SERVICE TAX
2018-TIOL-1564-CESTAT-MUM + Case Story
Poonam Roofing Products Pvt Ltd Vs CCE
ST - Intellectual Property Service - Sections 65(55a), 65(55b), 65(105)(zzr) of Finance Act, 1994 - Appellants are the owners of brand name "SWASTIK and had entered into an agreement with M/s New Sahyadri Industries Ltd. for permitting them to use the said trade name - consideration received of 0.01.% of value of sale of goods by M/s New Sahyadri Industries Ltd. is taxable under Intellectual Property Service - no merit in argument of appellant that the said transaction is not liable to Service Tax under Finance Act, 1994: CESTAT [para 4.5 to 4.7]
ST - It is not in the jurisdiction of this Tribunal to adjudicate on the leviability of VAT or otherwise - Tribunal is competent to adjudge regarding leviability of Service Tax under the Finance Act, 1994 only and insofar as the payment of VAT is concerned, the appellant may approach the appropriate authority: CESTAT [para 4.8]
ST - Penalty -Section 78 of FA, 1994 - Elements for imposing the penalty are identical to those necessary to invoke the extended period of limitation, therefore, no separate specific findings are needed for imposition of penalty under Section 78 of the Finance Act, 1994: CESTAT [para 4.9, 4.10] - Appeal dismissed: MUMBAI CESTAT
2018-TIOL-1557-CESTAT-MUM + Case Story
Veena Industries Ltd Vs CCE
ST - DG sets cleared from factory of payment of CE duty - Appellant engaging sub-contractors for providing installation and commissioning services and bills raised - service tax paid by them availed as credit by appellant and such charges recovered from their customers - Credit rightly availed as appellant have paid the applicable service tax on output service rendered by them - Following Division Bench decision in appellant's own case - 2016-TIOL-401-CESTAT-AHM and in the case of Koch-Glitsch India Ltd. - 2008-TIOL-2075-CESTAT-AHM , impugned order set aside and appeal allowed with consequential relief: CESTAT [para 6 to 8] -
Appeal allowed
: MUMBAI CESTAT
2018-TIOL-1556-CESTAT-DEL
Delhi Metro Rail Corporation Ltd Vs CST
ST - the assessee company operates metro train services in the city of New Delhi & its suburbs - It awarded a contract for design, manufacture, supply, installation, testing & commissioning of "trade control and signalling and telecommunication system" to a consortium of companies - This group comprised of one German company and one Indian company - The Department treated such service as taxable under category of "Erection, commissioning or installation service" u/s 65(105)(zzd) - The Department raised duty demand on the assessee since the service provider was a foreign company -
Held - The contract awarded by the assessee is a composite contraact, involving supply of material as well as execution of the contract - Hence following the Apex Court's decision in Larsen & Toubro such activity would be taxable as works contract - Also since works contract became taxable post June 1, 2007, no duty demand can be raised for period prior to such date - Since the contract was awarded in 2004, the duty demand is unsustainable: CESTAT (Para 2,5,6) - Appeal Allowed: DELHI CESTAT
2018-TIOL-1555-CESTAT-MAD
DM Wall System Company Pvt Ltd Vs CST
ST - the issue was in respect of fresh service tax demand under the category of Intellectual Property Right Service - Earlier SCN had been issued under "consulting engineer service" which arose from the same agreement-Revenue was of the view that Assessee had suppressed facts with the view to evade payment of tax - Revenue invoked the larger period and issued fresh SCN giving the reason that with the introduction of intellectual property right service the Assessee should have come forward on their own and should have filed the ST3 returns as self-assessment procedure is required to be followed -
Held - Following the ratio laid down in Nizam Sugar Factory Vs. Collector of Central Excise, A.P. , the demand is time barred : CESTAT (para 2,5) - Appeal Allowed: CHENNAI CESTAT
CENTRAL EXCISE
2018-TIOL-1554-CESTAT-MUM + Case Story
Sharp Engineer Vs CCE
CX - Pursuant to audit objection, appellant assessee reversed the CENVAT credit availed with interest and penalty and sought waiver of SCN - audit closed objection and no SCN was issued - later, appellant filing a refund claim on the ground that the CENVAT credit is admissible - claim rejected and, therefore, appeal to CESTAT.
Held: Once the appellant has opted for the provisions of Section 11A(6) & (7) of the CEA, 1944, paid the amounts due and intimated the department, the proceedings stand concluded and no grievance can be raised on behalf of either side - act of the appellant closed the entire proceedings, thereafter, neither the department can issue any show cause notice nor the assessee can change their stand for the reason that the department has no opportunity to issue any further show cause notice - impugned order rejecting the refund claim sustained and appeal dismissed: CESTAT [para 3, 3.1, 4] - Appeal dismissed: MUMBAI CESTAT
2018-TIOL-1553-CESTAT-ALL
Nova Plasmold Pvt Ltd Vs CCE
CX - the assessee company is engaged in manufacture of moulded plastic furniture - It obtained registration in December 2005 - On scrutiny of returns, the Department alleged that the assessee had invalidly availed Cenvat credit & cess on some capital goods which had been received in its factory much before it obtained registration - The Department claimed that credit could be availed only after obtaining registration - Held - Under Rule 6(4) of CCR 2004, no Cenvat credit can be allowed on capital goods used to manufacture exempted goods or provide exempted services, other than final products which are exempt from Excise duty under Notfn where exemption is granted based on value or quantity of clearances - it carves out an exception for factories or assessees whose products are otherwise dutiable but are enjoying exemption based upon value or quantity of clearance in a FY - Admittedly, goods maufactured by the assessee are dutiable but the assessee availed SSI exemption when it received the capital goods in the same FY - Hence the Department erroneously held that the assessee was not entitled for Cenvat credit merely on grounds that no excisable goods were manufactured - Registration is not a pre-condition for availing Cenvat credit - Order in question is set aside: CESTAT (Para 2,6) - Appeal Allowed: ALLAHABAD CESTAT
2018-TIOL-1552-CESTAT-DEL
Teva Api India Pvt Ltd Vs CCG, ST & CE
CX - the assessee, a 100% EoU engaged in manufacturing bulk drugs, received various inputs, capital goods and input services from various manufacturers - The assessee availed Cenvat credit on the same - The Revenue opined that the assessee being an EoU was eligible to obtain goods & services without payment of duty, and so it sought to deny such credit - It also denied refund under Rule 5 of CCR, 2004 - Held - Regarding assessee's entitlement to avail credit, neither the SCN nor the orders state any provision under which the assessee cannot avail credit - The only basis for denial of credit is that the duty itself should not have been paid by the supplier of inputs & capital goods - The order relying on the decision of Bombay High Court in Sandoz Pvt. Ltd. vs. Union of India is not sustainable - This decision is w.r.t. refund to be granted by DGFT on terminal excise duty in terms of relevant EXIM Policy - Such procedure was withdrawn by the DGFT it has no application to decide the eligibility or otherwise of the appellant to Cenvat credit in terms of CCR, 2004 - proceedings for demand or for rejection of refunds arising on such credit shall also held in assessee favour in line with the above findings - Hence the orders denying credit be set aside: CESTAT (Para 2,3,6,9,10) - Appeal Allowed: DELHI CESTAT
2018-TIOL-1551-CESTAT-CHD
Inox Air Products Pvt Ltd Vs CCE
CX - Assessee is manufacturer of liquid gases and were clearing these gases in Vacuum Insulated Transport Tanks under special procedure for removal of liquid gases pass out system, the pass-out document indicates, the description, net quantity of goods being dispatched (gross weight minus tare weight of tanker), and duty liability on such net quantity - This net quantity and duty leviable thereon (provisional) is provisionally entered/recorded in the Daily Stock Account at the time of clearance from the factory - Provisional calculation of duty and provisional entry should not be construed as "Provisional assessment under Rule 7 of the Rules - On completion of deliveries, the quantity actually delivered, the quantity actually returned in tanker and the quantum of loss, is duly recorded in the Daily Stock Account - The provisional entry relating to quantity of removal and the duty liability is thus converted into final entry in Daily Stock Account immediately after the return of the tanker (after a single trip/transportation) or latest by next morning-During audit for the period of March 2011 to September 2012 it was observed that Assessee's had taken service tax credit against the outward freight for transportation of these gases from factory gate to buyers' premises by treating the same as input services- Assessee was of the view that in the present case the place of removal is buyers premises-Revenue was of the view that outward transportation does not fall under the ambit of the definition of input services under Cenvat Credit Rules, 2004 - Duty demand was raised and confirmed along with interest and penalty - The Commissioner (Appeals) upheld the O-I-O-Revenue relied on the recent judgment of Supreme Court in Ultra Tech Cement Ltd. wherein the issue of input service credit availed for transport of goods from place of removal to buyers' premises was considered for the period after 01.03.2008, when the definition of 'input service' in the Cenvat Credit Rules, 2004 was amended and the word 'from' was replaced by the word 'up to' -
Held - The Tribunal observed that as the arrangement was provisional and considering special nature of goods and finalization of Daily Stock Account at the point of clearance from the factory - The place of removal is the factory gate - As the Cenvat credit is allowed upto the factory gate, after 2008 amendment made effective from 1.3.2008, hence, the amended rule is applicable in the present case - Therefore, the Tribunal upheld the O-I-A in respect of demand of Cenvat credit and interest and set aside the penalty imposed :CESTAT (para 2,7,8) - Appeal Disposed: CHANDIGARH CESTAT
CUSTOMS
CIRCULAR
cuscir11-2018
Testing of Samples at outside laboratories - more entities added CASE LAWS
2018-TIOL-1550-CESTAT-MAD
Electrosteel Castings Ltd Vs CC
Cus - The Assessee exported cast iron pipes - Revenue was of the view that such iron pipes were liable to export duty - Iron pipes is to be classified under Sl. No. 15 of the Table in Notification No. 66/2008-Cus dated 10.05.2008 - Assesee appealed on the ground that the description in the notification for export duty will more appropriately be covered under Import Tariff Heading 7304 and since their product is covered under 7303 as cast iron pipes, they are not liable to export duty - Heading 7304 talks about tubes, pipes and hollow profiles, seamless of iron (other than cast iron) or steel.
Held - The Tribunal held that when the export duty notification mentions tubes and pipes of iron or steel, all tubes and pipes which are made up of iron or steel are to be included in the heading- Inference can be drawn from the clarification issued on 03.06.2008 by the Board - Assessee is liable to export duty: CESTAT (para 1,5) - Appeal dismissed: CHENNAI CESTAT |
