| SERVICE TAX SECTION
2016-TIOL-179-HC-KAR-ST + Story
CCE, C & ST Vs Canara Bank
Service Tax - Banking and Other Financial Services -Exempted and dutiable services - Demand of CENVAT Credit on the ground that the assessee had availed Credit in excess of 20% and also had availed full credit on certain services, not falling under the category of Rule 6(5) Services - Appeal by revenue against order of the Tribunal confirming the demand to Rs. 3,71,501/- and interest of Rs.4,025/- under normal period. Held: The Tribunal without following the statutory provisions contemplated under the Act, proceeded to direct the assessee to make the payment of Rs. 3,71,501/- towards the amount due for the normal period with interest of Rs.4025/- for a month and closed the matter as said to have been suggested. The Tribunal proceeded to pass the order based on sentiments which is uncalled for, particularly, while adjudicating the revenue matters. (para 7) It would be appropriate to remand the matter back to the Original Authority to consider the matter afresh after providing an opportunity of being heard to the parties. (para 8) - Appeal allowed by way of remand
: KARNATAKA HIGH COURT
2016-TIOL-175-HC-DEL-ST
National Building Construction Corporation Ltd Vs CST
ST - Refund application rejected primarily on the ground that the Appellant was not able to satisfy the adjudicating authority that it has not passed on the burden of service tax - Accordingly, the refund amount was directed to be transferred to the Consumer Welfare Fund in terms of Section 11B of CEA, 1944 - appeal to High Court - Appellant informing that they would be filing an appeal against the order dated 30.11.2015 passed by AC, Service Tax - appellant raising three issues viz. that being a Public Sector Undertaking ("PSU") they are a "State" and, therefore, are outside the purview of Section 11B of the Act; that adequate documents were produced to indicate that tax was paid by mistake and they had not collected the same; that they are entitled to interest also.
Held: Court is of the considered view that instead of there being parallel proceedings on the question of entitlement of the Appellant to refund, the better course would be to permit the Appellant to raise the aforesaid three issues before the appellate authority - since the claim is pending for quite some time, Court directs the Commissioner (A) to dispose of the appeal within three months from filing of the same - Appeal disposed: High Court [para 9, 12] - Appeal disposed of : DELHI HIGH COURT
2016-TIOL-295-CESTAT-MAD
Prime International India Pvt Ltd Vs CST
Service Tax - Reverse Charge Mechanism - Demand - Set-off - Appellant was liable to service tax on foreign commission agent services availed from abroad which was claimed as CENVAT credit and to be set off against their tax liability in respect of taxable output service provided by them in India - Revenue denied appellant's claim for set-off - No reason as to why the legitimate tax paid on reverse mechanism to the treasury on taxable service shall be denied to be set off against duty/tax liability in India in absence of any statutory bar in that regard - As the scheme of law relating to CENVAT Credit exists, no anomaly in respect of reverse charge tax system which is appreciated by the precedent decision also - Appeal allowed in that count - However as to the issue of short payment, matter remanded to adjudication authority for verification on that aspect and difference if any, shall be realized with interest - No penalty in view of the confusion in law on the subject - Appeal disposed of. (paras 5, 6, 7) - Appeal disposed of : CHENNAI CESTAT
2016-TIOL-294-CESTAT-MAD
Tirunelveli Municipal Corporation Vs CCE & ST
Service Tax – Stay/Dispensation of pre-deposit – Renting of Immovable Property – Liability – Appellant-Municipal Corporation has rented immovable properties owned by it for commercial purposes for establishment of markets, shopping complexes etc. – Demand for service tax raised along with interest under ‘Renting of immovable property' – In all similar cases of other municipalities, Tribunal had ordered pre-deposit and municipalities have complied – Precedent decision of High Court also has upheld the pre-deposit order of Tribunal in a similar case and is squarely applicable to the case as appellant is a Municipal Corporation and has rented out commercial properties – Hence, appellant has no prima facie case – In view of the precedent order which directed assessee to make the pre-deposit in six equal monthly installments, appellant is directed to make pre-deposit of Rs. 30 lakhs in six equal monthly installments. (paras 2, 3, 4) - Pre-deposit ordered : CHENNAI CESTAT
CENTRAL EXCISE SECTION
TARIFF NOTIFICATION
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CASE LAW
2016-TIOL-177-HC-ALL-CX
Saraya Distillery Vs CCE
Modvat - Rule 57G of CER, 1944 - filing of declaration u/r 57G before availing credit - if a manufacturer was not in a position to make a declaration under subrule (1) with regard to the availing Modvat credit but provides sufficient reasons, the competent authority under subrule (10) could condone the delay if he is satisfied that the inputs were received in the factory prior to six months from the date of filing of such declaration or for other reasons mentioned in that subrule - appellant had contended that he was a new assessee and not aware of the modvat rules - this fact has not been disputed by respondents - once sufficient reasons had been given by appellant delay ought to have been condoned and credit allowed in terms of subrule (9) of rule 57G - as procedural lapse had stood cured, Tribunal has committed an error in not allowing credit - Order set aside and appeal allowed: High Court [para 6, 7] - Appeal allowed : ALLAHABAD HIGH COURT
2016-TIOL-300-CESTAT-MUM + Story
CCE Vs King Metal Works
CX - Four Revenue appeals involves total amount of Rs.5.84 lakhs - even if total amount is taken, in view of latest Board instruction dated 18.12.2015, based on monetary limit, appeals cannot be filed if the amount involved is less than Rs.10 lakhs - Revenue appeals are dismissed: CESTAT [para 4] - Appeals dismissed
: MUMBAI CESTAT
2016-TIOL-299-CESTAT-MUM
Centaur Pharmaceuticals Pvt Ltd Vs CCE
CE - s.4 of CEA, 1944 - Valuation of physician samples given free of cost needs to be valued on the basis of cost of production or manufacture of goods i.e. Cost of production + 15% as profit margin and not on the basis of pro rata value of the sale pack of the said physician samples of medicines as alleged by department - appellant submits that they have already paid differential duty which fact is to be ascertained by lower authorities - Since the issue of valuation of physician samples was being litigated during the relevant period, there is no necessity to visit the appellant with any penalty - Appeal disposed of: CESTAT [para 5] - Appeal disposed of : MUMBAI CESTAT
2016-TIOL-298-CESTAT-DEL
Valiant Communication Ltd Vs CC
CX - Assessee, being 100% EOU engaged in manufacture of telecom transmission equipment falling under chapter 85 of CETA, 1985 - They had been granted license for Private Bonded Warehouse with manufacture in bond facility under Section 58 and 65 of Customs Act, 1962 - Assessee vide its letter dated 15.12.2009 had requested Jurisdictional Deputy Commissioner of Central Excise to deposit MOT charges instead of cost recovery charges for period from 1.1.2010 to 31.12.2010 - Since dispute is for the period from 2007 to 2009, when assessee had paid Rs. 2,32,500/- for operating under cost recovery scheme, it is evident that charges are payable in entirety by assessee, which has not been paid - Thus, short paid amount on that account is payable to Central Excise Department in terms of statutory mandates - No infirmity in impugned order: CESTAT - Appeal dismissed : DELHI CESTAT
2016-TIOL-297-CESTAT-KOL
Indian Oil Corporation Ltd Vs CCE
CX - Cenvat credit on basis of endorsed BOE - Assessee procured inputs Additives from both indigenous & imported Sources - After payment of duty, BOE endorsed to IOCL who took Cenvat Credit on basis of said BOE - It is the case of Revenue that endorsed BOE was not a valid document for taking credit prior to 1/4/1994 as per documents prescribed under Rule - 57 G (3) of CER, 1944 - Endorsed BOE was a prescribed document up to 11/9/96 - There is no difference in BOE & endorsed BOE - Assessee have infact endorsed BOE on basis of which credit was taken - Credit on basis of endorsed BOE was correctly taken by assessee - So for as applicability of extended period is concerned, assessee were taking credit on basis of documents which were submitted to department for defacement - Extended period can not be invoked and no penalties are imposable upon assessee - Matter remanded to Adjudicating authorities only with respect to verification of receipt of entire consignments & their utilisation in manufacture of dutiable finished goods: CESTAT - Case remanded : KOLKATA CESTAT
CUSTOMS SECTION
2016-TIOL-176-HC-MUM-CUS
Diageo India Pvt Ltd Vs UoI
Cus - Pre-deposit - Tribunal while disposing appeal directing appellant to approach the adjudicating authority for re-quantification of the duty liability in terms of the lower appellate authority's order and if they are still aggrieved, to come before the Tribunal, after making pre-deposit of the difference of duty so determined - Writ Petition filed against this order of Tribunal.
Held: High Court observing that there is no reason to present the Writ Petition but deeming it proper to issue a clarification in the matter - After having noted the essential controversy in the appeal and when the assessing authority is yet to recompute the liability and determine the demand, High Court deems it appropriate to direct that the Tribunal shall restore the appeal of the Petitioner to its file and decide it in accordance with law and without insisting on a predeposit - condition of predeposit is waived in the peculiar facts and circumstances - Appeal to be decided by Tribunal uninfluenced by anything that is observed in the impugned order and in accordance with law - Tribunal to apply its mind afresh and pass a reasoned order upon hearing both sides - Petition disposed of: High Court [para 1, 6] - Petition disposed of : BOMBAY HIGH COURT
2016-TIOL-296-CESTAT-HYD + Story
Gayatri Timber Pvt Ltd Vs CC
Customs - Refund of Additional duty of customs (SAD) under Notification No 102/2007 Cus dated 14.09.2007 - Refund of SAD paid on timber logs imported and sold as cut sizes on payment of VAT - Refund denied on the ground that the logs were sold as cut sizes and timber logs fall under CTH 44.03 whereas the goods sold after sawing and cutting would fall under Customs Tariff heading 44.07 as also clarified in CBEC Circular No 15/2010 Cus dated 29.06.2010.
Held: The invoices show that some of the logs were sold as such whereas some logs were cut into sizes. The question is whether mere cutting and sawing of the goods for facilitating transportation would render the goods ineligible for refund of SAD has been considered and decided in favour of the importers by the Tribunal in the case of M/s. Agarwalla Timbers Pvt. Ltd. Vs. CC, Kandla & M/s. Variety Lumbers Pvt. Ltd. Vs. CC, Kandla and upheld by the Gujarat High Court. Though revenue filed an SLP before the Supreme Court, as there is no stay against the order passed by the High Court, the same is binding - Following the same, it is held that the appellants are eligible for refund - Appeals allowed. (para 4) - Appeals allowed : HYDERABAD CESTAT
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by ATISH LADDHA
by S RAMASWAMY
by RAMESH CHANDRA JENA
by DHARMENDRA N. CHOUDHARY 
by NARESH MINOCHA
