2018-TIOL-NEWS-068, Dated: Friday, March 23, 2018

ST - ROM application - Notice intimating fixation of hearing as 10.04.2017 was received by the applicant on 10.04.2017 itself and they, therefore, failed to appear for the hearing - however, order passed - applicant submitting that the order needs correction for mistake therein.

Held: Impugned order was passed after examining the merits of the case and, therefore, failure of appellant to appear does not become a reason for treating the order as an order passed under mistake of law - ROM application, therefore, dismissed: CESTAT [para 3] - Application dismissed: MUMBAI CESTAT

ST - Assessee have manufacturing units and depots at various places in India and in their course of business deputed some of their personnel to their group companies - The department has raised the demand holding that these activities would fall under category of manpower recruitment and supply agency service - The issue stands decided by decision of High Court of Gujarat in case of Arvind Mills Ltd. 2014-TIOL-441-HC-AHM-ST - Tribunal in case of Aircel Ltd. had occasion to analyze a similar issue and following the decision in case of Arvind Mills Ltd. , has held the issue in favour of assessee - Mumbai Bench of Tribunal in Spirax Marshall Pvt. Ltd. 2016-TIOL-238-CESTAT-MUM had also decided a similar issue following the decision in case of Arvind Mills Ltd. - Said decision was maintained by Supreme Court as reported in Krohne Marshall Pvt. Ltd. - Following the said decisions and appreciating the facts, demand helds to be unsustainable: CESTAT - Appeal allowed: CHENNAI CESTAT

ST - Assessee engaged in activities of online information and data services and renting of immovable property services - It was noticed by Department that in a few cases, assessee has wrongly availed CENVAT credit twice on the basis of same document - On being pointed out by audit, assessee reversed the wrongly availed CENVAT credit along with interest - The wrongly availed CENVAT credit is not being disputed by assessee and same has been reversed with interest as soon as the same has been pointed out by Department - However, assessee agitates against imposition of penalty - It stands further argued by assessee that intent to evade tax is not sustainable against them since the demand has been raised under reverse charge basis, since the assessee is entitled to have credit of tax demanded as soon as it is paid - Keeping in view the conduct of assessee, it is a fit case for invoking provisions of Section 80 of FA, 1994 for waiving the penalty which is imposed - Impugned order modified and sustain the demand of tax along with interest but set aside the penalties imposed by lower authorities: CESTAT - Appeals partly allowed: BANGALORE CESTAT

CX - Petitioner was not provided with O-I-O so far, thus not in a position to file an appeal as against the said order - Petitioner shall give a representation to 1st respondent seeking for a copy of O-I-O today itself and on receipt of the same, 1st respondent shall furnish the copy of O-I-O on or before 20.03.2018 - The petitioner is granted a week's time for filing an appeal before Appellate Authority - On filing of appeal, Appellate Authority shall decide the same on merits and in accordance with law: HC - Writ petition disposed of : MADRAS HIGH COURT

CX - CENVAT - Allowing credit only to the extent of tax paid by recipient assessee in respect of Manpower Supply service and denying credit of the quantum of tax paid by service provider is not based on law - Splitting of the responsibility for remitting the tax amount to the government has been prescribed for some services for specific reasons of policy - The entitlement to credit of the full tax amount in the invoice is inevitable as the balance amount is also recovered from appellant by the service providers - Impugned order set aside and appeal allowed: CESTAT [para 3, 4] - Appeal allowed : MUMBAI CESTAT

CX - Merely because there is a long interval in the manufacture of prototype vehicle, the assessee cannot cease to become a manufacturer and be considered as a trader so as to deny CENVAT credit on inputs - Impugned order set aside and appeal allowed : CESTAT [para 4, 5] - Appeal allowed: MUMBAI CESTAT

CX - Appellant M/s NRB Bearings Ltd. are engaged in manufacturing of Bearings and are supplying the same to M/s Tata Motors Ltd. - In order to get the early payment it was decided between M/s Tata Motor and the Appellant that the Appellant shall provide a discount of 1.9% so that M/s Tata Motors shall buy Hundi from the Bank and release payment to the Appellant - Revenue authorities considered the said discount as expenditure incurred by M/s Tata Motors on behalf of the appellant and included the same in AV for demanding duty - appeal before CESTAT.

Held: Transaction between Appellant and M/s Tata Motors was in terms of purchase orders and it is only after the early payment discussion between the Appellant and M/s Tata Motors that in order to receive payment earlier the Appellant passed on the discount to M/s Tata Motors thus bearing the cost of early payment - The same, therefore, cannot be in anyway held to be cost incurred by M/s Tata Motors - no demand can be made against the appellant - impugned order is set aside and appeals are allowed with consequential relief: CESTAT [para 4] - Appeals allowed: MUMBAI CESTAT

CX - CENVAT - Input Service - Rule 2(l) of CCR, 2004 - Appellant taking premises on rent for carrying out part of their manufacturing activities - Credit denied of service tax paid on Rented premises on the ground that the same is not in the nature of Input service; the said premises was not included in the Central Excise registration - appeal to CESTAT.

Held: As per definition of Input service, services used directly or indirectly in or in relation to manufacture and clearance of final products up to the place of removal would fall under the category ofInput service - It has been held in a number of judgments that credit cannot be denied on the ground that services were availed outside the registered premises - There is, therefore, no reason to disallow CENVAT credit - Impugned order set aside and appeals allowed with consequential relief: CESTAT [para 4, 5] - Appeals allowed: MUMBAI CESTAT

CX - CENVAT credit - Rule 7 of CCR, 2004 - case of the department is that appellants have three units at different locations and the entire credit was distributed to the appellant's Vikhroli plant which is not permissible; that after amendment of rule 7 only proportionate credit is allowed to be distributed to the respective unit - credit reversed - penalty imposed u/s 11AC of CEA, 1944 set aside by Commissioner(A), therefore, Revenue in appeal before CESTAT.

Held: Issue involved is of procedural lapse as the entire credit was taken by the appellant whereas same should be distributed proportionately to other unit also - However, entire credit was admissible to the appellant though in other units, therefore, there is no gain to the respondent by taking entire credit at one factory - on pointing out the said discrepancy, respondent assessee admittedly paid entire amount, therefore, it cannot be said that appellant had malafide intention -Penalty u/s 11AC was not warranted - Impugned order upheld and Revenue appeal dismissed: CESTAT [para 4] - Appeal dismissed: MUMBAI CESTAT

CX - Appellants are engaged in the manufacture of ‘Printed Plastic Cards' and classify the same under SH 4901.90 claiming Nil rate of duty - SCN alleged that the appellant had up to the year 1998 cleared the said goods by classifying the same under CH 3926.90 as Model Plastic Card/Blank Plastic Card and after imposition of duty in the Budget 1998-99, they have changed classification and claimed Nil rate of duty - demand issued and confirmed by lower authorities, therefore, appeal before CESTAT.

Held: It is apparent from Section Note 2 of Section VII to the CETA, 1985 that the articles of plastic etc. if printed with motifs, characters etc. which are not merely incidental would be excluded from the purview of Chapter 39 - Appellant is manufacturing printed plastic cards having printed matter as per customers' specification and thus cannot be termed as articles of plastic - therefore, impugned products are classifiable under CSH 4901.90 and the demand made under CSH 39 is not sustainable - impugned order set aside and appeals allowed with consequential relief: CESTAT [para4, 5] - Appeals allowed: MUMBAI CESTAT

CUSTOMS SECTION

NOTIFICATIONS

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Anti-dumping duty on 'Flat Base Steel Wheels' imported from China PR to continue till 25 March 2019

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Exemption from IGST and Compensation Cess under Advance Authorization Scheme and EPCG Scheme extended up to 01.10.2018

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FTP 2015-2020 - Advance Authorization - Self Ratification Scheme added in Handbook of Procedures

CASE LAWS

2018-TIOL-504-HC-P&H-CUS

CC Vs Golden Enterprises

Cus - The dispute between the parties is whether the goods that were imported were 'pressed distillate oil', as contended by assessee or whether they were 'base oil', as contended by revenue - Tribunal observed that there was no basis to disregard the declared value and stated that there was no valid reason to reject the classification or valuation of imported goods - Assessee had challenged that order which was disposed of by following judgment of Division Bench to which one of assessee was a party - Upon remand, other impugned order directed the revenue to release goods immediately to the assessee - The order, inter-alia, took into consideration the first impugned order, namely, the order in which the issue of alleged mis-declaration was decided in favour of assessee - In M/s Raja Dyeing 2017-TIOL-552-HC-P&H-CX , Division Bench held that so long as the question of valuation or classification arises the appeal would not be maintainable before High Court even if other issues are raised in view of section 35G(1) of CEA, 1944 - The provisions of section 35G(1) of the Act are in pari materia to section 130(1) of Customs Act, 1962 - The judgment, therefore, applies to the present case as well - Appeal is dismissed as not maintainable: HC - Appeal dismissed : PUNJAB AND HARYANA HIGH COURT

2018-TIOL-918-CESTAT-CHD

CC Vs Maya Enterprises

Cus - On the basis of intelligence received by DRI that certain Indian importers including assessee, were importing palm acid oil, palm fatty acid distillate and palm stearin from Malaysia and other countries and had misdeclared the same as mixed acid oil or mixed fatty acid and mis-classified the same under chapter 38 of Customs Tariff - A SCN was issued to assessee proposing enhancement of value, confiscation of goods under Section 111(d) and (m) of Customs Act and penalties under Section 112 and 114A of Customs Act - The first issue is, whether there was any misdeclaration of description of imported goods - In this regard, samples drawn from consignment were got tested from CRCL New Delhi - From said chemical test report, there was held cross-examination of Chemical Examiner as well as Joint Director - Commissioner has correctly analysed the findings in test report and cross examination of two experts - Experts of CRCL has not conclusively stated whether samples of goods were residue and why these were not Mixed Oil - Charge of misdeclaration against importers is not sustainable - On the issue of undervaluation, in a similar consignment imported as Mixed Acid Oil by another importer M/s. H.K. International, which was investigated by the DRI - In said case, Tribunal examined the valuation aspect of that consignment in which evidence consisted inter-alia the statements of Shri Rakesh Kumar and Shri Anil Kumar Arora, both are indenter and broker, as in present case - In said case also, Revenue had relied upon Export Price Bulletin prices issued by Malaysian Palm Acid Board, as in present case - In those set of facts, Tribunal has held that there is no direct evidence indicating that price reflected on invoices is not the correct transaction value - There is no merit in appeals filed by Revenue and same are liable to be dismissed: CESTAT - Appeals dismissed: CHANDIGARH CESTAT

2018-TIOL-917-CESTAT-DEL

Sardana Enterprises Vs CC

Cus - M/s. Sardana Enterprises, is a proprietory firm owned by Shri Gopal Sardana and they are one of the importers of impugned goods - M/s.Express Industry Council of India is a cargo handling agent authorized as custodian of imported cargo in designated area of Air Cargo Complex, New Delhi - With reference to M/s.Sardana Enterprises, it was alleged that they did not produce documents relating to booking of consignments at Hong Kong as claimed by them - No invoice relating to goods was found along with th goods at the time of examination by officers on 23.04.2012 - The Airway bill had shown that the consignment was shipped to one M/s.Raja Traders with no identifiable address or contact, which was later, amended to M/s.Sardana Enterprises - Much after interception of cargo, assessee came forward with invoice and other details claiming ownership of goods - Even at that time, assessee could not produce necessary supporting evidence with reference to booking of consignment at Hong Kong and also the reason for invoice not having full particulars like name of imported goods - Facts and circumstances of case, as revealed by investigation, have been examined by Original Authority before arriving at a conclusion.

Tribunal agrees with Original Authority regarding rejection of value declared by assessee and re-determination of value based on contemporaneous imports of similar goods - Assessee did not make any substantial or specific submission contesting the valuation of imported goods - In fact, as pleaded by them, on payment of customs duty, fine and penalty, they are requesting for release of goods seized by the Authorities - Redemption fine works out to more than 26% of re-determined value, same is excessive and accordingly, same is reduced to Rs.7.5 Lakhs : CESTAT - Appeals partly allowed: DELHI CESTAT