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SERVICE TAX
2018-TIOL-1888-CESTAT-MUM + Case Story
Holtec Asia Pvt Ltd Vs CCE, GST
ST - Refund - Place of Provision of Services Rules, 2012 cannot be applied to the refund being claimed in terms of Rule 5 of Cenvat Credit Rules, 2004 and to interpret the export of service - in terms of Explanation 3 to Section 65B(44), different establishments located in non-taxable territory and taxable territory are to be treated as establishment of different persons - office of M/s Holtech International situated in USA is different establishment from its project office in India - In the present case, it is the US establishment of M/s Holtech International, USA who has availed the services from the Appellant and, therefore, the services rendered by Appellant would clearly fall under the category of Export of Service in terms of Rule 6A of Service Tax Rules, 1994, thereby making them eligible for refund claimed by them - impugned orders set aside and appeals allowed with consequential relief: CESTAT [para 4] - Appeals allowed: MUMBAI CESTAT
2018-TIOL-1875-CESTAT-DEL Orient Paper Mills Vs CCE
ST- The assessee is a paper producing concern - The assessee received certain amounts from the partied during the period in dispute for providing railway siding facility & cargo handling services by way of lifting & transporting the coal or ash bed from its effluent treatment plan within the factory premises - The Revenue opined that assessee did not discharge ST liability with a view to evade payment of tax - The Order-in-Original was upheld by Commr.(A), leading to the present appeal.
Held - With respect to cargo handling services, the assessee made a contract, in which the amount on the basis of per trip on account of coal ash or bed ash is charged - As per the definition, the assessee has neither provided any transportation nor any labourers for execution of work - Therefore, the assessee is not providing any cargo handling services in respect of the transportation of coal ash or bed ash - In respect of renting of immovable property, the assessee have rented out the railway siding to other parties, without transfer of possession or control - Due to lack of production of evidence to support the contention that they themselves have maintained & controlled the railway sidings, the assessee is liable to pay service tax in this repsect: CESTAT (Para 1, 4, 5, 6, 7) - Appeal Partly Allowed: DELHI CESTAT
2018-TIOL-1874-CESTAT-DEL
Paramjit Kaur Vs CST
ST - Assessee provides multilevel marketing service, which is categorized as a taxable service under head Business Auxiliary Service, defined under Section 65(105)(zzb) of FA, 1994 - For nonpayment of Service Tax during period November 2004 to March, 2009, Department proceeded against assessee for confirmation of Service Tax demand - Whether, the activity of multilevel marketing should fall under taxable category of Business Auxiliary Service was highly contentious and the issue was finally resolved by Tribunal in case of Charanjeet Singh Khanuja 2015-TIOL-1205-CESTAT-DEL - Since the issue relates to interpretation of taxability of service, extended period of limitation cannot be invoked for confirmation of the service tax demand - In this case, since the SCN was issued beyond the normal period of limitation, same is barred by limitation of time - Accordingly, the Service Tax demand of Rs.1,01,983/- confirmed in impugned order against the assessee cannot be sustained: CESTAT - Appeal allowed: DELHI CESTAT
CENTRAL EXCISE
2018-TIOL-1879-CESTAT-DEL + Case Story
Amit Talwar Vs CCE
CX - M/s TAPL and M/s 3D were engaged in activity of importing and trading of various items like home appliances, shoes, furniture, hardware items and stationary items - Sh. Amit Talwar and Sh. Sumit Sehgal were the Directors of TAPL as well as Partners in 3D - At the time of search operations, various goods were seized at the godown premises of TAPL as well as 3D - It is the allegation of Revenue that activity of changing MRP/ affixing MRP stickers in their godown will fall within the deeming provision in Section 2(f) (iii) and consequently, Central Excise duty is required to be discharged in terms of Section 4A of CEA, 1944 which has not been done by assessee - Accordingly, demand of Central Excise duty stands confirmed - Both TAPL as well as 3D have separate existence in eyes of law - The former is a Private Limited company whereas the latter is a Partnership firm - The goods were imported under both names and have also been sold under both names, inspite of the fact that goods were mixed up at godown and have been sold on the basis of price list circulated by TAPL - It is settled position of law that in absence of mutuality of interest and financial flow back from one firm to another, clubbing of clearances is not permissible merely on the ground that both firms are in common premises and affairs of all firm are looked after by one person - It is further seen that the goods imported through TAPL as well as 3D have been separately tabulated by Revenue and demand also was tabulated on that basis but the value of clearances was finally clubbed for purposes of determining the entitlement to SSI exemption - Since TAPL as well as 3D have separate existence and have separate registration for VAT and Income Tax each one will be entitled to benefit of SSI exemption separately -Activity carried out by TAPL as well as 3D will amount to manufacture as per Section 2(f)(iii) of the Act and hence, Central Excise duty is required to be paid on the basis of MRP but such Excise duty payable is required to be computed after extending the benefit of SSI exemption separately to TAPL as well as 3D - Further, the demand made jointly and severally from two parties cannot be upheld - The case is required to be remanded to Adjudicating Authority to work out the demand denovo separately from TAPL as well as 3D after extending the benefit of SSI exemption separately to the two companies - At the time of denovo adjudicating proceedings, Adjudicating Authority will also consider the arguments advanced regarding the quantification of demands for period prior to April 2012 vis-a-vis the evidence on record - The orders in denovo proceedings will be passed after extending the opportunity of hearing to assessee: CESTAT - Matter remanded: DELHI CESTAT
2018-TIOL-1878-CESTAT-MUM
Ved Pmc Ltd Vs CCE
CX - Rule 2(l) of CCR, 2004 - Input Service - Whether appellant is entitled for CENVAT credit in respect of Outward Transportation during the period April, 2011 to March, 2016.
Held: Issue is settled against the assessee appellant in view of the Supreme Court decision in Ultratech Cement Ltd. - 2018-TIOL-42-SC-CX where it is held that CENVAT credit on GTA service availed for transportation of goods from place of removal to buyer's premises is not admissible w.e.f. 01.04.2008 - It cannot be said that the appellant had any malafide intention since they have acted and followed the Board's Circular 97/8/2007-ST dated 23.08.2007, therefore, credit taken by them at that time was correct and legal and hence demand for extended period is not sustainable - only demand for normal period is upheld, penalty imposed u/s 11AC for the entire period is also set aside - appeal partly allowed: CESTAT [para 4, 4.1] - Appeal partly allowed: MUMBAI CESTAT
2018-TIOL-1877-CESTAT-MUM
Arihant Industrial Corpn Ltd Vs CCE
CX- The assessee was engaged in manufcature of climbers and thriller which are used for children play & games and are installed in playground & gardens - They were availing benefit of exemption as per Notification No. 06/02-CE - However, the Revenue was of the view that these goods were not to be classified as sports goods and therefore, not entitled to exemption - Duty demand was raised, hence the present appeal.
Held - For various age group of children, different activities are considered as sports - The equipments manufactured by the assessee are used by children in playgrounds - Therefore, such equipments will fall under the category of sports goods - In addition, BIS also categorises such equipments like swings, slides, see saws used in playground in the category of "sports goods" - The issue is no longer res integra & has been adjudged in assessee own case wherein demand has been dropped - Hence, the order challenged is set aside :CESTAT(Para 2, 4, 5, 6) - Appeal Dismissed: MUMBAI CESTAT
2018-TIOL-1876-CESTAT-AHM
Aristo Pharmaceuticals Pvt Ltd Vs Commissioner of CGST & CE
CX - The assessee-company are engaged in the manufacture of excisable goods - It availed Cenvat credit of service tax paid by the service provider in relation to the input service i.e. 'Man-power supply service' which were used in relation to the manufacture of finished goods in the factory during the period in dispute - Although, as per Notification 30/2012-ST assessee was required to pay 75% of the service tax liability, on receiving the man-power supply service from the service provider - Initially the entire amount of service tax was paid by the service provider and later recovered from the assessee by indicating the same in the invoice - Demand notice was issued for recovery of the credit with interest and penalty.
Held - The principle laid down by the HC of Gujarat in the case of Commissioner of Central Excise Ahmedabad - III vs Nahar Granites Ltd . has settled the issue of amount which the service provider paid is to be considered as a deposit or service tax for deciding the eligibility of credit - The amount paid by the original manufacturer cannot take the character of excise duty - It is to be considered as a deposit only & in the present case, excess amount is to be refunded - The manufacturer had purchased the inputs & utilised it in production of final product - Resultantly, duty was paid on the same, therefore, the assessee has been fulfilling all conditions of availing cenvat credit - Hence, applying the same principle the order challenged is set aside :CESTAT (Para 3, 6, 7) - Appeal Allowed: AHMEDABAD CESTAT
CUSTOMS
2018-TIOL-1882-CESTAT-MUM + Case Story
CC Vs Hindustan Construction Company Ltd
Cus - Regulation 4 to Project Import Regulations, 1986 does not require the importer to enter into contract with foreign supplier - It merely requires existence of a contract under which imports are made - Revenue is relying on the para 3 of Chapter 5 of the Customs Manual which states that the importer should have entered into contract with the foreign supplier - Since the Project Import Regulations, 1986 do not mandate any such condition, the same cannot be imposed by the terms of Customs Manual - Project can be registered under the regulation by the Appellants even if the appellants are not a direct party to import contract: CESTAT [para 4.1]
Cus - Classification - ‘Water Conductor System' only relates to the lifting of water from one point and through pump houses and pipelines supplying to the recipient tanks at destination - Thus it cannot be called an irrigation project but it can only be called a Water Supply project in that sense - Since the project is classifiable as ‘Water Supply Project' the benefit of the notification 14/2004-Cus will also be available - Revenue appeal dismissed: CESTAT [para 4.4, 5] - Appeal dismissed: MUMBAI CESTAT
2018-TIOL-1881-CESTAT-AHM
Hindalco Industries Ltd Vs CC
CUS - The assessee is engaged in manufacture of aluminium and copper - They imported copper scrap during the period in dispute declaring the transaction value on respective bills of entry - On assessment, it was noticed that the assessee under-valued the imported goods and Revenue enhanced the same based on on prevailing LME price - Duty demand was raised and the assessee paid the difference - On challenge to the assessment order, the Commr. (A) observed that since the assessee did not dispute the assessment and paid duty, therefore, the appeals were rejected - Hence the present appeal.
Held - The matter is remanded to the Adjudicating authority for de novo adjudication : CESTAT (Para 5, 6, 7) - Matter remanded: AHMEDABAD CESTAT
2018-TIOL-1880-CESTAT-CHD
Hero Electric Vehicles Pvt Ltd Vs CC
Cus - Assessee engaged in manufacture of e-bike and imported e-bike parts namely DC Motor, DC Controller, Battery, Charger and spare parts of e-bike falling under Chapter 85 and 87 of the Customs Tariff Act, 1975 for use in manufacture of e-bike - The dispute in this case is as regards the classification of DC Motor which is performing dual function i.e. of DC Motor and of rear wheel - The assessee is claiming exemption under Notfns 12/2012- Cus, 21/2012-Cus and 12/2012-CE, 06/2006-CE and 12/2012-CE - As per the description of excisable goods, DC Motor is covered under said notifications and exempted from payment of duty on following the procedure laid down in Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 - Admittedly, assessee has complied with conditions and goods were allowed to be cleared by giving benefit of said notifications - The issue arose whether the goods in question are DC Motor or part of e-bike - As per provisions, the main principal and dominant function of imported goods shall be classifiable as per essential character of said goods - As impugned goods, having the essential character of motor, the same has the principal function of electric motor as rotor is fixed on the electric motor - It become rear wheel only after mounting the tyre and without tyre, it cannot perform as part of e-bike - In that circumstances, the main dominant and principal function of the impugned goods is electric motor - Therefore, the same merits classification in tariff item 8501 3119 as classified by assessee - Goods have been cleared after due examination - In that circumstance, the adjudication order has attained finality and without challenging the same, proceedings against the assessee are not sustainable in the light of decision of Apex Court in case of Flock (India) Pvt. Limited 2002-TIOL-208-SC-CX : CESTAT - Appeal allowed: CHANDIGARH CESTAT
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