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SERVICE TAX SECTION
2018-TIOL-93-SC-ST
NV Marketing Pvt Ltd Vs CST
ST – BAS - Assessee is engaged in lottery business in terms of agreement with State of Arunachal Pradesh and others - They are undertaking entire process of operating lottery business which includes promotion, marketing and all auxiliary and incidental support services - For organizing, promoting and marketing the lottery, assessee get the consideration as per the terms of agreement – CESTAT held that tax liability as affirmed by the Original Authority cannot be challenged; that in absence of any evidence to the effect that amount of consideration now taken up for tax liability is inclusive of service tax in terms of an arrangement or documentation, findings of Original Authority that value cannot be considered as cum-tax value is correct; No reason found to interfere with the findings imposing penalties – appeal by assessee before Supreme Court. Held: Delay condoned - Interim stay granted on the payment of the disputed tax liability subject to the condition that the appellant gives a bank guarantee for the amount of the disputed liability – Appeal to be tagged with Civil Appeal Nos. 9506-9507 of 2013: Supreme Court [para 1, 3] - Interim stay granted: SUPREME COURT OF INDIA
2018-TIOL-92-SC-ST
Baba City Channel Vs CC & CE
ST – Tribunal requiring the petitioner to make pre-deposit of entire amount of tax and to report compliance on or before 14.10.2013 with peremptory default stipulation for dismissal of appeal in case of non-compliance of the order dated 29.8.2013 – petitioner filing an appeal before High Court which was withdrawn on 22.10.2013 by an order which granted ten days further time to make pre-deposit – however, on 23.10.2013, appeal was dismissed by Tribunal – In appeal by petitioner, High Court while dismissing the same held that since the order of the court was not brought to the notice of the Tribunal, no fault can be found in Tribunal's order dated 23.10.2013; that appellant cannot take spin to contend that the Tribunal erred in passing the order; that since the orders attained finality, neither of them give rise to substantial question of law – appeal to Supreme Court - Petitioner makes a submission that dehors the provision of section 35F of the CEA, 1944 (as amended w.e.f 06.08.2014), they are ready and willing to make a deposit of 25% of the duty amount. Held: Petitioner may deposit the said amount and produce proof thereof whereupon Tribunal will adjudicate the appeal on merits – Special Leave Petition disposed of: Supreme Court [para 5, 6] - Petition disposed of: SUPREME COURT OF INDIA
2018-TIOL-865-CESTAT-ALL
Indo Solar Ltd Vs CCE & ST
ST - assessee-company was subjected to audit by Revenue, which opined that service tax on legal charges, testing charges, commission, advertisement and sales promotion expenses, maintenance and repair charges, under Reverse Charge Mechanism (RCM) had not been paid - While the assessee agreed to pay tax on domestic expenses, it contested tax liability on foreign expenditure - The Revenue opined that the assessee was liable to pay service tax under RCM on such payment made to foreign concerns - The Revenue further held that although the assessee claimed to be a 100% EOU, it was located in taxable territory, under Notfn No.30/2012 r/w Section 65B(52) r/w Section 68(2) of the Finance Act, 1994 - Duty demand was raised vide SCN invoking extended limitation - Equal amount of penalty u/s 78 was also imposed - Held - The assessee had clarified early on that it was not liable to pay tax on services received from abroad, and also that most of such services were received and consumed outside India - Hence SCN barred by limitation: CESTAT (Para 3,6,7) - Appeal Allowed: ALLAHABAD CESTAT
2018-TIOL-864-CESTAT-CHD
JGS Enterprises Vs CCE & ST
ST - the assessee-company is registered for providing "Renting of Immovable Property Services" - On audit, the Revenue found that the assessee was also operating a reading club, wherein books were provided to borrowers against varying annual charges depending upon package opted for - The Revenue opined that such activity was taxable under 'Club or Association service' - Duty demand was raised for period prior to 01.07.2012 with imposition of interest & penalty -
Held - The issue at hand is whether such activity falls under 'club or association service' during the period upto 31.06.2012 & whether the same is taxable service w.e.f 01.07.2012 - Considered definition of 'Club or Association service' and taxable service u/s 65(105)(zzze) - The definition u/s 65(25)(a) was subsequently replaced by Section 65(25)(aa) to add the word "Primarily" to its members - In the present case services in question are being provided to third parties, not to any members - Considered decision of Jharkhand High Court in Ranchi Club Vs. CCE - Also for the period after 01.05.2011 upto 30.06.2012, the SCN does not invoke Rule 65(25)(aa) - In this regard, considered findings of Tribunal in M/s Federation of India Chambers of Commerce and Industry - Hence demand for the period upto 30.06.2012 is unsustainable - Further w.r.t. definition of 'public place', considered findings in Union of India Insurance Ltd. Vs. Parvati Devi and Anothers - Admittedly, the library is open to all and accessible upon payment of subscription - Hence the library is a public library - Thereby, the demands are set aside: CESTAT (Para 2,4,8,10,12) - Appeal Allowed: CHNADIGARH CESTAT
CENTRAL EXCISE SECTION
2018-TIOL-91-SC-CX
Pentair Water India Pvt Ltd Vs CCE
CX - While allowing Revenue appeal, CESTAT held that FRP glass fibre vessel contained predominantly glass fibre, therefore, it is correctly classifiable under Chapter Heading 70.14 and not under 84.21 - Assessee appeal before Supreme Court. Held: Delay condoned - Status quo, as it exists to be maintained by parties: Supreme Court [para 3] - Notice issued: SUPREME COURT OF INDIA
2018-TIOL-868-CESTAT-DEL
Moil Ltd Vs CCE & ST
CX - Assessee was processing manganese ore in their factory in their beneficiation plant - The manganese ore is mined in Balaghat mine - Such ore is transferred to beneficiation plant of assessee wherein several processes are undertaken to make the ore saleable and to improve the quality of ore which will facilitate better recovery of the metal i.e. manganese - The processes undertaken include crushing, screening, sorting to remove rock, washing mechanically to remove waste material like clay - The dispute is with reference to Chapter Note 4 to Chapter 26, whether such processes are to be considered as converting ores into concentrates - Tribunal in case of Rungta Mines Limited 2016-TIOL-717-CESTAT-KOL has held that, processes which are very similar to those undertaken by assessee, have been held to be covered by the Chapter Note 4 and the resultant goods are liable to Central Excise duty - Decision of Tribunal is applicable to the present facts of the case and hence, processes undertaken by assessee will incur the mischief of Chapter 4 and Excise duty will be payable by assessee - However, by following the same, penalty imposed on assessee is set aside - Assessee has also argued that the demand is hit by time bar - Further, they have claimed alternately the benefit of Notfn 63/1995 - Since such benefit has not been claimed before the adjudicating authority, matter is remanded to adjudicating authority: CESTAT - Matter remanded: ALLAHABAD CESTAT
2018-TIOL-867-CESTAT-CHD
Kansal Engineering Ltd Vs CCE
CX - the assessee-firm is engaged in manufacturing tractor parts - It cleared some capital goods to its sister unit - The Revenue opined that considering Rule 9 of the Central Excise Valuation Rules, 2000 and CBEC Circular 643/34/2002-CX , such capital goods be assessed on the depreciated value - Duty demand for differential amount was raised - Interest & equivalent penalty under Rule 25 of CER, 2000 was imposed as well - Such demands were upheld by the Commr.(A) - Held - The sole basis of the SCN is that the assessee and the sister unit are related to each other - However, the basis of the relationship has not been spelt out & so the SCN is faulty in this regard - Moreover, the SCN proceeds on the basis that the proprietor of the sister unit is directly related to the directors in the assessee-firm - Apart from this, there is no other finding as to how relationship affected the value or whether there is mutuality of interest in the business, which has affected the value - Hence, without evidence showing mutuality of interest, mere fact that the directors of the assessee firm are related to each other or that the Director of the assessee firm is the proprietor in the sister unit is insufficient to hold that the value was affected in any way by such relationship - The judgments relied on by the Revenue avail it no aid since the the mutuality of interest was unproven therein - O-i-A in issue set aside: CESTAT (Para 2,5,6,9) - CHENNAI CESTAT
2018-TIOL-866-CESTAT-ALL
Tuftwen Petrochemicals Vs CCE
CX - the assessee-company is engaged in manufacturing prepared adhesives and organic composite solvents - The assessee availed Cenvat/Modvat credit on inputs received & used in manufacturing final products - The assessee also cleared inputs - On industrial solvents, the assessee availed credit only on Basic Excise Duty (BED), although it was eligible to avail credit on SED as well - This was because no SED was leviable - When clearing inputs, the assessee reversed BED equivalent to the BED availed - No SED was reversed since it was not availed in the first place - The Department relied on Rule 3 of CCR, 2001 and demanded reversal of SED - Thereupon, the assessee availed full credit on SED paid on inputs, and then debited the SED amount from such credit - The Department then relied on Rule 3(4) of CCR 2001, providing for payment of sum equal to the excise duty leviable on such inputs at the rate applicable to such goods on the date of such removal and on the value determined for such goods under Section 4 of the CEA, 1944 - Duty demand was raised under Rule 57AB(1)(b) of CER r/w Rule 3(4) - Later, the amount already reversed was appropriated & penalty under Rule 13 was imposed - The Commr.(A) dismissed the assessee's appeal -
Held - The Commr.(A) only dealt with duty for clearances made during April-Dec 2001 - However, the issue pertains to reversal of Cenvat Credit on removal of inputs - The credit of SED was admissible whenever inputs were brought into the factory - Therefore, debit of SED upon availment satisfied requirement of Rule 57AB of CER & Rule 3(4) of CCR, 2001 - Hence duty demands & penalty set aside - Reversed amount not interfered with: CESTAT (Para 2,6) - Appeal Allowed: ALLAHABAD CESTAT
CUSTOMS SECTION
CIRCULAR/ NOTIFICATION
cuscir06-2018
Refund of IGST on Export - EGM Error related cases
cnt21_2018
Declaration of Vijayawada Airport as Customs Airport; amendment of Notification No. 61/94(NT) - CUSTOMS dt. 21st November, 1994
ctariffadd18_009
CBEC removes Anti-Dumping Duty on Melamine imported from EU, Indonesia, Iran & Japan
CASE LAW
2018-TIOL-863-CESTAT-MAD
Enterprise International Ltd Vs CC
Cus - Assessee imported consignment of Mulberry Silk Fabric from China in May 2006 and filed Bill of Entry - In accordance with ADD which was provisionally fixed by Notfn 52/2006-Cus , they paid ADD - Later as per final Notfn 121/2006, Government finalized the ADD which was reduced - As per the final notfn, assessee had to pay ADD of Rs.93,690.48 only - They filed refund claim for excess amount of Rs.6,48,084.52 and the same was rejected by original authority stating that assessee had not requested for re-assessment of bill of entry - The refund claim is premature and that the claim can be considered only after bill of entry is reassessed by an order of appropriate appellate authority - On appeal, Commissioner (A) upheld the rejection of refund stating that refund claim is time barred - It is very much clear from the law laid in Rule 9A (2) that in case by final notification, the ADD is reduced, the excess paid is to be refunded - The Larger Bench decision in case of Caprihans India Ltd . 2002-TIOL-89-CESTAT-DEL-LB squarely covers the issue - Following the ratio laid by Larger Bench, rejection of refund is unjustified - Impugned order is set aside: CESTAT - Appeal allowed: CHENNAI CESTAT
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