SERVICE TAX
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Whether supply of furniture, fixture, lights and light
fittings are covered under the definition of “Pandal or Shamiana contractor”
when the same is provided without providing/supplying/ erecting a Pandal or
Shamiana?
Held : Yes
Whether PA system and other articles connected with sound
system is also covered?
Held : No
The appellant has raised questions before the Authority of
Advance ruling.
The following two questions were raised: -
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Under which classification; i.e. (a) to (zzy) of
sub-section 105 of section 65 of Chapter V of the Finance Act, 1994 are supply
of furniture, fixture, lights, and light fittings. PA system and other articles,
without providing/supplying/erecting a pandal or shamiana are covered.
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Are pandals and shamianas supplied for Hindu marriages
exempted from service tax as per the notification F. No. B2 / A / 2000 / TRU,
dated 10th September 2004.
The AAR went through the definitions and observed.
From the definition of “pandal or shamiana contractor” it is
clear that a person engaged in providing any service to a client, either
directly or indirectly, would be treated as a pandal or shamiana contractor as
long as he is engaged in providing a service in connection with the preparation,
arrangement, erection or decoration of a pandal or shamiana. The second part of
this definition which is inclusive in nature covers supply of furniture,
fixtures, lights and light fitting, floor covering and other articles for use
therein. The words “for use therein” reaffirms the proposition that such supply
has also to be in connection with preparation, arrangement, erection or
decoration of a pandal or shamiana. In other words, the type of service which a
person has to provide in order to become a pandal or shamiana contractor would
necessarily be in connection with a pandal of shamiana as defined in sub-section
(77a) of section 65 of the Act. As long as this criterion is satisfied, the
person will be covered by the definition of pandal or shamiana contractor and
any of the aforementioned services provided a taxable service under Clause (zzw)
of sub-section (105) of section 65 of the Act.
It is not necessary that a person
who is providing any service, whether directly or indirectly, in connection with
the preparation, arrangement, erection or decoration of a pandal or shamiana or
supplying furniture, fixtures, lights and lighting, fittings, floor covering and
other articles for use therein, would have to provide, supply or erect a pandal
or shamiana himself to qualify as a pandal or shamiana contractor. In order to
do so, any service which he provides has to be in connection with a pandal or
shamiana (may be provided, supplied or erected by some other person) as
envisaged in the definition of “pandal or shamiana contractor”. Therefore, even
if the applicant does not provide, supply or erect a pandal or shamiana, any
services provided by him, either directly or indirectly, to a pandal or shamiana,
including supply of furniture, fixtures, lights and light fittings, floor
coverings and other articles for use therein, would be classifiable as taxable
service under Clause (zzw).
Supply of “PA system and other articles” connected with sound
system is not covered by the definition of “Pandal or Shamiana contractor” and
hence would not come within the purview of clause (zzw) of sec 65 (105) of the
Act.
[Before Authority of Advance Ruling in Kartar Singh Kochar]
(187 ELT 304)
The second question being relating to communication by Tax
research unit does not get covered within the scope of section 96 (2) (d) of the
Act for Advance ruling and hence the same was not answered.
CENTRAL EXCISE
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Whether cost of transportation from appellant’s place to
appellants place of supply, charged from buyers on equalized basis and rental
charges for bottles in which beverages were supplied are include able in the
assessable value for the purpose of sec. 4?
The appellant a manufacturer of aerated water had a place of
manufacture. The manufactured goods were first transferred to duty paid godown
of the appellant and then sold from there in wholesale trade. The units were
under the management and control of the same appellant.
A showcause notice was issued to include the transport
charges and rental of bottles in the assessable value u/s 4.
The tribunal observed that there is no dispute over the fact
that transport charges in question is in relation to removal of goods from
factory gate to godown or other units of appellant. The transportation of the
goods to the buyers was charged on equalized basis. They emphasized that the
amended definition of “place of removal” will have no effect here. The referred
to SC decision in VIP Industries 155 ELT 8. The para 6 of the judgment mentioned
“it was required to be read as a whole and that sec. 4 (1)(a) where the price of
the goods is different for different places of removal, each such price was
deemed to be the normal price of such goods in relation to “such place of
removal”. If the place of removal was the factory, then the price would be the
normal price at the factory. If place of removal was some other place like a
depot or the premises of a consignment agent and the price was different then
that different price would be the price. In cases where the price remains
uniform or constant all over the country, it does not follow that value for the
purpose of excise changes merely because the definition of the term “place of
removal” is extended. It was held that normal price remains the price “at the
time of delivery” and “at the place of removal”.
The Tribunal further observed that it was not the case of
department that appellant had charged different prices from different places of
removal. Equalized freight was charged and this remains the same as held in UOI
vs. Bombay Tyre International Ltd. 14 ELT 1896 and Madras Rubber Factory Ltd. 77
ELT 433.
In respect of rental charges they observed that it is a
settled position in law that such rental charges cannot be included in
assessable value. The decision of Universal Drinks Pvt. Ltd. 95 ELT 356 was
relied upon. It was held that charges for rental are for ancillary or allied
services and that the activity of supply of bottles was not the activity of
manufacturing.
It was thus held and transport charges and rentals are not
includable in the assessable value for section 4.
Pure Drinks Ltd. vs. CCE Delhi 187 ELT 456 (TRI).
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Whether credit is allowable on bottles used for packing
aerated water?
Held : Yes
The Commissioner was directed to versify the factual position
regarding inclusion of cost of packing material in cost of aerated water as per
Tribunal order dt 6-4-1999. The Commissioner accordingly took into consideration
the break up of cost of production furnished by the Chartered Accountant of the
respondent under various heads such as, manufacturing cost, packing cost,
over-heads and others, and depreciation. It was held that the details shown in
the computation chart tallied with the balance sheet of the relevant years and
that it was demonstrated in clear terms, on the basis of records, that the cost
of packing materials was included in the value of aerated waters. The
Commissioner, therefore, held that the respondent was entitled to Modvat credit.
The Tribunal held that the bottles in which aerated water was
supplied were of durable nature and as held by the Tribunal in the case of Black
Diamond Beverages Ltd. vs. CCE, Kolkata– [reported in 1998 (103) ELT 340] Modvat
credit was admissible when cost thereof was included by the assessee in the
assessable value of aerated water.
Pure Drinks Ltd. vs. CCE, Delhi 187 ELT 460.
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Whether Credit (Modvat / Cenvat) was allowable on inputs
received before six months from date of duty paying documents?
Held : No.
Whether CVD credit can be claimed of Bill of entry dated six
months prior to date of taking credit
Held : No.
The appellants had taken credit on Inputs on 27-2-1996 on the
invoice dt. 31-1-1995. Also CVD was taken on 11-12-1995 of Bill of entry dated
11-2-1994.
The credits were disallowed invoking Rule 57G relevant to
Rules 4 & 9 of Cenvat Credit rules.
The Tribunal relying on the decision of Longer Bench of
Tribunal in Kusum Ingots and Alloys Ltd. 120 ELT 214 and SC decision in Osram
Surya Pvt Ltd. 142 ELT 5 confirmed the rejection of credit as per sec 57G (2) of
the erstwhile central excise Rule, 1944.
Ashok Leyland Ltd. vs. CCE, Chennai 187 ELT 355.
SERVICE TAX
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What would be the position on levy of service tax on the
service of transfer of money provided by “Angadia”?
Actual money handed over is transferred – Liable.
Actual money deposited at one place instructions given and
money given from corpus fund pool on the other end - Not liable
The appeals were against a common issue as to whether service
tax is leviable on “transfer of money” service provided by angadia.
It was conceded by the appellants that on carrying of diamond
packets, the service tax was liable and was being paid. It was argued that
service tax was not leviable on the activity of “transfer of money” provided by
the appellants.
The appellants explained that Indian currency was handed
over, at a recipient branch, only instructions are transferred and thereafter
payments are made from the corpus funds available at delivery branch. It was
reiterated that there is no transportation of the currency, which was deposited
at branch, what moves is only instruction by various modes of communication and
not currency.
It was clarified by the appellant that currency deposited by
client was not specifically moved and transported but funds were moved inter
branch or Head Office to Branch or vice versa as corpus fund of the angadia
company. It was the cash of the company and not a “bailment” of client.
The Tribunal held that there is no definition of “documents,
goods or articles”. Under the service tax enactment, the common understanding of
the meaning of word “documents, goods or articles” will not cover Indian
currency and therefore the payment received for such service would not be
concord by the levy of service tax under the heading “Courier agency”. They
however made it clear that if the actual currency notes deposited are actually
transferred then service tax will be leviable.
Pate Ambalal Hargovanlal & Co. vs. CCE Sural 187 ELT 65
(Tri-Mumbai)
SERVICE TAX
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Whether selling space / canvassing for advertisement and
passing on advertisement received from advertiser to publisher on commission
basis is covered under Advertising Agency?
Held : No
Is it covered under business auxiliary?
Held : Yes
The appellants are engaged in obtaining the orders of
advertisement for Kasturi and Sons Limited (publishers of The Hindu, Business
Line, etc.). The activity of the appellants is obtaining the advertisement and
passing it on to the publishers. They do not undertake the job of making,
preparation or display of the advertisement. They do not also undertake any
negotiation of price, preparing the layout of the advertisement or making the
text of the advertisement.
A show cause notice was issued on 11th July, 2003 for taxing
the service under Advertising Agency.
The original authority held that the activity was of
Advertising Agency and made them liable from 5 years before.
The appellant before the Commissioner argued that CBEC has clarified on this
position and held them not liable under Advertising Agency. They further
informed that after introduction of Business Auxiliary Service, they have got
themselves registered and started paying taxes.
The Commissioner Appeals accepted the contention of the
appellant. They further allowed the plea of the appellant that quantification
was incorrect. They agreed with the appellant that commission received should be
considered as cum-tax and tax should be exclude in arriving at the value liable
to tax. A clarification issued by Delhi commission rate vide trade notice No. 20
of 25-3-2002 was held to be valid and applicable to the appellants.
[Before Commissioner of Central Excise Appeals Chennai in case of Able Adds Pvt.
Ltd.] 187 ELT 133 (Commissioner Appeals)
