2018-TIOL-NEWS-062, Dated: Friday, March 16, 2018

ST - Appeal has been filed by Revenue against impugned order whereby Commissioner (A) has partly sanctioned the refund - Assessee is registered as a private limited company and is a subsidiary of Analog Devices Holdings BV, Netherlands, which in turn is a subsidiary of Analog Devices International - Assessee is exporting taxable services and has satisfied the condition for export in terms of Rule 6A of STR, 1994 - Assessee filed refund claim for period October 2014 to March 2015 and also complied with all the conditions of notification for seeking refund - Commissioner (A) held that BAS is covered under Rule 3(1)(iii) of Export of Service Rules, 2005 and foreign currency was received for payment of such services - The foreign company of assessee is located in Ireland and the sole recipient of services rendered by them - Though the services are provided with respect to buyers in India, the benefit of same accrued to company located abroad - It is undisputed that assessee and the parent company abroad are independent legal entities - They do not render any service to any Indian customers and the benefit is derived by foreign recipient - Further Commissioner(A) has also relied upon the decision in case of ABS India ltd. 2008-TIOL-1500-CESTAT-BANG wherein the Tribunal has held that booking of orders for sale of goods manufactured by subsidiary of assessee which is located in Singapore was services exported and assessee was not required to pay service tax - Further Commissioner(A) has discussed in detail the provisions of Rule 6A of STR, 1994 to come to a conclusion that services rendered by assessee are not intermediary services but an export of services - No infirmity found in impugned order, same is upheld: CESTAT - Appeal dismissed: BANGALORE CESTAT

ST - Assessee is manufacturer of ceramic tiles - It was noticed from ST-3 returns, that for period 01/2005 to 02/2006, assessee was discharging their service tax liability on 25% of freight charges paid by them, availing the benefit of notfn 32/2004-ST - Department took the view that there is no evidence that credit of duty paid on inputs or capital goods, has not been taken by Goods Transport Agency under notfn 12/2003-ST - Notfn 32/2004-ST restricted the service tax liability on taxable value in respect of services provided by GTA to 25% of gross amount charged - This notification was rescinded w.e.f. 01.03.2006 by notfn 2/2006-ST - However, exemption allowing for discharge of service tax liability only on 25% of gross amount charged by GTA was continued by notfn 01/2006-ST, without any conditions on declaration - Even this was amended vide notfn 13/2008 which while maintaining 25% cap of gross amount charged for purpose of discharge of service tax liability, changed the focus of exemption from taxable service provided by a Goods Transport Agency to a customer to taxable service provided by Goods Transport Agency to any person - On appreciating the chronological events and various clarifications of CBEC and in particular the circular 137/154/2008-CD.4 , it is but evident that even for past cases before the extension of benefit of 75%, abatement to GTA services unconditionally, the benefit of such abatement will be available to assessee without requirement of any specific endorsement on every consignment note, but merely on general declaration from GTA - Assessee have obtained such undertaking letters from concerned transporters - This being so, confirmation of demand is in contradiction to the clarifications of CBEC themselves vide circular dated 21.08.2008 - Hence, impugned order cannot sustain: CESTAT - Appeal allowed: HYDERABAD CESTAT

2018-TIOL-841-CESTAT-MUM + Story

Tetra Pak India Pvt Ltd Vs CCE

CX - Reality of manufacture makes trial run a necessity - denial of CENVAT credit on inputs on the ground that there is no evidence of discharge of duty on poor quality goods as waste and scrap is a specious argument - dutiability, or otherwise, of the waste product does not, in any way, attract restrictions on availment of CENVAT credit in respect of the inputs used therein - recovery of cost of inputs from foreign customers through debit notes does not alter eligibility to take credit of tax paid on tax liability that has been duly discharged - disallowance of CENVAT credit is without any basis in law - order set aside and appeal allowed: CESTAT [para 5, 6] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-840-CESTAT-MAD

CCE Vs Beehive Foundry Engineering Work

CX - the assessee-company was issued SCNs proposing duty demand on grounds that the goods cleared were not pre-fabricated building, attracting nil rate of duty, but were pre-fabricated structures, which were dutiable goods - Subsequently, the Tribunal held that the items cleared cannot be treated as pre-fabricated building & directed to re quantify the duty accordingly - The assessee filed ROM application & subsequently sought to amend the same, due to alleged error apparent on the face of record -

Held - The Tribunal cannot review its order but can only rectify an error which is apparent therein - The assessee claimed to have received orders for supply of complete pre-fabricated building - To the specific query by the Bench that when existing structure is dismantled and reused, re-fixed or re-erected at site whether it can be called 'pre-fabricated building' so as to be exempted from duty, the words used in the Heading 94.06 need to be considered - Thereby, if the pre-fabricated item is incomplete, as per the Chapter Heading 94.06, then it should have the essential character of building - The dismantled parts or structure, salvaged were used at the site for the items supplied by assessee - In that case, the items supplied cannot be said to have essential character of building - When the dismantled structures are re-erected and reused at site, the supplied item cannot be said to be pre-fabricated building - Hence no error apparent on the face of record is found, which needs rectification - Thereby, there is no ground to interfere with the final order - The ROM is dismissed: CESTAT (Para 2,5) - Application Dismissed: CHENNAI CESTAT

2018-TIOL-839-CESTAT-MAD

CCE Vs Trac Fujico Air Systems Ltd

CX - As per Revenue's allegations, assessee availed the benefit of Cenvat credit of duty paid on inputs and subsequently cleared the said inputs "as such" , without reversal of Cenvat credit to other 100% EOUs, on the basis of CT-3 certificates - Though, there is a doubt as to whether the inputs were cleared "as such" or after being processed partially, benefit stand extended to assessee by Commissioner (A) on the primarily basis of limitation - Though, he has also observed that the inputs supplied to 100% EOUs were partially processed, in which case, assessee is entitled to avail and retain Cenvat credit - Revenue in their memo of appeal have not produced any evidence or have not raised any plea to rebut the factual aspects adopted by Commissioner (A) for holding the limitation plea in favour of assessee - That being so, no infirmity found in order of Commissioner (A) on the issue of limitation - Accordingly, without going into the merits of the case, Revenue's appeals rejected: CESTAT - Appeal rejected: CHENNAI CESTAT

2018-TIOL-838-CESTAT-AHM

Ultratech Cement Ltd Vs CCE & ST

CX - the assessee-company used Naphtha for generating electricity in its factory - Part of such electricity generated was wheeled out to sister unit - The assessee availed Cenvat credit on such Naphtha - The Revenue alleged that the entire quantity of electricity generated was not used in the factory premises - Hence the Revenue sought reversal of proportionate credit for Naphtha used to generate electricity which was wheeled out - Interest & penalty was raised as well - Such demands were upheld by the Commr.(A) -

Held - The issue at hand stands decided by the decision of the Apex Court in Maruti Suzuki Ltd. vs. C.C.E. - Hence the assessee is ineligible to avail credit on Naphtha used for generation of electricity wheeled outside the factory - Hence duty demand sustained - However, as observed by the Apex Court, owing to conflicted views on the issue, imposition of penalty is uncalled for - Hence penalty set aside: CESTAT (Para 2,5) - Appeal Partly Allowed: AHMEDABAD CESTAT

2018-TIOL-837-CESTAT-AHM

Welspun Corporation Ltd Vs CCE & ST

CX - Assessee had availed Cenvat credit of service tax paid on cargo handling services of the pipes at customers premises during period April 2006 to August 2011 - Demand notice was issued to them for recovery of demand with interest on 15.9.2009 invoking extended period of limitation - On a plain reading of terms and conditions of agreement, it is clear that assessee is required to effect the delivery of pipes at customers premises for purpose of coating - Therefore, handling charges incurred at various locations including customers yard be considered as input service - Accordingly, service tax paid on such cargo handing charges is eligible to Cenvat credit in view of judgment of Gujarat High Court in case of Inductotherm India P. Ltd. 2014-TIOL-2678-HC-AHM-ST - Accordingly, following the said judgment, impugned order is set aside: CESTAT - Appeal allowed: AHMEDABAD CESETAT

CUSTOMS SECTION

2018-TIOL-834-CESTAT-DEL

Jeevan Jain Vs CC

Cus - the Revenue conducted a search at the premises of the assessee, whereupon certain petroleum products were found - On testing of such substance, the Revenue claimed that it was hazardous waste, attracting provisions of the Hazardous Waste (Management Handling and Trans-boundary Movement) Rules, 2008 - Thus, the Revenue confiscated the goods u/s 111(d) and 111(m) of the Act - On adjudication, penalty was imposed -

Held - The Revenue did not establish the fact that the assessee made any false statement or declaration in relation to the imported goods, or provided any material found to be false - In fact the Revenue itself was in doubt regarding the party who actually filed the bills of entry for assessment - Also the Revenue made contradictory statements in the adjudication order - Hence it is not conclusively proved that the assessee is the actual importer, who made a false declaration for the goods - Thus, penalty imposed is set aside: CESTAT (Para 2,4) - Appeal Allowed: DELHI CESTAT

2018-TIOL-833-CESTAT-MAD

CC Vs Bellary Iron Ores Pvt Ltd

Cus - The issue in dispute has emanated by issue of SCN dated 13.6.2008 to assessee pursuant to issue of Customs Notfn 79/2008 dated 13.6.2008 - The differential duty was paid proximate to issue of notice on 8.7.2008 - Amount was paid without any protest - Thereafter, CBEC vide Circular No. 18/2008 clarified that the existing policy of computation of export duty and cess by taking FOB value as cum-duty value would continue till 31.12.2008 - Based on this clarification, assessee preferred a refund claim - While the original authority held the refund claim as time-barred, the lower appellate authority allowed the appeal on the ground that export duty paid should be treated as paid under protest - It cannot be denied that the facts leading to filing of refund claim have occurred due to change in stand of department - High Court in case of Pricol Ltd. 2015-TIOL-515-HC-MAD-CX has categorically laid down that any amount that is deposited during the pendency of the adjudication proceedings or investigation is in the nature of deposit made under protest - No merit found in appeal filed by department for which same is dismissed: CESTAT - Appeal dismissed: CHENNAI CESTAT