SERVICE TAX
2018-TIOL-1665-CESTAT-MUM + Case Story
Ahmednagar District Central Co-Op Bank Ltd Vs CST
ST - Only part of the value of such service which represents 'interest' is exempted by notfn. 29/2004-ST, therefore, Rule 6(3) of CCR, 2004 has no application - Impugned order set aside and appeal allowed: CESTAT [para 5, 6] - Appeal allowed: MUMBAI CESTAT
2018-TIOL-1664-CESTAT-DEL
Team Hr Services Ltd Vs CST
ST - Assessee entered into an agreement with M/s ICICI Bank to market the products of bank with reference to car loans, retail finance, two wheelers loans, personal loans and home loans - Revenue views that assessee provided taxable service under category of BAS during period 01/07/2003 to 31/03/2005 - Demand confirmed and penalty was imposed - Regarding the monitoring and strict regulation exercised by ICICI Bank, same will not be a material fact to decide whether assessee have undertaken the main work of marketing the financial products of client bank - The client bank will certainly exercise various control on service provider in their commercial interest and to upkeep their goodwill and brand name - That by itself will not make the activities of service provider as other than marketing service of product - Having perused the terms of agreement extensively, no doubt that assessee did market the services provided by client bank - It will not be correct to state that assessee only provided operational assistance in such marketing - Assessee is in fact engaged in marketing and not simple operational assistance for marketing - As such, assessee have no case on merits - Assessee cannot be put to tax liability and penalty by invoking provisions like suppression of fact with intend to evade payment of service tax in terms of proviso to Section 73 (1) of the Act - While on merit, assessee is not having the case, on limitation, they have case against invoking the provision of Section 73 (1) proviso - Accordingly, impugned order is set aside only on the question of limitation: CESTAT - Appeal allowed: DELHI CESTAT
2018-TIOL-1663-CESTAT-CHD
Xerox India Ltd Vs CCE & ST
ST - the assessee company is engaged in the manufacture, import & sale of photocopy machines, printers, scanners, fax machines, MFDs & parts thereof - The assessee is also providing services of maintenance of such machinery - The assessee undertook Full Service Maintenance Agreements, Spares and Service Agreements, Volume Based Service Agreements and Annual Maintenance Contracts - For these, the assessee charged serice tax on the standard percentage of labour deduction allowed under State Sales Tax & VAT provisions - The assessee also provided Document Management Services to various clients, wherein it provided paper, envelopes & ink along with the main service - Classified as 'Business Auxiliary Service', the assessee paid tax on the same after deducting an amount towards material consumption - Upon audit, SCNs were issued alleging that the assessee was liable to pay tax on the gross amount received from the clients - The SCN raised duty demands under various heads & also proposed penalties - The deductions claimed were rejected - On adjudication, demands for Maintenance and Repair services (MMR) and Business Support Service (BSS) & Business Auxiliary Service (BAS) were dropped, as being time-barred - Hence the cross-appeals -
Held - Considering the Tribunal's decision in Wipro GE Medical Systems Limited vs. CST which was later affirmed by the Apex Court, the maintenance agreements are classifiable as 'Works Contract' - Hence the assessee needs to pay tax only on the labour portion - Also considering the findings of the Apex Court in Larsen & Toubro Limited the activities of the assessee under contracts for maintenance & repair & business support service & business auxiliary services, classify as Works Contract service - However, no tax is payable for services provided prior to 01.06.2007 - For the period after 01.06.2007, the assessee is providing services in question along with material but the same is not covered under Works Contract - Therefore the assessee is not liable to pay duty under MMR, BSS or BAS - Hence the duty demands, and consequently, the demands for interest & penalties imposed are set aside: CESTAT (Para 2,9-13) - Appeal Allowed: CHANDIGARH CESTAT
CENTRAL EXCISE
2018-TIOL-1662-CESTAT-DEL
Mondeloz India Foods Pvt Ltd Vs CCE
CX - Assessee engaged in manufacture of Cadbury Milk Treat and claimed the classification under sub heading 1905.39 but the department has classified it under sub heading 1905.31 - The department has demanded the differential duty - An identical issue has came up before the Tribunal in case of Cadbury India Ltd. 2017-TIOL-2416-CESTAT-CHD where the same was treated under 1905.3219 - By following the said order, no reason found to sustain the impugned order, same is set aside: CESTAT - Appeal allowed: DELHI CESTAT
2018-TIOL-1661-CESTAT-MAD
Orchid Health Care Vs CCE
CX - Assessee, a 100% EOU engaged in manufacture of Formulation and is registered with Central Excise Department - The officers of preventive unit visited the premises on the intelligence gathered that the assessee have imported/purchased indigenous raw materials and capital goods without payment of duty and have used the same in R&D and have availed irregular input tax credit on the services used in R&D and thereby availed wrong exemption benefit under EOU scheme - SCN was issued proposing to deny exemption under Notfn 52/2003-Cus and Notfn 22/2003-CE and for recovery of duty, interest and for imposing penalties - The assessee have explained in detail how the R&D activities are linked to the process of manufacture - After the R&D process, the samples of final products undergo test and then are manufactured and exported by assessee - It is very much clear that R&D activities are directly linked to the process of manufacture of final products of assessee - The assessee being a 100% EOU, the finished products are exported - Therefore, availment of concession of duty on inputs and capital goods and Cenvat credit on input services is fully in order - A similar issue was discussed by Tribunal in case of Dr. Reddy Laboratories Ltd. 2010-TIOL-846-CESTAT-BANG - Following the precedent decisions in case of Dr. Reddy Laboratories Ltd. and Serum Institute of India Ltd., demand cannot sustain - Impugned order set aside: CESTAT - Appeal allowed: CHENNAI CESTAT
2018-TIOL-1660-CESTAT-ALL
Reliance Industries Ltd Vs CCE
CX- The Assessee is engaged in manufacture of Polyester Staple Fibre (PSF) at its factory - Under Notification No.225/86, duty paid on Mono Ethylene Glycol (input) would be set off against the duty payable on PSF - The assessee sought refund of the unutilized set-off duty under the Modvat scheme - The Department opined that set off amount would not be transferred to their Modvat account for utilization of payment of duty - At a later stage, transfer was allowed - However, the interest on delayed refund/transfer of credit to Modvat account was denied for the reason that there was no such provision under the Rules to entertain the same under section 11B of the Act -
Held - Following the decision of Hindustan Coca-Cola Beverages Pvt .Ltd. any amount received by the Revenue as deposit or pre-deposit i.e. unauthorizedly or under mistaken notion cannot be retained by Revenue - It has no authority in law to retain such amount and it must be refunded with interest - Therefore, the assessee is entitled to claim interest from the date of filing of refund of set off by way of credit to the Modvat scheme after three years from the date of filing claim of refund:CESTAT (Para 2, 7, 8, 9) - Appeal Allowed: ALLAHABD CESTAT
CUSTOMS
2018-TIOL-1022-HC-MAD-CUS
Giridhari Homes Pvt Ltd Vs PR CC
Cus - the assessee imported some goods, which were later detained by the Department - While the Department waived off payment of demurrage & container detention charges - Despite the same however, the assessee's goods were not released by the agencies holding the goods in its custody - Hence the present appeal.
Held - It is seen that one of the agencies holding the goods in its custody had also been impleaded in an earlier matter - A similar complaint had been filed against this agency - In that case, the agency had not appeared during hearing - However it was directed that it waive off the demurrage & detention charges and then release the goods - In the present case, the agencies have again flouted the directions of the Department - Such repeated violations must be viewed seriously & warrant punitive action being taken against them - Hence, they are directed to relase the goods without insisting for payment of demurrage & detention charges: HC (Para 2,4,5,6) - Writ Petition Allowed: MADRAS HIGH COURT
2018-TIOL-1667-CESTAT-CHD + Case Story
Kisco Casting Ltd Vs CC
Cus - Since transaction value has not been rejected by Revenue, same has to be accepted - Revenue has not produced any evidence to reflect upon the inaccuracy of the transaction value - only in that case where appellant has consented to enhance the Assessable value, demand sustains - All appeals except appeal No. C/60003/2016 are allowed and the said appeal no. C/60003 of 2016 is rejected: CESTAT by Majority. - Appeal partly allowed: CHANDIGARH CESTAT
2018-TIOL-1666-CESTAT-MUM
Jindal Saw Ltd Vs CC
Cus - Appellant exported, during the period 23.05.2008 to 26.05.2008, Iron & Steel Pipes/Tubes at an effective rate of @10% in terms of notification 66/2008-Cus dated 10.05.2008 - later, the said duty became Nil by notification 77/2008-Cus. dated 13.06.2008 - appellant challenged assessment of export and filed refund claims on the ground that assessment should have been made at NIL rate -lower authorities rejecting claim and, therefore, appeal to CESTAT.
Held: During the period when export has taken place, the rate of duty on Iron & Steel pipes/tubes was 10% and, therefore, duty was correctly discharged - That, if any contrary view is adopted, then the notification 66/2008-Cus prevailing from 10.05.2008 to 13.06.2008 would become redundant - merely by interpretation, duty cannot become NIL - if at all, there was any intention of the Government to not levy duty during the said intervening period, the right course of action would be that the Government issue a retrospective amendment notification by exercising powers vested u/s 28A of the Customs Act, 1962 - Tribunal, being a creature of statute is bound to follow the rules and notifications issued under the Customs Act, 1962 - impugned order is upheld and appeals are dismissed: CESTAT [para 4, 4.2, 5] - Appeals dismissed: MUMBAI CESTAT
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by Shailendera Kumar 
