Vodafone Essar South Ltd Vs CST

ST - Issue relates to cenvat credit on inputs/capital goods and input services availed by assessees who are all involved in telecommunication business - On the first issue with reference to cenvat credit availed by them in respect of structural items like MS angles and also various capital goods which are all used for setting up of telecommunication towers in various places - Both the sides agree that the matter is no more res Integra as Bombay High Court in Bharti Airtel Ltd. 2014-TIOL-1452-HC-MUM-ST as well as Larger Bench decision in Tower Vision India Pvt. Ltd. 2016-TIOL-539-CESTAT-DEL-LB held that credit on such inputs / capital goods as claimed by assessee are not available - Following the ratio of these decisions, assessees are not eligible for such credits.

On the second issue regarding eligibility of various credits on input services, main activity of which substantial credit has been availed by various assessees is with reference to erection and construction of telecommunication towers - The plea of assessee is that these towers are basic essential requirements for telecommunication service - The ratio adopted for inputs and capital goods which were used for creating such towers cannot be automatically applied to input services rendered in creating towers - In this connection, Tribunal refer to a decision of Tribunal in Idea Cellular ltd. 2016-TIOL-2486-CESTAT-MUM - Following the ratio already laid down, input service credit on erection of telecommunication towers are eligible for assessee.

Regarding various other input services like Rent-a-cab, Outdoor catering, Air Travel Agent and tour operator, plea of assessee is that these are directly used by them in connection with providing telecom service - The denial of credit is not due to non-availability of documents - The denial is on legal principle that these are not input services - Since these services have been availed by assessee in course of their business of providing telecom services and the same should be eligible for them - Certain miscellaneous amounts have been disallowed on other expenses like Authorized Service Station service, Business Auxiliary Service and ineligible documents - On examining the issue, Tribunal is not fully satisfied with details on the basis and the purposes of such credit and accordingly Tribunal agrees with the lower authorities in denying them in the absence of any contrary evidence produced by assessee to establish their eligibility for the same.

Regarding the plea of assessee against demand of extended period and penalty, the issue regarding cenvat credit on inputs and capital goods with reference to telecommunication towers set up by telecom operators has been a subject matter of substantial disputes in various forums - Admittedly, the dispute is one involving legal interpretation and difference of opinion - In such circumstances, it is not tenable to invoke ingredients of Section 73 proviso for confirming the demand for extended period as well as imposing penalties - In this connection, Tribunal refer to the decision of Tribunal in Vodafone Mobile Services Ltd. 2017-TIOL-1904-CESTAT-HYD - Similar view is taken by Bombay High Court in Vodafone Essar Cellular Ltd. 2018-TIOL-124-HC-MUM-CX and in FASCEL Ltd. 2017-TIOL-888-CESTAT-AHM - Accordingly, demand wherever raised will be restricted to the normal period with no penalties: CESTAT - Appeals partly allowed: CHENNAI CESTAT

CST Vs Sip Academy India Pvt Ltd

ST - The assessee-company is engaged in imparting coaching programme through their appointed franchisees to develop the mental skills of children using ABACUS and Brain Gym techniques - It entered into agreements for providing services classifiable as 'Franchise Service', which included collecting various fees like licensing fees, annual fees, student fees from the franchisees based on the agreement - The Revenue opined that such activity fell under 'Commercial Coaching or Training Service' - Duty demand was raised with interest & penalty - However, the entire demand was deleted by Commr. (A) relying on the decision in Fast Arithmetic Vs. ACCE, ST & EOU -

Held - The Commr.(A) erroneously applied the decision of Fast Arithmetic without considering whether the demand under franchise service is justified or not - Hence, the matter is remanded for de novo jurisdiction: CESTAT (Para 1, 5, 6) - Matter remanded: CHENNAI CESTAT

2018-TIOL-2303-CESTAT-MAD

SE Forge Ltd Vs CCE

ST- The assessee an SEZ, filed claim for refund under Notification NO.9/2009-ST as amended by Notification No.15/2009 - It claimed exemption of service tax paid on various services - In respect of refund claim on renting of immovable property service was rejected by the Revenue - The grounds for rejection were on the date of filing of the refund claim of renting of rmmovable property services was not approved by the Development Commissioner, as required under Notification 9/2009 as amended - Hence, the present appeal by the assessee.

Held - The Approval Committee has approved the aforementioned services - The requisite for obtaining approval is only a procedure to be complied, for the substantive benefit of exemption from payment of service tax - When the services have been approved, the benefit of exemption cannot be denied - The section 26 of the SEZ Act, lays down provisions for exemption from duties and taxes - In addition, section 51 of the said Act provides for over riding effect - Therefore the benefit of exemption cannot be taken away by the procedural prescriptions of Notification No.9/2009 or 15/2009 - The lapse in procedural compliance can be condoned - Hence, the assessee is eligible for refund : CESTAT (Para 2, 5, 6) - Appeal allowed: CHENNAI CESTAT

CENTRAL EXCISE

2018-TIOL-2302-CESTAT-MUM

Force Motors Ltd Vs CCE

CX - Appellant, a manufacturer of motor vehicles, during the period under consideration had sold motor vehicles to 109 wholesale dealers located in different parts of the country - on the request of the wholesalers, the appellant had given advertisements regarding the vehicles and which expenses were reimbursed by the wholesale dealers - case of the department is that this value should be included in the AV - case traveled to the apex court when it was remanded to the adjudicating authority for fresh adjudication with a direction to ascertain whether the amount involved is reimbursement or expenses - adjudicating authority reconfirmed the demand on a new ground that advertisement enhanced the marketability to attract business - appellant before CESTAT.

Held: Genesis of the dispute was generated three decades before, therefore, it will not serve any useful purpose if the matter is remanded to the adjudicating authority - it is apparent that on the request of the wholesale dealers, the advertisement was made in the local newspapers for promotion of the sale of the vehicles, thus, it is reimbursement and its value cannot be included for the purpose of excise duty - impugned order is set aside and appeal is allowed: CESTAT [para5] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-2301-CESTAT-KOL

CCE & ST Vs Carbon Resources Pvt Ltd

CX - Assessee is engaged in manufacture of Calcined Petroleum Coke (CPC) and received Raw Petroleum Coke (RPC) from M/s. IOC Limited, Barauni and used the same for manufacture of dutiable finished goods CPC - On examination of ER-1 Returns, it is found that as per ratio of conversion of IPC to CPC, assessee should have manufactured higher quantity of CPC - SCN issued alleging clandestine removal of goods - The entire demand was made on Input and Output norm of 1.3:1 basis - Commissioner (A) had set aside the demand as there is clear lack of evidence - It is well settled that the burden of proof on the charge of clandestine removal of goods lies with the Revenue -It cannot be discharged in a casual manner - In the present case, charge of clandestine removal is raised on the basis of E.R-I Returns - For the Input/Output ratio, no enquiry was conducted - The Tribunal in case of Hindustan Coca cola Beverages Pvt Ltd observed that the charge of clandestine removal of goods cannot be substantive only on a single parameter i.e. Input Output ratio - There is no reason to interfere with order of Commissioner (A) - Accordingly, the appeal filed by revenue is dismissed: CESTAT - Appeal dismissed: KOLKATA CESTAT

2018-TIOL-2300-CESTAT-AHM

Acme Diet Care Pvt Ltd Vs CC

CX - Assessee is manufacturer of finished goods and were exporting and clearing goods for home consumption - They had availed cenvat credit of service tax and the central excise duty paid on inputs consumed for manufacturing of goods which were exported under bond / rebate and for home consumption - The assessee had closed on the unit and surrendered registration which has been accepted by lower authorities, on execution an indemnity bond, cancelled the registration - Assessee subsequently filed refund claim of amount of balance lying unutilized in personal ledger account in the cenvat credit account of inputs and input service - Same was sought to be rejected by the issuance of SCN - Adjudicating Authority as well as First Appellate Authority are in error as OIA dt 1.10.2012 was not challenged by Revenue and the said order is in favour of assessee and the matter was remitted back only for quantification - Further litigation which has been entered into by lower authorities by going into merits of the case is unwarranted and the Adjudicating Authority should have granted the refund to assessee following the directions given by the First Appellate Authority in OIA dt 1.10.2012 - On this point itself the impugned order is set aside - Lower authorities are directed to quantify the amount of refund that needs to be sanctioned to assessee in pursuance of directions in OIA dt 1.10.2012: CESTAT - Appeal allowed: AHMEDABAD CESTAT

CUSTOMS

NOTIFICATION

ctariff18_055

Urea sold by Department of Fertilizers to Fertilizer Marketing entities on high sea sale basis - IGST calculated on AV over and above the Pool-in-Price exempted

CASE LAWS

2018-TIOL-1457-HC-MAD-CUS + Case Story

Angel Overseas Corporation Vs UoI

Cus - Drawback - By Notification No. 77/2003-CUS(NT) dated 18.09.2003, the Central Government retrospectively revised the drawback rates for those goods, which were exported by the petitioner - Supplementary claims filed -period of limitation as per Rule 15(1)(i) read with the second proviso is 3 months + 9 months, i.e. 12 months- Rule 15 of the Drawback Rules, 1995 provides for an outer time limit for condonation of delay in filing the supplementary claim petition - power to relax the Rules has been granted to the Central Government by rule 17 of the Rules - it cannot be stated that the power under Rule 17 is in derogation of the other provisions of the Rules - To exercise the power under Rule 17, satisfaction of the Central Government is primordial - Central Government may after considering the representation and for reasons to be recorded in writing, exempt such exporter or agent from the provisions of such Rule and allow drawback in respect of such goods - Central Government, under the Scheme of the Act and Rules, is the Revisional Authority - it cannot be stated that the power under Rule 17 is in derogation of the other provisions of the Rules - So far as the procedural aspect is concerned, always liberal interpretation is given so that the exporter or the importer gets the benefit of the scheme framed by the Government - petitioner should not be non-suited on the ground stated by the respondents viz. that ignorance of procedure cannot be excused for condonation of delay, which is beyond the permissible period of 12 months - Delay beyond 12 months is only of 7 days - impugned order is set aside and the Dy. Commissioner of Customs, Drawback is directed to apply the revised drawback rates as notified by the Central Government in Notification No . 77/2003-CUS(NT) and sanction and effect payments of the amount to the petitioner within a period of three months - Writ Petition allowed: High Court [para 18 to 27] - Writ Petition allowed : MADRAS HIGH COURT

2018-TIOL-2299-CESTAT-MAD

Prince Fortified Steels Pvt Ltd Vs CC

Cus - The assessee imported goods and declared them as Heavy Melting Scrap and Re-rollable scrap under CTH 72044900 - It claimed exemption under Notification No.21/2002-Cus - However, on audit it was found that the subject goods were twisted TMT rods of assorted sizes - Based on audit report and chartered engineer's report the Revenue took a view that cut pieces of TMT rods are classifiable under CTH 72149990, hence not eligible for exemption and that the declared value is not true transaction value - Duty demand was raised and confiscation of the goods was ordered with option to redeem u/s 125 of Customs Act, 1962 and penalty u/s 112 of Customs Act - On appeal, the Commr. (A) reduced the redemption fine from Rs.2 lakhs to Rs.1 lakh and penalty from Rs.2 lakhs to Rs.1 lakh, however upheld the remaining portion of the order of original authority - The assessee & Revenue were in cross appeals.

Held - The proforma invoices described the goods as HMS - Then again, the invoiced issued by supplier had similar description - The pre-inspection certificate by the internationally accepted agency M/s.Worldwide Inspection Services – SARL certified that the imported goods are metallic scrap as per internationally accepted parameter for such classification - The Chartered Engineer's report held otherwise on the basis thatin common parlance the length of subject goods do not have proportionate size - This explanation is not sound enough to reject pre-inspection report in toto - Following the decision of CC Chennai Vs Kamatchi Sponge & Power Corpn. Ltd., the subject goods are Heavy Melting Scrap only - Hence, the order challenged is set aside : CESTAT (Para 1, 4, 5, 6) - Assessee's appeal allowed: CHENNAI CESTAT

CC Vs True Impex

Cus - The assessee filed manual bill of entry for the import of various household electric goods declaring the Country of origin as Dubai - On audit, it was noticed that the value declared was very low as well as imported goods were of a different country of origin, without affixing any MRP as required - Inaddition, the assessee did not comply with General Note to the Import policy - The value of goods was enhanced & goods were confiscated with an option to redeem the same on payment of fine u/s 125 of Customs Act along with penalty - On appeal, the Commr. (A) upheld the enhancement but reduced the amount of penalty & assessee was allowed to re-export the goods on payment of fine - The assessee & Revenue are in cross-appeals challenging the enhancement of value of goods & fine plus penalty and reduction of penalty, respectively.

Held - Various importers have imported the goods of same make, same country of origin at higher value than the value declared by the importer - The importer has accepted the above values for the purpose of assessment - Therefore, the order enhancing the value of goods is upheld - With respect to reduction of redemption fine & penalties, the order-in-appeal justifies the action with reasons - Moreover, in the present scenario the importers cannot be allowed to re-export the Electric Iron Boxes - Hence, the order challenged is upheld : CESTAT (Para 2, 6) - Appeals dismissed: CHENNAI CESTAT