SERVICE TAX

Buldana Urban Co Operative Vs CCE

ST - Alleging that as per the P&L account the taxable value is Rs.7,12,46,826/- vis-à-vis that shown in the ST-3 returns of Rs.5,33,61,913/- tax demand issued and confirmed by original authority – Commissioner(A) extending benefit of cum-tax and reducing tax liability and also dropping penalty imposed u/s 76 of FA, 1994 – in appeal before CESTAT, appellant submitting that they had repeatedly sought the ‘account heads' under which the tax demand has been made but none of the lower authorities disclosed the same.

Held: It is observed that the value of Rs.7,12,46,826/- is nowhere appearing in the profit and loss account - Appellant seeking detail of income head considered for taxable value is legitimate as without such detail neither SCN is justified nor it satisfies the principles of natural justice - impugned order set aside and matter remanded to adjudicating authority: CESTAT [para 4] - Matter remanded: MUMBAI CESTAT

2018-TIOL-1825-CESTAT-MUM

SKF India Ltd Vs CST  

ST - The assessee manufactures housings, sleeves, locating rings, lock nuts and washers - The Department denied cenvat credit to Chennai unit of assessee-company on grounds that such grant availed on input services were distributed by the corporate office without taking ISD registration - Further, the Department opined that the Cenvat Credit was availed on documents which indicate corporate office - No nexus could be established between the services mentioned in the documents and the Chennai unit of the assessee.

Held - The credit is not deniable as non-registration of ISD is only a procedural irregularity - In the case in hand, it is clear that the Cenvat Credit which has been availed by Chennai unit is the amount of service tax paid by the service providers - This service tax is not distributed to any other unit of the assessee - This flows from the CBEC Circular No.1063/2/2018-CX & the ratio laid down by HC of Gujarat in the case of Doshion Ltd. v. CCE - Hence, the Order-in-Appeal is set aside: CESTAT (Para 4, 5, 6) - Appeal allowed: MUMBAI CESTAT

2018-TIOL-1824-CESTAT-DEL

Research In Motion India Pvt Ltd Vs CCE

ST - Assessee engaged in promoting the business of principal, M/s RIM, Singapore, in connection with the products and services for period October, 2005 to February, 2010 - The assessee received consideration pursuant to Service Agreement with RIM, Singapore - Revenue considered the said receipt as a taxable amount for promotion and marketing of products and services of client under category of BAS in terms of Section 65(19) of FA, 1994 - Assessee have provided marketing and promotion service which is, admittedly, covered under BAS - Admittedly, services are provided in pursuant to agreement between assessee and RIM, Singapore, and beneficiary is RIM, Singapore, who paid the consideration for such services - The legal position by now is well settled in such situation that services are to be considered as exported out of India - The decisions of Delhi High Court and Tribunal in case of Microsoft India (I) (P) Ltd. 2014-TIOL-1964-CESTAT-DEL, are on similar set of facts where services are rendered to foreign recipient, though performed in India - Accordingly, following the settled legal position, no merit found in impugned order - Regarding denial of Cenvat Credit for unregistered premises, following the ratio of decisions in Scionspire Consulting Services 2017-TIOL-798-HC-MAD-ST; Artenta India Pvt. Ltd. 2016-TIOL-2741-HC-ALL-ST and Tavant Technologies 2016-TIOL-441-HC-KAR-ST, Cenvat Credit cannot be denied - Regarding interest liability, examining the similar dispute for delayed payment of interest, Delhi High Court in case of McDONALDS India Pvt. Ltd. 2017-TIOL-2157-HC-DEL-ST has held that the provisions were prospective in application and cannot apply to the book adjustments already made prior to said amendment - That being the case, no interest liability can be accrue on entry already made as debit or credit, but available in books on date of amendment - Accordingly, impugned order is not sustainable on this count - Impugned order is not legally sustainable: CESTAT - Appeal allowed: DELHI CESTAT

2018-TIOL-1823-CESTAT-AHM

Regal Shipping Pvt Ltd Vs CCE & ST  

ST - In SCN, it is alleged that debit note is not a prescribed document as per Rule 9 of CCR, 2004, therefore, assessee is not entitled to avail cenvat credit, whereas in impugned order it has been held that the details as per Rule 9 (2) of CCR, 2004 and Rule 4 of Service Tax Rules, 1994 has not been mentioned in debit notes, therefore, they are not entitled to avail cenvat credit - Commissioner (A) has gone beyond the scope of SCN, as in SCN, it is alleged that debit note is a prescribed document to avail cenvat credit - Requisite details, as prescribed under Rule 9 (2) of CCR, 2004 are mentioned in debit note and as per the decision of Tribunal in case of Godrej Consumer Products Ltd. 2010-TIOL-1739-CESTAT-DEL, Tribunal has held that the assessee is entitled to avail cenvat credit on debit notes when all requirements are mentioned in debit note - As issue has already been settled in favour of assessee, therefore, relying on decision of Godrej Consumer Products Ltd, cenvat credit allowed to assessee - Therefore, no merit found in impugned order, same is set-aside: CESTAT - Appeal allowed: AHMEDABAD CESTAT

CENTRAL EXCISE

2018-TIOL-1829-CESTAT-CHD + Case Story

Kadimi Tools Manufacturing Company Pvt Ltd Vs CCE

CX - Assessee, a 100% EOU engaged in manufacturing of Thread Rolling Dies and clearing the goods in DTA and was not paying education cess and higher education cess on the duty of excise as determined under proviso to Section 3(1) of CEA, 1944 - A SCN was issued to assessee demanding education cess and higher education cess on duty of excise leviable under the aforesaid proviso for the third time after the assessee had paid education cess already on two occasions, first on CVD and second as cess leviable on Customs duty.

Held: Issue is no longer res integra and has been decided in favour of assessee by Tribunal in case of Sarla Performance Fibers Ltd - 2010-TIOL-408-CESTAT-AHM and Kumar Arch Tech Pvt Ltd - 2013-TIOL-614-CESTAT-DEL-LB - Order of Commissioner (A) is not sustainable and accordingly, same is set aside: CESTAT [para 6, 7] - Appeal allowed: CHANDIGARH CESTAT

2018-TIOL-1828-CESTAT-AHM

Jindal Saw Ltd Vs CCE

CX - Assessee engaged in manufacture of Coated Steel Pipes and availed Cenvat credit on amount of 2% Education Cess and 1% Secondary and Higher Secondary Education Cess paid on CVD potion of duty by 100% EOU, the inputs supplier, in accordance with Notfn 23/2003-CE - Alleging that the Cess paid on CVD portion of duty paid by 100% EOU is not admissible to credit, SCN was issued for recovery of said credit with interest and proposal for penalty - Issue of admissibility of Cenvat credit of 2% Education Cess and 1% Secondary and Higher Secondary Education Cess paid on CVD portion of duty by 100% EOU held to be admissible to credit by this Tribunal in case of Jai Corp Ltd 2014-TIOL-2518-CESTAT-AHM - Following the said precedent and the subsequent judgement of this Tribunal in Zabatex Textiles India Pvt. Ltd. 2016-TIOL-521-CESTAT-AHM, no merit found in impugned order passed by Commissioner (A) - Consequently, same is set-aside: CESTAT - Appeal allowed: AHMEDABAD CESTAT

2018-TIOL-1827-CESTAT-BANG

Schneider Electric India Pvt Ltd Vs CCE  

CX- The assessee is a manufacturer of excisable goods viz. digital panel meters for energy, IT Software, Harmonic Filter Systems - It availed Cenvat credit on capital goods, inputs or input services - Duty demand was raised as the Department opined that the assessee were undertaking trading activity as a first stage dealer from the same premises where manufacturing activities were also taken - They were using common input services both for manufacturing of dutiable goods and the traded goods - The Commr.(A) rejected the appeal of assessee, hence the present appeal -

Held - Prior and post 2011, trading activity is to be considered as an exempted service and the Cenvat credit availed on common input services is to be reversed in proportionate as laid down under Rule 6(3)(c) of CCR - Following the ratio laid down by Madras HC in the cases of Ruchika Global Interlinks & FL Smidth Pvt. Ltd, the Order-in-Appeal is upheld: CESTAT (Para 2, 7, 8, 9) - Appeal Dismissed: BANGALORE CESTAT

2018-TIOL-1826-CESTAT-DEL

Texmo Pipes And Products Ltd Vs CCE

CX - Assessee engaged in manufacture of HDPE pipes and LLDPE pipes and related products - A part of manufactured goods are cleared on payment of duty and some part is cleared availing exemption from payment of duties - During search conducted by DGCEI, department recovered incriminating documents, investigated an offence case and issued SCN - As regards to non-payment of an amount equivalent to 6% of value of exempted goods during July 2014 to March 2015 - W.e.f. 20.11.2012, assessee has opted to pay an amount at the rate of 6% as per Rule 6(3) - Explanation (I) in Rule 6(3) is categorical in its provision that once a manufacturer exercises the option under Sub-rule 3, such option shall not be withdrawn during the remaining part of financial year - Assessee has changed the option already exercised w.e.f. 01.07.2014 - In view of Explanation (I) forbidding such change in middle of Financial Year, such change can be given effect to only w.e.f. 01.04.2015 and assessee is required to pay an amount at the rate of 6% as per Rule 6(3) till the end of financial year 2014-15 - Consequently, no infirmity found in demand confirmed by adjudicating authority, and hence the same is upheld.

As regards to Suo Moto credit of extra amount paid on account of turnover discount allowed to buyer, imposition of full amount of mandatory penalty is not justified since the incorrectly availed credit has since been paid back along with interest - Hence, imposition of mandatory penalty set aside and restrict penalty to 15% of duty amount.

As regards to CENVAT credit availed at the time of merger of various entities with assessee in year 2009, department has objected to availment of CENVAT credit, lying in unutilized accounts of merged entities, for the reason that assessee failed to provide any CENVAT documents issued under Rule 10 of CCR, 2004 - Since the entire amount of credit stands reversed, hence no justification found for imposition of penalty, same is set aside.

As regards to demand of differential duty by including amount of incentive received on account of capital subsidy, dispute is with reference to incentive amount received by assessee from the Madhya Pradesh Government as part of scheme for setting up of new industrial units in backward areas - In terms of scheme, assessee is required to collect VAT/CST from buyers and deposit the same in full with state Government - Subsequently, a part of said amount deposited is sanctioned as incentive - Since no part of VAT/CST collected by assessee is retained by them, situation is clearly distinguishable from case decided by Supreme Court in Super Synotech - Similar views have been taken by Tribunal in case of Khanna Polyware 2018-TIOL-1327-CESTAT-DEL - By following the said decision of Tribunal, such amount of incentive received under scheme formulated by Madhya Pradesh Government cannot be included in assessable value for payment of Central Excise Duty - Consequently, demand raised on this ground set aside: CESTAT - Appeal partly allowed: DELHI CESTAT