Considering the fact that the entire amount of service tax and interest has been paid before the issuance of the show-cause notice, I reduce the penalty under section 78 to 25% of the service tax but confirm the penalty imposed under section 77 by the impugned orders. The appellants are directed to pay penalty under section 78 confirmed by this order within 30 days of the communication of this order. Failing which, the appellants shall be liable to pay 100% of penalty as imposed in the impugned orders. The appeals are disposed of in the above terms.
Income from auction of abandoned cargo not taxable under Storage & Warehousing Services as its a sale – Even though the appellant is the custodian of the goods and not the owner, still transfer to title of the goods takes place during the auction and hence it is to be treated as a sale. The fact of sale is also evident from the sales tax having been paid by the successful bidder. Thus, when the transaction is one of sale and not a service, the question of payment of Service tax will never arise.
The short point in question is whether only a registered trademark has a right under any law for the time being in force In India and whether any law other than enacted law In force In India will come within the meaning of any law for the time being in force.
If there is no transfer of right of possession and effective control of the aircraft to the appellants. However, the findings arrived at by the adjudicating authority clearly point out to one fact that aircraft is required to be maintained, operated and controlled by the appellants. If that be so, at this prima facie stage, we note that the appellants do not satisfy the definition of said service.
Brief facts of the case are that the adjudicating authority rejected the refund claim for the period prior to the Registration of service tax paid by the respondents on the ground that the assessee entitled to refund claim of input service credit only for the period after registration. The said order was challenged before the Commissioner (Appeals). The lower Appellate Authority relied on the decision of the Tribunal in the case of Textech International (P) Ltd v. CST [2011] 33 STT 233 and allowed the refund claim.
Furthermore, reliance was also placed on the case of CST & STC v. Molex (India) Ltd. [2012] 18 taxmann.com 113 (Kar.), the Hon’ble High Court had held that supply of technical know-how cannot be taxed under “Consulting Engineering Service”. Therefore, the argument of Revenue to tax the supply of technical know-how under “Consulting Engineering service” was also rejected by the Hon’ble CESTAT.
Hon’ble High Court of Mumbai in the case of CCE v. Ultratech Cements (P.) Ltd. [2010] 29 STT 244 held that any service availed by the assessee in or in relation to the business of manufacturing or providing output service is entitled to input service credit.
In the case of consideration received for freight we are of the prima facie view that ocean freight was not liable to service tax. While there are specific entries in Finance Act, 1994 levying tax on transportation of goods by road, rail, aircraft, pipeline etc. there is no entry levying tax on transportation by sea. It has to be reasonably presumed that this is kept outside the tax net and it cannot be taxed under a general entry like business support services. Further it appears that such services are rendered in respect of export cargo.
If the appellant have paid the service tax they are entitled to take credit of the same. In that view, it cannot be said that by suppressing the fact that the appellants are going to get extra benefit on account suppression. In view of these observations and following the decision in the case of Amman Steel Corpn. (supra), I am of the view that penalty under Section 78 of the Finance Act is not sustainable.
As per Notification No. 5/06, the assesses are required to file a refund claim within the time prescribed under Section 11B of the Central Excise Act. As per Section 11B of the Act, the assessees are required to file a refund claim within one year from the relevant date and the limitation of one year shall not apply where duty has been paid under protest.
