2018-TIOL-NEWS-008 Part 2, Dated: Tuesday, January 09, 2018

ST - Whether services of a club or association to its members is taxable – CESTAT while dismissing Revenue appeals held there were no operative legislative provisions of Act legitimizing levy and collection of ST from appellants, for providing "club or association" service, insofar as these relate to any services provided to members of these appellants – Appeal by Revenue before the Punjab & Haryana High Court was also dismissed on the ground of maintainability u/s 35G of the CEA, 1944 – Appeal to Supreme Court. Held: Delay condoned and leave granted – Appeal to be tagged with Civil Appeal no 7497 of 2012: Supreme Court - Appeal admitted - SUPREME COURT OF INDIA

ST - Appellant is engaged in construction of residential complex but no service tax was paid – SCN issued and seeks appropriation of tax and interest already deposited by appellant – demand confirmed with interest and imposition of penalty – appellant seeking waiver of penalty imposed by submitting that the constitutional validity of the levy was challenged and reliance is placed on the decision in S.P.Associates - 2016-TIOL-1196-CESTAT-MUM

Held: Bombay High Court in the case of Maharashtra Chamber of Housing Industry - 2012-TIOL-78-HC-MUM-ST has held the levy to be constitutional - following the same, held that appellant is liable to pay service tax along with interest – however, since the levy itself remained disputed and there was confusion regarding levy on the service of construction of residential complex, there was genuine reason for non-payment – case cannot be considered to be of deliberate non-payment of service tax – as service tax demand along with interest has been paid before issuance of SCN, same is upheld but penalty is set aside – Appeal partly allowed: CESTAT [para 5, 6] - Appeal partly allowed : MUMBAI CESTAT

ST - Assessee engaged in mining and production of coal and same was sold to M/s. Coal India Ltd. (CIL) at the prices which are notified from time to time by CIL - The price notification issued by CIL contained the prices of coal grade wise - In addition, the Circular also gave details of additional charges payable to supplier for providing special grades/sizes of coal and to provide additional services such as loading and transportation - In addition, the Circular also gave details of additional charges payable to supplier for providing special grades/sizes of coal and to provide additional services such as loading and transportation - Since this process does not amount to manufacture under Section 2(f) of CEA, 1944, the department took the view that such consideration received by assessee will be liable for payment of service tax under category of BAS as contained in Clause 105 (zzb) of Section 65 of FA, 1994 - An identical issue came before this Tribunal in case of M/s. Mahanadi Coal Fields Ltd. in which the appeal was dismissed by Tribunal - In view of same, impugned order is not sustainable and is set aside: CESTAT - Appeal allowed : KOLKATA CESTAT

CENTRAL EXCISE SECTION

2018-TIOL-06-SC-CX

CCE & ST Vs Transpek Industry Ltd

CX – Input Service – Rule 2(l) of CCR – Gujarat High Court while dismissing Revenue appeal held that the term 'input service' would mean any service used by the manufacturer directly or indirectly in or in relation to manufacture of final products and clearance of final product from the place of removal; that CENVAT credit is admissible on ‘Outdoor Catering Services' and ‘Rent-a-Cab services' – appeal to Supreme Court. Held: Leave granted and appeal tagged with Civil Appeal no. 10623 of 2013: Supreme Court - Appeal admitted - SUPREME COURT OF INDIA

2018-TIOL-04-SC-CX

CCE, C & ST Vs Gujarat Alkalies Chemicals Ltd

CX – CENVAT – Input Service – Rule 2(l) of CCR - ST – CESTAT allowed credit of tax paid on Outdoor Catering Service by relying on the Bombay High Court decision in Ultratech Cements Ltd - 2010-TIOL-745-HC-MUM-ST – Revenue appeal was dismissed by Gujarat High Court, therefore, appeal to Supreme Court of India. Held: Leave granted and appeal tagged with Civil Appeal no. 10623 of 2013 : Supreme Court - Appeal admitted - SUPREME COURT OF INDIA

2018-TIOL-124-CESTAT-DEL

Shree Prithvi Steel Rolling Mills Pvt Ltd Vs CCE

CX - Assessee is in appeal against impugned order confirming the demand of duty along with interest and imposition of penalty - During course of investigations in premises of assessee, certain shortages of finished goods as well as raw material was detected and it was also found that one invoice issued by M/s. Ganpati Enterprises vehicle number was not mentioned - Cenvat Credit sought to be denied to assessee on the ground that the vehicle number has not been mentioned on invoices - No investigation was conducted at the end of supplier of said goods - Merely vehicle number was not mentioned on invoices cannot be the reason to deny Cenvat Credit as per the decision in case of SRF Ltd. - Therefore, assessee is entitled to avail Cenvat Credit on invoice issued by M/s. Ganpati Enterprises - With regard to input received from registered dealer, no investigation was conducted with the registered dealer whether they have supplied goods or not - Merely on the ground that these inputs cannot be the inputs for manufacturing of final goods and the process is very costly for manufacturing final product cannot be the grounds to deny Cenvat Credit - In these terms, assessee has correctly availed Cenvat Credit on invoices issued by registered dealer - With regard to shortage of inputs as well as finished goods, no panchnama was drawn for verification of finished goods and it is not coming out from the impugned order whether stock verification was done physically or on sample basis - Further, shortage is negligible in quantity - Therefore, duty cannot be demanded on the mere shortage of inputs as well as of finished goods: CESTAT - Appeal allowed : DELHI CESTAT

2018-TIOL-123-CESTAT-BANG

Big Bags International Pvt Ltd Vs CCE

CX - the assessee-company removed dutiable goods to their own unit, on payment of duty under Rule 8 r/w Rule 9 of the Central Excise Valuation Rules 2010 - The Revenue alleged short-payment of duty, on which the assessee paid the balance amount - The Revenue claimed to have pointed out the same on audit, and so raised demand for interest & imposed penalty - The amount already paid was appropriated and & equivalent penalty imposed - The same was upheld by the Commr.(A) -

Held - The assessee claimed that the audit party unearthing undervaluation of finished goods from their own records, could not be tantamount to suppression of fact with intent to evade payment of duty - However, such contention hold no weight, because w.r.t. under-valuation, only the assessee would know the correct value to be applied while discharging tax liability - Considered relevant findings of the Commr.(A) in this regard - Therefore, the O-i-A merits being upheld: CESTAT (Para 3,7,9) - Appeals Dismissed : BANGALORE CESTAT

2018-TIOL-122-CESTAT-ALL

CC, CE & ST Vs Mohd Azmal Noorani

CX - Revenue is in appeal against common order wherein Commissioner (A) have held that demand raised jointly and severally is not tenable and is in the teeth of ruling of this Tribunal in ENAR Cements Private Ltd and have also been pleased to hold that the actual manufacturer in instant case are M/s Indian Chemicals, Naini and M/s Rahat Industries, therefore, duty if evaded, it should have been demanded from them instead of respondents herein who are partners in these firms - No attempt have been made to find out the actual manufacturer of goods seized on the date of search from residential premises - From the facts on record and findings of Adjudicating Authority, it is found that he have taken contrary stands - On one hand, the two firms have been deemed to be the manufacturers and the seized goods have been ordered to be released to them - Whereas duty have been demanded from individuals/respondents and also the firm Rahat Industries jointly and severally, which is against the very stand of Revenue that the respondent individuals form an 'Association of persons' - Two firms namely Indian Chemicals Industries and M/s Rahat Industries are the actual manufacturers instead of respondent individuals, who are admittedly partners either in both or one of these two firms - No reason have been assigned by Joint Commissioner for not treating these two firms to be manufacturer of goods found and seized on date of search - Allegation of clandestine removal is not established which is simply based on print outs from floppy disks, without there any further enquiry with respect to the transactions and persons involved in the transactions therein - Accordingly, no merit found in these appeals, same are dismissed: CESTAT - Appeals dismissed : ALLAHABAD CESTAT

CUSTOMS SECTION

DGFT PUBLIC NOTICE

dgft17pn051

Certificate of Origin of Goods for European Union Ceneralised System of Preferences (EU-GSP) - Modification of the system as of 1st January, 2017

dgft17pn050

Enlistment of Agricultural and Processed Food Products Export Development Authority's (APEDA)'s Regional Offices located in Mumbai, Hyderabad, Bangalore, Kolkata and Guwahati under Appendix 2E [List of Agencies Authorized to issue Certificate of Origin (Non-Preferential))

CASE LAWS

2018-TIOL-126-CESTAT-MUM

Dr Manu C Rajnani Vs CC

Cus - Valuation - Law is well settled that declared value if disturbed, burden of proof is on Revenue to prove its stand without valuing the import to value arbitrarily - That not being discharged by Revenue to disturb the declared value, appeal is allowed: CESTAT [para 5] - Appeal allowed : MUMBAI CESTAT

2018-TIOL-125-CESTAT-AHM

Shri Dinesh Mills Ltd Vs CC

Cus - Assessee filed a EDI Bill of entry and sought assessment without claiming the refund of exemption of Notfn 21/2012-CUS in respect of SAD - Said bill of entry was assessed applicable duty, as assessed also discharged subsequently, assessee preferred refund claim with lower authorities - Adjudicating authority granted the refund claim holding that assessee is eligible for exemption of Notfn 21/2012-Cus - Aggrieved by said order, Revenue preferred an appeal before first appellate authority - In impugned order, first appellate authority has come to a conclusion that assessee having not challenged the assessment and filed the refund claim is incorrect procedure, should have challenge the assessment and hence impugned order needs to be set-aside - Similar issue came up before Division Bench of Tribunal, recently in case of Steel Authority of India Ltd 2016-TIOL-735-CESTAT-MUM - The ratio as reproduced therein, facts of this case, would squarely apply, accordingly in respect of assessment in EDI system by filing of refund, is in itself seeking amendment of Bill of entry and benefits otherwise available should not be denied - Impugned order is set-aside: CESTAT- Appeal allowed : AHMEDABAD CESTAT