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SERVICE TAX
2018-TIOL-1789-CESTAT-MUM + Case Story
Fulchand Tikamchand Vs CCE & ST
ST - Section 11B of the CEA, 1944 - Refund matured only as a consequence of the Appellate Tribunal's order, therefore, there is no question of granting interest for the period prior to the date of order - interest is payable from three months from the date of application - Tribunal, being a creature under the statute of Central Excise Act, cannot go beyond the statutory provision made under that Act - Except the provision of Section 11BB, there is no provision by which the interest can be granted from the date of deposit - appellant is not entitled for the interest from the date of deposit of the demand amount as determined by the adjudication order and subsequently set aside by the Tribunal - since the refund was sanctioned within three months from the date of filing application u/s 11B, no interest is payable - Appeal dismissed: CESTAT [para 4 to 6] - Appeal dismissed: MUMBAI CESTAT 2018-TIOL-1783-CESTAT-CHD
Alcatel Lucent Network Management Services India Ltd Vs CCE & ST
ST - The present reference to third Member is by Division Bench on a difference of opinion in disposing of stay application of assessee - The point of difference is with reference to full waiver of pre-deposit to admit the appeal as held by Member (J) or requirement of pre-deposit of Rs. one crore to admit the appeal and to stay the recovery of remaining amount as held by Member (T) - Assessee had a contractual agreement with M/s Airtel Limited for management, maintenance and repair service of telecommunication network of client - For this, one of the requirement is that the client should provide office/infrastructure for 1938 seats for the staff of assessee - This is a requirement for providing management, maintenance service - While valuing the tax liability of such service, assessee considered only the amount paid on such seats provided by M/s Airtel Limited - The arrangement between the two stipulated that assessee need to pay for only 1200 seats from 01/04/2010 onwards - There is no consideration stipulated for remaining seats provided by M/s Airtel Limited - Revenue views that remaining seats are also to be considered as a requirement for providing taxable service by assessee and being a non-monetary consideration arrived at the value attributable to such not charged seats - The value was accordingly modified, differential tax was demanded - There is no evidence as per the record that remaining seats for which no monetary consideration is charged or collected by M/s Airtel had influenced the taxable value on the part of assessee in providing management, maintenance and repair service - It is only an inference that when M/s Airtel was charging for some seats and not charging for other seats, in respect of such seats the charges not collected should be considered as non-monetary consideration - This aspect is debatable and requires closer scrutiny and at the present stay stage, it is to be noted that on such debatable point pre-deposit almost 30% is not justified.
M/s Airtel are discharging service tax on provision of such seats under category of business support service - It is not clear that whether any demand proceedings were raised against M/s Airtel in respect of such seats for which no monetary consideration was mentioned in arrangement - In other words, business support service provided by M/s Airtel is the first stage of verification which necessarily forms input service for assessee and the provision of management, maintenance and repair service back to M/s Airtel - It is sufficient to record that the issue involved requires much closer scrutiny and prima facie the evidences available on record do not indicate any evidence of non-monetary consideration attributable to the seats for which no money has been paid by the assessee - Appeal may be admitted without insisting on pre-deposit for a final decision.
In view of majority decision, appeal can be admitted without insisting on pre-deposit: CESTAT by Majority - Application allowed: CHANDIGARH CESTAT
2018-TIOL-1782-CESTAT-CHD
Higrow Industries Vs CST
ST - Assessee had imported three hydraulic presses and plates for hydraulic press and other accessories/parts under bill of entry - The machines imported were later claimed to be sold as scrap by assessee in 2010 - Revenue suspected that the capital goods imported under bills of entry and procured under domestic invoices, on which assessee had availed Cenvat credit has been diverted and credit should be recovered in terms of Cenvat Credit Rules - Issue relate to availment of Cenvat credit on capital goods, which allegedly were not sold as scrap and utilization of excess Cenvat credit of basic custom duty - As regards to availment of cenvat credit on capital goods, some of the documents, in particular three forms VAT-D3, which show the declared weight of goods as 250 tonnes, 250 tonnes and 260 tonnes, do not appear to have been submitted before the Commissioner (A) - These documents are undoubtedly relevant to arrive at proper conclusion on this issue and, therefore, need to be examined first Commissioner (A) - Besides, findings of Commissioner (A) are very terse and restricted to simply endorsing the order of adjudicating authority without giving any kind of analysis on submissions of assessee made before him - Such an order, which lacks judicial analysis of contentions of assessee, does not do justice to any of the sides - Hence, matter requires to be re-adjudicated by Commissioner (A) - As regards to utilization of excess Cenvat credit of basic custom duty, assessee had not shown the Cenvat credit of BCD, CVD and Cenvat duty separately in their register - On this issue too, Commissioner (A) has given no finding at all in his order and simply upheld the order of adjudicating authority - Hence, the matter on this issue also remanded back to the first appellate authority: CESTAT - Matter remanded: CHANDIGARH CESTAT
2018-TIOL-1773-CESTAT-MUM
+ Case Story
CST Vs Jasper International
ST - Consideration was received in convertible foreign exchange and there is no dispute that the customers of the appellant were situated outside the country - Levy of tax on transaction which pertains to activities outside the country is not appropriate: CESTAT [para 5]
ST - Respondent made bulk purchases of air tickets that were then assigned at market price to various successful candidates proceeding abroad - Provisions of Finance Act, 1994 are very clear; it is the service that is taxable and not a money transaction between two entities - Revenue has not been able to establish that the said activity of purchasing seats which have been sold to individual travelers are liable to be covered by the definition of 'business auxiliary service' - it is a profit on sale and is not a consideration for taxable service - no reason to interfere with the order of the Commissioner(A) setting aside the demand - Revenue appeal dismissed: CESTAT [para 5, 6] - Revenue appeal dismissed: MUMBAI CESTAT
CENTRAL EXCISE
2018-TIOL-1781-CESTAT-CHD
HP Agro Industries Corporation Vs CCE
CX - Assessee who manufactures pesticides, were working under small scale scheme during financial year 2006-07 - Since the benefit of Notfn 8/03-CE is admissible provided the manufacturer does not avail the credit on inputs and since the assessee had availed the Cenvat credit right from 1.4.2006, but paid excise duty @ 9.6% instead of 16% tariff rate of duty, Department confirmed the demand of duty along with interest - Penalty of equivalent amount was also imposed under Section 11AC of CEA, 1944 - Member (J) observed that tariff rate applicable was @ 16% and after availment of 60% concession, 9.6% of tariff rate, the duty was paid at the balance rate - Said demands stands confirmed raising demand of 40% - Whatever credit was availed stand utilized by them for payment of 60% of duty - However, if any balance credit is available the same stands reversed by assessee - It can be concluded that no credit stands availed by them so as to benefit them at any point of time - It will amount to Revenue neutral situation as credit availed by assessee would become nil and as such the condition of Notfn 8/03-CE, stands fulfilled by assessee - Instead of raising differential duty, at full rate of duty, Revenue should have extended the benefit of Notfn.8/03-CE to the assessee - As such, confirmation of duty against assessee along with confirmation of interest and imposition of penalty is not warranted.
On the other hand, Member (T) observed that assessee have availed Cenvat credit on inputs and utilized the same for payment of duty - Therefore, condition 2(iii) is not fulfilled - Hence, without fulfilling the condition mentioned in para 2(iii) of the notification, which is clearly spelt out, the benefit of notification is not available to assessee - In number of judicial pronouncements, Apex Court has held that the assessee is required to fulfil the conditions of notification in strict sense if it wants to avail the benefit of exemption notification - Once it is found that the conditions have not been fulfilled, obvious consequence would be that the assessee was not entitled to the benefit of notfn 8/03-CE - Hence, there is no infirmity in order of lower authorities in denying the benefit of notification and confirming the demand and interest.
The matter placed before the Third Member wherein it is found that Notfn 9/03-CE has prescribed effective rate of duty at the rate of 60% of tariff rate - It is settled position of law that if duty is paid under mistake of law it should be compensated towards recovery of cenvat credit - In view of the settled position of law, view expressed by Member (J) founds correct and proper: CESTAT - File returned to Division Bench: CHANDIGARH CESTAT
2018-TIOL-1780-CESTAT-DEL
Hind Metal Vs CCE
CX- The assessee is engaged in distribution & supplier of stainless steel coils, ss coils, magnetic steel coil - During investigation, statement of the workers were recorded wherein the assessee admitted to removal of goods without payment of duty -However, these statements were retracted at various stages of the proceedings - On the basis of admission made earlier, the Department took a view that the assessee were clearing finished products viz. copper wire, without payment of excise duty in a clandestine manner - The stock of finished goods as well as raw materials were seized & confiscated- A SCN was issued raising duty demand of central excise duty -Held - The statements made by the assessee & workers were retracted as being made under duress - During cross-examination, the witnessess denied their presence at factory premises at the time of search & seizure as against Department's view - On the basis of machines found working in the units, the diaries recovered & statements the issuance of SCN is incorrect - The oral as well as documentary evidence relied by the Revenue Authorities are not authentic - Therefore, the allegations have not been established by the Revenue, the order-in-appeal is set aside : CESTAT (Para 1, 7, 8, 9, 10, 11) - Appeal Allowed: DELHI CESTAT
2018-TIOL-1779-CESTAT-CHD
Imperial Auto Industries Ltd Vs Commissioner Of CGST
CX- The assessee manufactures fluid transmission products & availed Cenvat credit on input goods & services - The Department opined that the assessee is not entitled to such credit - Thereafter, the assessee reversed the credit and later filed claim for refund - However, the Department appropriated the amount already reversed - On appeal, the Commr.(A) allowed cenvat credit to the assessee & sanctioned refund claim with interest - The Revenue rejected the claim of interest on grounds that the assessee cannot claim interest for the intervening period till the refund is sanctioned i.e. after the order of Commr. (A) - Held - The assessed is entitled to claim interest on delayed refund after three months from the date of filling the refund claim till its realization - This follows from the decision of Apex Court in the case of Cranberry Laboratories Ltd. - Therefore, the remaining interest be paid to the assessee : CESTAT (Para 2, 6, 7,8) - Appeal Dismissed: CHANDIGARH CESTAT
CUSTOMS
2018-TIOL-1778-CESTAT-CHD
Jindal Drugs Pvt Ltd Vs CCE & ST
Cus - Assessee was having advance authorisation and imported Cocoa Paste against advance authorisation - 50MT of Coco Butter was lost during transit from port to their factory and the same has been intimated to department but the lost quantity has been replaced by assessee by purchasing Cocoa Paste from local market to fulfil their export obligation and assessee has not claimed any rebate or draw back in respect of locally procured Coco Butter - It is also a fact on record that advance authorisation has been discharged by DGFT as export obligation has been fulfilled by assessee - As assessee has discharged export obligation, it is not open for Revenue to initiate proceedings against assessee that they have not fulfilled the condition of advance authorisation - A similar view was taken by High Court of Bombay in case of Autolite (India) Limited - Assessee has not violated any condition of Notfn 93/2004-Cus - As per the condition of said notfn, assessee shall not transfer or sale the imported goods - Admittedly, assessee has neither transferred nor sold the imported goods but said goods were lost in an accident in transit - In that circumstance, it cannot be held that assessee has violated the condition of Notfn 93/2004-Cus - Therefore, on that account also demand cannot be raised against assessee - Assessee has discharged their export obligation and to that effect, they have redeemed their bond executed with licensing authorities i.e. DGFT - Customs authorities cannot initiate proceedings against assessee - Impugned order set aside: CESTAT - Appeal allowed: CHANDIGARH CESTAT
2018-TIOL-1777-CESTAT-MUM
RL Steel And Energy Ltd Vs CC
Cus - The assessee exports, manufactures and supplies of carbon & alloy - The assessee in their bill of entry for clearance of goods declared heavy metal scrap under CTH 7204 4900 - The Department opined that the goods were other articles of iron & steel to be classified under CHT 7318 2900 - The value of goods were re-assessed and confiscated with imposition of fine & penalty - The Commr. (A) upheld the order-in-original, hence, assessee filed the present appeal - Held - The Jurisdictional Central excise authority of the assessee-company issued an end use certificate that the assessee used Heavy Melting Scrap in the manufacture of final product - Therefore, the goods imported by the assessee were Heavy Melting Scrap - Merely, because the scrap is in the form of used article of steel it is not sufficient to deny the classification as Heavy Melting Scrap - Therefore, the Revenue wrongly classified the product based on assumptions and presumptions - Hence, the Order-in-Appeal is set aside: CESTAT (Para 1, 4) - Appeal Allowed: MUMBAI CESTAT
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By R K Singh
