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SERVICE TAX SECTION
2018-TIOL-940-CESTAT-ALL
Premier Security Services Vs CCE
ST - The issue is whether the SCN can be validly issued on legal heir of proprietor for duty allegedly short paid on the ground that his son-legal heir is carrying the same business after the death of proprietor under the same name and style - Proprietor Birendra Singh, with respect to whom SCN was issued after his death, purportedly on the legal heir Shri Jasjit Singh is ab-initio avoid and hit by ruling of Supreme Court in case of M/s Shabina Abraham 2015-TIOL-159-SC-CX - It is of no consequence or help to the revenue that legal heir Shri Jasjit Singh have also taken registration under the same name and style and is carrying on similar business - The said proprietorship concern of Shri Jasjit Singh is totally different from earlier proprietorship concern of his late father Shri Birendra Singh - The Revenue have erred in issuing SCN on him after the death of late Birendra Singh - Demand of tax, allegedly short paid collected from Shri Jasjit Singh when he approached the Department for registration under the same name and style, as his father was carrying on business, is also ab-initio void - Accordingly, amount of Rs.38,24,602/- collected from Shri Jasjit Singh is against the provisions of law and accordingly, Adjudicating authority is directed to refund the same with interest: CESTAT - Appeal allowed: ALLAHABAD CESTAT
2018-TIOL-939-CESTAT-AHM
Repro India Ltd Vs CCE & ST
ST - Assessee had filed refund claim of service tax paid on export commission to foreign commission agent in accordance with Section 66 A of FA, 1994 - Since the said service was used in relation to export of goods they claimed refund of same under Notfn 9/2009-ST - The adjudicating authority sanctioned the refund claim - Commissioner (A) set aside the order of refund and allowed the appeal filed by Revenue - Issue is squarely covered by judgment of Allahabad High Court in Glyph International Ltd.'s 2012-TIOL-122-HC-ALL-ST - Also, the Board in its Circulars dated 16.7.2009 and 18.5.2011 clarified that there is no difference between treatment of service tax paid under Section 66 and Section 66A of FA, 1994 - Accordingly, impugned order being devoid of merit is set aside: CESTAT - Appeal allowed: AHMEDABAD CESTAT
CENTRAL EXCISE SECTION
2018-TIOL-938-CESTAT-MAD
Golden Plast Rigid Pvc Pipes Vs CCE
CX - Assessee is manufacturer of rigid PVC pipes - On an allegation that assessee had suppressed production and clearance and that their clearances had exceeded Rs. One crore SSI exemption limit, a SCN was issued - The assessee paid the amount under protest even before issue of SCN - Original authority ordered that even after clubbing the value of all group companies, it has not crossed Rs. One crore and therefore ordered dropping of proceedings - Assessee filed refund claim for the duty amount paid by them under protest - The adjudicating authority held that the refund claim is eligible for sanction on merits - Accordingly, in case the department felt that such sanction of refund was erroneous, SCN should have been issued under section 11A for recovery of duty allegedly "erroneously refunded" which certainly was not done - Of course, there had been some doubt regarding assessee was required to be issued SCN under section 11A within the statutory time limit - The period of dispute is 2003 - 04 and as such, department officers were fully aware of Board circular which is also binding on them - Nonetheless, no SCN has been issued proposing recovery of alleged "erroneously refunded amount" - This aspect should have been taken note by lower appellate authority - Order passed by Commissioner (A) cannot sustain and is therefore set aside: CESTAT - Appeal allowed: CHENNAI CESTAT
2018-TIOL-937-CESTAT-MAD
Tansi Engineering Works Vs CCE
CX - Assessee engaged in manufacture of furniture such as steel table, chair and benches - On audit, it appeared that assessee had removed a quantity of waste and scrap which had arisen during course of manufacture of finished goods to one Kanishk Steel Industries without payment of excise duty - Department took the view that such waste and scrap are excisable and dutiable - The said quantities of scrap had been converted by said Kanishk Steel into angles and channels and returned to assessee - The returned items were taken into stock - Also, the converted materials were received from the above company under invoices indicating "after conversion" - Assessee have also averred that they paid conversion charges to M/s.Kanishk Steel Industries and that the materials received back have been converted as finished goods and sold through invoices on payment of duty - Though assessee did not take permission or intimate that they are sending the goods to a job worker under Notfn 214/86-CE, it is not in dispute that waste and scrap that were sent out to Kanishk Steel Industries were done so only on delivery notes and the converted products had also been received back under invoices accounted for and utilized in further manufacture of final products - There is thus no allegation that the waste and scrap have been diverted or clandestinely sold - In any case, broad procedural requirements of said Notfn, though not opted for, have been largely followed - Waste and scrap could at best be considered as captively consumed goods, value of which is definitely not required to be excluded under SSI exemption notification - Therefore, when the goods recycled captively, the value will not form a part of aggregate value: CESTAT - Appeal allowed: CHENNAI CESTAT
2018-TIOL-936-CESTAT-CHD
Tegs Masrado Pvt Ltd Vs CCE & ST
CX - Assessee, a 100% EOU engaged in manufacture of canned mushrooms - They were registered as such, in terms of Letter of Permission and imported capital goods and raw materials in terms of Notfn 13/81-Cus and also procured certain capital goods and raw materials indigenously in terms of Notfn 57/94-CE free of duty - SCN was issued to assessee proposing confiscation of imported capital goods, raw materials, indigenous capital goods and raw materials besides the duty demand on the ground that they have not fulfilled the export obligation - This is a second round of litigation - While remanding the matter in earlier round of litigation, it was held by Tribunal that proceedings could be initiated against assessee only after the recommendation of Development Commissioner and Development Commissioner has dropped the proceedings against assessee - Admittedly, Development Commissioner has dropped the proceedings against assessee therefore, proceedings initiated by adjudicating authority in impugned order are contrary to the order of Tribunal dated 19.09.2001 and also against the spirit of CBEC Circular No. 21/95-Cus - Order of Development Commissioner have not been challenged by Revenue or concerned department therefore, same has attained finality - Moreover, orders passed by Tribunal dated 19.09.2001 and 08.08.2003 have also not been challenged by Revenue and the same have also attained finality - Proceedings against assessee are not sustainable, impugned order set-aside: CESTAT - Appeal allowed: CHANDIGARH CESTAT
2018-TIOL-935-CESTAT-CHD
Kayem Food Industries Pvt Ltd Vs CCE
CX - the assessee-company is engaged in manufacturing wheat flour, rice flour, corn crunch & rice crunch - These were supplied to industrial consumers, and then classified under heading 1901.11 - The assessee also declared the goods for use of infant in unit container of 30 kgs/10 kgs - The Department issued an SCN classifying the goods under heading 1901.19, attracting 16% duty - Duty demand was raised with imposition of interest & equivalent penalty - Held - Difference of opinion - Member (J) considered the scope of heading 1901.11 and heading 1901.19 - Considering the entries, they should be food preparations put up in unit containers - The goods are for infant use and the same is not disputed - Hence the goods classify under heading 1901.11 - The legislative intent is not that such goods be strictly used by infants or that they cannot be used by another industrial unit for further manufacture for ultimate consumption by infants - The entry clearly shows that the goods should be the food preparations put into unit container for infant use - Thereby, the classification favored by the assessee is correct - Regarding invocation of extended limitation, it may be noted that the assessee regularly filed declaration under Rule 173B of the Act - Such declaration was known to the Revenue and the classification was approved - Hence the extended limitation is not invocable - Meanwhile, Member (T) held that the actual issue is whether the products in question were capable of use by infants - Admittedly the assessee made intermediate products which are incapable of being consumed by infants in actual state - These goods were sent to industrial consumers, which made the products fit for consumption by infants - Hence the products would not be for use by infants, and so not classifiable under heading 1901.11 - Instead they would classify under heading 1901.19 - Nonetheless appeal be allowed on limitation: CESTAT (Para 2,6-12,14) - Appeal Allowed: CHANDIGARH CESTAT
CUSTOMS SECTION
NOTIFICATIONS/ CIRCULAR
ctariffadd18_016
Seeks to notify provisional assessment for imports of 'Jute Products' namely, Jute Yarn/Twine (multiple folded/cabled and single), Hessian fabric, and Jute sacking bags exported by M/s. Natural Jute Mill [Bangladesh] and M/s Kreation Global, LLC,USA [Bangladesh]
cuscir08-2018
Refund of IGST on Export-Extension of date in SB005 alternate mechanism cases & clarifications in other cases-reg
ctariff18_033
Seeks to Amend notification No 52/2003- Customs dated 31.03.2003 for extending exemption from IGST and compensation cess to EOUs on imports till 01.10.2018
ctariff18_032
Seeks to further amend notification No. 50/2017-Customs so as to reduce BCD from 10% to 5% on Opencell(15.6” and above) of LCD/LED TV panels
CASE LAWS
2018-TIOL-934-CESTAT-MAD
Itspossible Marketing Ltd Vs CC
Cus - the assessee imported products such as Anderson's Concentrated Mineral Drops (CMD), Elete Electrolyte and NanoSil - The assessee declared them under CTH 3004 5020, whereas the Revenue claimed them to be classifiable under CTH 2106 9099 - The Revenue also rejected the declared values of the imported goods under Rule 12 of the Customs Valuation Rules, 2007 and sought to redetermine them - Demand for differential duty was raised, with interest & penalties u/s 114A & 114AA - The Revenue also enhanced the declared value of the goods - An amount of freight was also added to the assessable value - The imported goods were confiscated with redemption fine being imposed u/s 125(1) of the Act - Further penalty u/s 112(a) & u/s 114AA were also imposed on the director of the assessee firm - Held - Regarding CMD, while the bottle label states it to be naturally sourced and harvested supplement, the Revenue claims it to be a food preparation - However, it adduced no evidence in support of its claim - Considering the provisions of notes 5 & 6 of Chapter 21 of the CTA, 1975, it cannot be said that CMD drops are of a genre classifiable under notes 5 & 6 - CMD drops also cannot be classified under the residual heading under CTH 21069099 - Hence the classification heading proposed by the Revenue is untenable, since it is not backed either by test reports or expert opinion - The same reasoning would apply mutatis mutandis to the classification of Elete and Nanosil - Turning to the issue of valuation, the assessee did not dispute the recovery of hard disc, files & documents - Such records were analyzed by the Revenue - When the Revenue found the assessee to be undervaluing the imported goods, the assessee could not adduce any evidence proving otherwise - Hence the rejection of value declared as well as their redetermination is correct - Hence the matter is remanded to calculate the differential duty payable, based on enhanced value: CESTAT (Para 1, 10-22) - Appeal Partly Allowed: CHENNAI CESTAT
2018-TIOL-933-CESTAT-AHM
MSA Shipping Pvt Ltd Vs CC
Cus - Assessee, a shipping line has transported the cargo from Pakistan to India imported by M/s Archana Traders from the overseas supplier - On examination of consignments, it was noticed that the cargo consist of 'Arecanut Betelnut Splits' not of Pakistan Origin but was of Indonesian origin and imported misusing SAFTA agreement - Consequently, SCN was issued - Issue relates to penalty confirmed/upheld against assessee under Section 112(a) of Customs Act, 1962 - Even though Commissioner (A) analyzing the facts and evidences on record has reduced the penalty to Rs. 25,000/- however, the contention assessee is that the allegation in SCN against assessee proposing penalty was that assessee had colluded/ connived with shipper in bringing Arecanut Betelnut Splits to India - Since both the authorities below had categorically recorded a finding that assessee had neither connived nor colluded with shipper or importer in getting the cargo imported, therefore, imposition of penalty under Section 112(a) is unwarranted: CESTAT - Appeal allowed: AHMEDABAD CESTAT
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