Hermes Academy Of Training Ltd Vs CCE

ST - the assessee provides services falling under "Commercial Coaching and Training Services" & pay service tax on the same - The assessee entered into sub-contracts with a foreign entity for training its personnel abroad - This service was further sub-contracted to another firm, due to assessee's lack of enough personnel - The assessee received the consideration and paid a portion of it to its sub-contractor - The sub-contractor paid service tax on the consideration received & the assessee availed Cenvat credit in Cenvat a/c - The assessee then claimed refund of such credit - The Revenue opined that the assessee was ineligible to avail since it was not directly involved in providing the service - The Commr.(A) denied the assessee's claims -

Held - The counsel for the assessee claimed that the services agreed to be provided to foreign personnel, and further handed over as sub-contract for completion, were covered under the definition of Declared Services - Further, the counsel claimed that such service being exported, was not taxable - Thereupon, the assessee claimed to be eligible for refund under Rule 5 of CCR,2004, as long as the same cannot be utilized on account of export of services - However, the assessee claimed to have not raised these issues before the lower authorities - Hence in light of the same, the matter merits fresh adjudication: CESTAT (Para 2-6) - Case Remanded: CHENNAI CESTAT

2018-TIOL-378-CESTAT-DEL

Religare Enterprises Ltd Vs CST

ST - Dispute relates to tax liability of assessee on the consideration paid as reimbursement charges to joint venture partner (AEGON) for providing Bank guarantee for capital protection in terms of J.V. Agreement - The joint- venture agreement originally entered into between AEGON and Ranbaxy provides for capital protection - Assessee later substituted Ranbaxy - The guarantee has to be provided by AEGON, Netherlands - They have provided said capital protection by way of LC of ABN Amro Bank - In terms of same J.V. Agreement, assessee has to reimburse the cost incurred for such LC - Both AEGON and assessee jointly promoted their new business and in pursuance of such intention made the capital protection arrangement and the payments are towards such arrangements - There is no third party involved and there is no relationship of service provider and service recipient, as the activity is for joint benefit of parties in joint-venture - In effect, admittedly, these are part of shared responsibilities - In pursuance of such a joint-venture, no scope of tax liability found in such arrangement: CESTAT - Appeal allowed: DELHI CESTAT

 

 

CENTRAL EXCISE SECTION

2018-TIOL-179-HC-AHM-CX

Garden Silk Mills Ltd Vs UoI

CX - Jurisdiction - In context of territorial jurisdiction, it is undisputed that manufacturing unit of petitioner is situated at Surat - The duty of excise was paid at the time of clearance of goods - The rebate claim is relatable to such duty of excise so paid by petitioner - Substantial cause of action therefore, has arisen within the territorial jurisdiction of this Court - It was only on account of departmental instructions that rebate claims are to be filed before designated Maritime Commissioner - This by itself would not mean that this Court cannot entertain the petition.

On merits - Petitioner had paid excise duty on CIF value of goods exported and does not dispute the stand of Government of India that excise duty was payable on FOB vale and not on CIF value - The Government of India also does not dispute the petitioner's stand that in such a case the additional amount paid by petitioner would be in nature of deposit with Government which the Government cannot withhold without the authority of law - If these facts are established, a simple corollary thereof would be that the the amount has to be returned to petitioner - If therefore, petitioner's request was for re- credit of such amount in Cenvat account, same was perfectly legitimate - Government of India should not have asked the petitioner to file separate applications for such purpose - Revenue is directed to recredit the excess amount paid by petitioner categorising as excise duty of CIF value of goods to Cenvat credit account: HC - Petition allowed : GUJARAT HIGH COURT

2018-TIOL-386-CESTAT-MUM + Story

Ahsan Metal Industries Vs CCE

CX - Notfn. 1/93-CE - Value of intermediate goods used for the manufacture of final products cannot be considered for the purposes of computing aggregate value of clearances under the SSI notification - Matter remanded - original authority directed to decide the matter within a period of three months' as the matter was too old: CESTAT [para 4 to 6] - Matter remanded: MUMBAI CESTAT

2018-TIOL-385-CESTAT-DEL

Him Teknoforge Ltd Vs CCE

CX - the assessee-company manufactures forgings of steel & availed Cenvat credit of Excise duty paid on input goods & services & capital goods - The assessee availed such credit to pay duty on clearance of final product from factory - During the period of dispute, the assessee removed the finished goods on payment of Excise duty from the Cenvat a/c - Such goods removed from the factory were returned back by the buyers - On receipt of those goods in the factory premises, the assessee availed credit of Excise duty reflected in the invoice received along with the goods - The Department claimed that the assessee was liable to reverse the credit availed on the goods so returned - Duty demand was raised and interest with equivalent penalty was imposed - The Commr.(A) upheld such demands -

Held - The Commr.(A) noted that the assessee did not produce any evidence to show what specific manufacturing activities were undertaken by it on the goods received from the buyers - Since such onus lies on the assessee, the assessee's plea that goods were removed as such, cannot be accepted - However, the assessee has adequate material to demonstrate that the goods received from the buyer were further processed in its factory and thereafter, were sold to the buyers - Hence matter merits fresh verification of such fact: CESTAT (Para 2,6) - Case Remanded: DELHI CESTAT

2018-TIOL-384-CESTAT-DEL

JV Industries Pvt Ltd Vs CCE

2018-TIOL-383-CESTAT-BANG

Shanthakamal Engineering Industries Pvt Ltd Vs CCE, C & ST

CX - Assessee engaged in manufacture and clearance of excisable goods viz. LPG tankers - It was noticed that during years 2002-03 & 2003-04, assessee have manufactured and cleared excisable goods in excess of full exemption limit in respect of which no duty of excise has been levied/paid - It was also observed that while opting out of cenvat scheme at the end of financial year 2005-06 in favour of full exemption from payment of Central Excise Duty in terms of Notfn 8/2003 CE as amended from 01.04.06, assessee have not reversed the cenvat credit present in the stock of inputs lying as such, those available in semi finished goods and those present in stock of finished goods as required in terms of Rule 11 (2) of CCR, 2004 - On these allegations, a SCN was issued to assessee and its Managing Director - It is an admitted fact that duty was paid along with interest before issue of SCN - An amount of Rs. 1,28,928/- was received from customer but the same was not paid and subsequently paid - Further, proportionate cevnat credit on stock of inputs, semi finished goods and finished goods was also paid after being pointed out by Department - In view of these facts, no infirmity found in impugned order - Imposition of penalty under Section 11AC of the Act is not legal and proper and the actual duty liability under Section 11A of the Act comes to Rs. 5,70,113/- and not Rs. 6,99,041/- because the amount of Rs. 1,28,928/- was not duty assessed under Section 11A but the amount liable to be collected under Section 11D of the Act - In view of this legal position, penalty reduced to Rs. 5,70,113/- - As far as penalty on Managing Director is concerned, since equal penalty has been imposed on assessee-company, therefore penalty imposed on Managing Director dropped: CESTAT - Appeals partly allowed: BANGALORE CESTAT

2018-TIOL-382-CESTAT-ALL

Honda Siel Power Products Ltd Vs CC, CE & ST

CX - A SCN was issued to assessee on the ground that assessee have availed Cenvat credit on Capital Goods- Electric Generating Set of duty paid under protest on the strength of supplementary invoice issued by supplier- M/s Quippo Energy Pvt. Ltd. in respect of goods removed earlier without payment of duty and without having registered themselves with Department - During course of audit, it was observed that assessee was engaged also in trading activity of items - The audit party observed that assessee is availing Cenvat credit of common input services such as advertising, security and business exhibition in respect of which no separate account is maintained - It has not been disputed that assessee had sufficient balance in their Cenvat register, which amount was subsequently reversed, on being objected by audit - Further it has been provided by way of amendment vide Notfn 18/2012-CE(NT) that no interest is chargeable upon subsequent reversal of credit, if assessee is able to demonstrate that they had not utilized the credit - The period of dispute in present appeals is 2011-12 and 2012-13 - Accordingly, under the provisions of amended Rule 14 of CCR, 2014, same shall have retrospective effect and under the admitted fact that they have not applied the credit and they are not liable to pay interest - So far the other issue of Cenvat credit on Electric Generating Set is concerned, there is no stay granted by Gujarat High Court against the order of Tribunal - In this view of matter, no merits found in appeal of revenue: CESTAT - Assessee's appeal allowed: ALLAHABAD CESTAT

2018-TIOL-381-CESTAT-AHM

Indian Oil Corporation Ltd Vs CCE & ST

CX - Dismantling of existing pipes and tubes, chemical vessels, relating to chemical equipments and tanks installed in assessee's Oil Refinery, due to passage of time becomes unusable and needs repairs/replacement - He submits that such services fall within the scope of 'input services' in view of judgement of Tribunal in case of Hindustan Zinc Ltd. hence, admissible to credit - Cleaning Services & House Keeping Services are utilized as statutory obligations for maintenance of factory premises in accordance with provisions of Factories Act, 1948 and rules made thereunder, hence, admissible to credit - Gardening and Designing Work services under Horticulture Service pertain to maintenance of garden/plantation so as to create and maintain green belt within factory premises, in accordance within the environmental law, is input service - Assessee fairly admits that gardening work carried out at township, creation and maintenance of nursery and children play area in township are not admissible services - Also, they had disputed the amount of credit shown against these services in annexure as 8,48,048/- which according to his contention should be Rs. 79,192/- - Since, major portion of demand are decided in favour of assessee, therefore, no justification found for imposition of penalty for credit availed in relation to Maintenance of Gardening and Construction of Work in township which has been accepted by assessee to be payable, and interest is also required to be paid on said inadmissible credit: CESTAT - Appeal partly allowed: AHMEDABAD CESTAT

2018-TIOL-379-CESTAT-ALL

Rimjhim Stainless Ltd Vs CCE & ST

CX - Assessee having two units are manufacturers of Tower structure for transmission line used in projects of Central Government/State Governments - Their main inputs are M.S. Angles, Rounds Bars, Channels and Plates - During inspection, some discrepancies found - As regards to Credit of Rs.3,00,649/- taken on invoices on which proper address was not found, admittedly there is only clerical error in invoice(s) - Assessee had two units in same industrial area, only difference name - "Structure Division", by the same management - Further admitted facts are that goods were found properly accounted in proper records as required and no discrepancies were found with regard, and used in manufacture of finished goods, cleared by assessee on duty payment - Accordingly, amount of Rs.3,00,649/- to be allowed as Cenvat credit.

So far the next amount of Rs.1,42,839/- taken on CC Billets is concerned, Commissioner (A) erred in observing that reversal is without protest - As assessee have not accepted objection of Revenue and have also been contesting the matter in appeal - Thus, the reversal of credit ipso facto is not admission - Accordingly, there is no ostensible reason of disallowance of amount of Rs.1,42,839/- being Cenvat credit taken of Billets - Credit on Billets is thus fully allowed.

So far the issue of Rs.26,803/- duty levied on removal of scrap is concerned, cogent explanation was given by assessee, not found untrue - Thus demands have been confirmed only on presumptions - Accordingly, duty demand of Rs.26,803/- is deleted.

Demand of duty of Rs.1,81,002/- on stock inputs, found short at the time of physical verification - Admittedly there is no calculation sheet annexed to Panchnama, neither any such calculation is referred in SCN - Thus, demand is by way of presumption which is not tenable - Accordingly, demand of duty amounting to Rs.1,81,002/-is also set aside - The appeal succeeds on all the grounds, thus, the impugned order is set aside: CESTAT - Appeals allowed: ALLAHABAD CESTAT

2018-TIOL-379-CESTAT-ALL

Rimjhim Stainless Ltd Vs CCE & ST

CX - Assessee having two units are manufacturers of Tower structure for transmission line used in projects of Central Government/State Governments - Their main inputs are M.S. Angles, Rounds Bars, Channels and Plates - During inspection, some discrepancies found - As regards to Credit of Rs.3,00,649/- taken on invoices on which proper address was not found, admittedly there is only clerical error in invoice(s) - Assessee had two units in same industrial area, only difference name - "Structure Division", by the same management - Further admitted facts are that goods were found properly accounted in proper records as required and no discrepancies were found with regard, and used in manufacture of finished goods, cleared by assessee on duty payment - Accordingly, amount of Rs.3,00,649/- to be allowed as Cenvat credit.

So far the next amount of Rs.1,42,839/- taken on CC Billets is concerned, Commissioner (A) erred in observing that reversal is without protest - As assessee have not accepted objection of Revenue and have also been contesting the matter in appeal - Thus, the reversal of credit ipso facto is not admission - Accordingly, there is no ostensible reason of disallowance of amount of Rs.1,42,839/- being Cenvat credit taken of Billets - Credit on Billets is thus fully allowed.

So far the issue of Rs.26,803/- duty levied on removal of scrap is concerned, cogent explanation was given by assessee, not found untrue - Thus demands have been confirmed only on presumptions - Accordingly, duty demand of Rs.26,803/- is deleted.

Demand of duty of Rs.1,81,002/- on stock inputs, found short at the time of physical verification - Admittedly there is no calculation sheet annexed to Panchnama, neither any such calculation is referred in SCN - Thus, demand is by way of presumption which is not tenable - Accordingly, demand of duty amounting to Rs.1,81,002/-is also set aside - The appeal succeeds on all the grounds, thus, the impugned order is set aside: CESTAT - Appeals allowed: ALLAHABAD CESTAT

 

 

CUSTOMS SECTION

2018-TIOL-180-HC-AHM-CUS

PA International Vs UoI

Cus - The petitioner have challenged an O-I-O and case of petitioners is that there was serious breach of natural justice in conducting proceedings due to which the petitioners should not be relegated to appeal route - In particular, petitioners point out that in previous round of litigation, Tribunal had given certain directions to departmental authorities to bring relevant documents on record and to proceed further - While passing fresh order, adjudicating authority committed two errors - Firstly, it recorded that petitioners had not brought such documents on record which was not the duty of petitioners to do and secondly, even proper hearing was not granted - If the case of petitioners is that they are in possession of copies of any of the additional documents, though the department contends that the same are not available, it would be open for the petitioners to produce the same before the adjudicating authority - In any case, order in original must go paving way for fresh adjudication: HC - Petition disposed of : GUJARAT HIGH COURT

2018-TIOL-377-CESTAT-DEL

Jagatjit Industries Ltd Vs CC

Cus - the assessee imported some goods and warehoused the same in public bonded warehouse, u/s 60 of the Act - On expiry of warehousing period, the goods were not cleared by the assessee - The assessee also did not seek extension of warehousing period - The Revenue ordered confiscation of the goods, imposed redemption fine & penalty - Such order was upheld by the Commr.(A) -

Held - Considering the facts, such goods would be deemed as goods improperly removed u/s 72(1)(b) of the Act - Hence goods liable for confiscation u/s 111(d) of Act - Nonetheless, the redemption fine & penalty warrant reduction, since they are on the higher side - However duty demand with interest upheld: CESTAT (Para 1,5) - Appeal Partly Allowed: DELHI CESTAT

2018-TIOL-376-CESTAT-CHD

Ligare Aviation Ltd Vs CC

Cus - At the time of initial import, two Aircrafts were cleared for home consumption by filing bill of entry under Section 46 of Customs Act - Subsequently, the aircrafts left the country without filing shipping bills under Section 50 of Customs Act - They went to Colombo to be handed over to M/s. INV-2R Leasing Company Limited as per Sale and Purchase Agreement - Later, both aircrafts were brought back into India without filing necessary bills of entry, under Section 46 of the Act - Department has alleged that export of aircrafts was in contravention of Section 50 of Customs Act, 1962 and, that their import being fresh import, assessee violated Section 46(1) of Customs Act, 1962 - Assessee had initially imported 7 aircrafts - In similar set of facts in respect of five other aircrafts of assessee, same issues arose and in separate adjudication orders dated 15.02.2017 and 13.07.2017, two different Principal Commissioners by relying on Tribunal judgment in Nobel Asset Company Limited 2006-TIOL-1482-CESTAT-MUM have taken a view that the aircrafts are not liable to confiscation under Section 111 or Section 113 of Customs Act and also not liable to pay import duty as and when they are brought back into India after making trips abroad and duty cannot be demanded on these aircrafts - Proceedings for demand and penalty were dropped in both the cases - Therefore, following the judgment of Tribunal in case of Noble Asset Company Limited and considering the fact that the Department itself has dropped similar proceedings in relation to five other aircrafts, order of Commissioner is not sustainable and the same is set aside: CESTAT - Appeal allowed: CHANDIGARH CESTAT