2018-TIOL-685-CESTAT-MUM

Ghatge Patil Industries Ltd Vs CCE & C

CX - CENVAT - Input Service - Rule 2(l) of CCR, 2004 - Credit denied of tax paid on 'motor vehicle insurance' for the period after 01.04.2011 and also denied on 'mandap keeper service', 'advertising service', 'construction service' and insurance service - appeal to CESTAT.

Held: There is no evidence on record to controvert the claim of the appellant that vehicles that had been insured were in use for business activities, therefore, disallowance of credit to the said extent does not sustain; observance of its silver jubilee was occasion for giving publicity to their business activities, hence disallowance of credit of tax collected by provider of 'mandap keeper service' and 'advertisement service' is not correct in law; denial of credit on 'construction service' does not pertain to specified services used in construction of building or civil structure but to maintenance of existing facilities viz. duct for lift facility and hence credit has been wrongly denied; health of employees is vital to the continuance of business activities, consequently, the appellant was not in error by availing the credit of tax paid on premium for life/health insurance services - impugned order is, therefore, set aside and appeal is allowed: CESTAT [para 4 to 7] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-684-CESTAT-MUM

Gabriel India Ltd Vs CCE

CX - CENVAT - Input Service - Rule 2(l) of CCR, 2004 - Tax paid on utilization of ‘security service' for the hostel maintained at their factory at a remote location was availed as credit by appellant and which was denied by lower authorities - appeal to CESTAT.

Held: Tribunal in Reliance Industries Ltd. - 2015-TIOL-2343-CESTAT-MUM has allowed credit by distinguishing the decision in Manikgarh Cement - 2010-TIOL-720-HC-MUM-ST - following the same, the disallowance of CENVAT credit is not maintainable - impugned order is set aside and appeal is allowed: CESTAT [para 3, 4] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-683-CESTAT-MUM

DM Exporters Vs CCE

CX - Appellant availed Cenvat credit on the invoice issued by supplier - Since there was proceeding going on against supplier in connection with alleged wrong availment of credit, department has raised objection on the availment of credit by the appellant and accordingly they reversed the credit, thereafter, they filed refund claim in respect of credit so reversed - refund rejected by lower authorities, therefore, appeal before CESTAT.

Held: Supplier has paid the duty which has been verified by the Superintendent under a report, therefore, goods supplied to the appellant is clearly eligible for Cenvat credit - no reason why due to any case proceedings against the supplier, appellant should be denied the Cenvat credit - impugned order set aside and appeal allowed: CESTAT [para 4] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-682-CESTAT-AHM

Plenco Closures Pvt Ltd Vs CCE & ST

CX - Assessee imported four machines and availed total Cenvat credit on CVD amount paid, after receiving the capital goods in factory - In same financial year they have cleared two machines 'as such' and reversed credit - Alleging that assessee is required to reverse further credit, SCN was issued for recovery of said credit with interest and penalty - Issue revolves in a very narrow compass inasmuch as assessee has imported four machines and availed credit on clearance of two machines as such during the same financial year, they were required to reverse Rs. 20,67,465/- attributable to said two machines - Thus, there was a short fall of Rs. 6,88,155/- - To ascertain exact amount of credit required to be reversed, matter needs to be remanded to adjudicating authority: CESTAT - Matter remanded: AHMEDABAD CESTAT

2018-TIOL-681-CESTAT-MUM

Dagger Forst Tools Ltd Vs CCE

CX - Appellants are clearing goods to their customer Tata Motors Ltd. on the price as agreed and confirmed as per purchase order/contract - TML were releasing the payment after 89 days, however, considering the appellant's urgency in releasing payment against clearance of goods, TML decided to issue a hundi of 89 days which permitted appellant to get money through bankers of TML - however, the financial charge to the extent of 1.9% towards immediate release of payment was a burden on TML who negotiated with appellant that they are required to give 1.9% discount on value of clearance - case of department is that 1.9% discount is not a discount but an additional consideration received by appellant and is includible in the assessable value - Adjudicating authority had observed that since TML had borne the expenses of 1.9%, therefore, it cannot be said that the discount has been passed on to the buyer - demand confirmed by Commissioner(A), therefore, appeal to CESTAT.

Held: Bench notes that 1.9% expenses incurred by Tata Motors Ltd. is an arrangement between them and the banker - The appellant have extended this discount since they have received the prompt payment instead of waiting for 89 days, therefore, this discount is nothing but prompt payment discount - Therefore, the discount extended by the appellant cannot be part and parcel of the assessable value and the deduction on that account is admissible under Section 4(1)(a) of the CEA, 1944 - impugned order is set aside and appeals are allowed: CESTAT [para 5, 6] - Appeals allowed: MUMBAI CESTAT

2018-TIOL-680-CESTAT-MUM

CCE Vs Benzo Chem Industries Pvt Ltd

CX - Refund - Rule 5 of CCR, 2004 - Respondent assessee had filed refund claims after treating deemed export as exports - Commissioner(A) allowing refund claim and, therefore, Revenue in appeal before CESTAT.

Held: In respondent's own case, in identical circumstances, the Tribunal had vide order - 2017-TIOL-1879-CESTAT-Mum while allowing their appeal held that rule 5 provides for refund of unutilized accumulated Cenvat Credit against export of goods; that Rule 5 does not discriminate between physical exports out of India and deemed exports supplies made within Indian territory, therefore, in absence of such discrimination, it cannot be said that Rule 5 refund is applicable only for exports of goods out of India and not for deemed exports supplies in India; that relief was granted by following decision in Super Packs - 2017-TIOL-709-CESTAT-MUM - in view of the decision of Tribunal in respondent's own case, appeals of Revenue are dismissed: CESTAT [para 3, 5] - Appeals dismissed: MUMBAI CESTAT

 

CUSTOMS SECTION

2018-TIOL-358-HC-MUM-CUS + Story

Atul D Pandya Vs UoI

Cus - the petitioner herein is an individual & claimed to have provided crucial and valuable information w.r.t. tax evasion by e-commerce companies - The petitioner also claimed to have done so at great personal risk and on personal expense - The petitioner claimed to have collected information regarding the activities and modus operandi of tax evasion of a particular company, and claimed to have supplied such information to officers of the DRI - The petitioner alleged that such company had evaded payment of Customs duty and was misuing concessions granted to it - The petitioner also claimed that such firm was allegedly engaged in smuggling and anti-national activities - The petitioner also provided information about a courier company which was aiding in such smuggling activities - The petitioner claimed to be motivated by an obligation to help the Government curb tax evasion and prevent leakage of revenue - Based on such information supplied by the petitioner, a considerable duty demand was raised against the firm named by the petitioner - Thereupon, the petitioner was hopeful of receiving a monetary reward for the information supplied by him, but did not receive the same from the DRI officials - Subsequent complaints by the petitioner were dismissed, and the Department took the stand that the petitioner had provided no worthwhile information, and that the Department did not rely exclusively on material provided by the petitioner.

Held - the petitioner contacted and acquainted himself with a DRI officer - Such association developed into a familiarity, which is surprising - The officer grew friendly with the petitioner & continued to engage his services - The petitioner then suplied information regarding the misuse of courier facilities - The petitioner enquired about the usefulness of the information supplied, to which the officer assuaged him that his information was being analyzed - From such conversation it is clear that the petitioner was only interested in obtaining a monetary reward - Since the Revenue has its own in-house intelligence & investigating agencies, and the Department can easily approach them, the petitioner was concerned that such agencies would jump in the fray and jeopardize the interests of the petitioner - This generally does not appear to be a genuine and bona fide act to protect the larger public interest or block revenue leakages - Based on the duty demand raised, the petitioner claimed reward and also claimed to have more information and inputs available which could lead to more revenue being recovered - Therefore it is not a case as clear on facts as it is emerging from the orders passed in the writ petition of other informers - Pertinently, each case has to be decided on its own merits and none can claim absolute right in seeking a reward - The circular relied upon by the petitioner also states that the policies for reward are looked into, considered and reviewed from time to time - Though the essential scheme without fundamental changes is the same in tune with the various recommendations and changing scenario of smuggling and commercial frauds, certain modifications have been considered necessary - Therefore specific guidelines and procedure have been evolved in dealing with reward - A eligible government servant is one part of the policy - Such stipulation is equally applicable to both the government servants and informers - The petitioner claimed reward before the proceedings had ended - Further he claimed to be a professional informer and that the same was enough to ensure a reward - Meanwhile the Department claimed to have relied on its in-house agencies and that the information supplied by the petitioner was already available to it - This dispute is clearly factual in nature - Moreover, the precedents relied on by the petitioner avail him no aid, as the facts involved therein are different - In those cases some reliance was placed by the Department on information supplied by the petitioner therein, and the same was acknowledged - In light of these facts and reward policies, the petitioner's claim for reward has rightly been set aside: High Court (Para 3-9,35,42,43,44) - Writ Petition Dismissed : BOMBAY HIGH COURT

2018-TIOL-679-CESTAT-MAD

Doosan Infracore India Pvt Ltd Vs CC

Cus - Assessee engaged in importing construction equipments from principal associates from Korea - The imports were referred to Special Valuation Branch of Customs which culminated in review order dt. 4.6.2014 of Deputy Commissioner (SVB) who accepted the transaction value except for addition of Rs.8000/- towards freight forwarding and directed finalization of all pending provisional assessments - Against this review order, Revenue preferred appeal before Commissioner (A) who remanded the case to consider the matter afresh - Commissioner (A) addressed not just the issue of addability of royalty which alone was appealed by Department but also other issues like payment to foreign supplier in name of professional and consultancy charges and also directed collection of extra duty deposit of 5% of value of goods imported, which action, has surely gone beyond the grounds of appeal placed before him by department - In the event, additional areas of dispute suo motu taken up and decided upon by Commissioner (A) cannot sustain - Accordingly, remand and de novo adjudication ordered by Commissioner (A) will only be restricted to grounds of appeal preferred by department and summarized by Commissioner (A) himself: CESTAT - Appeal disposed of: CHENNAI CESTAT

2018-TIOL-678-CESTAT-MAD

RR Donnelley Publishing India Pvt Ltd Vs CC

Cus - Assessee, 100% EOU, after due authorization of procurement Certificate from jurisdictional Central Excise Officer imported various items without payment of customs duty - Based on subsequent verification, jurisdictional Central Excise Officer initiated proceedings against assessee on the ground that some of items imported by assessee may not qualify as capital goods - Impugned order independently examine the liability of assessee for certain goods and held these are not eligible for exemption - Apparently, the terms of bond by assessee was invoked - Goods were duly assessed as capital goods by competent officer at the port of entry - Same has not been varied by that officer - In case of Verifone India Pvt. Ltd., Tribunal examining the scope of the very same notification for EOU held that when the goods were in the warehouse without invoking the provisions of Section 72 of the Customs Act, proceedings cannot be held against them - Denial of exemption under notfn 52/2003-Cus is not sustainable: CESTAT - Appeal allowed: CHENNAI CESTAT