2018-TIOL-NEWS-157, Dated: Thursday, July 05, 2018

ST - It is well settled that when an effective alternative remedy is available under the relevant statute, filing of writ petition cannot be entertained, more particularly, in fiscal matters - Writ Appeal filed by Revenue is allowed and the interim order of stay granted by the writ Court was set aside: High Court [para 9 to 13] - Appeal allowed: MADRAS HIGH COURT

ST - The main issue on which Revenue has filed the appeal is whether assessee is eligible for refund of unutilized credit under Rule 5 of CCR, 2004 when Notfn 8/2003 exempts the levy of service tax on call centre services which are the output services of assessee - This issue whether the manufacturer/service provider will be eligible for refund of input credit even if such input credit is availed for export of exempted goods / exempted services was analyzed in case of Zenta Pvt. Ltd. 2012-TIOL-624-CESTAT-MUM and held in favour of assessee - The meaning of the word "excisable goods" used in Rule 6(6)(v) of CCR, 2004 was analyzed by High Court of Bombay in case of Repro India Ltd. 2007-TIOL-795-HC-MUM-CX wherein it is held that the word 'excisable goods' has a wide expression as it includes both exempted as well as dutiable goods - Said view was followed in Drish Shoes Ltd. 2010-TIOL-350-HC-HP-CX which was upheld by Apex Court - Similar issue was considered in MGMT Services (I) P. Ltd. 2016-TIOL-287-CESTAT-MUM wherein substantial portion of refund was rejected for the reason that prior to 1.3.2006, the services provided by assessee, i.e. call centre services were exempted services - The other reason for rejection was that the assessee had not taken service tax registration - Both these issues were decided in favour of assessee - The Tribunal held that CENVAT credit / refund in respect of input services used in providing output service, even though exempted service, when such output service is exported cannot be denied - Commissioner (A) has rightly held that assessee is eligible for refund of CENVAT credit even though the output services is exempted from levy of service tax under Notfn 8/2003: CESTAT - Appeals dismissed: CHENNAI CESTAT

ST- The assessee is engaged in providing services of maintenance and repair service - On audit, it was noticed that assessee availed ineligible credit on various input services - The Revenue took a view that as assessee took centralized registration but had no centralized billing system, the credit availed inadmissible - Duty demand was raised and confirmed by the Revenue wherein interest with penalty was imposed.

Held - The issue at hand was whether assessee was elligible to take credit on various input services like Mandap Keeper Service, Real Estate Agent Service, Transport of Goods by Air Service, Programme Producer Service, Event Management Service - Prior to 01.04.2011 the definition of input services included 'activities related to business' , therefore, all activities relating to the business of the assessee would fall within the ambit of input service - Following the decision of Coca Cola India Pvt. Ltd. Vs. Commissioner of Central Excise, Pune, this term was analysed - Therefore, the credit on these services qualify for input service and are admissible in terms of CCR - With respect to disallowance of credit on grounds of centralized registration - There was no ISD registration at the time of availing credit and even though services are availed in different units of the assessee, credit is admissible - The Department issued SCN by invoking extended period of limitation which is incorrect - Returns have been duly filed by the assessee & prodution of documents was acknowledged by the Department - Therefore, there has been no suppression of facts regarding the availment of credit on input services - Hence, the order challenged is set aside : CESTAT (Para 1, 6, 7, 8, 9) - Appeal allowed: CHENNAI CESTAT

ST - The assessee availed cenvat credit of service tax paid on input services like catering charges, insurance premium on employees, insurance charges on vehicles and brokerage charges paid for arranging residential premises for employees - The Revenue denied cenvat credit on these input services.

Held - In the business model adopted by assessee, there is a centralized billing system - It discharges service sax applicable on output services rendered at various locations - Therefore, it is not necessary for the assessee as per the proviso to Rule 4 of Service Tax Rules, 1994 to get Branch offices registered with the Department so as to be eligible to avail Cenvat credit - With respect to credit on input services like canteen services provided to the patients during the course of clinical test on them, it has direct nexus with the 'output services' of clinical test service provided by the assessee - Therefore, eligible to credit as the same does not fall in the exclusion clause of the definition of the input services - Next, the credit availed on the Service Tax paid on 'Insurance Charges on vehicles and on Brokerage charges for arranging accommodation for the employees, are not eligible to credit - Following the ratio laid down in decision of CCE vs . ECOF Industries Pvt Ltd and Ion Exchange India Ltd vs. CCE , the appeal is partly allowed: CESTAT (2, 7) - Revenue's appeal partly allowed: AHMEDABAD CESTAT

CX - Revenue is in appeal against impugned order of Tribunal remanding the case back to Adjudicating Authority to consider the claim of refund of unutilized CENVAT Credit after investigating and reexamining the facts of the case about nexus between output service and input service provided by assessee, which is engaged in business of software solutions - Following the order in case of MISYS SOFTWARE SOLUTIONS (INDIA) PVT. LTD., court do not find any substantial question of law in the remand order of Tribunal: HC - Appeals dismissed: KARNATAKA HIGH COURT

CX - Whether respondent assessee is liable to pay interest on the duty paid during the period of provisional assessment before finalization of the assessment.

Held: Issue is no longer res integra in view of the Bombay High Court decision in CEAT Ltd. - 2015-TIOL-397-HC-MUM-CX in favour of the assessee - in appellant's own case also, Tribunal has held in their favour as reported - 2017-TIOL-1607-CESTAT-MUM . - in view of the same, there is no substance in the appeal filed by the Revenue - impugned order is upheld and Revenue's appeal is dismissed: CESTAT [para 4] - Appeal dismissed: MUMBAI CESTAT

CX - Defective/damaged moulds are sent to job worker u/r 4(5)(a) of CCR, 2003 fore reconditioning and remaking of the same - after return, same are used for manufacture of final product - case of department is that the said defective/damaged moulds ought to have been removed on payment of duty as they are waste/- scrap - appeal to CESTAT.

Held: On the moulds purchased, the appellant had availed CENVAT credit and after use, when the moulds are cleared, though defective/damaged, it is in the form of input only, particularly for the reason that though defective/damaged, after reprocessing/remaking the same is further used in the manufacture of final product - removal of defective/damaged moulds is nothing but a removal of input for further processing by job worker and is correctly covered u/r 4(5)(a) of CCR, 2004 - issue is no longer res integra in view of Larger Bench decision in Wyeth Laboratories Ltd. - impugned order set aside and appeals allowed: CESTAT [para 5] - Appeals allowed: MUMBAI CESTAT

CUSTOMS

2018-TIOL-1255-HC-MAD-CUS

Sunshine Enterprises Vs Asst.CC

Cus - Petitioner has filed writ petition seeking a direction to respondents to provisionally release the goods covered under Bill of Entry by exercising the powers under Section 110A of Customs Act r/w.Customs (Provisional Assessment) Regulations - The petitioner has filed the said Bill of Entry stating that goods imported are consumer goods and there is no offending goods - On examination of Cargo, it was found that there is mis-declaration in respect of certain goods and non-declaration in respect of the electronic weighing scales which have been arrived in 158 containers - The importer has given a statement stating that Current Account in ICICI Bank in Parry's Branch in name of M/s.Sunshine Enterprise and he would provide his current bank account statement and proforma invoice, but he has failed to give the particulars - In the normal course, court would have given a direction to Authorities to consider the scheme of provisional release subject to certain conditions, but since there is an allegation that the petitioner has provided false information regarding the residential address and the Bank account, petitioner is directed to appear before in person before the first respondent within a period of one week and produce to the respondent the proof to show that he is residing in address given by him and a proof to show that there is a Bank account in the name of Sunshine Enterprise.

So far as electronic weighing scales are concerned, which have not been declared, the petitioner has made a request for release of the goods for re-export - The respondent is directed to consider the said request, as the request has also come from the exporter.

Subject to full compliance of the first limb of the direction, the second limb of the direction shall be complied with by the first respondent within a period of three weeks from the date on which the first direction is complied with: HC - Writ petition disposed of: MADRAS HIGH COURT

2018-TIOL-1254-HC-MAD-NDPS

Syed Musafar Sadiq Vs Intelligence Officer

NDPS - The Petitioners are A-1 to A-3 - Case of Prosecution is that A-1 is a drug smuggler, A- 2 is alleged to have financed A-1 and A-3 assisted him - On specific intelligence, the petitioners have been arrested by DRI and remanded to judicial custody - During search, the DRI officials seized Pseudoephedrine and in International Market, it is valued at Rs.4,78,00,000/ - It is a controlled substance - Same was seized in presence of mahazar witnesses along with certain fabrics and it is intended to be exported - Further in course of investigation, DRI intercepted Speed Post article which contained Alprazonem Tablets, a scheduled H1 drug under NDPS Act - These items were seized under cover of a mahazar - The seized remnant sample was deposited to Custom Warehouse - The petitioners claimed bail as their indefeasible right under Section 167(2) Cr.P.C. - It is true that since the offence under Section 25(A) of the Act is punishable with imprisonment which may extend up to 10 years and other offences to the line of Section 25(A) of the Act, the prosecution needs to file complaint on completion of investigation within 60 days from the date of remand of the accused in terms of Section 167(2) Cr.P.C. - It is also true that the petitioners were remanded to judicial custody on 28.11.2016 but the complaint was filed by DRI only on 24.05.2017 i.e, beyond the period of 60 days and thereby the indefeasible right to claim bail was accrued to petitioners/accused immediately after the expiry of 60 days - The Apex Court in case of Dr.Bipin Shantilal Panchal referring its earlier judgment in Sanjay Dutt , it held that if an accused person exercises his right to be released on bail for the failure of the prosecution to file the charge sheet within the maximum time allowed by law, he had an indefeasible right for bail.

Petitioners were confined in Prison from 28.11.2016 without any progress of the trial, since the Supreme Court seized the similar issue involved in this case to a larger Bench and the same is now pending - Petitioners are ordered to be released on bail in executing a bond for a like sum of Rs.1,00,000/- with two sureties each to the satisfaction of II Additional Special Court under NDPS Act at Chennai: HC - Petition allowed: MADRAS HIGH COURT