CENTRAL EXCISE

2018-TIOL-2257-CESTAT-MAD

Madras Cements Ltd Vs CCE

CX - Assessee is engaged in manufacture of cement and clinker - On verification of ER-1 returns as well as details of cement dispatched by them to SEZ furnished along with their returns, it was noticed that assessee had cleared cement without payment of duty claiming exemption under Notfn 3/2004-CE but had shown in ER-1 returns as clearances made to SEZ - The department views that assessee is not eligible for benefit of Notfn and have mis-declared the clearances in their ER-1 returns - The goods which are exempted as per the notification does not include cement - Therefore, contention of assessee that cement is impliedly exempted as per notification does not hold water - The contractor M/s. Driplex Water Engg. Ltd. has obtained a certificate from District Collector wherein it is shown that cement is to be supplied and is included in the list of goods exempted vide Notfn 3/2004 - When the notfn per se does not grant any exemption to cement, the certificate issued by District Collector cannot exempt the goods from payment of duty - No ground found to interfere with confirmation of demand or interest - As regards to penalty, assessee submitted that there was no intention to evade payment of duty and the exemption was availed only because the contractor produced the certificate issued by Collector - Penalty imposed under section 11AC is unwarranted and same is set aside: CESTAT - Appeal partly allowed: CHENNAI CESTAT

2018-TIOL-2256-CESTAT-HYD

Mane India Pvt Ltd Vs Commissioner of Central Tax Central Excise & Service Tax

CX- The assessee are manufacturers of fragrances and flavoring essences - It availed credit of duty paid on inputs & input services - Thereafter, it utilized the same for discharging duty liability on final products - On audit, the Revenue observed that the assessee availed inadmissible credit amount on one works contract service which was exclusively utilized for its R&D unit - A SCN was issued as assessee did not pay the interest & penalty payable on works contract service - The demand was confirmed by the adjudicating authority along with interest & penalty - Hence, the present appeal.

Held - As regards works contracts services, assessee is not eligible to avail Cenvat credit of the service tax paid - Post 01.04.2011 the definition of input services specifically excludes credit of tax paid on works contract services, if they are rendered from setting up factory - Therefore, assessee is not eligible for credit - With regard to service tax paid on other services which are rendered by the service providers at the Mumbai premises which was used by the assessee for the sales related activity, marketing and research of the few products - The credit was denied on grounds that R&D is not a part of manufacturing activity - Besides, had the assessee been registered as ISD then the activity undertaken as R&D could be called a manufcaturing activity but that is not the case - It is held that the assessee has centralized accounting & therefore, getting an ISD registtration is not of any relevance - Further, applying the ratio of Ahmednagar Forgings Ltd. case the assessee is eligible to avail Cenvat credit of service tax for the Renting of Immovable Property, Security Services, Cleaning, Internet services - Therefore, the appeal is partly allowed and the imposition of penalty on credit taken on WCS is upheld - Hence, the order challenged is upheld w.r.t. Cenvat credit availed on works contract services : CESTAT (Para 2, 6, 7, 8, 9, 10) - Appeal partly allowed: HYDERABAD CESTAT

2018-TIOL-2255-CESTAT-MAD

CCE Vs Mercury Manufacturing Company Ltd

CX - The assessee, a SEZ/MEPZ filed refund claim towards duty paid on procurement of High Speed Diesel (HSD) oil from DTA namely M/s. Indian Oil Corporation Ltd. - It appeared to department that assessee had not followed the procedure laid down under Rule 30 of SEZ Rules, 2006 r/w Notfn 19/2004-CE and also that they had not submitted the required documents prescribed under law - SCNs were issued proposing to deny the refund claim - Refund claim for period 8/2008 to 9/2008 was sanctioned and for the period 9/2004 to 5/2006 and 6/2006 to 12.4.2007 was rejected by lower authorities - The main contention for rejection of refund for the period upto 2007 is that the assessee had not furnished necessary documents to which the assessee has submitted that if given a chance the assessee would be able to furnish necessary documents - Both the appeals remanded to adjudicating authority for fresh decision - The adjudicating authority is directed to consider the issue of refund afresh: CESTAT - Matter remanded: CHENNAI CESTAT

CUSTOMS

cscaadri10-2018

CBIC appoints common authorities to adjudiate SCNs issued by DRI to several noticees

CASE LAW

2018-TIOL-2254-CESTAT-DEL

Sai International Vs CC

Cus - The assessee is engaged in the business of trading of dog food or snacks imported from out of country - The Revenue opined that the value of the imported goods was grossly under-invoiced - The goods were seized, subsequently released on payment of duty and furnishing of bond - The grounds elaborated by the Revenue was that the price of dog food or snacks of Gnawers brand given on the website of the manufacturer exporter based in China - It found that the particulars given on the website of various kinds of Gnawers brand dog food or snacks were several times higher than what were declared by the importer in the Bills of Entry - Differential duty demand was raised - Both the Addl. Comm. of Preventive (Customs) as well as Commr. (A) endorsed the order-in-original - Hence, the present appeal by assessee.

Held - The Revenue did not have any concrete evidence at the time of assessment of the Bill of Entry for rejecting the transaction value declared by the assessee as prices indicated on the website cannot primarily form the basis for undertaking the inquiry of an imported consignment - Besides, along-with the contemporary higher prices of similar goods, it is also to be proved that how the additional amount of money is paid to the supplied - The onus lies on the Revenue - Furthermore, the contemporary import prices of similar goods were very much available at the time of import on the Customs NIDB data - These prices are almost very close to the transaction value declared by the assessee at the time of import of various consignments - The Customs Valuation Rules, 2007 have to be applied sequentially and something more than the mere suspicion, has to be proved for rejection of the transaction value - Following the decision of the Tribunal in the case of M/s Shivam Electronics vs. CC (Import) Mumbai , the order challenged is set aside : CESTAT (Para 1, 9, 10, 11) - Appeal allowed: DELHI CESTAT