2018-TIOL-NEWS-008, Dated: Tuesday, January 09, 2018

ST – Application filed before CESTAT for condonation of delay of more than 480 days – In Writ Petition filed against o-in-o passed by the Commissioner of Service Tax, High Court held that it is not that the conditions imposed by the statute are either excessive or arbitrary requiring interference of High Court in Writ jurisdiction; that it is inconceivable that an assessee approaches the High Court and avoids filing of an appeal which requires making a pre-deposit of 7.5% of the tax - Writ petition was held to be misconceived and dismissed on the ground that there is an alternate and equally efficacious remedy available to the petitioner – appeal filed before CESTAT with an application for condonation of delay.

Held: Law of limitation cannot be invoked as we are dealing with a complete code prescribed under Central Excise Act, where not only the period of limitation is prescribed but also the grounds on which condonation can be granted are prescribed - there is no upper limit for period of condonation in the instant case, therefore, there is no necessity to invoke the provisions of the Limitation Act, so long as the reasons of delay are covered by the provisions of law - so long as the appellants are able to show that there was sufficient cause for not presenting appeal within period prescribed under section 35B(3), the Tribunal may admit the appeal after the expiry of the relevant period - When various High Courts had taken a clear stand on the issue, the appellants approach to High Court on the same issue of pre-deposit was not with clean hands - Even after the decision of High Court was received, the appellants delayed the filing of appeal for a long time and this shows their callous approach - When the matter has been agitated before High Court for over a year it is obvious that the defense of the appellants should have been ready and immediately the appellants should have filed the appeal before Tribunal - Bench is unable to take a liberal approach and, therefore, the application for condonation of delay is dismissed: CESTAT [para 4.2, 4.3, 5, 5.2, 6] - Application/Appeal dismissed : MUMBAI CESTAT

ST - Clearing and Forwarding Service - Taxing provision should be considered strictly without leaving any intendment - It is inconceivable how an activity not being covered by the fold of law shall be taxable beyond its mandate - When law prescribed certain activity shall only be taxable on occurrence of taxable event, without any evidence to that effect, there is no presumption in taxation - liaisoning is not be covered by the definition of clearing and forwarding service - appeal allowed with consequential relief: CESTAT [para 7, 8] - Appeal allowed : MUMBAI CESTAT

ST - Assessee entered into an agreement with M/s. Geojit BNP Paribas Financial Services Ltd. and M/s. Geojit Comtrade Ltd. to act as an intermediary between these principals and individual investors - In case of investors who are not directly registered on trading platform offered by principals, business associates, such as assessee who are located at different places, offer the facility of placing buy or sell orders which are executed on platform installed at the premises of business associate - Impugned orders rejected the contention of assessee that service provided on electronic platform and other related services provided by stock and commodities and corresponding clearing and settlement organizations are not liable to tax under Business Auxiliary Service in accordance with CBEC Circular dated 18.5.2007 - Commissioner (A) has given reasons based on the facts and the law on the point by observing that the demand to the extent of receipts from M/s. Geojit BNP Paribas Financial Services has to be set aside as their services does not fall with the meaning of Section 65(19)(ii) of the Finance Act, 1994 and hence not taxable under Section 65(105)(zzb) of the said Act - No infirmity found in impugned order, same is upheld: CESTAT - Appeal dismissed : BANGALORE CESTAT

ST - Assessee was availing services of UK based service providers - The only point of contest is that service provider in UK is having a permanent establishment in India and as such, assessee is not covered by Section 66 A of FA, 1994 - The dispute is relating to their liability to pay service tax on reverse charge basis in terms of Section 66 A for the services availed by them from foreign companies under category of "Banking and Other Finance Services" - On a clear fact that assessee received service provided by a legal entity separately recognized and established in a foreign country, this is a case covered under Section 66 A - Accordingly, assessee is liable to pay service tax on reverse charge basis w.e.f. 18.04.2006.

Assessee contested the demand on limitation as well as for imposition of penalty - Their claim is that they have discharged the consideration for receipt of service, which includes service tax elements - This is not evidenced by any documentary support placed before Tribunal - In any case, assessee having received service from foreign entity and having been aware of provision of Section 66 A, should have examined the tax liability for due discharge - As such, no reason found to interfere with findings of Original Authority with reference to limitation - However, provision of Section 80 can be invoked for waiver of penalty as assessee have been pleading regarding payment of consideration through Indian affiliates of service provider situated in UK: CESTAT - Appeal partly allowed : DELHI CESTAT

CENTRAL EXCISE SECTION

2018-TIOL-118-CESTAT-MUM

Asian Colour Coated Ispat Ltd Vs CCE

CX - Appellants have used the steel items on which credit has been availed as supporting structure for the capital goods – Credit denied by lower authorities, hence appeal. Held: On this very issue, the Apex Court in the case of Saraswati Sugar Mills 2011-TIOL-73-SC-CX has held that items used for fabrication of supporting structure cannot be allowed - Moreover with effect from 07.07.2009 the definition of input appearing in Rule 2(k) of the CCR, 2004 has been amended and it specifically excludes cement, angles, channels, Centrally Twisted Deform bar (CTD) or Thermo Mechanically Treated bar (TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods from the ambit of definition of inputs – in these circumstances, no merit in appeal, hence same is dismissed: CESTAT [para 5, 6] - Appeal dismissed : MUMBAI CESTAT

2018-TIOL-117-CESTAT-BANG

Beml Ltd Vs CCE, ST & C

CX - Assessee engaged in manufacture of excisable goods and availing of facility of CENVAT credit of CX duty/ST paid on inputs, capital goods and input services used in manufacture of their final productions under provisions of CCR, 2004 - In course of audit, for year 2010-11, it was observed that there was a shortage of inventory of inputs reported during year end stock taking - Assessee was asked to reverse the CENVAT credit taken on those inputs as the same has not been used by them in manufacture of their dutiable products - Commissioner (A) in impugned order has observed that the assessee has not produced documents explaining the shortages in inputs - He has further observed that on verification of appeal papers, he found that the physical verification report claimed to have been enclosed as Annexure 4 are not forthcoming - None of the Annexure 1 - 4 claimed to have been enclosed to their appeal memo is found to be enclosed and therefore, Commissioner observed that their claim of having reconciled their account and having made the good the impugned shortage is unsubstantiated in the absence of any relevant supporting evidence - Though assessee had filed all these documents before this Court but the same were not considered by Commissioner (A) because he did not find the same in the appeal paper-book - Case remanded to original authority with a direction to pass a de novo order after considering the documentary evidence produced by assessee explaining the reasons for shortage of inputs: CESTAT - Matter remanded : BANGALORE CESTAT

2018-TIOL-116-CESTAT-BANG

Cargill India Private Ltd Vs CCE, C & ST

CX - Assessee engaged in manufacture of Food Flavours - During course of audit, it was noticed that assessee have availed CENVAT Credit of service tax paid in respect of courier, housekeeping, rent and maintenance services - It appeared that assessee's Head Office has taken centralized service tax registration for payment of service tax and also taken registration as Input Service Distributor (ISD) and passed on the service tax credit taken in respect of courier services rendered at assessee's premises who availed credit based on ISD invoices for services rendered at Eco Space Campus - Lower authority has confirmed demanded irregular CENVAT credit availed under Rule 14 of CCR read with Section 11A of Act along with the interest under Section 11AA on the said amount and also imposed penalty under Rule 15(1) of the CCR - There is nothing wrong in distributing the credit through ISD invoices; simply on the ground that the services have been received at the R & D Centre instead of factory - This issue has been covered in assessee's own case in the Final Order dated 23.1.2014 - Further, the courier service and housekeeping service have been held to be input service in view of decision in Wabco TVS (India) Ltd. - Therefore, impugned order is not sustainable: CESTAT - Appeals allowed : BANGALORE CESTAT

2018-TIOL-115-CESTAT-MAD

Chennai Bottling Company Pvt Ltd Vs CCE

CX - Assessee is a job worker for M/s. Hindustan Coco Cola Beverages Pvt. Ltd. (HCCB) during the period under dispute and were manufacturing and clearing 'Pre-Mix and Post-Mix' syrup - They were using the materials supplied by HCCB and clearing the products on payment of appropriate duty - During the period April 1999 to April 2000, department entertained the view that assessee was not adding 'Machine Rental Charges' to assessable value as the same was additional consideration for the supply of pre-mix and post mix syrup canisters by HCCB to their customers - The issue regarding valuation of goods manufactured on job work basis is no more res integra and the law has been well settled in this regard by Apex Court in case of Ujjagar Prints 2002-TIOL-02-SC-CX-CB - Adjudicating authority has rightly dropped the allegation in this regard and interference by Commissioner (A) by placing reliance on Notfn 27/92 is misconceived - The issue whether the Machine Rental Charges are includible in assessable value is also settled by the judgment in case of Pepsico India Holding Ltd. 2004-TIOL-01-CESTAT-DEL which was upheld by Supreme Court vide judgment reported in 2009-TIOL-20-SC-CX wherein it has been categorically held that the charges are not includible in assessable value - Demand confirmed by Commissioner (A) is not justified and the same is set aside: CESTAT - Appeal allowed : CHENNAI CESTAT

2018-TIOL-114-CESTAT-BANG

Cnc Automotive Vs CCE

CX - Assessee engaged in manufacture of Roller Tappet Body and Pump Barrel and also supplying pump barrel to M/s. Bosch who placed an order on assessee to manufacture a tool for R.12 lakhs which the assessee manufactured and amortised at the cost of Rs.60 per piece and added it to the value of pump barrel and discharged the duty thereon as the tool was retained by them and used in the manufacture of pump barrel supplied to M/s.Bosch - Notwithstanding the amortisation while paying duty for the month of September, 2008, the assessee has erroneously added the tool cost of Rs.12 lakhs to the value of the clearances for the month of September, 2008 and paid amount also which was not required - Assessee filed the refund claim of duty erroneously paid - Original authority while holding that assessee is eligible for refund has observed that the assessee has wrongly paid this duty by oversight by including the value of aforesaid tool cost while debiting the duty for the month of September 2008 - The original authority has also got it verified from the jurisdictional Range Officer and confirmed the same and thereafter sanctioned the refund by way of recredit in CENVAT credit account - Whereas the Commissioner (A) in the appeal has totally misconstruing the facts and has raised the issue which was not before the adjudicating authority as there is no dispute with regard to amortisation of the tool cost - Therefore, impugned order is not sustainable in law and same is set aside: CESTAT - Appeal allowed : BANGALORE CESTAT

2018-TIOL-113-CESTAT-DEL

Kaipan Pan Masala Pvt Ltd Vs CCE

CX - Appellants, engaged in the manufacture of Pan Masala & Gutkha, on an apprehension that the Government of Madhya Pradesh is going to ban the said products, applied to the department for sealing their machines on 28.3.2012 - on 31.3.2012, the departmental officers were prevented from sealing the machines on the ground that the notification from the State Government is yet to come - in the late hours of 31.3.2012, the appellant received the copy of order banning the said products - since the next two days were Saturday and Sunday, they gave the letter to the department only on 3.2.2012 for sealing the machines, which were duly sealed - department demanded duty for 1 st , 2 nd and 3 rd April, 2012 - appeal to CESTAT.

HELD: It is a mystery that at midnight wherefrom the order of the State Government banning the said products has come into the possession of the appellants - appellants were covered by the compounded levy of duty under section 3A of the CEA in terms of which duty is required to be paid on the basis of number of packing machines installed in the factory - actual production is not necessary - for the period prior to sealing the machines, the duty is leviable - hence, no reason found to interfere with the impugned order and the same is hereby upheld along with the reasons mentioned therein - appeal dismissed : CESTAT [para 6, 7, 8] - Appeal dismissed : DELHI CESTAT

CUSTOMS SECTION

2018-TIOL-53-HC-MUM-CUS + Story

CC Vs S S Offshore Pvt Ltd

Cus - Order/decision given for provisional release would be in the nature of quasi judicial decision/order - Letter communicating the decision of the Commissioner of Customs allowing provisional release u/s 110A of the Customs Act, of the imported vessel, is a decision taken by the adjudicating authority and is appealable to the Tribunal under Section 129(1)(a) of the Act – Revenue appeal dismissed: High Court [para 15 to 19, 21] - Appeal dismissed : BOMBAY HIGH COURT

2018-TIOL-129-CESTAT-MUM + Story

Sanjeevan Medical Foundation Vs CC

Cus - Defiance of the orders of the Tribunal by the field formation in West Zone - total disregard to the order of the Tribunal and obstruction to the process of justice - Member (Customs) requested to issue appropriate direction to the field to co-operate with the office of the Commissioner (AR) for reduction of dispute – Matter posted for hearing on 17.01.2018: CESTAT [para 3, 4] - Matter posted : MUMBAI CESTAT

2018-TIOL-112-CESTAT-DEL

Delphi Automotive Systems Pvt Ltd Vs CC

Cus - SCN was issued to the assessee-company herein by the Commr. of Customs - On adjudication, duty demand was raised with interest & penalty being imposed - The validity of such SCN is under challenge -

Held - The issue of jurisdiction of Customs officers to act as 'proper officers' for demand proceedings was raised in the decision of Delhi High Court in Mangli Implex vs. Union of India - In similar such cases, various Benches of the Tribunalhave set aside impugned orders and remanded the matter to the original authority for deciding the issue of jurisdiction - Thereafter the cases were to be decided on merits, upon pronouncement of judgment in Mangli Impex by the Apex Court - Hence, impugned order set aside & matter remanded to original authority for deciding the issue involved in the present appeals: CESTAT (Para 2,4,5) - Case Remanded : DELHI CESTAT

2018-TIOL-111-CESTAT-DEL

Honda Cars India Ltd Vs CC

Cus - Assessee have imported goods against FPS licence under relevant customs notification - The goods were assessed as they have satisfied the conditions of notification at the time of importation - Subsequent investigations revealed that the licence was obtained by M/s Krishnav Enterprises by submitting manipulated/ forged document - The Revenue seeks to recover the duty forgone from assessee on the ground that licence was obtained by fraudulent means and no benefit can accrue on such licence - Similar dispute came before the Tribunal/High Courts and Apex court in cases namely Deep Exports 2016-TIOL-1366-CESTAT-DEL , Pee Jay International 2016-TIOL-2136-HC-P&H-CUS, Taparia Overseas (P) Ltd. 2003-TIOL-144-HC-MUM-CUS and East India Commercial Co. Ltd. 2002-TIOL-138-SC-LMT-CB - It is pertinent to note that assessee in a further written submission, categorically asserted that FPS licence now in dispute is still valid and alive as per the official website of Licencing Authority, DGFT, New Delhi - As such, no duty demand can be made on such import made on the basis of valid and subsisting licence at the relevant time - Accordingly, impugned order for demanding customs duty and imposing penalty on assessee is not sustainable: CESTAT - Appeal allowed : DELHI CESTAT