SERVICE TAX

Bharti Airtel Ltd Vs CST

ST - Assessee engaged in providing cellular telecommunication services and discharging their Service tax liability - It is seen that as a result of Delhi High Court order passed on September, 19, 2007, demerger took place and all the assets i.e. specific infrastructure were transferred by assessee to M/s. Bharti Infrastructure Telecom (BIL) - On the date of demerger as on 31/01/2008, assessee was having unutilized credit in their account books - After making certain investigations, assessee was served with SCN seeking to recover Cenvat credit availed by them on capital goods and inputs used in erection of towers and fabricated building and utilized by them for payment of Service tax on output services during the period 10/09/2004 till 31/01/2008 - In terms of Rule 10, assessee was within its rights to seek benefit on this count - Transfer of said credit is not mandatory - The Rule nowhere suggest that the owner or transferor of business is legally bound to transfer the credit which cannot remain in existence - A similar issue has been examined by Tribunal in case of Bilag Industries Pvt. Ltd. wherein it was observed that inputs and capital goods not having been removed from factory premises of assessee, who continue to have the complete control over the factory, sale of certain capital goods would not invoke the provisions of Rule 10 - Relying on decision of said case, it is held that provisions of Rule 10 of Cenvat Credit is not applicable - As said provisions under Rule 10 have not invoked in SCN, adjudicating authority has gone beyond the SCN, which is not permissible on that count also demand is not sustainable - Impugned order is not sustainable on merits as well as on limitation: CESTAT - Appeal allowed: CHANDIGARH CESTAT

2018-TIOL-1483-CESTAT-MAD

Madras Cements Ltd Vs CCE

ST - Assessee engaged in manufacture of Ready-mix concrete attracting Nil rate of duty and despatch said goods to construction sites by road and pay service tax on behalf of transporters - It appeared to department that such utilization of cenvat credit was irregular since the service provided by GTA for outward transportation does not become an output service for consignor or consignee in terms of Rule 2(p) and 2 (r) of CCR, 2004 - Prior to 1.3.2008, there is no bar on assessee for utilization of cenvat credit for discharging, as a consignor, the tax liability on GTA services availed for outward transportation - However, for the period 1.3.2008 to September 2008, i.e., remaining part of disputed period, by virtue of amendment brought in Rule 2 (p) of Rules vide Cenvat Credit (Amendment) Rules, 2008 w.e.f. 1.3.2008 assessee cannot utilize cenvat credit for discharging tax liability on said GTA service for outward transportation - Cenvat credit so availed will then will have to be paid back along with appropriate interest liability thereof - For this limited purpose, matter remanded to adjudicating authority - As regards to penalty, issue per se was mired in confusion during the disputed period - The very fact that the matter had to be referred to Larger Bench by itself indicates that there was insufficient clarity on the issue even amongst various Bench of the Tribunal - When this being so, there was reasonable cause on the part of assessee for his failure to discharge tax liability from 1.3.2008 - This being so, no penalty shall be imposable and accordingly penalty under Section 76 & 78 are set aside: CESTAT - Appeal partly allowed: CHENNAI CESTAT

CENTRAL EXCISE

2018-TIOL-1492-CESTAT-CHD + Case Story

Escorts Ltd Vs CCE

CX - CENVAT - Inputs sent to job worker returned as rejected/spoiled - no cause for denial of credit in view of coverage under paragraph 3.7 of Chapter 5 of the CBEC Supplementary Manual - CENVAT credit is also admissible on the part of the input that is contained in waste, refuse or byproduct even if the same is generated at the job worker's end - Impugned order set aside and appeal allowed with consequential relief, if any: CESTAT by Majority - Appeal allowed: CHANDIGARH CESTAT

Usha International Ltd Vs CCE

CX - Appellant purchasing engine/pump/base frames and undertaking inspection and testing for proper alignment; thereafter, packing all three items in a master carton and selling the same as pump sets – in view of Note 6 to Section XVI of CETA, 1985, activity is to be held as ‘manufacture' u/s 2(f) of CEA, 1944 – CENVAT credit rightly availed on engine/pump/base frames – Impugned order set aside and appeal allowed with consequential relief: Tribunal by Majority. - Appeal allowed: CHANDIGARH CESTAT

2018-TIOL-1482-CESTAT-MUM

Blue Star Ltd Vs CCE

CX - CENVAT - Whether demand u/r 6(3)(b) of CCR, 2004 is maintainable in respect of goods supplied to SEZ developers during the period 2005-08.

Held: Issue is no longer res integra - Tribunal has taken a consistent view that the supply made to the SEZ developers is considered as export even prior to Notification 15/2008-CE(NT) applying the provisions of the SEZ Act - Lotus Power Gears (P) Ltd. - 2016-TIOL-1410-HC-KAR-CX refers - impugned order is, therefore, set aside and appeal is allowed: CESTAT [para 4] - Appeal allowed: MUMBAI CESTAT

Endurance Technologies Pvt Ltd Vs CCE

CX - CENVAT - Issue is admissibility of credit of Service tax paid on goods outward transportation charges for the period September 2012 to May 2013.

Held: Apex Court in the case of Ultra Tech Cement Ltd. 2018-TIOL-42-SC-CX has settled the law holding that CENVAT credit of service tax paid on Goods Transportation Agency services availed for transport of goods from place of removal to buyer's premises is not admissible - following the settled law, impugned order to the extent challenged does not require any interference - appeal rejected: CESTAT [para 4] - Appeal rejected: MUMBAI CESTAT

2018-TIOL-1480-CESTAT-DEL

CCE & ST Vs Symbiotec Pharmalab Ltd

CX - Assessee engaged in manufacture of 'Active Pharmaceutical Ingredients' (cortico Steroids) and registered with the Department - A consignment of waste was intercepted and seized by Preventive officers of Central Excise Hqrs. Indore on the allegation that invoice covering the consignment was showing process waste/scrap whereas the goods were high valued pharmaceutical ingredients - Revenue is in appeal on the ground that Commissioner (A) have erred in concluding that on payment of duty with interest and penalty of 15% within 30 days of issue of SCN results in closure of proceedings of SCN and no redemption fine and penalty under Rule 25 of CER, 2002 can be imposed - SCN requires to adjust two issues namely "non-payment of duty" and "seizure of goods and vehicle" and assessee paid duty involved alongwith interest and penalty within stipulated time frame, then according to provisions of Section 11AC only proceedings related to non-payment of duty would be concluded - Further, proceedings in respect of seizure/ confiscation of goods and vehicle are required to be concluded separately - Redemption fine and penalty cannot be treated as one and the same - Provision of Section 11AC are very clear and there is no ambiguity - The second proviso for conclusion of all proceedings comprised in a SCN, if duty, interest and penalty as prescribed are paid within the stipulated period of 30 days from date of communication of SN - Thus, no merit found in appeal filed by Revenue: CESTAT - Appeal dismissed: DELHI CESTAT

CUSTOMS

NOTIFICATION

ctariffadd18_025

Veneered Engineered Wooden flooring - composition explained by inserting Explanation in ADD Notification 17/2018-Cus(ADD)

CASE LAW

2018-TIOL-1479-CESTAT-DEL

Shilpi Cables Technologies Ltd Vs CCE

Cus - Assessee had imported Copper Strips, Copper Tuber and Polythene Compound at 'nil 'rate of duty, for manufacture of RF Feeder Cable, by claiming the benefit under Notfn 25/2005-Cus. (Sl. No. 33), as amended on the ground that RF Cables manufactured by it were electric conductors, classifiable under sub-heading 8544 42 and 8544 49, and therefore, should fall under Serial No.28 and 29 of Notfn - Customs authorities at the port of import had assessed the Bill of Entry and cleared the goods for home consumption - After testing of samples, test report confirmed that the tested sample is "co-axiable cable" - Shri M.K. Sethi, Plant Head and Authorised Signatory as well as Shri B.R. Mishra, Manager (Excise) of assessee in their voluntary statements tendered under Section 14 of CEA, 1944 have admitted that cable manufactured by assessee is a type of "Coaxial Cable", as both the conductors are in same axis - Classification of finished goods made by Department as "co-axial cable", under Tariff heading 8544 20 10 is accepted - "co-axial cable", under Tariff heading 8544 20 10 is not finding place as the eligible goods for benefit of exemption provided under said Notfn - Therefore, assessee is outside the scope and purview of said Notfn and accordingly, was liable to pay applicable Customs duty on the goods imported by it.

In view of the fact that assessee was not entitled for benefits provided under said Notfn, condition of observance of procedures provided under Customs Rules, 1996 does not arise - Since the Customs Officer at the port of import had assessed the bill of entry and cleared the goods for home consumption, he is the only competent authority to issue the notice under Section 28 of the Act - Since the provisions of Rule 8 of Customs Rules, 1996 do not have any application to the case of assessee, there was no jurisdiction on the part of Central Excise Officer, having jurisdiction over the factory of assessee to issue SCN and adjudication of the matter under Section 28 of the Act - Therefore, impugned order passed by Commissioner of Central Excise and Service Tax, Alwar cannot be sustained, as he is not the Jurisdictional Customs Officer, who assessed the imported goods, cleared by assessee on filing the bill of entry - Adjudged demand confirmed in impugned order set aside on the ground of jurisdiction: CESTAT - Appeal allowed: DELHI CESTAT