2018-TIOL-NEWS-019 Part 2, Dated: Monday, January 22, 2018

ST - Assessee have delayed discharge of service tax liability in spite of having collected the same from their clients - However, entire proceedings had been initiated after discharge of entire tax liability, albeit belated, and SCN only proposes demand of interest on such belated payments - Assessee is a charitable organization and not in the business - They definitely should not be equated with a manufacturing set up or service provider focused on profit making - Tribunal found the reasons put forth for delay in payment as reasonable and convincing - There is no allegation of suppression of facts with intent to evade payment of tax liability nor is there a proposal in SCN to impose penalty under section 78 of FA, 1994 - In circumstances, there was a reasonable cause for failure on the part of assessee to have discharged tax liability in time and instead pay up the same with delay - Viewed in this light, provisions of section 80 ibid, as it was in force during the relevant period, can be invoked in their case and accordingly, there is a case for complete waiver of penalty imposed under section 76 ibid - Accordingly, the penalty imposed under section 76 ibid is set aside: CESTAT - Appeal allowed : CHENNAI CESTAT

ST - the assessee-company sought refund of service tax paid on Port Service, Technical Testing Inspection & Certification Service and Customs House Agent Service used for export of goods - An amount of refund was sanctioned by the Adjudicating Authority - Later, the Commr.(A) scrapped such order & denied refund - Duty demand was raised with interest -

Held - The Commr.(A) denied refund for non-submission of requisite documents & that there was nothing on record to show that the Adjudicating authority examined any such documents - However, the Adjudication order mentions submission of documents by the assessee, on examination of which, the Adjudicating authority had allowed the refund after slight modification - Hence the O-i-A is contrary to records, and so unsustainable: CESTAT (Para 3,4,5) - Appeal Allowed : KOLKATA CESTAT

2018-TIOL-283-CESTAT-MUM

Asian Pre-Lam Industries Pvt Ltd Vs CCE

CX - CENVAT – Provisions of Rule 6(3) of CCR, 2004 specifically indicate that an assessee, if he is opting not to maintain separate account shall follow the options given under the said sub-rule - In the case in hand, the appellant had exercised their option of not maintaining separate account and followed the option of payment of an amount as determined under sub-rule (3A) - said sub-rule (3A) specifically lays down the procedure that needs to be followed by the assessee and one of the main requirement is in clause (a) wherein an option needs to be exercised by the manufacturer/assessee - appellant herein had exercised this option on 7th October 2013 itself - It is the case of the Revenue that the appellant has to exercise this option every year and since not having done the same, both the lower authorities have come to a conclusion that appellant are not eligible to reverse the amount proportionately attributable to the exempted service (trading activities) - On careful perusal of the provisions of Rule 6(3A) of the said Rules, Bench does not find any requirement of filing of an intimation every year -Both the lower authorities have misdirected their own findings stating that an assessee is required to file an intimation every year – on this ground itself, proceedings need to be set aside –Furthermore, both the lower authorities have not disputed the calculation done by the appellant and indicated in their monthly returns - Having not disputed the said calculation and there being no contest to such reversal undertaken by the appellant confirming the demand of an amount of equivalent to 6% of the value of the trading activity only on the ground that the appellant has not filed the intimation every year seems to be not in consonance with the law – impugned order is set aside and the appeal is allowed with consequential relief: CESTAT [para 5.1, 6] - Appeal allowed : MUMBAI CESTAT

2018-TIOL-282-CESTAT-MUM

Brassica Pharma Pvt Ltd Vs CCE

CX - CENVAT - Appellant, a job worker, was receiving materials as imported by Ajanta Pharma Ltd. - duty liability was debited under the target plus scheme by Ajanta Pharma Ltd. by availing the benefit of Notification No.73/2006-Cus. - Lower authorities objected to such availment of cenvat credit on the ground that the Bills of Entry do not indicate the appellants name as an importer or delivered to them and under Target Plus scheme, the goods could not have been transferred or sold by the said Ajanta Pharma Ltd. to the appellant and hence cenvat credit availed is ineligible - appeal to CESTAT.

Held: Notification 73/2006-Cusnowhere states that in respect of the inputs which are dispatched for manufacturing by the importer to their job workers, cenvat credit needs to be denied - It is undisputed that the appellant is a job worker of Ajanta Pharma Ltd. and inputs which were imported under target plus scheme by filing different Bills of Entry were received and consumed by the appellant for manufacturing of final products which were subsequently transferred to Ajanta Pharma Ltd. who then exported the same as well as cleared the same for home consumption - There is no dispute that the inputs which were imported by Ajanta Pharma Ltd. under Target Plus scheme were sent for conversion to the appellant as a job worker and were not transferred or sold to the appellant - In this factual matrix, denial of cenvat credit to the appellant seems to be incorrect - Revenue has also not filed any appeal on that part of the impugned order wherein the first appellate authority has allowed cenvat credit holding that the name of the appellant need not be mentioned on the Bill of Entry - impugned order is unsustainable, hence set aside and appeal is allowed: CESTAT [para 4, 7, 8] - Appeal allowed : MUMBAI CESTAT

2018-TIOL-281-CESTAT-MUM

Ciron Drugs And Pharmaceuticals Pvt Ltd Vs CCE

CX - Appellant submitting that demand of interest and penalty has been made without raising any demand of duty u/s 11A of the CEA, 1944.

Held: No demand of interest and imposition of penalty can be made unless there is a determination of duty under Section 11A of the Central Excise Act - Since in the instant case, there is no demand of duty and determination under Section 11A of the Central Excise Act, demand of interest and penalty cannot sustain – Appeal is consequently allowed: CESTAT [para 5] - Appeal allowed : MUMBAI CESTAT

CUSTOMS SECTION

NOTIFICATION

cnt08_2018

CBEC modifies Drawback rates several items in several Chapters

CASE LAWS

2018-TIOL-278-CESTAT-AHM

H V Ceramics Vs CC

Cus - Assessee is in appeal against impugned order, wherein the refund claim has been rejected as time barred - An investigation was conducted and during course of investigation, assessee paid a sum as anti-dumping duty - Later on, SCN was issued and was adjudicated confirming duty liability on assessee and co-noticees jointly and severally - The matter was travelled up to this Tribunal and Tribunal dropped the charges alleged in SCN - Thereafter, assessee filed refund claim which was rejected holding that refund claim is barred by limitation, as prescribed under Section 11 B of the Act - As per CBEC Circular No. 802/35/2004-CX , Revenue is duty bound to refund the amount paid as duty during course of investigation within three months from the date of order passed by appellate Tribunal, unless and until there is a stay against the order of Tribunal - As Revenue has failed to discharge the duty, therefore, refund claim cannot be held as time barred: CESTAT - Appeal allowed : AHMEDABADI CESTAT

2018-TIOL-127-HC-MUM-CUS

Unik Traders Vs UoI

Cus - By this petition under Article 226 of Constitution of India, petitioner has challenged a memo styled as Seizure Memorandum dated 31st October 2017 and provisional release order dated 3rd November 2017 - Investigations are in relation to certain consignments which have been dubbed to be not of Sri Lankan origin - The power of investigation and the power to seize goods upon such investigation and further power to issue a seizure memo is not at all questioned - The limited argument is that presently there are documents certifying the goods or the consignments to be of Sri Lankan origin and there is no reason to question the genuineness and authenticity thereof on some preliminary investigation - The goods obviously are lying in port and incurring and inviting several charges, including detention charges as complained - The investigations are going to take some more time as is revealed in affidavit because the investigating machinery under the Customs Act would have to route its request to conduct and complete proper investigation through several Ministries of Government of India and which would then authorise the officials either to visit Sri Lanka or to summon more material or documents from Sri Lanka and Indonesia - No useful purpose will be served by allowing the goods to be detained and when samples have already been drawn - On the petitioner executing a bond equal to 150% of value of goods and furnishing a bank guarantee in sum of Rs.1.20 crores both within a period of two weeks, competent authority shall pass an order on the pending application seeking a detention certificate and release the goods in favour of petitioner - The bank guarantee shall be kept alive till final orders of Competent Authority: HC - Assessee's appeal allowed : BOMBAY HIGH COURT