2018-TIOL-2291-CESTAT-MAD

Prime Consultancy Services Vs CST

ST - The assessee was discharging service tax under the category of "Manpower recruitment and Supply Agency services" - It paid wages on behalf of the one of the clients - As per the contract between the assessee and client they were to deduct PF / ESI & remit the same to the authorities concerned - On audit, the Revenue observed that assessee did not pay service tax on amounts received towards reimbursable expenses during the period in dispute - Duty demand was raised along with imposition of penalty u/s 76 & 78 of FA Act, 1994 - The Commr.(A) upheld the demand but set aside penalty u/s 76 of FA Act, 1994 and continued penalty u/s 78.

Held - Following the decision of Intercontinental Consultants & Technocrats Pvt. Ltd. vs. UOI & Commissioner of Service Tax vs. Sangamitra Services Agency, the order challenged is set aside - Moreover, if the liability to deduct is cast upon the assessee, it cannot be said that such expenses are not reimbursable expenses when the client later reimburses the same: CESTAT (Para 1, 5, 6) -Appeal allowed : CHENNAI CESTAT

2018-TIOL-2290-CESTAT-DEL

Public Health Foundation India Vs CST

ST - Assessee engaged in providing training to doctors in field of Diabetes Management in India - For these courses, assessee charges a fee of Rs.8000/- per trainee - There is no dispute that they have paid Service Tax on such consideration received from trainees under Commercial Coaching or Training Service - In addition assessee has received grants from MSD as per MOU with them - Such grants are given to assessee for defraying the expenses incurred in connection with conducting training programme for doctors - Whether assessee is liable to pay Service Tax on the amount received from MSD treating the same as part of consideration for providing commercial training or coaching - The link between the amount and training is direct and hence the amount received from MSD, even though a third party in the transaction between service provider and service receiver, the same is to be considered as part of consideration for the service - Such a view also finds support from Section 2(d) of Indian Act, 1872 which defines the term "consideration" - There is no doubt that the training imparted to doctors is covered by category of Commercial Coaching or Training Service - Accordingly, service tax is liable to be paid under category by including the amounts received as grant from MSD.

As regards to demand of Service Tax under category of Management, Maintenance and Repair service for grants received from Ministry of Health, assessee carried-out the activity of re-launch/upgradation of Healthy India Website for the Ministry of Health - Assessee has received "grants-in-aid" from the Ministry of Health - Under the circumstances, there is no service being rendered by PHFIassessee to Ministry in lieu of grant - There also seems to be no service provider-service recipient relationship between the parties - Accordingly, no Service Tax is to be paid on the amount received by assessee from the Ministry of Health - Confirmation of Service Tax with interest and penalties by lower authorities upheld in respect of grants received from MSD towards provision of training to doctors - However, demand in respect of grants received from Ministry of Health set aside: CESTAT - Appeal partly allowed : DELHI CESTAT

2018-TIOL-2289-CESTAT-DEL

Radhey Associates Vs CCE & ST

ST- The assessee rendered recovery agent services to ICICI bank but were not paying service tax leviable - On issuing summons to the assessee and it turning out to be unresponsive - The Department directed the Bank to furnish statement of ICICI bank accounts held by the assessee - After investigation a SCN was issued demanding service tax along with interest and penalty - The demand was confirmed by both the adjudicating authorities - In the present appeal, the assessee questioned quantification of demand seeking cum-tax benefit for calculation of their service tax liability.

Held - The tax on the activity Service tax on recovery agent's service was introduced with effect from 1.5.2006 and amended in 2012 u/s 66 (B) of the Act to be levied at twelve percent on the value of all services, other than those services specified in the negative list - Held - As the assessee is covered under recovery agent service, the service tax payable by the assessee under section 66 D of the Finance Act - Furthermore, the assessee presented challans before the Tribunal reflecting timely payment of tax paid - It submitted that all the transactions have been recorded in the books of accounts and taxes are duly paid before one year of issuance of SCN- Therefore, the order challenged is set aside and case is remanded for de novo adjudication : CESTAT (Para 2, 8, 9, 10,11) - Matter remanded : DELHI CESTAT

CENTRAL EXCISE

Himmatnagar Wire Industries Vs CCE & ST

CX - the assessee company is engaged in manufacturing Steel wire - The assessee sought to avail Cenvat credit on inputs lying in stock & inputs contained in the finished goods - On verification, it was noticed that the some amount on inputs, on which credit had been availed, were not available in the stock - Duty demand was raised for reversal of credit wrongly availed & imposing penalty - Such demands were upheld by Commr.(A) & then also upheld by the Tribunal.

Held - the scrutiny of month-wise accounts for the relevant AY pertaining to stock of inputs did not tally with stock of inputs declared during the period of dispute - On this ground alone, denial of Cenvat credit is justified - A manufacturer can avail Cenvat credit only on those stock of inputs which tally in the records - Any discrepancy in actual stock & stock declared can point towards clandestine removal of goods - Hence in such circumstances, the denial of Cenvat credit by the authorities cannot be assailed: HC (Para 2,5) - Appeal Dismissed: GUJARAT HIGH COURT

2018-TIOL-2288-CESTAT-DEL

Pilania Industries India Pvt Ltd Vs CCE & ST

CX - Assessee is engaged in manufacture of TMT Bars from raw materials i.e. MS Ingots/ Billets - The investigation started through search of residential premises of Shri Kailash Agarwal, Director - One laptop was seized from residence which was opened in presence of Shri Kailash Agarwal on the same day and details pertaining to clearance of TMT Bars available in laptop was printed out for period 01/07/2011 to 07/07/2011 - The resultant data when compared with statutory records indicated a difference in manufacture and clearance of finished products - The discrepancy was also accepted by Shri Kailash Agarwal in his statement who also deposited the duty due thereon - The laptop was further subjected to forensic examination and certain deleted data files said to contain details of manufacture and clearance of finished products as well as stock and consumption of raw materials for period May, June and July, 2011 - The comparison of such data with statutory records resulted in demand of Central Excise duty - There is a statement recorded from Shri Manoj Agarwal, another Director to the effect that the deleted files in the laptop did not reflect the correct figures - The details printed out on 09/07/2011 covering alleged clearances for the period 1-7 July, 2011 stands admitted and hence the duty liability has to be sustained against assessee - The forensic examination of laptop does not appear to have been conducted in presence of Shri Kailash Agarwal, Director - Neither Shri Kailash Agarwal nor Shri Manoj Agarwal, Director admitted to the truth of such data - In fact Shri Manoj Agarwal in his statement has claimed that the deleted data did not reflect correct figures of production and clearance - Revenue has failed to carry out any further investigation into allegation of clandestine clearance - Apart from the print out, no evidence has been brought on record regarding the unaccounted procurement of raw materials - Consequently, the demand of Central Excise duty amounting to Rs. 1,38,85,137/- merits to be set aside - Penalty imposed on Shri Kailash Agarwal reduced to Rs. 3 Lakh: CESTAT - Appeal partly allowed : DELHI CESTAT

2018-TIOL-2287-CESTAT-AHM

Proflex System Vs CC

CX - The present application has been filed by the assessee for recalling order of the Tribunal as one of issue related to sale of subject goods was not raised before the lower authorities - The assessee claimed refund of SAD on imported coils, sheets which were used in laying down the roofing system under WCS - The imported goods were converted into proflex sheets for laying down the roof sheets which includes 'supply of material and also service - Furthermore, it sold the sheets and coils to the customers - However, this issue of sale was not raised previously - Therefore, in the total refund claim disallowed a portion of refund amount comprises of sale along with works contract services would be admissible - Hence, the present rectification application

Held - The issues not raised during the course of argument cannot be allowed under the garb of rectification of the order - Following the ratio laid down by the Supreme Court in the case of CCE vs. Hindustan Zinc Ltd , the application is rejected : CESTAT (Para 2, 5) - Application dismissed : AHMEDABAD CESTAT

2018-TIOL-2286-CESTAT-MAD

Tamilnadu Petrochemicals Ltd Vs CCE

CX- The assessee is engaged in the manufacture of various chemicals - The assessee procured invalidated advance licences from another entity for duty-free imports, which were used by them for duty free imports - The issue arose in the case of M/s. IFGL Refractories Ltd., Vs. Commissioner of Central Excise & Customs, Bhubaneswar that whether the advance liences so procured by the assessee from their customers under which duty-free imports stand made by the assessee are required to be considered as an additional consideration received by the assessee from their buyers or not - It was observed that the statutory benefits allowed by statutory authorities cannot be additional consideration flowing to the manufacturer from their buyers - Thereafter, the decision of the Tribunal was appealed against by Revenue before the SC - Here the SC opined that the Tribunal allowed the appeal of the assessee on merits & did not consider the question of limitation - Thus, the matter was remanded to Tribunal - During remand proceedings, it was observed that the fact of use of advance licences was disclosed to the Revenue and as such there could be no fraud, collusion or mis-statement - Thus, justifying invocation of extended period of limitation - When entire excise duty paid by the assessee was refundable to them under para 12(C) of Import Policy, in such a revenue neutral situation, larger period of limitation of five years could not be invoked.

Held - It is held that major part of the demand is barred by limitation - Whilst during the relevant period the law as interpreted by the Tribunal was in favour of the assessee, the entire issue was revenue neutral - Therefore, it cannot be concluded that there was mala fide intent to evade payment of duty to invoke the larger period of limitation - Therefore, the demand falling within the normal period be quantified & penalty is deleted - Hence, the order challenged is set aside : CESTAT (Para 1, 4, 5) - Appeal partly allowed : CHENNAI CESTAT

CUSTOMS

dgft18pn024

Removal of all items from the Appendix 3A of the Handbook of Procedures, 2015-20

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Amendment in Para 2.47 and para 3.05 of Chapter-3 of FTP 2015-2020

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Amendment in policy condition of pepper classified under Chapter 09 of ITC (HS), 2017-Schedule-1 (Import Policy)

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In supersession of Notificatoin No.35/2015-2020 dt. 17.01.2017 amends the Import Policy of Arecanut

CASE LAW

2018-TIOL-2285-CESTAT-MAD

Raspn Shipping Services Pvt Ltd Vs CC

Cus - the appellant is engaged as a Customs House Agency - It was aggrieved by two orders, wherein one suspended it from operating as a CHA, while the other revoked its license to operate as a CHA - The assessee contested the revokation of license on grounds that the adjudicating authority did not complete adjudication proceedings within the period prescribed in Regulation 20 of CBLR, 2013.

Held - The appeal contesting the assessee's suspension as CHA is infructuous as the assessee's license stands revoked by the order of suspension - Considering Regulation 20(7) of the CBLR 2013, the Commr. of Customs has to pass an order within 90 days from date of submission of Inquiry Report - In the present case, it has been passed after expiry of 92 days - The time-limits prescribed under the CBLR are sacrosanct & are required to be adhered to - The same stands established by several judgments of the Tribunal and the High Courts - Hence the order of revocation is set aside and the suspension of license is revoked: CESTAT (Para 1,3,5) - Appeals allowed : CHENNAI CESTAT