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SERVICE TAX
2018-TIOL-1163-HC-AHM-ST
CGST & CE Vs Cadila Health Care Ltd
ST - Department is challenging common judgement of Tribunal by which large number of appeals came to be disposed of - Case of department is that the issue is already decided in their favour in case of Cadila Healthcare which was later on followed in Astik Dyestuff Private Limited 2014-TIOL-237-HC-AHM-ST - According to department, Tribunal should have followed such judgement - Before the Tribunal however, it was pointed out that subsequently, there were amendments in relevant statutory provision - A co-ordinate bench of Tribunal in case of M/s. Essar Steel India Ltd., had held that such amendments were clarificatory in nature and therefore even with respect to cases arising prior to amendment, service tax paid on sales commission would be eligible for cenvat credit - Such judgement of Tribunal has been carried in appeal by department before High Court which is admitted and is pending - In view of such factual background, Tribunal disposed of appeals - Held: Tribunal ought not to have disposed of appeals in said manner - Appeals presently stands disposed of without finality - Even after the High Court decides the issue, it is not clear how the outcome would apply to the appeals which are disposed of by Tribunal by present judgement: HC - Notice for final disposal returnable : GUJARAT HIGH COURT
2018-TIOL-1929-CESTAT-MUM + Case Story
Machado and Sons Agents and Stevedores Pvt Ltd Vs CCE & ST
ST - Water sprinkling is not a requisite for extracting the contents of a mine; at best, it may be considered as requisite for transportation of extracted ore which has been clarified to be a post-mining activity - While it may fall under some other category of taxable service, in the context of lack of any such proposal in the show cause notice, Bench is not required to follow that line of thought to its logical conclusion: CESTAT [para 7]
ST - Supply of fuel/lubricant - Taxability is not determined by section 67 of Finance Act, 1994 but by coverage in section 65 - Without examining the latter, an omnibus determination from the measure for value for taxation is not valid in law - Supply of goods is a trading activity and not a service acknowledged for taxation in Finance Act, 1994 - Consequently, the income from supply of fuel/lubricants are beyond the scope of taxability: CESTAT [para 8]
ST – Mining service - Providing of machinery does not fall within the scope of tax as a separate taxing entry was incorporated later and the scope of section 65 (105) (zzzy) cannot be enlarged to include supply of tangible goods – Impugned order set aside and appeal allowed with consequential relief: CESTAT [para 9, 10] - Appeal allowed: MUMBAI CESTAT
2018-TIOL-1928-CESTAT-CHD
Hero Motocorp Ltd Vs CST
ST - Assessee is manufacturer of two wheelers i.e. scooters and motor cycles - They have given some loan to their subsidiary @ of 9.60% for short period - Said amount was shown by assessee in their balance sheet and has declared to registrar of companies in compliance with AS18 as interest received from their subsidiary companies - During audit, objection was raised by revenue that amount of interest is chargeable to service tax as these are service charges - Assessee drew the attention to letters produced by them to authorities below which clearly show that the amount shown in their balance sheet is an interest only and these letters have been the part of SCN and are relied upon documents but adjudicating authority have neither discarded these documents or nor commented on but simply held that the amount shown by assessee is not an interest but service charges - In impugned orders, there is no iota of evidence to discard the amount shown by assessee is not an interest, merely saying that the amount received by assessee is service charges for providing deposit to their subsidiary companies is without any evidence and the same cannot be accepted - Amount received by assessee as interest cannot be said as charges of service provided by them - Interest received by assessee is not chargeable to service tax as held by Tribunal in case of Thermax Ltd. 2007-TIOL-1466-CESTAT-MUM , therefore, assessee is not liable to pay any service tax of amount in question - Accordingly, impugned order is set aside: CESTAT - Appeal allowed: CHANDIGARH CESTAT
2018-TIOL-1927-CESTAT-BANG
Ultra Tech Cement Ltd Vs CCE, C & ST
ST - The assessee is engaged in manufacturer of Cement and Clinker - The assessee availed cenvat credit on guest house maintenance & colony up keeping expenses for the period in dispute - The Revenue disallowed the credit as these services fell outside the purview of the definition of input service of CCR - Duty demand was raised.
Held - The assessee is entitled to cenvat credit in respect of the services used or utilized in the Residential Colony and the Guest House which are situated at a place away from the factory - Moreover, the cost incurred in rendering of the services is included in the cost of production of the final product - Hence, the same should be considered as 'input service' - This follows from the decision of assessees own case of Ultra Tech Cement Ltd. Vs CCE C& ST wherein cenvat credit was allowed relying on the ratio of AP HC judgment of CC Vs. ITC - Therefore, the order challenged is set aside: CESTAT (Para 1,2, 4, 5) - Appeal allowed: BANGALORE CESTAT
2018-TIOL-1926-CESTAT-MAD
Thomas Cook India Ltd Vs CST
ST- The assessee are engaged in providing services such as air travel agent, railway travel agent, BAS - It has centralized registration for all its branches - It was availing abatement benefit of Notification No.1/2006-ST - One of the conditions of the notification was that to avail abatement the assessee could not avail Cenvat credit facility - However, the assessee availed abatement of notification as well as Cenvat on duty paid inputs - Thereafter, the assessee reversed credit without utilization but not the interest amount - Duty demand was raised on grounds that assessee is not eligible for availment under the notification - The original authority confirmed the demand and Commr. (A) upheld the same - Hence, the present appeals.
Held - N o interest is liable to be paid when the credit is reversed before utilization - Besides, when credit has been reversed the condition that the assessee should not avail credit has been complied with and therefore, making the assessee eligible for the benefit of notification - Following the ratio laid down in the case of CCE Vs. Strategic Engineering P. Ltd. & Punj Lloyd Ltd. Vs. CCE, respectively - The disallowance of abatement is set aside: CESTAT (Para 1, 6, 7) - Appeals Allowed: CHENNAI CESTAT
CENTRAL EXCISE
2018-TIOL-1925-CESTAT-MAD
CCE Vs India Cements Ltd
CX - Assessee engaged in manufacture of cement and availed credit in respect of capital goods used in mines which are located outside the factory for period March 2006 to October 2007 - SCN was issued proposing to recover the credit alleging that they are not eligible for credit - Revenue has argued that the mines cannot be considered as captive mines for the reason that assessee have been clearing the waste and inferior quality limestone from captive mines to others - He argued that assessee sold the waste outside for its commercial exploitation and thus the mines do not become captive mines - No merit found in this argument put forward by revenue - The waste in mines has to be disposed for further excavation and convenience - Further, assessee has obtained permission from Government of Tamil Nadu to dispose of the waste / inferior quality limestone to nearby industries - Such a disposal of waste will not make the mines non-captive mines - The Commissioner (A) has rightly observed that the inferior quality limestone which is not fit for use in manufacture of cement is sold to other manufacturers who are not engaged in manufacture of cement and is used for white washing - Assessee having sold only limestone which is not fit for use in the manufacture of cement to other non-cement manufacturers, decision of Apex Court in case of Vikram Cement 2006-TIOL-150-SC-CX is not applicable - The appeal filed by department is devoid of merits and the same is dismissed: CESTAT - Appeal dismissed: CHENNAI CESTAT
2018-TIOL-1924-CESTAT-MAD
Madura Coats Pvt Ltd Vs CCE
CX - Assessee was denied exemption claimed on cotton sewing threads made out of duty paid cotton yarn in terms of Notfn 435/86-CE - Pursuant to such denial, assessee had deposited the amount - Thereafter, on realizing that they are eligible for benefit of exemption, assessee filed Writ Petition before High Court of Madras praying for a direction to return the amount deposited along with interest, same was allowed - On 26.6.2009, assessee requested the department to return the amount with interest @ 18% - Vide O-I-O, refund was sanctioned with interest @ 6% - On another refund application, refund sanctioning authority sanctioned the refund but denied interest - Against such order of denial of interest, appeal filed appeal before Commissioner (A) who dismissed the same - Simultaneously, assessee had filed contempt petition before High Court of Madras who dismissed the petition - Against this assessee filed Appeal before Supreme Court who directed to pay interest - Pursuant to judgment of Supreme Court, vide O-I-O interest of Rs.16,38,182/- was sanctioned and vide separate O-I-O dated 12.5.2014, interest of Rs.52,74,505/- was sanctioned - Appeals have become infructuous: CESTAT - Appeals dismissed: CHENNAI CESTAT
2018-TIOL-1923-CESTAT-MAD
Chemplast Sanmar Ltd Vs CGST & CE
CX - Assessee who is engaged in manufacture of excisable products are also availing facility of CENVAT credit on inputs, capital goods and input services - Department views that the credit availed on MS plates, sheets, beams and angles used in structural construction of factory buildings, workshop and work shed and also for structural supports of pipelines and storage tank is not eligible for credit - Disputed period is December 2006 to December 2008 - Commissioner has discussed the eligibility of credit on MS items and held that since the steel structures are embedded to earth after fabrication, they become immovable property and are not eligible for credit - He has placed much reliance on decision in case of Vandana Global Ltd. 2010-TIOL-624-CESTAT-DEL-LB - Assessee has produced photographs to substantiate his contention that MS items were used only as support structures for vessel/tanks and also for pipelines which carried the raw materials - On perusal of said photographs, it is found that the submission made by assessee is not without merit - Tribunal in assessee's own case for a period prior to 7.7.2009 which analyzed the very same issue held that when the MS items are used for structural support of capital goods applying the user test evolved by Supreme court in case of Rajasthan Spinning and Weaving Mills Ltd. 2010-TIOL-51-SC-CX observed that pipelines cannot be made functional without properly securing them and these structural supports are integral part of such plant and machinery - Following the decision in case of Thiru Arooran Sugars 2017-TIOL-1357-HC-MAD-CX as well as the decision in case of Rajasthan Spinning and Weaving Mills Ltd. and that of India Cements Ltd. 2014-TIOL-1185-HC-MAD-CX it is held that disallowance of credit is unjustified - Impugned order is set aside: CESTAT - Appeal allowed: CHENNAI CESTAT
CUSTOMS
2018-TIOL-1164-HC-MAD-CUS
Nagavalli Traders Vs Dy.CC
Cus - Petitioner seeks for issuance of a writ of mandamus to call for assessments of Bill of Entry and seeks for a direction upon respondent to re-assess the Bill of Entry after extending the benefit of Sl.No.20 of notfn 50/2017, as it stood when the entry inwards of vessel prior to e-publication of Notfn 93/2017 customs - When the petitioner has an appellate remedy, Bill of Entry cannot be quashed in a writ petition as matter requires to be adjudicated before Commissioner (A), where it will be open to importer to raise the issues raised in this writ petition - Revenue submitted that already a SCN has been issued to petitioner - Therefore, issues raised by petitioner are preserved and petitioner is granted liberty to adjudicate the same before the respondent in pending SCN: HC - Writ petition disposed of : MADRAS HIGH COURT
2018-TIOL-1922-CESTAT-AHM
Sabic Innovative Plastics India Pvt Ltd Vs CC
CUS - The assessee is engaged in the manufacture of "Poly Carbonate, ABS, PBT" - At the time of provisional assessment, the assessee paid 1% RD on the the imported goods - On assessment order, the assessee filed for refund claim - The Revenue opined that assessee failed to establish that the burden of the duty has not been passed on other customers - However, the Revenue sanctioned the refunds but the refund amount was transfered to the Consumer Welfare Fund.
Held - The assessee did not pass the burden of the amount claimed as refund to others, as the refund amount shown as 'Provision' in balance sheet - The 1% RD made at other customs houses, have been refunded to the assessee without raising the issue of unjust enrichment - Therefore, the assessee are eligible to the refund claim paid as RD at the time of provisional assessment of the goods - Hence, the order challenged is set aside: CESTAT (Para 2, 5) - Appeal Allowed: AHMEDABAD CESTAT
2018-TIOL-1921-CESTAT-BANG
Mainiprecision Products Pvt Ltd Vs CC & ST
CUS - The assessee is manufacturer & supplier of high precision components and assemblies - It exported goods namely Full Tension Sleeve but these were rejected and sent back - The assessee re-worked these products & re-exported them - It then claimed duty drawback on export of goods - However, the Original Authority rejected the duty draback claims, the Commr. (A) also rejected appeals of the assessee.
Held - The Tribunal does not have jurisdiction under Section 129A to entertain duty drawback claims - The Revisionary Authority has the power to decide the drawback claims - Hence, the appeal is dismissed as non-maintainable: CESTAT (Para 2,5) - Appeal Dismissed: BANGALORE CESTAT
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