2018-TIOL-439-HC-KAR-CX + Story

Euro Metal And Glass Interiors Pvt Ltd Vs UoI

CX - After Rule 8(3A) of CER, 2002 was held to be ultra vires and unconstitutional, department shifted its stance for denying CENVAT credit on the ground that invoices were not produced; no books of accounts/records were maintained in terms of rule 10 of CER, 2002 - this indifferent attitude of the Department is arbitrary exercise of power denying the legal entitlement of the assessee - Settlement Commission also could not have rejected application on grounds other than what was stipulated in the show cause notice and the reports issued - CENVAT credit is the benefit available to the assessee after payment of duty and interest - Order denying credit quashed and Respondent directed to consider the claim of the assessee for CENVAT credit of Rs.16,43,129/- and adjust the same towards the payment of duty and interest - Writ Petition allowed: High Court [para 4] - Petition allowed : KARNATAKA HIGH COURT

2018-TIOL-812-CESTAT-DEL + Story

Mahle Engines Components India Pvt Ltd Vs CCE

CX - Appellant changed classification of Camshaft from CH 8483 (@12.36%) to CH 7325 and paid duty @10.36% and upon being pointed out by Audit paid the differential duty - demand notice issued and equivalent penalty imposed u/s 11AC of CEA, 1944 - as the clearances @10.36% were reflected in the ER-1 returns filed during the impugned period, the charges of fraud, collusion, willful mis-statement cannot be leveled - penalty u/s 11AC not sustainable: CESTAT [para 5]

CX - CENVAT - Rule 2(l) of CCR, 2004 - Input Service - services used for painting factory building and plant & machinery are appropriately classifiable under category of "renovation or repair of the factory" contained in the inclusive part of the definition of the "input service" and cannot be considered as service in relation to 'construction of building' so as to fall under exclusion clause - Credit admissible - Appeal allowed: CESTAT [para 6]

Also see analysis of the order  

2018-TIOL-811-CESTAT-AHM

Indian Oil Corporation Ltd Vs CCE & ST

CX - Assessee is in appeal against impugned order wherein Commissioner (A) confirmed denial of CENVAT credit for the period June 2015 to March 2016 availed by assessee on input service namely, inspection charges, on the ground that document on which assessee availed credit are not valid documents as per Rule 9(1) of CCR, 2004 - There is no dispute about the fact that service tax paid on inspection charges is eligible to CENVAT credit - Also, Third Party Inspection Agency raised invoices in name of input suppliers mentioning the place of testing and relevant purchase order of IOCL in invoices as well as relevant inspection reports - Therefore, correlating the documents namely, purchase order, invoices issued by Third Party Agency inspection report and the invoices of input suppliers, it is clear that the inspection was carried out at the behest of assessee and used in or in relation to supply of spare parts/inputs - Therefore, credit is definitely admissible to assessee: CESTAT

2018-TIOL-810-CESTAT-BANG

Ramco Industries Ltd Vs CCE, ST & C

CX - Assessee engaged in manufacture of asbestos cement products and availing input cenvat credit on capital goods and input services - During internal audit of assessee, it was found that credits taken for various services availed at their Head Office and transferred to assessee under cover of ISD invoice were not in order as service was availed at a place beyond the place of removal - The commission is paid on sale of product / services with an intention to boost the sale of company - In view of this, sales commission has a direct nexus with sales which in turn is related to manufacture of product - It is to be understood that there need not be manufacture unless there is a sale of product - To increase the manufacturing activity encouragement is being given for increased sales - Hence, commission paid on sales becomes part of sales promotion resulting in increased manufacturing activity - High Court of Punjab & Haryana in the case of Ambica Overseas 2011-TIOL-951-HC-P&H-ST has categorically held that sale and manufacture are directly inter related and the commission paid on sales needs to be taken as services related to sales promotion - Impugned order is not sustainable in law and therefore same is set aside: CESTAT - Appeals allowed: BANGALORE CESTAT

2018-TIOL-809-CESTAT-CHD

CCE & ST Vs Steel Strips Ltd

CX - Revenue is in appeal against impugned order wherein Commissioner (A) has allowed the refund claim to assessee after examining the issue of unjust-enrichment - Commissioner (A) has examined the issue of unjust-enrichment independently holding that assessee was required to clear the goods during impugned against Central Excise gate pass and have issued composite invoice without showing duty element and relied on the decision of Metro Tyres Limited 2002-TIOL-31-CESTAT-DEL wherein it was held that burden to prove that incidence of duty passed on to the customer is discharged by assessee when assessee's invoice during the material period showing a composite price and duty not indicated separately - Therefore the refund claim is admissible - Commissioner (A) has examined certain documents like certificate issued by Chartered Accountant, Finance Year wise Cost Data, Sample Invoices and thereafter has arrived at decision that refund claims were rightly sanctioned by the adjudicating authority - A refund claim of Rs. 97,19,781/- has been rejected by authorities below on the ground that assessee has failed to discharge the burden of unjust-enrichment - Impugned order upheld: CESTAT - Appeal dismissed: CHANDIGARH CESTAT

2018-TIOL-808-CESTAT-MAD

CCE & ST Vs Eid Parry India Ltd

CX - Assessee, 100% EOU engaged in manufacture of ABDA, Plant Vitalizer, Avana and Neemazal and Pesticides - During course of audit, it was noticed that assessee have been clearing products to DTA viz., Neem Oil and Neem Cake which arose in course of manufacture of pesticides under non-excise challans/invoices thereby not paying duty - Department views that assessee cannot sell said products into DTA without payment of full duties as applicable, as if product has been imported into India and that assessee is not entitled for exemption or concession under any of Sl.Nos. of Notfn 23/2003-CE as amended - The adjudicating authority has held that once education cess is added to customs duties to arrive the aggregate of customs duties, question of charging education cess again does not arise - This position is settled in favour of assessee - Further in assessee's own case, in recent decision, Tribunal has held the issue in favour of assessee: CESTAT - Appeal dismissed: CHENNAI CESTAT

2018-TIOL-806-CESTAT-MAD

Airflow Equipments India Pvt Ltd Vs CCE

CX - Assessee is manufacturers of grills, dampers and diffusers of aluminum used in centralized air-conditioning system and aluminum door window frames and grill dampers meant for railway coaches - Based on intelligence that assessee is evading payment of excise duty by clearing goods on invoices raised in name of dummy unit M/s. Bala Enterprises, SCN was issued proposing to club the clearances of assessee and Bala proposing to demand duty along with interest and penalties besides proposing to impose separate penalties on M/s. Bala and Shri D. Venkatesan, MD of assessee and Shri Dakshinamurthy - Admittedly, M/s. Bala has a separate sales tax registration and is a separate income tax assessee - Thus it is a separate unit before all public authorities for compliance of various laws - Shri G. Dakshina Moorthy the father of Sh. D. Ventakesh who is managing director of assessee, is the proprietor of M/s. Bala - It is settled law that merely because the directors are related to the proprietor/partners of the other unit, such unit cannot be said to be a dummy unit - M/s. Bala has supplied goods to M/s. Air Care Engineers, and M/s. Adit Association - The purchase orders to these customers were placed by M/s. Bala and invoices were also raised in the name of M/s. Bala - Only because these invoices contained the signature of D. Venkatesan, the department alleges that the goods are actually supplied by assessee and no goods have been supplied by M/s. Bala - Only because Sh. D. Venkatesan was helping to manage the affairs of the proprietorship concern run by his father, that will not by itself make the unit a dummy unit - In the result, impugned order is set aside and the matter is remanded to the adjudicating authority for denovo adjudication: CESTAT - Matter remanded: CHENNAI CESTAT

 

 

 

 

CUSTOMS SECTION

2018-TIOL-430-HC-P&H-CUS

Kulbhushan Goyal Vs UoI

Cus - the assessee is engaged in manufacture & export of bicycle parts, in respect of which duty drawbacks were claimed u/s 74 & 75 of the Customs Act r/w the Customs and Central Excise Duties Drawback Rules, 1995 - Subsequently, the DRI alleged that the assessee had misdeclared the goods - It alleged that the assessee actually exported spurious or junk material, on which it had availed drawback - Duty demand was raised for recovery of drawback & imposed penalty - The assessee contested the jurisdiction of the DRI to issue SCN - Later the Tribunal held on merits that the DRI had no jurisdiction to issue SCN - The assessee sought refund of an amount pre-deposited - Meanwhile the Revenue initiated proceedings for incorrect valuation of goods - Thereupon, an amount of drawback claimed was disallowed and fresh penalty was imposed - Hence assessee's appeal.

Held - addressing one issue, the adjustment of a refund granted amounts to taking a coercive step - Merely because an amount lies with the Revenue, the unilateral action of its adjustment is equally coercive as recovering an amount lying with the assessee - The next issue is whether Circular No.967/1/2013 dated January 1, 2013 places an absolute bar of prohibition against the Revenue recovering an amount in excess of the amount deposited as per the said circular - The Circular does not place any such restriction - Considered para 4.2 of the Circular, as well as Section 142 of the Customs Act - Thereby, the officer exercising powers u/s 142 must, in view of this circular, consider whether or not an amount exceeding the amount deposited under Para 4.2 of the circular, should be recovered - In the present case, one reason for passing the order is that an appeal had not been filed in the name of one of the proprietary firms - The name in which the assessee carries on business is irrelevant - Having filed the appeal, the assessee serves the purpose of challenging the demand - Hence, order in question is set aside & original authority directed to pass fresh order - Revenue is entitled to encash bank guarantee & may retain amount deposited, subject to fresh orders passed: High Court (Para 2,3,4,7,11,12,13) - Appeal Partly Allowed: PUNJAB AND HARYANA HIGH COURT

2018-TIOL-807-CESTAT-MAD

Kaizen Computech Ltd Vs CC

Cus - Assessee had imported consignment from China declared to contain 5 models of computer mouses, 2models of TV tuner cards and mouse spares - Neither the import documents nor the Bill of Entry declared the brand of goods - All the five models of computer mouses were declared at the same unit price of USD 0.75 and the same MRP of Rs.100/- - Both models of TV tuner cards were declared at the same unit price of USD 8.0 and classified as parts of computers under CTH 8473 @ Nil BCD - On intelligence gathered by SIIB officers, said goods had been misdeclared to evade appropriate payment of duty - Assessee is not contesting the enhancement of value - As seen from value enhanced as well as the redemption fine and penalty imposed, redemption fine and penalty is high and requires interference - Taking into consideration the facts and appreciating the evidence, redemption fine and penalty reduced to Rs.2,00,000/- and Rs.1,00,000/- respectively: CESTAT - Appeal partly allowed: C/hENNAI CESTAT