2018-TIOL-NEWS-041, Dated: Saturday, February 17, 2018

ST - the assessee herein is a merchant exporting iron ore, & filed refund claims under Notfn. No. 17/2009, which exempted certain services availed by exporters - The assessee claimed exemptions on technical testing and analyses service, port services, test inspection and certification service and transport of goods by road services - Such refund was sanctioned by the Adjudicating authority & the same was upheld by the Commr.(A) - Held - While the Revenue raised issue of jurisdiction, it has not specified the correct jurisdiction - Regarding transport service, this aspect was examined in detail by both authorities & records that the assessee transported the goods directly to the port through different modes of transport as per their convenience, and as such the refund claim was admissible - Regarding submission of documents and certain mis-match, the assessee submitted all the requisite documents - Besides, the Revenue did not bring out a specific case of any mis-match in the documents - None of the grounds have merit either factually or legally & the appeals seem to be filed mechanically - Hence dismissed: CESTAT (Para 1,4,6-9) - Appeals Dismissed: DELHI CESTAT

ST - Assessee engaged in providing software services - Dispute relates to service tax liability of assessee under category of BAS with reference to service rendered to one of their clients in USA - Assessee engaged various vendors as service providers, which facilitated them to provide onsite service to their clients based outside India - Vendors are located outside India - However, assessee, located in India, did benefit and consumed the services of vendors, which in turn helped them to provide services to clients based abroad - Same is covered under tax entry BAS - This is a reverse case of ratio laid down in Microsoft Corporation (I) Pvt. Ltd. 2014-TIOL-1964-CESTAT-DEL and Paul Merchants Limited and as affirmed by Delhi High Court is Verizon Communication India Pvt. Ltd. 2017-TIOL-1863-HC-DEL-ST - It is clear that destination has to be decided on the basis of place of consumption, not the place of performance of service - As such, assessee is liable to pay service tax on services, which they received from various vendors located outside India.

Limitation - Admittedly, SCN mainly invoked Rule 2 1(d)(4) of STR, 1994 though the provisions of Section 66 A also were mentioned in the notice - Bombay High Court in case of Indian National Shipowners Association 2008-TIOL-633-HC-MUM-ST held that there is no provision to tax such recipient of service prior to introduction of Section 66A w.e.f. 18.04.2006 - The provisions of Rule 2(1)(d)(4) has no application for such tax liability - Assessee would have been eligible for cenvat credit in case of payment of such tax on reverse charge basis - Accordingly, while upholding the demand on merit, liability shall be restricted to normal period covered by demand - On same reasoning, penalties imposed are also set aside: CESTAT - Appeal partly allowed: DELHI CESTAT

CENTRAL EXCISE SECTION

2018-TIOL-584-CESTAT-MUM + Story

Press Matic Eletro Stampings Pvt Ltd Vs CCE

CX - Cancellation of penalty and demand of extended period are different issues which are to be dealt separately - merely because Commissioner(A) while cancelling penalty held that there was no malafide, by misinterpreting the wording or law, no benefit can be extended to the appellant by holding that the demand is, therefore, time barred - appeal dismissed: CESTAT [para 4, 5] - Appeal dismissed: MUMBAI CESTAT

2018-TIOL-583-CESTAT-MAD

CCE Vs Jeevan Diesels And Electricals Ltd

CX - Allegation of department is that subject goods namely base frame fitted with engines or alternators, fuel tank and acoustic enclosures and base frame fitted with engine, alternator fuel tank and acoustic enclosures cleared to 100% EOU are not goods manufactured by assessee - According to department, goods have been procured on the basis of invoices and goods have been cleared as such since the activity of fitting of base frame with acoustic enclosure does not amount to manufacture - As rightly pointed out by assessee as well as discussions made by Commissioner (A), department has taken contradictory stand with respect to subject goods cleared by assessee - Since for very same goods, after visit to the factory for period 2006 - 07, department having accepted that process in factory amounted to manufacture and also for the reason that clearances of subject goods to independent buyers and DTA units are undisputedly made on payment of duty, allegation that activity does not amount to manufacture when very same goods are cleared to 100% EOU is not justified - Demand is hit by limitation - Assessee has been regularly filing ER-1 returns and subject goods have been cleared to 100% EOU on CT3 certificate - There has been communications from assessee to the department on said issue - Therefore, there is no evidence to establish any suppression of facts or willful mis-statement with intent to evade payment of duty on the part of assessee - On such score, demand invoking the extended period is unsustainable - Appeal filed by department is devoid of merit and impugned order calls for no interference: CESTAT - Appeal dismissed: CHENNAI CESTAT

2018-TIOL-582-CESTAT-ALL

Onkar Nath Goel Vs CCE

CX - Penalty - Appeal filed against impugned order wherein SCN issued to M/s Venus Costing Pvt. Ltd., Venus Loha Ltd., Venus Enterprises and 5 others including the assessee was adjudicated - It is alleged that among others, assessee had contravened provisions of Central Excise Act, and Rule 209A of CER, 1944 read with Rule 26 of CER, 2002 and they were instrumental in selling of pig iron at Agra, which was consigned to M/s Venus Casting Pvt. Ltd./Venus Loha Udyog Ltd. and returned this amount to M/s Venus Casting Pvt. Ltd./Venus Loha Udyog Ltd. on account of bogus purchase of M.S. Ingots, manufactured by M/s Venus Casting Pvt. Ltd./Venus Loha Udyog Ltd. to his firm - Assessee has challenged the imposition of penalty on him - Further, assessee had given particulars of transactions which were genuine and it was incumbent upon Revenue Officers to have made their investigation into nature of those transactions - So far the allegation of clandestine sale of pig iron is concerned, allegation appears to be presumptive, as investigating officers have not stated a single instance, the name of the party to whom Pig Iron was sold by assessee - The allegation of sending of consignment of pig iron by M/s Apparent Iron & Steel Pvt. Ltd. Goa, is also presumptive - Further, assessee had retracted his statement recorded on 09th March, 2005 and the same cannot be weighted for imposition of penalty - In reply to SCN, assessee has alleged that Revenue officers misguided him - Further, High Court of Gujarat in M/s Continental Cement Company 2014-TIOL-1527-HC-ALL-CX and Sakeen Alloys Pvt. Ltd. 2014-TIOL-739-HC-AHM-CX have held that confession cannot form of levy of Excise duty, much less retracted statements - Impugned order is set aside: CESTAT - Appeal allowed: ALLAHABAD CESTAT

2018-TIOL-581-CESTAT-HYD

Gulabchand Silk Mills Pvt Ltd Vs CC, CE & ST

CX - Clandestine removal - Assessee's main grievance is that adjudicating authority has not followed the law as settled by High Court of Punjab & Haryana in case of Ambika International which follows the judgment of same Court in case of Jindal Drugs Pvt. Ltd 2016-TIOL-1230-HC-P&H-CX - It is also noticed that entire adjudication proceedings (denovo) is after the judgment by High Court of Andhra Pradesh, wherein their Lordships had directed the adjudicating authority to extend cross examinations of specific persons - Adjudicating authority has, to that extent, followed the directions of High Court of Andhra Pradesh in granting cross examinations of Shri Gopal Gupta and others, however Central Excise law being a law which specifically follows the precedence cited by higher Judicial Forum vis-`-vis the provisions of CEA, 1944 - Claim of assessee that provisions of Section 9(D) has to be followed scrupulously as per the directions of High court of Punjab & Haryana in case of Jindal Drugs Pvt. Ltd 2016-TIOL-1230-HC-P&H-CX, needs to be addressed by Tribunal - High Court of Punjab & Haryana in case of Jindal Drugs Pvt. Ltd has specifically interpreted the provisions of Section 9(D) of CEA, 1944 and came to a conclusion that unless the provisions of Section 9(D) are scrupulously followed, reliance cannot be placed on statements which were recorded during investigation of a case - In view of foregoing and the law settled by High Court of Punjab & Haryana as to the reliance that can be placed by adjudicating authority on statements recorded by investigating Officers, matter remanded back to adjudicating authority to reconsider the issue afresh, after following the law as settled by High Court of Punjab & Haryana: CESTAT - Matter remanded: HYDERABAD CESTAT

2018-TIOL-580-CESTAT-DEL

Nuvoco Vistas Corporation Ltd Vs CCE & ST

CX - the assessee-company herein is aggrieved because the Cenvat credit availed on service tax paid on insurance, packers and movers service, was denied - The Department claimed that such input service had no nexus with the manufacture of final product and was not a valid input service under Rule 2(l) of the CCR, 2004 - Held - the phrase "activities relating to business" denotes that the definition is broad enough to consider the activities meant for the business activities, even if the services are not directly related to the manufacturing activities - It is undisputed that the premium was paid for general insurance of the plant and machinery installed within the factory and the insurance premium including the service tax thereon forms part of the cost of production - Thus the same should be considered as 'input service' - The service tax paid on General Insurance by the assessee merits consideration as 'input service' under the amended definition w.e.f. 1.4.2011 - The assessee does not contest the denial of Cenvat credit on service tax paid on Packers & Movers: CESTAT (Para 1,7,8) - Appeal Partly Allowed: DELHI CESTAT

CUSTOMS SECTION

DGFT PUBLIC NOTICES

dgft17pn062

Directives for processing of application for MEIS claims under Foreign Trade Policy 2015-20

dgft17pn061

Inclusion of Seaports located at Dhamra Port and Dighi Port under Para 4.37 of Hand Book of Procedures 2015-20

CASE LAWS

2018-TIOL-577-CESTAT-MAD

MMTC Ltd Vs CC

Cus - Assessee engaged in export of iron ore and lumps and fine - Issue relates to refund claims filed for exports made during June 2008 to November 2008 - Same were rejected by original authority for various reasons, inter alia, not filed within prescribed time, not produced original exporter's copy - In respect of five Shipping Bills, refund denied on the ground of non-submission of original of exporter copy of shipping bill - Matter remanded to original authority to consider refund claims on the basis of Indemnity Bonds that may allowed to be produced by assessee - In respect of shipping bill at category covered by Sl.No. (4), the issue is being remanded to original authority to consider the claim made by assessee that export duty was paid on a shipping bill which was cancelled due to non availability of vessel and that actual export was done after the duty was exempted, hence the refund is justified - This issue is also remanded to adjudicating authority with directions to examine the eligibility of refund in this situation taking into account all the legal aspects in this regard - Needless to say, that in such de novo adjudication assessee will be given sufficient opportunity to present their case including submission of additional documents, if so required - Coming to departmental appeal, in view of assessee's concession recorded, and also taking the view that assessee not being "government organization" but only a corporation cannot become eligible for extended period of limitation of one year for filing refund claim, merit found in appeals filed by department for which reason, both appeals are allowed: CESTAT - Appeals partly allowed: CHENNAI CESTAT

2018-TIOL-576-CESTAT-MAD

Mahilaratnam Women's Monthly Vs CC

Cus - the assessee imported news print & filed two Bills of Entry for "Glazed News Print" - based on testing of the surface roughness of the imported goods, the Department opined that they did not satisfy the condition of Chapter Note 4 for Chapter 48, wherein Surface roughness should exceed 2.5 microns - Thus the Department held the goods in question to not be news print and denied concessional rate of duty under Notfn. No. 21/2002 - Duty demand with interest was raised - The Commr.(A) upheld the same - Held - The samples tested conformed to all specifications of 'news print' except for the surface roughness - The imported items being 'Glazed News Print' cannot be expected to have surface of Parker Print Surface roughness of more than 2.50 microns - Glazing of ordinary news print reduces the roughness - Therefore the specifications given w.r.t. standard news print cannot be applied to them of glazed newsprint - The concessional duty under Notfn. No. 21/2002 was intended to be given, considering the Budget Speech for the Year 1998-99 - There has to be synergy & synchronization between the intention of the legislature and the uniform tax structure that was intended to be extended to all news print including glazed newsprint - Hence assessee eligible for exemption under this Notfn.: CESTAT (Para 1,4.2-5) - Appeal Allowed: CHENNAI CESTAT