-2006 was issued demanding the reversal of such service tax credit, with interest and penalty was sought to be imposed.