TaxTMI 
TaxTMI 
2024 (3) TMI 73
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.... a. Purchase and sale booked in the books of appellant: Based on a specific purchase order from customer(s) in India, the appellant raises specific order on Mercury for purchase, and the goods are supplied to the customer in India. In such cases both purchases and sales are booked in the accounts of appellant and subsequently M/s. Mercury also issues a credit note to the appellant crediting the post sale margin/discount. b. Direct sale by Mercury and only margin booked in the books of the appellant: In these cases, the customers of the appellants raise a direct purchase order on M/s. Mercury and the products are shipped directly to such customers, which is mostly in the cases where the clients have customs concessions/exemptions for direct import. Appellant being exclusive distributor for the Territory of India, is entitled for margin for this direct shipment as well (price difference between sale price in India and distributor price). c. Warranty Repairs: The appellant also undertakes free warranty repairs for the sale of products of Mercury on behalf of Mercury, for a period of 1 year. Accordingly, the appellant raises a statement of spares used and man hou....
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....ich were in fact submitted in appeal proceedings. As per the agreement, Appellant has taken the responsibility of providing cold storage facility, its maintenance including temperature and security of the facility. Hence, it is clear case of 'cold storage facility' service which do not fall under the category of 'renting of immovable property'. The observation in the impugned order that 'sea products' is not 'agriculture' but a 'pisciculture' is irrelevant in the present case, in absence of such proposal in the SCN and also considering the ordinary meaning of the term 'agriculture'. Agriculture as defined in Section 65B(3) includes rearing of all forms of animals. Management, Maintenance & Repair service (to Navy/coastal guard): 8. Here again, the demand was confirmed on the differential turnover between the books and ST-3 returns merely stating that documentary evidence was not furnished except turnover bifurcation and claim that services are rendered to Navy/coastal guards etc. Out of the total turnover of Rs.4,71,49,579 towards 'repair or maintenance' works, turnover of Rs.2,70,97,757/- was declared in ST-3 and paid appropriate service tax thereon whereas impugned SC....
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.... sale are accounted and applicable VAT/CST was remitted. The additional discount was given by the Manufacturer qua M/s. Mercury Marine Singapore Pvt Ltd., by sending credit note after the conclusion of sale (popularly known as 'post sale discount). The additional discount was accounted as 'Discount - dealer margin'). 10. He contended that, the appellant in the first instance could have got all his trade margin/discount, but to maintain the actual price of the goods and to maintain competitiveness by giving post sale discounts, the mechanism of post sale discount was adopted. Sample copies of purchase invoice, sale invoice, bill of lading, credit note of Mercury and copies of the entries in the books of accounts are enclosed in the appeal and explained during the course of hearing with the instance of a transaction: Sl.No. Description Amount 1 Purchase order based on list price 1,18,42,805 2 Sale price 1,25,47,920 3 Difference/ trade margin (2-1) 7,05,115 4 Additional discount received from M/s. Mercury (discount Dealers Margin) 11,63,877 As explained above, both trade margin and dealer margin are related to tradin....
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.... 47 which permits set-off of export receivables against import payables. b. RBI Master Circular 14/2013-14 dated 01.07.2013 vide Para No. C 26(B) which clarifies netting is allowed. c. OIA No. TVM-EXCUS-000-APP-172-2016-17 dated 22.11.2016 in case of erstwhile Proprietorship firm (M/s. Esmario Export Enterprises). d. J.B. Boda - 1997 (223) ITR 271 (SC) e. Commr. Of C. Ex., Jaipur-1 Vs. National Engineering Industries Ltd. 2019 (30) G.S.T.L. 211 (Raj.) f. Bharat Re-Insurance Brokers Pvt. Ltd. Vs. Commissioner of Central Excise Customs and Service Tax, Hyderabad-II 2020 (6) TMI 259 - CESTAT HYDERABAD (Para- 11) g. Suprasesh General Insurance Services & Brokers P. Ltd. v. Commissioner2016 (41) S.T.R. 34 (Mad.) (Refer Para 43, 44, 57 and 58) h. Sun-Area Real Estate Pvt. Ltd. v. CST, Mumbai-I, 2015 (39) S.T.R. 897 (Tri. - Mum.) (Refer Para 9 & 10) The same was also clarified by the CBIC vide its Circular No. 78/52/2018- GST - Central Tax, dated 31-12-2018 under GST. The provisions of GST and service tax with respect to the condition of receiving convertible foreign exchange are similar. 14. He further contended that Im....
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....ury to the beneficiary in India and no amount is being charged from service beneficiaries. Both Mercury and this appellant have privity of contract. As per Rule 3 of POPS Rules, 2012 place of provision will be the location of the service recipient i.e., on whose account the service is provided i.e., Mercury, thus activity being Export. Reliance is placed on Blue Star Ltd. v. Commissioner - 2016 (46) S.T.R. 59 (Tribunal); Samsung India Electronics Pvt. Ltd. Vs. Commissioner of C. Ex., Noida 2016 (42) S.T.R. 831 (Tri. - Del.). 'Extended period of limitation' & 'Penalties': 19. It is a periodical notice wherein no extended period can be invoked. Initially department had issued notice for 2008 to 2010 on the following issues a. Dealers margin b. Agency commission and c. Warranty claims The present show cause notice is issued for the period 2010-11 to 2013-14 which covers all the above three issues. It is settled legal position that extended period cannot be invoked in subsequent periodical notices. Reliance is placed on Nizam Sugar factory vs. Collector of Central Excise, A.P. 2006 (197) ELT 465 (SC). 20. Initially the appellant was under th....
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....n a. Freezair India (P) Ltd. v. Commissioner 2014 (304) E.L.T. 360 (Del.) dealt with similar facts & circumstances (Para 28). The appeal of the department is dismissed by the Hon'ble SC in C.A. No. 006949/2015 vide its order dated 06.02.2019. b. Shabina Abraham v. Collector - 2015 (322) E.L.T. 372 (S.C.) c. Commissioner v. Dhiren Gandhi - 2012 (281) E.L.T. 64 (Kar.) d. Commissioner v. Press Fab Precision Components Pvt. Ltd. 2007 (207) E.L.T. 207 (Kar.) 24. On the other hand, Ld. DR reiterated the findings of the impugned order and contended that demand was mainly due to non-submission of supporting documents. Hence, the matter may be remanded. 25. Heard both sides. The perusal of SCN and OIO brings out that the main demand is under 'BAS' for the amounts received in the capacity of 'distributor' to M/s. Mercury. Both SCN & OIO while admitting that the payments were received by Appellant by way of adjustment in the running account &raising credit notes but refused to equate with receipt of 'convertible foreign exchange' solely on the ground that requisite procedure/permissions were not taken from RBI. This finding is not sustainable for the ....