SERVICE TAX SECTION

2018-TIOL-1255-CESTAT-DEL

ST - Assessee engaged in construction activities - The impugned order confirmed service tax liability under three main headings viz. commercial or industrial construction service, management maintenance or repair service and GTA service - Admittedly, contracts for construction executed by assessee are of composite nature - These are liable to be taxed only w.e.f. 1.6.2007 under "works contract service" in terms of decision of Apex court in case of in case of Larsen & Toubro Ltd. 2015-TIOL-187-SC-ST - Assessee contested the quantification of service tax liability alleging wrong application of tax rate for composition - He also pleaded for extending the provision of Section 67(2) for cum duty valuation - This requires verification by Original Authority - The rate to be applied for relevant period should be examined along with taxable consideration for requantification - Cum duty valuation in terms of Section 67(2) benefit can be extended subject to verification of invoice/contract to the satisfaction of provisions of Section 67(2) - Regarding repairs and maintenance of roads, period in present demand is fully covered by retrospective exemption in terms of Section 97 of FA, 2012 - Accordingly, no tax liability will survive - As regards to GTA service, no demand has been made to assessee on such category - Service tax liability confirmed cannot be sustained - Tax liability on composite works contract are subject matter of litigation, accordingly, no penalty is leviable for such tax liability against assessee: CESTAT - Matter remanded: DELHI CESTAT

ST - Assessee has paid service tax under registration No.xxxxx36 instead of registration No.xxxxx35 - The adjudicating authority has rejected the request of assessee to condone the procedural lapse and for adjustment of payment made - The ground on which such request was denied is that there is no provision for said adjustment under FA, 1994 - The Board issued a Circular dated 20.5.2003 wherein it is clarified that assessee shall not be asked to pay service tax again if he has paid service tax under a wrong accounting code - Said issue was considered by coordinate Bench of Tribunal in case of Sahara India TV Network 2015-TIOL-2341-CESTAT-DEL and has referred the Board Circular - The Tribunal had set aside the demand as well as the penalties imposed directing the adjudicating authority to make necessary adjustment - Following the same, impugned order cannot sustain - Impugned order is set aside: CESTAT - Appeal allowed: CHENNAI CESTAT

ST - Assessee engaged in manufacture of MET Coke and availing the credit of duty paid on inputs, capital goods and service tax on input services under provisions of CCR, 2004 - It appeared that the assessee is contravening the provisions of sub-rule (4) of Rule 3 of CCR, 2004, as CENVAT credit cannot be used for payment of service tax in respect of services where person liable to pay the tax is service recipient - The adjudicating authority held that Notfn 28/2012-C.Ex(NT) amended Rule 2(d) and Rule 3 to include the explanation wherein it is clarified that CENVAT credit cannot be used for payment of service tax where the person liable to pay tax is the service recipient and accordingly has disallowed the payment of service tax through CENVAT credit and order for recovery of the cenvat credit so utilized for payment of works contract service, manpower supply service, rent-a-cab service and GTA besides confirming interest and imposition of equivalent penalty - On appeal, Commissioner (A) has passed recent order after considering various provisions of CENVAT Credit Rules, 2004 - Revenue submitted that assessee is liable to pay service tax in cash because CENVAT credit cannot be used for payment of services tax on works contract service, manpower supply service, rent-a-cab service and GTA as service recipient and the same is in clear violation of Rule 3 of CCR, 2004 - No infirmity found in impugned orders: CESTAT - Appeals dismissed: BANGALORE CESTAT

CENTRAL EXCISE SECTION

CX - CENVAT - Rule 16 of CER, 2002 - Assessee taking credit on rejected goods, recyling the same and paying duty on clearance - alleging that credit has been availed irregularly is unsubstantiated - no question of double duty - demand has been confirmed on the basis of assumptions and presumptions - no investigation was conducted by the Department and there is no allegation that the appellant has removed the rejected goods as such - order set aside and appeal allowed : CESTAT [para 6, 7] - Appeal allowed: BANGALORE CESTAT

CX - Mere reiteration of the order of penalty imposed by the original authority, who had jurisdiction, by the first appellate authority, who lacked jurisdiction, does not cause grievance to the appellant at that stage - For the Tribunal to be conferred with jurisdiction, there must be an order passed either by the Commissioner, as original authority, or by Commissioner (Appeals) against an order of a lower authority - Appeal dismissed: CESTAT [para 5, 6] - Appeal dismissed: MUMBAI CESTAT

CX - COD - Similarly situated petitioners approached to the High Court of Punjab & Haryana and in case of some of the petitioners, namely, Ambika International, Jay Ambey Aromatics, Fine Aromatics, Shiva Mint Industries and Jindal Drug Ltd., the High Court has entertained the Writ Petitions filed by those petitioners and vide order dated 17/06/2016 have allowed the same - The petitioner is also one of petitioners, which is similarly situated in case of Ambika International and others - But in case of appellants, the High Court has considered the view that when the appellants are having alternate remedy before this Tribunal and only prayer of the applicants, the petitions were allowed to be dismissed as withdrawn - Section 14 of Limitation Act, 1963 have role to play as the applicants have approached to the wrong forum for taking the remedy against impugned orders - Relying on the decision of Apex Court in case of Pasupati Overseas Pvt. Ltd. 2002-TIOL-713-SC-CUS , delay condoned: CESTAT - Appeal allowed: CHANDIGARH CESTAT

CX - Assessee engaged in manufacture of HDPE bags and PP bags - During audit, it was noticed by department that the assessee had wrongly availed input service credit on service tax paid on outward freight i.e. from the place of removal to the buyers premises - As per purchase order, cost of transportation is included in price fixed between the parties and as per the condition in purchase order, the ownership and property in goods is transferred to the buyer only when the goods reached at buyer's door step and all the risks pertaining to loss or damage has to be borne by seller and the freight charges form integral part of the price - In view of these conditions, impugned order is not sustainable in law - In case of Ambuja Cements Ltd. 2009-TIOL-110-HC-P&H-ST , High Court of Punjab & Haryana has held that when the goods are sent on FOR basis up to buyer's premises and all the conditions in Circular No.97/8/2007 are satisfied, then the assessee is entitled to take CENVAT credit of service tax paid on GTA service - Therefore, by following the ratio of said decision, impugned order is not sustainable: CESTAT - Appeal allowed: BANGALORE CESTAT

CX - Assessee engaged in manufacture of petroleum products and engaged various contractors for executing different work in their manufacturing premises - The dispute is with reference to eligibility of assessee for cenvat credit of duty paid on various items under category of "inputs/capital goods" in terms of CCR, 2004.

As regards to Electrical fittings, lights, earthing strip, high mast pole accessories, coils and cables used to light up the plant area & nearby area within the refinery of assessee, such light fittings are admittedly used by assessee inside their refinery premises only - It is not proper to distinguish such fittings used inside the factory and fittings used in adjacent premises though within the manufacturing facility in overall campus - Denial of credit on such bifurcation is not justified.

Regarding credit on Cable Trays, this cable trays are used as supporting structures for laying and holding the cables in manufacturing facility - The credit on such items cannot be denied on the ground that they have become part of foundation or structural supports.

As regards to credit on grating, chequered plates, fabricated platform, eligibility of product used to fabricate certain structures can be decided by applying user test as evolved by Supreme Court in case of Rajasthan Spinning & Weaving Mills Ltd. 2010-TIOL-51-SC-CX - Applying the said ratio, denial of credit is not justifiable.

As regards to credit on coal tar tape, bitumen and joists, assessee strongly pleaded that these are actually used for coating pipes and ducts connecting various capital machinery used in the manufacture of final product in refinery - These are part and parcel of capital goods for proper functioning - No reason found to deny the credit.

Substantial portion of credit availed was on duty paid Angles, Channels, TMT bars, Steel Structures and MS fittings which were disallowed - Tribunal has consistently held in various cases that these items when they are used in fabrication of structures which are in association with capital goods or accessories of capital goods should also be eligible for credit: CESTAT - Assessee's appeal allowed: DELHI CESTAT

CUSTOMS SECTION

CIRCULAR

cuscir09-2018

Classification of remnant fuel & oils- regarding

CASE LAWS

Cus - Assessee is a Petroleum Refinery manufacturing petroleum products and refining crude oil - They imports crude oil and warehouses the same under various bond bill of entry and which are subsequently cleared under various ex bond bills of entry under provisional assessment - Upon finalization, assessee became entitled to seek a refund since the duty paid on provisional basis was higher than the duty determined upon finalization - Thereafter assessee filed six refund claims - Instead of granting the refund in cash, adjudicating authority only appropriated the refund against demand of duty made under four other Orders-in-Original - Apex Court in 2015-TIOL-199-SC-CUS has finally settled the matter as regards O-I-O No. 113/2006 in assessee's favour and has directed that consequential action, in accordance with declaration of law has to be carried out by Customs authorities in accordance with law - The appropriation made vide O-I-O No. 6/2007 was clearly untenable - In view of the judgment of Apex Court, impugned order is liable to be set aside and matter is remanded to original authority for fresh adjudication - The issue of refund now would be a matter consequential to the determination of duty if any payable upon finalization of assessment afresh as directed by Supreme Court - Consequently, appeal allowed by way of remand: CESTAT - remanded: BANGALORE CESTAT

2018-TIOL-1251-CESTAT-MAD

Cus - Assessee filed the Bill of Entry for clearance of 28802.0 Kgs. of 80% acrylic 20% polyester fur fabrics and 67859 sq. mts. of 100% polyester lining - It appeared that assessee had mis-declared the subject goods as 80% acrylic and 20% polyester fur fabrics as against 57.4% polyester,40.6% polyacrylonirile and 2% cotton knitted pile fabrics with knitted base in order to clear the same without payment of duty under Advance License issued under Customs Notfn 96/2009 - Original authority ordered for reclassification, confirmation of duty with interest, confiscated the goods imposing redemption fine and also imposed penalties - On appeal, Commissioner (A) allowed the appeal of assessee observing that they had got the Advance License amended and modified from Jt. DGFT, Bangalore by including the description of impugned goods - Revenue stated that DGFT cannot issue Advance License retrospectively so as to include description of impugned goods also in the license - In case of Bhilwara Spinners Ltd. 2011-TIOL-159-HC-MUM-CUS , High Court has observed that DGFT is empowered to amend or modify the license retrospectively - From the impugned order, it is seen that Commissioner (A) has followed the decision in Bhilwara Spinners Ltd. to set aside the demand - No reason found to take a different view: CESTAT - Appeal dismissed: CHENNAI CESTAT