SERVICE TAX SECTION

Multimodal Storage Solutions Pvt Ltd Vs CST

ST - Appellant is entitled to CENVAT credit on input services used for construction of immovable property which is ultimately rented out - No service tax on notional interest earned on security deposit received under the lease and licence agreement - Impugned order set aside and appeal allowed: CESTAT [para 6, 7] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-1239-CESTAT-BANG

ST - Assessee filed a refund claim on the ground that they had erroneously paid the service tax on services exported in terms of Rule 3(2) of Export of Service Rules - The Assistant Commissioner rejected the refund claim partly on the ground of limitation including Section 11B of CEA, 1944 - Since the amount was paid as deposit and not as service tax and the same was also shown in ST-3 returns as an advance of service tax clearly shows that the said amount was paid as a deposit and not as service tax - Therefore, period of limitation as prescribed under Section 11B of Central Excise Act will not be applicable as held in In house Productions Ltd. 2017-TIOL-1242-HC-MUM-CX and Swastik Sanitarywares Ltd. 2012-TIOL-757-HC-AHM-CX - In view of this, impugned order is not sustainable in law and therefore, same is set aside: CESTAT - Appeal allowed; BANGALORE CESTAT

2018-TIOL-1238-CESTAT-BANG

ST - Assessee is registered under category of Manpower Recruitment /Supply Agency Service; Maintenance of Repair Service; and Erection, Commissioning and Installation Service - During audit, it was observed that assessee had availed CENVAT credit based on two credit notes aggregating the CENVAT credit and utilized the same for payment of service tax during the subsequent months - On these allegations, original authority has held that credit note was not a valid document for claiming credit - There was no intention to evade service tax on the part of assessee because they filed the returns and in ST-3 return, he has shown the adjustment under Column 'D2' instead of 'D4' which is only an error in disclosure - Further, there is no revenue loss in the present case as it is only an adjustment of the credit availed and further, in decisions in Schwing Stetter (I) Pvt. Ltd. 2016-TIOL-1895-CESTAT-MAD and SRC Projects Ltd. 2010-TIOL-1223-CESTAT-MAD , it is found that service tax paid in excess towards services rendered can be adjusted towards service tax payment for the subsequent period - Therefore, by following the ratio of said decisions, impugned order is not sustainable in law: CESTAT - Appeal allowed: BANGALORE CESTAT

CENTRAL EXCISE SECTION

2018-TIOL-1244-CESTAT-MUM + Story

CX – No evidence appears of any clearances having been effected other than of manufactured goods or of inputs as such - Clearance of inputs as such is an acknowledged activity under CENVAT Credit Rules, 2004 - Disallowance of CENVAT credit availed on services in proportion to the value of clearance of inputs as such does not have the backing of law - There is no evidence that any input services were utilized exclusively for the purpose of clearing inputs as such and, hence, the availment of credit is well within the provisions of rule 3 of CENVAT Credit Rules, 2004 – Revenue appeal dismissed: CESTAT [para 5, 6] - Appeal dismissed: MUMBAI CESTAT

2018-TIOL-1243-CESTAT-MAD

CX - the assessee-company manufactured 'Idly Chilli Powder' & 'Bajji Bonda Mix' and 'Adai Mix' - Later, the Commr.(A) held that Idly Chilli Powder is classifiable under CETH 0903 10 - The Department opined that it would be classifiable under 2103 10/2103 90 40 while bajji bonda mix & adai mix would fall under CETH 2109 99/2106 9099 of the First Schedule to CETA, 1985 - Held - The findings of the Commr.(A) are based on the decision in Order-in-Appeal No. 33 & 34/2009 dated 3.8.2009 - Also, the Revenue's appeal against this O-i-A was dismissed by the Tribunal - Hence the findings of the Commr.(A) in the present case stand upheld: CESTAT (Para 1,6) - Appeal Dismissed: CHENNAI CESTAT

2018-TIOL-1242-CESTAT-DEL

CX - Assessee has availed the benefit of concession duty under Notfn 1/2011 as amended - The benefit is available subject to condition that no credit of duty on inputs or tax on input services has been taken under provisions of CCR, 2004 - During audit, departmental officers noticed that the assessee has availed cenvat credit on input services - Revenue has taken the view that this is in violation of condition of notfn No. 1/2011 - The benefit of notification was denied and Central Excise duty has been demanded alongwith interest and penalties - The assessee has argued that they will be entitled to benefit of such notification since subsequent to the observations of audit, assessee has filed revised ST-3 returns in terms of Rule 7B of STR, 1994 - In revised return they have reversed the credit indicated in original return which was pertaining to input services used in manufacture of exempted goods - They have claimed that the balance amount which has been availed and utilised was in respect of output services and not pertaining to the manufacture of exempted goods - The legal position that once the cenvat credit availed has been reversed, it is to be considered as not availed, ab initio has been settled by Supreme Court in case of Chandrapur Magnet Wires (P) Ltd. 2002-TIOL-41-SC-CX - It is seen from the record that the entire cenvat credit availed on input services have been reversed by assessee - Assessee can be considered as not availed the cenvat credit of input services, ab initio - Accordingly, they will be entitled to benefit of Notfn 1/2011 during the disputed period: CESTAT - Appeal allowed: DELHI CESTAT

2018-TIOL-1241-CESTAT-CHD

CX - Assessee had availed input service credit on outward transportation of finished goods upto premises of customers - A SCN was issued on the ground that such credit was inadmissible and assessee did not put forth any documents evidencing admissibly of credit to the satisfaction of Department - Both sides agree that the goods were cleared on ex factory basis and no central excise duty has been paid on freight element - Adjudicating authority has applied the Board circular dated 23.8.2007 incorrectly because on one hand there is a finding given that the goods have been cleared on ex factory basis and on the other it has proceeded to examine the three conditions in the said circular which relate only where the place of removal is not the factory gate - In the order of Commissioner (A) also, there appears to be confusion on the facts and undoubtedly the judgments relied upon by assessee were not considered - Since the facts need to be amply clear and accordingly the law has to be applied, order of Commissioner (A) remanding the matter to adjudicating authority is modified to the extent that adjudicating authority would bring out the relevant facts clearly and pass a fresh order in accordance with law: CESTAT - Appeal disposed of: CHANDIGARH CESTAT

2018-TIOL-1240-CESTAT-MAD

CX - A SCN was issued to M/s. AWBI - The said unit was primarily engaged in manufacture of PP/HDPE strips/ tapes and woven fabrics on their own account as well as on job work basis - Department took the view that in the event of granule supplier not paying duty on woven fabrics/sacks, the earlier removal of strips / tapes from the job work end is covered by Notfn 83/94-CE as amended, which is however available only to SSI units manufacturing goods, specified under SSI Notfn 8/2003-CE - Department took the view that the benefit under notfn 83/94 cannot be availed - New registration was obtained by M/s. Palmetto Industries on 14.9.2007, on which date, there were no duty or sums recoverable or due - In respect of AWBI, even though the SCN was issued on 20.9.2007, the amount would become recoverable or due only at the time of determination of liability by original authority, which was on 25.4.2008 - Even so, it is not a case where the entire manufacturing activities or business was continued by new owners - M/s. Palmetto Industries has emphasized that they had bought only the plant and machinery from AWBI - From the sale agreement, it does not spell out that M/s. Palmetto Industries would be responsible for any central excise dues that may arise in respect of AWBI - Proceedings per se are hit by limitation, since the SCN for the period December 2004 to April 2005, was issued only on 20.9.2007 - Keeping in view all these aspects, the impugned order upholding the duty liability demanded by original authority, but who ordered recovery of the same from M/s. Palmetto Industries on the one hand but chose to impose penalty on Mrs. V. Indurani cannot be sustained, for which reason it is set aside: CESTAT - Appeals allowed: CHENNAI CESTAT

CUSTOMS SECTION

NOTIFICATION

ctariffadd18_022

Government imposes definitive anti-dumping duty on Glassware imported from PR China and Indonesia

CASE LAWS

2018-TIOL-738-HC-MAD-CUS

Tecno Doors Pvt Ltd Vs CC

Cus - the assessee company imported 'Landing Panel Left and Right Landing Doors' & 'Panel Centre Cabin Operator' for home consumption - Regarding their valuation, the assessee claimed that for determining assessable value under Rule 10 of the Customs Valuation Rules 2007, the freight amount should not exceed 20% of the FOB value of the imported goods - Hence it added freight amount being 20% of FOB value, to the invoice value - However the Revenue directed the assessee to include additional freight amount as miscellaneous charges - Subsequently, the Tribunal remanded the matter to the Commr.(A) to determine whether the Bill of Entry had indeed been assessed on higher freight amount adopted by the Revenue, in which case, the Commr.(A) was to consider the matter on merits.

Held - considering the provisions of Rule 10 of the Valuation Rules, it is clear that where the cost of transport in terms of Rule 10(2)(a) is not ascertainable, such cost would be taken as 20% of the FOB value of the goods - Also, assuming that the assessee did not protest the excess payment, the Revenue is not entitled to collect any extra amount, which exceeds 20% of the FOB value - Moreover, the Tribunal's remand order, directing verification of whether the assessee declined the addition of miscellaneous charges, is bad in law - Hence Tribunal order set aside & issues answered in favor of assessee: High Court (Para 2-7,17,18,20) - Appeal Allowed : MADRAS HIGH COURT

Honda Siel Power Products Ltd Vs CC

Cus - Claim for refund of SAD filed by assessee under Notfn 102/2007-Cus. as amended was disallowed by lower authorities on the ground that no VAT/CST was paid against imported goods at the time of sale, hence condition 2(d) was not fulfilled - Issue involved have been settled by Tribunal in Kubota Agricultural Machinery India Pvt. Ltd. and Acer India Pvt. Ltd. which laid down that if appropriate rate of Sales Tax/VAT was Nil, then the appropriate Sales Tax / VAT will also to be Nil and the importers concerned would be very much eligible for the refund in such cases - Following the ratios laid down by Supreme Court in Vazir Sultan Tobacco Co. Ltd. 2002-TIOL-215-SC-CX-LB and also the ratio of Tribunal in Gazal Overseas , appeals filed by assessee succeed - It is held that assessee have discharged appropriate sales tax / VAT for the sale of the goods imported by them - As such the refund claimed by them under Notfn 102/2007-Cus. cannot be denied to them, as long as assessee is able to establish that nil VAT/Sales Tax was required to be discharged on impugned goods - Impugned orders set aside: CESTAT - Appeals allowed: CHENNAI CESTAT

2018-TIOL-1236-CESTAT-BANG

Cus - Assessee is registered as 100% EOU engaged in manufacturing of instrument and apparatus for measuring or detecting ionizing radiations - They were not able to use some of raw materials and components procured duty free and which became obsolete / redundant and wanted to destroy the said items in terms of provisions of para 6.15(b) of FTP 2004-09 - The permission to destroy obsolete material and components was sought from jurisdictional Range Officer, who has informed the assessee that Assistant Commissioner has denied the permission for destroying the unutilized raw material and thereby directed the assessee to make payment of duty foregone - Order of Assistant Registrar has not been given to assessee and observation of Commissioner (A) that assessee has not challenged the order dt. 09/04/2009 is not sustainable because the order is not of 09/04/2009 it is only a letter written by the Range officer to the assessee - Refund claim has only been rejected on the ground that warehousing period has been expired whereas the fact of the matter is the Customs licence granted to assessee had been renewed and the goods were still in bonded warehouse - Further, claim for refund under Section 27 of Customs Act, 1962 has not been considered at all since the impugned order gives finding beyond the scope of proceedings - Goods are still in bonded warehouse only and assessee's unit will continue to be an EOU - It is well settled law that no duty is payable when the goods are in bonded warehouse - Further, both the authorities have not considered the provisions of FTP 2004-2009 which by para 6.15(b) allows the assessee for destruction of goods under intimation to the Department - In view of these infirmities, impugned order is not sustainable in law and the matter remanded to the original authority to decide the claim of assessee afresh after complying with the principle of natural justice: CESTAT - Matter remanded: BANGALORE CESTAT