SERVICE TAX
2018-TIOL-962-HC-AHM-ST Dharnidhar Developers Vs JCST
ST - the assessee is a partnership, which has since been dissolved - The Department raised duty demand with interest & penalty & also attached the assessee's bank accounts - The assessee claimed to have not been served a certified copy of the order - However, the Department claimed to have attempted service of order on multiple occasions, all of which did not succeed - It also claimed that the assessee did not participate in the adjudication process - While the assessee subsequently received a photcopy of the order, it considered the same to be insufficient.
Held - It is undisputed that the assessee were not provided certified copies of O-i-O - Whether or not the Department's attempts to serve the same can be treated as valid service, is immaterial - Hence in the peculiar circumstances of the case, the assessee is enabled to approach the Commr.(A) with a simple copy of the O-i-O - The assessee is also directed to pre-deposit 25% of the duty demanded - Till then, the attachment of bank accounts is lifted: HC (Para 2,3,5) - Writ petition allowed: GUJARAT HIGH COURT
2018-TIOL-961-HC-AHM-ST
Enviro Control Associates (I) Pvt Ltd Vs UoI
ST - the assessee was awarded turnkey project of water supply & water treatment & other maintenance - Such project was awarded by the Surat Municipal Corporation - The Department opined that such services were taxable & raised duty demand with interest & penalty - When the assessee filed an application seeking rectification of mistake in the O-i-O, the Addl. Commr. denied the same on grounds that no provisions permitted such rectification in an O-i-O.
Held - Considered the provisions of Section 74 of the Finance Act 1994, concerning rectification of mistake - Section 74(1) empowers an Central Excise officer to rectify any mistake apparent from the record within two years from the date of passing of the order - Further, Section 2(b) of the CEA defines 'Central Excise officer' & includes the Additional Commissioner of Central Excise - Lastly, Section 65(121) of the Finance Act provides that words & expressions used in the CEA, 1994 were applicable to the duty of exercise - Hence the Addl. Commr. was empowered to exercise power of revision - Hence the communication denying the request for rectification of mistake is set aside - The Addl. Commr. directed to consider assessee's application afresh: HC (Para 2,3,5,6) - Writ Petition Allowed: GUJARAT HIGH COURT
2018-TIOL-1607-CESTAT-MUM + Case Story
Kamala Mills Ltd Vs CCGST & CE
ST - CBEC has clearly clarified in Circular no. 170/05/2013-ST that notice for rejection of VCES-1 declaration should be issued within 30 days - This Circular dated 18.08.2013 was in the knowledge of the department - notice issued after 1½ years is clearly time barred - Impugned order set aside and appeal allowed: CESTAT [para 5 to 7]
ST - VCES, 2013 - Appeal against rejection of the VCES-1 declaration is maintainable before the CESTAT - law settled in the case of Narasimha Mills Pvt. Ltd. 2015-TIOL-1504-HC-MAD-ST: CESTAT [para 5] - Appeal allowed: MUMBAI CESTAT
CENTRAL EXCISE
2018-TIOL-960-HC-AHM-CX
Rohinton Panthaki Vs UoI
CX - the petitioner herein was aggrieved by a communication from the Central Excise department to the chairperson of the housing society, of which the petitioner is a member - Such communication was in relation to a flat which the petitioner inherited from his mother - Besides, his mother had purchased such flat using her own funds - The Department sought details of payments made to the society by the petitioner's mother - Subsequently, the property was attached to recover some dues allegedly owed by the petitioner's father - Thereupon, when the petitioner tried to liquidate the property to meet medical expenses, he was prevented from doing so due to the prohibitory order passed by the Excise department.
Held - the Department put forth no evidence showing that the petitioner's fathers owed any tax dues - There is no assessment order proving the same - Besides, when the petitioner's mother obtained the property, there is no material suggesting that it was a benami purchase - Lastly, the Department failed to establish that the petitioner's property could be utilized to recover tax dues owed by the petitioner's father - Hence the property must be released from the Department's clutches - The attachment of property is lifted: HC - Writ Petition Allowed: GUJARAT HIGH COURT
2018-TIOL-1608-CESTAT-MUM + Case Story
Ramakrishna Electricals Ltd Vs CCE
CX - Expression in the statute cannot be allowed to be circumscribed on an unfounded interpretation by lower authorities - appellant supplying transformers on short-term basis to customers on payment of CE duty and upon return, availing credit by following rule 16 of CER, 2002 - credit denied on ground that 'appellant has twisted rule 16 to suit his convenience' - appeal to CESTAT
Held:It is not the intention of the statute that goods once taxed should be subject to repeated duty liability on every incidence of removal - It is to provide a mechanism for such removal, without repeating the duty burden, that rule 16 of CER, 2002 carves a separate facility of adjustment of duty that is levied in the first instance - A wrong construction has been placed on the object and intention of rule 16 of CER, 2002 - impugned order denying credit set aside and appeal allowed: CESTAT [para 2, 3] - Appeal allowed: MUMBAI CESTAT
2018-TIOL-1603-CESTAT-CHD
Manish Vinyls Vs CCE
CX - the assessee company was served SCNs, proposing to deny Cenvat credit on several grounds - Firstly, the assessee had claimed credit on PVC resin & which was denied on grounds that the same was not received in the assessee's factory - Secondly, credit availed on imported PVC was also denied on the same grounds - Thirdly, credit availed on PVC resin transported in the assessee's own vehicle was denied on grounds that the inputs were not received & the vehicle had been used for other purposes in that period - Lastly, duty demand was raised for alleged clandestine removal of final products - Such demand was based on transporter's documents.
Held - Difference of opinion - The Member (J) held that regarding the denial of Cenvat credit on PVC resin, it is based on transporter's statements & without any corroborative evidence being produced - The maker of the statements was not cross-examined by the assessee - Also the SCN in this regard was issued after a 2-year delay - Hence credit availed in this regard cannot be denied - Further, the Department's allegations that the assessee received goods without cover of invoices & such goods were used to produce final products, which were cleared without payment of duty, are also based on statements of the transporter - As again, no cross-examination was permitted despite requests - No evidence showing manufacture of goods or their transportation or procurement of raw material was put forward - Since the statements of the transporter have been relied on solely, the denial of cross-examination contravenes the principles of natural justice - Thus the allegations of clandestine removal are unsustainable - However, Member (T) thought fit to remand the matter to the adjudicating authority & give chance to follow the provisions of Section 9D - The authority would permit cross examination & give fair chance to the assessee to defend its case, before passing a speaking order - Difference of opinion to be resolved by third member: CESTAT (Para 3,10,15,19,20) - Case Deferred: CHANDIGARH CESTAT
2018-TIOL-1602-CESTAT-MUM
Flamingo Pharmaceuticals Ltd Vs CCE
CX - CENVAT - Rule 2(l) of CCR, 2004 - Appellant is an exporter of pharmaceutical products and is entitled to export incentives mandated in the FTP - they had availed the services of M/s JAK Traders Pvt. Ltd. for compliance with the necessary formalities necessary to obtain the sanctions of their incentives - Contention of the department is that the professional fees on which service tax liability has been discharged pertains to activities beyond the place of removal and hence ineligible to be availed as CENVAT credit - appeal to CESTAT.
Held: Input service in relation to manufacture and input service in relation to a specific activity enumerated in the exclusive portion or both are eligible for availment as CENVAT credit - In the context of certain services such as outward transportation, judicial interpretation shifted the ‘place of removal' from factory to the port of export - Export incentives are an entitlement of the appellant upon grant of ‘Let Export Order' - Also the lapse of time between exports per se and the release of incentives is attributable to procedural formalities which does not deprive the export goods of the eligibility for incentives upon export - eligibility for incentives on completion of export formalities is consisted with the place of removal being the port of export - Exports are the culmination of production activity and the motive force for production, therefore, denial of CENVAT credit on the ground that there is no nexus with the manufacturing activity will not sustain - impugned order set aside and appeal allowed: CESTAT [para 4] - Appeal allowed: MUMBAI CESTAT
CUSTOMS
NOTIFICATIONS
ctariff18_046
Notification 50/2017-Cus amended to increase BCD on Wheat from 20% to 30% - Omits entries pertaining to Shelled almonds and Protein Concentrates
ctariff18_045 Central government exercises emergency powers to increase tariff rate of basic customs duty on Walnuts in shell from 30% to 100% and on Protein concentrates and textured protein substances from 30% to 40% CASE LAWS
Asahi Songwon Colors Ltd Vs CCE & ST
Cus - duty demand was raised against the assessee company - Subsequently, the assessee's appeal before the Tribunal was dismissed, when the assessee asked for an adjournment.
Held - The Tribunal refused the assessee's request for adjournment on grounds that the issues were in narrow compass - If the Tribunal felt that no case for adjournment was made out for whatsoever reason, the request could have been denied - However, the Tribunal's conclusion is a risky one, arrived at without assisstance from the assessee - The issue requires proper consideration after hearing the assessee's contentions as well - Hence the proceedings are remanded for fresh verification: HC - Case remanded: GUJARAT HIGH COURT
2018-TIOL-1601-CESTAT-DEL
Avanti Overseas Pvt Ltd Vs CCE & C
Cus - the assessee company, a DTA unit, is engaged in manufacture & export of steel pet bowls - It availed duty drawback on such exports - When the assessee set up a separate EoU unit in the same premises & obtained LOP, it was unable to get the premises customs-bonded within the valid period of LOP - Later the Customs department enquired from the Excise department as to whether or not the assessee was a functional EoU - The latter clarified in the negative since the assessee failed to get its premises customs-bonded within the validity of LOP - Thereupon, the assessee's pending drawback claims were released - After some years, the DRI conducted investigations & surmised that the assessee was an EoU since it claimed benefits u/s 10B of the Income Tax Act & such benefits were only available to 100% EoU - SCN was issued proposing recovery of drawback sanctioned to the assessee - The same culminated into an O-i-O raising duty demand with interest & penalty and which was later upheld by the Commr.(A) - The assessee does not contest the issue of drawback & instead seeks to determine whether or not it classifies as a 100% EoU - Since the Commr.(A) dismissed the assessee's appeal after examining the issue as to whether or not it is 100% EoU, the appeal against such findings is maintainable before the Tribunal, u/s 129A of the Act.
Held - There was a difference of opinion during an earlier hearing on the matter - The Member (J) held the assessee to be a DTA unit, on grounds that Department failed to effectively prove that the assessee was a 100% EoU - That its status under the Income Tax Act was inconsequential for purposes of the Customs Act - Meanwhile, the Member (T) relied on some precedent cases to hold that any proceedings to recover drawback cannot be appealed before the Tribunal when the order is passed by Commr.(A) - Hence the appeal was dismissed for lack of jurisdiction - Considering the decision of the three-member Bench in Commissioner vs. Jindal Stainless Steel Limited, it is to be considered at par with a Larger bench decision & so is a binding precedent - Presently, to determine assessee's eigibility for drawback, it must first be determined whether or not it is a 100% EoU - The two issues are not independent of each other - The pith & substance of the matter pertains to payment of drawback - Hence the present case is one in which the appellate jurisdiction of the Tribunal is barred - The O-i-A can only be challenged before the Revisionary authority - Thus the present appeal is not maintainable: CESTAT - Appeals Dismissed: DELHI CESTAT |
by Shailendera Kumar 
by Naresh Minocha 
