2018-TIOL-NEWS-046, Dated: Friday, February 23, 2018

ST - Refund - Notification 17/2009-ST - Banking services are utilised for raising finance for import as well as export of the goods manufactured by assessee; technical inspection and certification services are also co-related with export - no substantial question of law arises for consideration - Tribunal's order is not vitiated by any error of law apparent on the face of the record and perversity - Revenue appeal dismissed: High Court [para 3, 5, 8]- Appeal dismissed : BOMBAY HIGH COURT

ST - Appellant is a cricketer and represented 'Rajasthan Royals', a franchisee owned by M/s. Jaipur Indian Premier League Cricket Pvt. Ltd., Mumbai in the Indian Premier League – case of the department is appellant is rendering taxable services to the franchisee and is not paying the service tax – demand confirmed for the period 2009-10 to 2011-12 by lower authorities, hence appeal to CESTAT.

Held: Show cause notice was issued proposing to demand service tax under ‘Business support service' and the original authority has confirmed the demand under the said category whereas at the appellate stage, the Commissioner (Appeals) has changed the classification from 'Business support service' to 'Brand promotion service' suo motu and unilaterally, which is not permitted under law – impugned order passed by the Commissioner (Appeals) going beyond the show cause notice is not sustainable in law and, therefore, same is set aside and appeal is allowed - moreover, issue has been settled in favour of the assessee in the case of Swapnil Asnodkar 2018-TIOL-92-CESTAT-MUM and other decisions – appeal allowed: CESTAT [para 6] - Appeal allowed : MUMBAI CESTAT

ST - Assessee engaged in construction activities and providing management, maintenance service - On verification of Income tax returns of assessee for years April 2006-2007 to 2010-2011, Revenue entertained a view that assessee is not discharging service tax on full taxable consideration received by them - It appeared that they are not paying service tax on some portion of the consideration which is admittedly shown as income in their tax returns - Admittedly, assessee did not maintain detailed accounts for all transactions undertaken by them - They have availed provision of Section 44 AD of Income Tax Act for filing returns - This formed basis for service tax demand as the income shown is much higher than the declared consideration for taxable service - Assessee categorically asserted that they did not provide any other service other than those, the details of which have been submitted to lower authorities - Revenue also could not point out excess receipt on these contracts or taxable service which gave them the consideration escaping the tax - All identified contracts for identified service recipients have been examined and concluded by lower authority - No service tax liability can be fastened on unidentified service for unidentified service recipient - There is no provision for such summary assumption even under Section 72 of FA, 1994 - Assessee did file returns under Section 70 and also made available all the contracts on which service tax liability will arise for them - As such, application of Section 72 cannot be extended based solely on the income tax return without identifying the specific taxable service or service recipient: CESTAT - Appeal Allowed : DELHI CESTAT

ST - the assessee-company is engaged in installation of wired line and cables on behalf of M/s Bharti Airtel Ltd. - The Department proposed to tax these services under heading "Commissioning and Installation Service" - Duty demand was raised -

Held - activities undertaken pursuant to the agreement dated 1.4.2003 would not fall under the category of "installation of land, machinery, equipment" u/s 65(39a) of Finance Act, 1994 - The specific entry of "installation of electrical and electronic devices, including wiring or fittings" thereof were specifically brought into the provisions of Section 65(39a) ibid with effect from 16.6.2005 - Since the activity of the assessee cannot be categorised under simple installation of equipment, and more precisely falls under installation of wiring or fittings as contained in the amended definition with effect from 16.6.2005, the classification should be appropriately made under the amended definition effective from 16.6.2005 - Further, vide Circular No. B-I/6/2005- TRU, dated 27.7.2005 , the Board clarified that scope of the taxable service has been expanded by including specified services therein - Thus, such taxable service should be covered under the amended provisions of "erection, commissioning and installation service" - The order in question is unsustainable: CESTAT (Para 1,5) - Appeal Allowed : DELHI CESTAT

CENTRAL EXCISE SECTION

2018-TIOL-648-CESTAT-MUM

Hercules Hoist Vs CCE

CX – CENVAT – Rule 2(l) of CCR, 2004 - CENVAT credit for outdoor catering service has been disallowed by the authorities below on the premise that the same is covered under exclusion class of Rule 2(l) of CCR, 2004 – appeal to CESTAT. Held: As per the said Rule, CENVAT credit of outdoor catering service is not available to the assessee when such service are used primarily for personal or consumption of the employees - it has not been disputed by the authorities below that the outdoor catering service in question has been provided by the appellant to the employees in the factory in terms of section 46 of the Factories Act, 1948 wherein the appellant is required to provide canteen service to the employee mandatorily – In these circumstances, credit cannot be denied in view of the decision in Hindustan Coca Beverages Pvt. Limited = 2016-TIOL-2223-CESTAT-HYD - impugned order qua denying Cenvat credit on outdoor catering service post 01.04.2011 is set aside and appeal allowed with consequential relief: CESTAT [para 5, 6] - Appeal allowed : MUMBAI CESTAT

2018-TIOL-641-CESTAT-AHM

Styrolution Abs India Ltd Vs CCE & ST

CX - SCN was issued to assessee to deny Cenvat credit on various grounds - With regard to wrong distribution and utilisation of Cenvat credit by ISD, services of Kandla Port has been received by head office for other units but the units was not utilising said service - Therefore, it was sought to be denied to assessee but as per Rule 7, there is no bar for distribution of credit for period prior to 01.04.2012, hence, Cenvat credit cannot be denied - Therefore, relying on decision of Vishnu Chemicals Limited 2017-TIOL-3696-CESTAT-DEL , assessee is entitled to avail Cenvat credit.

As regards to wrong availment of Cenvat credit of office situated in Mumbai, said office in Mumbai is doing marketing for assessee and the activity of marketing is directly connected to activity of manufacturing as without marketing, sale or purchase of input or finished goods cannot take place - Therefore, for the office for which rent and service tax has been paid, assessee is entitled to avail Cenvat credit.

As regards to wrong availment of Cenvat credit of construction, works contract services for repair and maintenance, it is a fact on record that these services are for repairs and maintenance of old factory building of assessee and the inclusive part of rule 2(l) provides Cenvat credit to renovation, repair and maintenance of factory - In that circumstance, assessee has correctly availed the Cenvat credit

With regard to Wrong availment of Cenvat credit of repair and maintenance services of wind mills situated at a distant place, as per rule 2(l) of CCR, 2004 the place has not been defined whether outside the factory or otherwise and assessee is entitled or not, the assessee relied on the decision of Bombay High Court decision in case of Endurance Technology Pvt. Limited 2015-TIOL-1371-HC-MUM- ST - Accordingly, assessee is entitled to avail Cenvat credit on said service.

Assesssee has correctly availed Cenvat credit on services in question - Therefore, impugned order deserves no merit and is set-aside: CESTAT - Appeal Allowed : AHMEDABAD CESTAT

2018-TIOL-640-CESTAT-ALL

CCE Vs Sambhaoli Sugar Ltd

CX - After investigation, a case of shortage was booked against assessee - It is a fact on record that it was found finished sugar of 213423 qtls and 14948 qtls of BISS plus sweeping sugar which were stored in other godowns - It is also a fact on record that a case was booked against assessee for 7500 qtls which is going on separately - In that circumstances, if said quantity to be added to the physical stock found in their factory, in that circumstances there is an excess of sugar of 3646 qtls. - As it is the case of shortage of sugar and whereas as per the record, sugar is found in excess, therefore, SCN alleging shortage of sugar is not sustainable - No infirmity found in impugned order, same is upheld: CESTAT - Appeal dismissed : ALLAHABAD CESTAT

2018-TIOL-639-CESTAT-MUM

Suresh Kumar Agarwal Vs CCE

CX – Appellant engaged in printing of man-made fabrics and used to receive dyed fabrics from the merchant manufacturers and used to carry out printing activity on the dyed fabrics by manually applying on the said fabrics the printing paste which was prepared captively out of the duty paid purchased or prepared dyes by mere mixing or stirring – appellant was not paying any central excise duty on the said job work activity under the bonafide belief that they are not required to do so as was the case with several other screen printing units across the country – demand issued and confirmed – appeal to CESTAT.

Held: Fact is not under dispute that the appellant is a job worker of merchant manufacturer and engaged in the manufacture of the goods falling under Chapter 54 & 55 of the first Schedule to the CETA, 1985 - In respect of the goods falling under Chapter 54 & 55, in terms of Rule 12Bof CER and notification issued thereunder viz. 24/2003-C.E.(N.T.), the job worker is not under obligation to discharge the duty liability for the reason that liability of Excise duty is on the merchant manufacturer – Issue has been considered in various judgments and it is consistently held that the job worker of textiles and textile articles is not required to pay duty, therefore, demand is not sustainable – impugned order set aside and appeal is allowed: CESTAT [para 5 to 8] - Appeal Allowed : MUMBAI CESTAT

2018-TIOL-638-CESTAT-DEL

Bhansali Engg Polymer Ltd Vs CCE & ST

CX - The goods, ARG powder, manufactured by assessee at Santoor unit is cleared to other unit of company at Abu Road - For such stock transfer, duty was being paid on the basis of cost of production of goods certified in form CAS-4 by independent Cost Accountant - During scrutiny of ER-1, ER-4 as well as ER-6 returns with CAS-4 certificates, departmental officers noticed discrepancy in receipt and consumption figures of raw materials - Allegation of clearance of finished goods without payment of duty has been made only on the basis of discrepancy in figures between ER-1, ER-4 and ER-6 returns - Revenue has not undertaken any investigation to see whether such raw materials have actually been received in factory, used in manufactured finished goods and cleared clandestinely - Without any other evidence as to the receipt of raw material or clearance to finished goods, mere discrepancy in figures between various returns alone cannot support the charge of clearance of goods without payment of duty - Consequently, such huge amount of duty is not justified and has to be set-aside - Assessee had declared the total quantity of goods manufactured and cleared by them in monthly ER-1 returns - It has been admitted by them that there were mistakes in preparation of ER-6 returns resulting in mistakes in valuation of goods as per CAS-4 - The revised ER-6 as well as CAS-4 certificate tally with ER-1 as well as ER-4 - Consequently, no reason found to ignore the revised returns - In any case, since clearances have been made from one unit to the other of the same company, the principle of revenue neutrality will come into play which is a settled position of law - Any duty paid in Santoor unit will be available as credit in the Abu Road unit: CESTAT - Appeal Allowed : DELHI CESTAT

CUSTOMS SECTION

2018-TIOL-332-HC-KAR-CUS + Story

Cargomar Vs UoI

Cus - CBLR, 2013 - Prohibition - Even the orders passed under Regulation 23 are appealable u/s 129A of the Customs Act, 1962 - Petition not maintainable: High Court [para 16 to 22, 24, 26, 29] - Petition disposed of: KARNATAKA HIGH COURT

2018-TIOL-637-CESTAT-DEL

Johar Enterprises Vs CC

Cus - Assessee had filed shipping bill on behalf of M/s Global Products - On a specific information, consignment of goods was examined with help of X-ray machines and it was found that it contains 19.7 kg of Ephedrene HCL, which is a narcotics and prohibited item - Assessee was involved in exporting narcotics which is prohibited in law - Being anti-national activity, merely the statement of Ms. Bharti Chawla that somebody has handed over the consignment is neither sufficient nor acceptable - Tribunal is surprised as to why penal action has not been taken against Ms. Bharti Chawla - In this context, no reference has been made in impugned order - Unfortunately, Tribunal has no power to enhance punishment - In these circumstances, for anti-national activity and for exporting the drugs, impugned order sustained along with reasons mentioned: CESTAT - Appeal dismissed : DELHI CESTAT