2018-TIOL-NEWS-007, Dated: Monday, January 08, 2018

ST - Management or Business consultant does not cover land development charge within its fold to give rise to a taxable event for the purpose of levy under FA, 1994 - Promotion of business is taxable under BAS, since the assessee has co-operated and paid the tax and interest, penalty is waived as the order of the lower authority does not allege contumacious conduct of the appellant to bring it to the ambit of s.78 of the FA, 1994 - Assessee appeal partly allowed in the matter of waiver of penalty but tax demand confirmed - Revenue appeal dismissed: CESTAT [para 6, 7] - Assessee appeal partly allowed/Revenue Appeal dismissed: MUMBAI CESTAT

ST - Appellants are managing a hotel –in terms of an agreement between the appellant and the Bank of Punjab Limited, the appellants were accepting foreign exchange from their customers and passing it on to the Bank – appellants received certain amount as a consideration/commission for their activities – revenue held that such consideration received shall be liable to ST under the category of ‘business auxiliary service'.

HELD: The appellants are accepting/purchasing foreign exchange in the course of their business of running hotel where the customers pay through foreign exchange - all the foreign exchange received by the appellant are transmitted without any change to the Bank of Punjab who pay certain consideration for this service - this activity is nothing but promotion of business of Bank of Punjab and also acting as an extended representative of the bank for a limited purpose and getting commission for the same – the Bench agrees with the findings of the lower authorities that the tax liability of the appellant is sustainable on this consideration -the title of the agreement stating the same as franchisee agreement and the nature of business in dealing with foreign exchange might have given a bonafide reason for the appellant regarding their non-liability to ST for this activity - in such circumstances, it is not tenable to invoke extended period with allegation of willful mis-statement, suppression etc. – the tax liability of the appellant upheld – such liability sustainable only within the normal period of limitation – penalties set aside –appeals disposed of in these terms : CESTAT [para 4, 5, 6] - Appeals disposed of: DELHI CESTAT

ST - Responent is a deemed university and providing commercial training and coaching services - it has various branches throughout India -the department has brought the said services under the clutches of ST but by the impugned order, the Commissioner (Appeals) observed that the main appeal is already lying in Hyderabad -so for want of jurisdiction, appeal filed by the department were dismissed – revenue before CESTAT.

HELD: An identical issue has come up before the Tribunal in the appellant's own case in Hyderabad [Icfai University vs. CCE, Hyderabad - Final Order No.A/31654-31657/2017 dated 24.10.2017] wherein the appeals of the appellant were allowed – from the above Final Order, it is observed that the Tribunal has decided the appeal on its merits – by following this Tribunal's earlier order, no reason found to interfere with the impugned order and the same is hereby sustained along with the reasons mentioned therein - in the result, the appeals filed by the department are dismissed : CESTAT [para 4, 5, 6, 7] - Appeals of Revenue dismissed: DELHI CESTAT

CENTRAL EXCISE SECTION

2018-TIOL-100-CESTAT-MUM + Story

Walchandnagar Industries Ltd Vs CCE

CX - Notification 5/99-CE dt. 28.2.99, 6/2000-CE dt. 1.3.2000, 3/2001-CE dt. 1.3.2001 and 6/2002-CE dt. 1.3.2002 - Merely because the boiler is cleared in CKD/SKD form, if the exemption notification is denied then the exemption notification will become redundantas there will be no case where the boiler is cleared in fully assembled form – Impugned order set aside and appeal allowed: CESTAT [para 4]

Limitation - Appellant had bonafidely declared the goods manufactured by them in their classification list filed in 1995, thereafter, they were issuing invoices for clearance parts of boiler as a piecemeal of complete boiler under chapter heading No. 8402.10 - with this available information if at all Revenue had any objection the show cause notice could have been issued well within the normal period of 1 year - facts were known to the department and, therefore no suppression of fact could be alleged against the appellant – Demand is time barred – Impugned order set aside and appeal allowed: CESTAT [para 4] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-99-CESTAT-MUM

Mahindra and Mahindra Ltd Vs CCE

CX - Proceedings were initiated for availment and distribution of credit as 'Input Service Distributor' during the period from 2007-08 to 2009-10 as allegedly only the headquarters was registered and appellant had availed credit against invoices issued in favour of branch offices and despite payments having been issued by branch offices. Held: Issue has been decided by Tribunal in appellant's own case 2015-TIOL-125-CESTAT-MUM where it is held that payments are accounted at the head office which is registered as an ISD, therefore, availment of credit and distribution by headoffice are legal and proper - Appeal is allowed: CESTAT [para 4, 5] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-98-CESTAT-MUM

CCE Vs JSW Steel Ltd

CX - It is apparent that in terms of Rule 6 of the Central Excise (Removal of Goods at Concessional Rate of duty for manufacture of Excisable Goods) Rules, 2001, the duty is paid on behalf of the supplier of inputs under the said procedure prescribed under Rule 6 - Since the goods were received in the factory, the respondents were entitled to the credit of the same - show-cause notice mentions that duty has been demanded for diversion of the goods received under Rule 19(2) of the CER - No allegation in SCN that the said goods were used by the appellant for other purposes - Under these circumstances, there is substantial force in the observations of the Commissioner (Appeals) that demand raised and confirmed against the appellants is under mistaken understanding that the disputed duty has not been paid on their inputs but on their finished goods; that demand is not sustainable on merits as well as on time limit - Revenue appeal dismissed: CESTAT [para 5.1, 6] - Appeal dismissed: MUMBAI CESTAT

2018-TIOL-97-CESTAT-MUM

Hindustan Petroleum Corporation Ltd Vs CCE

CX - Input Service - Rule 2(l) of CCR, 2004 - Mediclaim/Medical Insurance Services for employees, credit denied on the ground that services which are primarly for personal use or consumption are hit by the exclusion clause of the definition - Period involved is April 2015 to September 2015 and the case laws cited are not in respect of the definition of Input service prevailing during the material period - It is noticed that the policies are not only for employees but also for the family of the employees - In these circumstances, the existence of element of personal use cannot be ruled out - Appellants have not produced any evidence to support assertion that the policies are not primarily for personal use or consumption - However, if there is a requirement under Factories Act to provide insurance as claimed by the appellants, then in respect of the factory employees, the credit of the medical premium cannot be denied - impugned order insofar as it relates to rejection of premium on medical premium is set aside and matter is remanded to the Commissioner to decide afresh: CESTAT [para 4] CX - Input Service - Rule 2(l) of CCR, 2004 - Grass cutting service, credit denied. Held: Maintenance of factory premises is an activity which is directly related to the manufacturing activity - Clean atmosphere and safety are part and parcel of the manufacturing process - Commissioner(A) has already allowed credit by his order dated 10.06.2016 - in these circumstances, services of grass cutting and garden maintenance are allowed: CESTAT [para 5] CX - Input Service - Rule 2(l) of CCR, 2004 - Laying of PCC pipelines used in movement of products in the factory premises - no evidence produced regarding nature of job done, therefore, credit denied: CESTAT [para 6] CX - Input Service - Rule 2(l) of CCR, 2004 - Repair and maintenance of internal roads within the factory premises - no reasons given in impugned order for denial of credit, hence matter remanded: CESTAT [para 7] CX - Input Service - Rule 2(l) of CCR, 2004 - Services for Republic Day celebrations denied as same is a welfare service - appellant has not submitted any argument in support of their claim, therefore, Credit denied: CESTAT [para 8] CX - Input Service - Rule 2(l) of CCR, 2004 - Services for removal of Honey Comb from factory premises - Same is a part of maintenance of factory premises, hence credit cannot be denied: CESTAT [para 9] - Appeal partly allowed/denied/partly remanded: MUMBAI CESTAT

2018-TIOL-96-CESTAT-MUM

Hawkins Cookers Ltd Vs CCE

CX - Input Service - Rule 2(l) of CCR, 2004 - Courier service is used for movement of documents between the factory and various offices of the appellants and thus credit of the said service cannot be denied as the same would be in relation to the manufacture of finished goods - as regards movement of goods from factory to depot is concerned, appellants have clarified that depot is the place of removal as goods are moved from factory only on stock transfer basis and sale takes place only from depot, therefore, credit of courier service cannot be denied: CESTAT [para 7] CX - Input Service - Rule 2(l) of CCR, 2004 - Air travel/Rail travel and tour operator service - Appellants have clarified that the said services were used exclusively for official work and not as LTC and that they can produce the necessary documents as evidence before the original authority - Matter remanded: CESTAT [para 8] CX - Input Service - Rule 2(l) of CCR, 2004 - Service Tax credit on Club and Association Service - Appellant pressing for credit in respect of ASCI (Advertising Standards Council of India). Held: As advertising is related to business promotion, it would be included in the inclusive part of the definition of Input service - Cenvat credit allowed to this extent and in respect of other Clubs since the appellant has fairly accepted ineligibility to credit, demand on that count is upheld: CESTAT [para 9]

CX - Input Service - Rule 2(l) of CCR, 2004 - Outdoor Catering Service - Appellants have pointed out that they have more than 250 employees and maintaining canteen is obligatory as per law; that they are claiming cenvat credit only on the portion of the service availed for which the appellants are paying and not claiming credit for the part of the service for which any amount is recovered from employee - In view of decision in Hindustan Coca Cola Beverages Pvt. Ltd - 2016-TIOL-2223-CESTAT-HYD , credit allowed: CESTAT [para 10] - Appeal partly allowed/partly remanded: MUMBAI CESTAT

CUSTOMS SECTION

2018-TIOL-95-CESTAT-BANG

CC Vs Atul Automation Pvt Ltd

Cus - the assessee-company filed bills of entry for clearance of 372 old & used copier machines, and declared value for them - Since the invoice produced by the importer did not mention specifications for second-hand goods, an independent Chartered Engineer was hired - Based on his report, the assessable value was enhanced - The Department alleged that the importer had no license for importing the subject goods - Thus, the imported goods were confiscated u/s 111(d) of the Act r/w Section 3(3) of the Foreign Trade (D & R) Act, 1992, with option of redemption fine being given - Penalty was also imposed u/s 112(a) - The Department claimed that the quantum of the penalty was too low, considering the value of the goods and the magnitude of the offence - Held - The Commr. considered the precedent judgments of the Madras High Court and the Kerala High Court, before determining the quantum of the penalty - Hence such order suffers from no deficiency and merits no interference: CESTAT (Para 2,5) - Appeal Dismissed: BANGALORE CESTAT

2018-TIOL-94-CESTAT-MUM

GKB Ophthalmics Ltd Vs CC & CE

Cus - Appellant being a 100% EOU imported certain goods and warehoused the same for the purpose of manufacture and consequently exported the final products without being cleared for home consumption – Revenue alleged that the appellant was not having EOU status during the period July 2002 to June 2003, therefore, there shall be no grant of exemption notification 1/2004-Cus – appeal to CESTAT. Held: The basic structure of the customs law requires levy of the import duty on import made for home consumption - material facts recorded does not establish that there was a case of home consumption for levy of import duty - Therefore, a plain reading of the provisions contained in Section 62, 65, 67 and 69 of the Customs Act, 1962 calls for an irresistible conclusion that the goods meant for export but staying in India during the transit period of making improvement thereto through the process of manufacture, does not call for levy of customs duty – appeal allowed: CESTAT [para 4] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-93-CESTAT-DEL

S I Group India Pvt Ltd Vs Designated Authority

Anti-Dumping Duty - Though there is a delay in filing these appeals, admissibility of these appeals itself is a matter to be examined in terms of legal provisions of Section 9 C of the Act - Considering that admissibility in terms of statutory provisions is to be examined, appeal allowed to be taken up condoning the delays.

Appeals are basically against final findings of Designated Authority recommending that there is no need for continued imposition of ADD on import of acetone/phenol - There are no orders by the Department of Revenue regarding imposition of ADD - The appellants apart from contesting the final findings in sunset review by D.A., submitted replies received under RTI Act from the Ministry of Finance, Department of Revenue - Similar issue came before the Tribunal in case of Panasonic Energy India Co. Ltd. & Others - In the absence of any order or Notification issued by Department of Revenue in terms of Customs Tariff Act or Anti-Dumping Rules, 1995, no appeal lies with the Tribunal - Accordingly, following the ratio of Tribunal in 2017-TIOL-3216-CESTAT-DEL , present appeals are not maintainable - Accordingly, the appeals are dismissed: CESTAT - Appeals dismissed: DELHI CESTAT