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2018-TIOL-NEWS-002 Part 2 | Tuesday January 02, 2018
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DIRECT TAX |
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INDIRECT TAX |
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SERVICE TAX SECTION
2018-TIOL-31-CESTAT-DEL
Klm Royal Dutch Airlines Vs CST
ST - Interest - Assessee is registered with ST department for providing airlines services - During course of audit, it was observed that assessee had taken Cenvat credit in relation to services used in its Hyderabad office, which was not registered under Service Tax statute at the material time - Thus, taking of Cenvat credit on services in respect of such unregistered premises was objected to by the department - Issue arising out of the present dispute is no more open in any debate in view of coordinate bench of Tribunal in case of M/s Actis Advisers Pvt. Ltd. 2014-TIOL-1701-CESTAT-DEL - Since the service tax/Cenvat demand was dropped by adjudicating authority, there was no question of payment of any interest - No merits found in impugned order, same is set aside: CESTAT - Appeal allowed: DELHI CESTAT
2018-TIOL-30-CESTAT-BANG
Popular Vehicles And Services Ltd Vs CCE, C & ST
ST - the assessee-company is a authorised dealer of cars manufactured by Maruti Udyog Ltd. - The assessee sold spares and also provided services of vehicle servicing & repair, apart from advertising, promotional activities of Maruti products and arranging finance & insurance for cars - For arranging finance & insurance, the assessee received commission from banks & NBFCs - Also, for sales promotion for Maruti, the assessee received incentives/commission - The Department alleged that the assessee canvassed customers to purchase their products and were also marketing auto loans provided by banks & NBFCs, and for both services, the assessee received commission - Thus, the Department claimed that such service provided was taxable under 'Business Auxiliary Service' - Duty demand was raised with interest & penalty u/s 78 of the Finance Act, 1994 - The same as upheld by the Commr.(A) - Having paid duty amount with interest before issue of SCN, assessee contested imposition of penalty - Held - The assessee paid service tax with interest before issue of SCN - There as confusion regarding taxability of incentives received from NBFCs, and the assessee was under a bona fide belief that no tax was payable on such amount - There is nothing to show intent to evade payment of duty - Hence imposition of penalty unsustainable: CESTAT (Para 1,5) - Appeal Allowed: BANGALORE CESTAT
CENTRAL EXCISE SECTION
2018-TIOL-34-CESTAT-MUM
CG Lucy Switchgear Ltd Vs CC & CE
CX – CENVAT – Refund of accumulated credit – Rule 5 of CCR, 2004 - In terms of Rule 5 and Notification No. 5/2006-CE(NT) issued thereunder, the refund claim under this provision can be sanctioned only in respect of accumulated cenvat credit, which the assessee is not in a position to utilize for the clearance of goods for home consumption and that means the cenvat credit should lie unutilized in the account of the assessee - In the present case, the cenvat credit was utilized by the appellant before sanction thereof - Since, the amount of cenvat credit has been utilized, there is no question of refund of the said amount under Rule 5 of CCR, 2004 – no reason to differ with the finding given by the Commissioner(A) – impugned order is upheld and the appeal is dismissed: CESTAT [para 4] - Appeal dismissed: MUMBAI CESTAT
2018-TIOL-33-CESTAT-DEL
Case New Holland Construction Equipment (I) Pvt Ltd Vs CCE
CX - Appellants, engaged in the manufacture of wheeled tractor loader backhoe & vibratory compactor, sell these products through their dealers - during the period of warranty, after sales service and repairs are carried out by the dealers, on behalf of the appellant, and such charges along with ST paid are reimbursed to the dealers - ST paid in these cases were availed as cenvat credit on input service - department was of the view that after sales service, such as repairs, during warranty period do not qualify as input services - cenvat credit amounting to Rs.70.86 lakhs denied - appeal to CESTAT.
HELD: Service of after sales repair has been rendered not in the factory and not even used in the manufacture of goods up to the place of removal -hence, the cenvat credit is not allowable under the main clause of the definition of ‘input service'- the in-warranty repairs are not covered by any of the services within the ‘includes' portion of the definition of ‘input service' - the Bench is in agreement with the findings of the adjudicating authority and uphold the demand for the reasons mentioned in the impugned order - the eligibility of a service as input service is required to be decided in relation to the definition of ‘input service' given in rule 2 (l) of the Cenvat Credit Rules -the fact that the value of certain services are included in the assessable value by itself will not entitle the cenvat credit - no reason found to interfere with the impugned order, appeal dismissed : CESTAT [para 7, 8, 9, 10] - Appeal dismissed: DELHI CESTAT
2018-TIOL-32-CESTAT-DEL
Guljag Indus Ltd Vs CCE
CX – Cenvat credit on chemical storage tanks was denied to the appellant – Department objected to such cenvat credit that the goods falling under sub-heading 73.09 would not qualify to be capital goods - appeal to CESTAT.
HELD: The controversy is regarding the classification -after going through the Chapter Note 73 and 84 of the CETA, 1985, it is found that the tank with temperature controller is classifiable under Heading 84.19 -the contention raised by the appellant that storage tank had such facility is not disputed in view of the observation made by the Tribunal in its earlier order –the Bench is in agreement with the contention of the appellant that they are eligible for cenvat credit on the duty paid on such tank -hence, the classification under Heading 84.19 is approved and the cenvat credit allowed on the duty paid on such tank -consequently, the penalty imposed also stands dropped - the second issue regarding mono rails and structure for various towers and acid tank is not pressed by the appellant - hence, the same is dismissed being not pressed - the appeal filed by the appellant is partly allowed and the impugned order is modified accordingly : CESTAT [para 7, 8, 9] - Appeal partly allowed: DELHI CESTAT
CUSTOMS SECTION
2018-TIOL-29-CESTAT-ALL
CCE Vs Banaras Glass Pvt Ltd
Cus - the assessee imported .8mm Aluminium Coated Sheet Glass Mirror, filed Bills of entry and paid SAD along with Customs duty - Later the goods were sold & the assessee sought refund of SAD under Notfn. No. 102/2007 - The Revenue examined the invoices and claimed that what was sold was 2.0 mm mirror glass and not the 1.8 mm mirror glass originally imported, and in respect of which the refund was sought - Thus the refund of SAD was denied - The Commr.(A) allowed the assessee's appeals on grounds that both goods tallied with each other, and accepted that the 2.0 mm thickness glass was accepted by the Bureau of Indian Standards, and was known to all traders and customers - It was reasoned that the permissble thickness lay between 1.8 mm to 2.2 mm - Held - The dimensions of the goods mentioned in the resale invoice are same as those mentioned in the bills of entry - Further, the desciption of 'IMP' in the invoices stands for 'imported' - This clarifies that the goods in both documents are one and the same - Further, the invoice stated that no credit of the SAD would be admissible w.r.t. the subject goods - Further, there is no material difference between Mirror Glass of 1.8 mm thickness and Mirror Glass of 2.0 mm thickness - Therefore, the O-i-A in question merits no interference: CESTAT (Para 2,6) - Appeal Dismissed: ALLAHABAD CESTAT
2018-TIOL-28-CESTAT-DEL
Awtar Singh Bedi Vs CC
Cus - DRI investigated the goods imported - Both Bill of Entries were filed by CHA M/s. Abhinav Cargo Movers - When the two containers were opended and examined by DRI officers, it was found that in addition to declared goods, contraband in form of 'Refrigerant R-22 gas' - The import of R-22 gas was prohibited since this was in nature of ozone depleting substance - Samples of R-22 gas cylinders were drawn from both the containers and sent for testing to Defence Research & Development Organisation, Centre for Fire Explosive s & Environment Safety, Delhi for chemical analysis - The CEFEES vide their analysis report confirmed that the cylinders contained R-22 gas which is an Ozone Depleting Substance - The detailed examination of cargo in both the containers revealed that the containers contained other consumer goods viz, table napkin papers, decorative items and AA cells - Goods in both the containers are seized by DRI and detailed investigations were taken up - During course of investigation, valuation of goods, other than R 22 cylinders which were used to conceal R 22 was valued on basis of market inquiry to ascertain the wholesale market price in India - Assessable value was arrived after permitting allowable deductions from the market price. - Appeals dismissed: DELHI CESTAT
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