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SERVICE TAX SECTION
2018-TIOL-1202-CESTAT-MUM + Story
Lemon Tree Hotels Ltd Vs CCE, C & ST
ST - Appellant is paying service tax only in respect of few services, namely, 'rent-a-cab service', 'internet cafe', 'convention service', 'mandap keeper service', 'outdoor catering service', 'health and fitness service' and 'dry cleaning service' - short term accommodation service and restaurant service became taxable only w.e.f. 01.05.2011 - Even though some part of the hotel business is not taxable, it cannot be said that construction service was used exclusively for non-taxable service as the overall hotel business is rendered within the common hotel building - hotel building is common for all taxable and non-taxable service - construction service is clearly covered under rule 6(5) of CCR, 2004, therefore, credit is admissible - impugned order is not sustainable, same is set aside - Appeal allowed: CESTAT [para 6, 7] - Appeal allowed
: MUMBAI CESTAT
2018-TIOL-1191-CESTAT-BANG + Story
Netapp India Pvt Ltd Vs CCT
ST - Interest - Assessee filed the refund claim seeking refund of unutilized CENVAT credit on input services used for providing output services exported during the period under Rule 5 of CENVAT Credit Rules, 2004 r/w Notfn 27/2012 -CE(NT) - The Assistant Commissioner partially sanctioned an amount in terms of Rule 5 - The present appeal has been filed by assessee seeking interest on the already sanctioned amount by original authority - Apex Court in case of Ranbaxy Laboratories Ltd. 2011-TIOL-105-SC-CX has upheld grant of interest in case of late disbursal of refund from the expiry of three months of refund application till refund is granted and not from the date of order of refund - Circular No. 670/61/2002-CX issued by CBEC had clarified that the provisions of Section 11BB of the Central Excise Act gets automatically attracted for any refund sanctioned beyond a period of three months - Therefore, in view of settled position of law which has been settled by Supreme Court (supra), impugned order is not sustainable in law and same is set aside: CESTAT [para 5] - Appeals allowed: BANGALOARE CESTAT
2018-TIOL-1190-CESTAT-MAD
Lemon Tree Hotels Pvt Ltd Vs CST
ST - Assessee is running a 4 star hotel - A SCN was issued interalia alleging wrong availment of credit and wrong availment of abatement under Notfn 1/2006-ST - Demand confirmed alongwith interest and penalties - Assessee was rendering taxable services of cab operator's service, health club and fitness centre service, internet cafe service and dry cleaning service - The input service credit was availed by them on construction services which were used for setting up of premises from where the output services were rendered by them - Even if consider that prior to 01.05.2011, output services of short term accommodation services and restaurant services were not taxable services, assessee was rendering other taxable services like health club and fitness service and internet cafi service - Since the services specified in Rule 6 (5) were not used by assessee exclusively for non-taxable services, they are eligible for credit - The decision in case of Asia Pacific Hotels Ltd. 2013-TIOL-1078-CESTAT-MUM explains the same - Similar view was taken by Tribunal in case of Tidel Park Ltd.2010-TIOL-1006-CESTAT-MAD - As regards to eligibility of abatement under Notfn 1/2006-ST, assessee has not availed any credit of input services used for providing Short term accommodation services and Restaurant services - The credit already availed in 2009 was used to discharge the service tax liability - In assessee's own case, the co-ordinate Bench of Tribunal at Hyderabad had considered the very same issue on identical facts by relying upon the judgment of High Court of Gujarat in case of Mundra Ports and Special Economic Zone Ltd. 2015-TIOL-1288-HC-AHM-ST - Demand raised in respect of wrong availment of credit and wrong availment of abatement cannot sustain: CESTAT - Appeal allowed: CHENNAI CESTAT
2018-TIOL-1189-CESTAT-BANG
Empower Research Knowledge Service Pvt Ltd Vs CST
ST - Assessee has filed appeals against common impugned order whereby Commissioner (A) has partly allowed the appeal of assessee and rejected the refund on certain input services on account of nexus - In assessee ’s own case the same appellate authority for the period from January 2009 to March 2011 has allowed the credit on the very same services which are denied in impugned order - All the input services on which refund has been denied have been held to be input services by decisions of Tribunal in Nash Industries 2016-TIOL-2194-CESTAT-BANG, Utopia India Pvt. Ltd. 2011-TIOL-1080-CESTAT-BANG, Netcracker Technologies Solutions India Pvt. Ltd. 2017-TIOL-3163-CESTAT-HYD, Reliance Industries Ltd. 2016-TIOL-2392-CESTAT-MUM, Jubilant Biosys Ltd. 2018-TIOL-65-CESTAT-BANG, C-Cubed Solutions 2017-TIOL-3284-CESTAT-BANG and Victor Gaskets India Ltd. 2008-TIOL-409-CESTAT-MUM - By following the ratio of said decisions, impugned order is not sustainable in law and the same is set aside: CESTAT - Appeals allowed: BANGALORE CESTAT
CENTRAL EXCISE SECTION
2018-TIOL-1203-CESTAT-MUM + Story
Arihant Udyog Vs CCE
CX - Denial of SSI notification 8/2000-CX on the ground that the goods were not completely manufactured in rural area but various processes of heat treatment, shot blasting, plating were undertaken by job workers located in urban areas and only embossing/engraving of brand name was undertaken by assessee - appeal to CESTAT. Held: Activity of carrying out affixation of brand on bought out spanner does not amount to manufacture - It also prima facie appears that the processes carried out by job workers of heat treatment, shot blasting, plating do not amount to manufacture and even if it is held that the activities carried out by job worker do amount to manufacture, then the duty liability arises on job workers and not on appellant assessees as held by the Larger Bench in Thermax Babcock and Wilcox Ltd. & Thermax Ltd. 2017-TIOL-4390-CESTAT-MUM-LB - Under this legal position, appellant cannot be charged to duty even if the exemption notification no. 8/2000-CX is held as not admissible to them - Assessee appeals allowed, Revenue appeal dismissed: CESTAT - Assessee appeal allowed/Revenue appeal dismissed : MUMBAI CESTAT 2018-TIOL-1195-CESTAT-HYD
Madras Cement Ltd Vs CCE
CX - Assessee was availing Cenvat Credit on Petroleum Coke, substitute for coal as fuel - The officers observed that the documents on which credit was availed, did not mentioning vehicle Number and the truck Number - A SCN was issued for reversal of Cenvat Credit availed by them on Petroleum Coke - Adjudicating Authority held that demands are unsustainable and accordingly dropped the proceedings but imposed penalty on assessee for contravention or Rule 3,4,7 or 9 of CCR, 2004 - Assessee is against the order only on penalty imposed - The provisions of Rule 15 will come into play only if an assessee avails wrong credit and utilize the same - Impugned Order that imposes the penalty of Rs 30 lakh on assessee is found unsustainable by any strange of imagines more so, for reason that Adjudicating Authority has not recorded even a single sentence of reasoning for impose such a penalty - Impugned Order to the extent contested by assessee is set aside - As regards the revenue appeals, it is his submission that in absence any link to- establish that the petcoke cleared by supplier were received under the invoices on which credit was availed, findings needs to be set aside - Assessee has produced a Chartered Account Certificate indicating purchases of petcoke during the period in question of certify transported from Chennai Port to their various factories - This Chartered Accounts Certificate was also considered by Adjudicating Authority in impugned Order - Revenue's appeal against impugned order is devoid of merits and stands rejected: CESTAT - Assessee's appeal allowed: HYDERABAD CESTAT
2018-TIOL-1194-CESTAT-MAD
SR Mineral Water Pvt Ltd Vs PR CCE
CX - M/s. SRM is manufacturer of packaged drinking water under brand name 'KINLEY' - They manufacture said goods on job work basis for M/s. HCCB - It was noticed that M/s. SRM was packaging KINLEY packaged drinking water in 25 lts. Packing with RSP of Rs.50/- declared on labels as 'institutional pack' and on 'regular pack' RSP of Rs.70/- was declared - Case of department is that the MRP of Rs.50/- indicated on institutional packs does not represent the real MRP and that such products also have to be considered as Rs.65/- (till November 2004) and Rs.70/- (from December 2004) - The main allegation raised is that for the goods having same quality and quantity, assessee have affixed different MRP for distribution / supply in same area - Explanation (c) of Section 4A provides that different sales price can be declared when goods are sold in different areas - Undeniably in case of packaged drinking water, MRP has to be affixed in case of packets supplied to ultimate consumer and the duty has to be discharged on basis of this MRP - Rule 34 of SWM (PC) Rules, 1977 provides that in case of supply to institutional buyers, RSP need not be affixed as goods are not intended for retail sale - In such case, duty has to be discharged under section 4 of Central Excise Act - Thus, duty has to be discharged in case of institutional buyers on basis of transaction value - If the goods are supplied to institutional buyers and not intended for retail sale, it is not necessary for assessee to affix the MRP - However, they have affixed MRP and discharged the duty under section 4A - No allegation made in SCN in this regard, requiring assessee to discharge duty under Section 4 as per transaction value - The main allegation is that assessee cannot affix different MRP for same goods in the same area - Assessee asserts that they have discharged duty on the higher value of Rs.70/- even though these regular packs were sometimes supplied to institutional buyers - It is not clear whether such duty has been discharged - The matter requires verification as to whether the assessee has been supplying goods to two distinct classes of consumers and whether duty has been discharged for clearances: CESTAT - Matter remanded: CHENNAI CESTAT
2018-TIOL-1193-CESTAT-BANG
Sami Labs Ltd Vs CCE, C & ST
CX - Assessee engaged in manufacture of herbal extracts, spices extracts, capsules and tablets which are known as food supplements - The dispute is for the period 13.5.2005 to 28.2.2006 - With effect from 13.5.2005, an amendment was carried out in Section 5A of Central Excise Act whereby it was specified that where exemption is granted in respect of any excisable goods from the whole of duty of excise leviable, then the manufacturer of such excisable goods shall not pay the duty of excise on such goods - Various processes undertaken in assessee's plant include extraction of active ingredients using certain solvents - But, after considering the nature of operations carried out, it will not be correct to take the view that assessee's industry falls within categories of industries listed out in Schedule to the Notfn - The fact that solvent extraction is a process which is utilized within the factory cannot bring the factory within the purview of an industry such as oil mill and solvent extraction industry - So, assessee may not be eligible for Notfn 115/75 ibid during the disputed period - It is on record that assessee has paid duty at the time of clearance of goods and under the circumstances, CENVAT credit cannot be denied to them - In case of Bhushan Steel Ltd., Tribunal has taken the view that by debiting CENVAT credit while paying the duty on final product, entire CENVAT credit stands reversed - For this purpose, Tribunal has followed the view expressed by Apex Court in case of Narmada Chematur Pharmaceuticals Ltd. 2004-TIOL-113-SC-CX-LB - CENVAT credit availed by assessee already stands reversed at the time of making payment of duty on clearance of final products - In view of this, no justification found in impugned order asking for payment of CENVAT credit all over again: CESTAT - Appeals allowed: BANGALORE CESTAT
2018-TIOL-1192-CESTAT-BANG
Sanmar Speciality Chemicals Vs CCE, ST & C
CX - During internal audit of records maintained by assessee, it was observed that assessee had cleared certain Bio-technology products such as Enzymes to various reputed research institutions, universities, colleges for research purposes at 'nil' rate of duty by availing exemption under Notfn 10/97-C.E. - Lower authorities, coming to conclusion that the provisions of said Notfn are not properly complied with, issued a SCN to assessee on the ground that only items which are used as consumables to various machineries specified in Notfn are only eligible for exemption and demanded the duty liability to be paid on such Enzymes cleared by assessee - On perusal of certificates issued by various institutes, it is found that they have clearly indicated that Enzymes supplied by assessee were to be used as consumables for research purposes - It is common knowledge that the said Enzymes are used in scientific instruments installed in premises of institutes - Enzymes which are used in scientific and technical instruments, would be eligible for benefit of exemption of excise duty as per said Notfn as they are consumed during research conducted by such various institutes - It is also seen that conditions which are laid down by said notfn have been complied with by assessee - This view is fortified by decision of Co-ordinate Bench in case of Inductotherm (India) Pvt. Ltd. 2009-TIOL-853-CESTAT-AHM: CESTAT - Appeal allowed: BANGALORE CESTAT
CUSTOMS SECTION
2018-TIOL-1188-CESTAT-DEL
Commercial Synbags Ltd Vs CCE & ST
Cus - Assessee engaged in manufacture of Flexible Intermediate Bulk Container (FIBC) and Polypropylene Woven Fabrics (PWF) - The assessee was granted the advance authorisation for export of PP woven fabrics - They had filed wrong declaration with regard to export of goods mentioned in bill of export inasmuch as against 16 rolls of PP woven fabrics, only 12 rolls of PP woven fabrics and 4 rolls of FIBC were actually loaded for export - Thus, it is the case of mis-declaration of goods and accordingly, Section 113 of Customs Act, 1962 is attracted for confiscation of goods and for imposition of redemption fine - However, imposition of redemption fine is in higher side and accordingly, same is reduced - With regard to penalty imposed on assessee under Section 11AC of CEA, 1944, authorities below have not specifically brought out any evidence to show the mala fides of assessee in defrauding the government revenue - Since wrong filing of declaration is due to the lapses of concerned person and is not attributable to any suppression, fraud, collusion, penalty cannot be imposed under Section 11AC of the Act on assessee - Accordingly, penalty imposed is set aside - Impugned order imposing penalty under Section 114 of the Act against assessee is proper and justified: CESTAT - Appeals partly allowed: DELHI CESTAT
2018-TIOL-1187-CESTAT-DEL
MCT Deluxe Honour Industries Pvt Ltd Vs CC
Cus - A shipping bill was filed by M/s. Bhavya Exports in Air Cargo Complex declaring the export cargo as handicrafts - On examination, goods are found to contain Red Sanders - Since the export of red sanders is prohibited in terms of FTP read with CITES, the officers seized the goods and made follow up investigations - Proceedings were initiated against various persons including the present assessee proposing confiscation of seized goods and for imposition of penalties on them - While Tribunal is presently dealing with only two of parties involved in proceedings, these two assessee's role in such improper exports, present and past have been brought out by cogent and credible evidence recorded by Original Authority - The case cannot be restricted to simple calculation of local procurement and its further disposal - Though the local disposal of such procured items itself was not corroboratively established, fact of export attempt and connection of assessee with the said attempts has been brought out clearly by the investigation - The close examination of facts analyzed by the impugned order makes it clear that assessee cannot be de-linked from responsibility of involvement in such improper attempt to export of the items - The present assessees were imposed with a penalty of Rs.10 lakh and Rs.5 lakh, perhaps, on the reason that they were master mind behind such action - Considering the overall facts penalties imposed on main assessee and the second assessee are reduced: CESTAT - Appeals partly allowed: DELHI CESTAT
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