Jubilant Chemsys Ltd Vs CCE & ST

ST - Assessee, (JCL) is engaged in research and development of drug chemicals and export thereof under the 100% EOU scheme - They have been granted permission for carrying out manufacturing operations in a bonded warehouse under Customs Act and also registered under Central Excise Act as a manufacturer - As per Revenue, assessee have not actually exported their services and/or products, but have given services and or sold their products to Jubilant Biosys Ltd.(JBL), as a sub-contractor or agent of theirs - The Commissioner in impugned order has held that under all the agreements, the services have been ultimately exported by JBL - The Commissioner has examined and discussed the agreement between Eli Lilly and Company and JBL, JCL and Jubilant Life Sciences Limited (JLL) and has denied the benefit of export of services to the assessee for the reason that they have not produced anything to establish that JBL Bangalore has acted as their agent - As regards applicability of proviso to Section 73(1) of FA, 1994, fact of disclosure of value of disputed services in ST-3 returns is admitted in SCN - Further, SCN also records that assessee during relevant period was claiming refund of accumulated CENVAT credit - The refund orders passed by Assistant/Deputy Commissioner record the fact that entire export turnover and receipt of the export proceeds in convertible foreign exchange has been verified by Jurisdictional Range Superintendent - It is also on record that SCN has been issued in pursuance to an audit objection. Therefore, it is not a case of mis-declaration or suppression of facts but a case where there is a change of opinion on the manner of assessment by the Department - Proviso to Section 73(1) and provisions of Section 78 are not applicable - Accordingly, demand for the extended period is not sustainable and mandatory penalty under Section 78 cannot be imposed - As regards applicability of Section 80, there is no contumacious conduct on the part of assessee and the entire issue involves interpretation of the legal provisions - Moreover, the assessee has paid service tax to avoid any further dispute, in a revenue neutral situation - Therefore, it is fit case for invoking the provisions of Section 80 of FA, 1994 and setting aside penalty under Section 76 of Act, 1994.

As regards the issue of payment of interest on the duty paid through the CENVAT account when sufficient balance was available on the date the duty liability crystallized, issue is squarely covered by the decision in case of Oil and Natural Gas Corporation Limited - In view of the settled position of law, interest is not payable by assessee on the amount of duty paid through CENVAT account: CESTAT - Appeal allowed: ALLAHABAD CESTAT

2018-TIOL-2311-CESTAT-BANG

Vodafone South Ltd Vs CCT

ST - Assessee is engaged in the activity of providing cellular phone service falling under category of 'Telecommunication Service' - They are also taking credit of service tax paid in utilizing various input services used in provision of their output services - During internal audit as well as CERA Audit, it was observed that the availment of CENVAT credit on certain services is not proper as such services considered as input service for the nature of output services provided by assessee - The CENVAT credit to the extent of Rs.27,05,949/- has been demanded on the ground that certain input services such as restaurant service, event management service, health management service, apartment maintenance, credit in respect of Indian Hotels have in no way impacted the efficiency of provision of their output service and further, assessee have not submitted documentary evidence to show that tickets for air travel, transportation services are for official purposes - All the input services fall in the definition of 'input service' and they have a direct impact on the output services of assessee and has been held to be 'input service' in the decisions in Essar Oil Ltd. 2015-TIOL-2768-HC-AHM- CX, Robert Bosch Engineering and Business Solutions Ltd 2018-TIOL-1003-CESTAT-Bang, M/s. Jubilant Biosys Ltd 2018-TIOL-65-CESTAT-BANG and Monarch Catalyst Pvt. Ltd. 2016-TIOL-1162-CESTAT-MUM - Therefore, impugned order set aside.

CENVAT credit of Rs.19,27,869/- has been denied on the ground that the documents submitted by assessee claiming to be cenvatable documents does not provide for certain details like the name of the service provider, their registration number, amount paid, and further ground of rejection was that the credit has been availed without support of relevant documents which is in contravention of Rule 9 of CCR, 2004 - Said CENVAT credit was availed on banking services on the strength of documents issued by bank and the said documents have also been placed on record which shows the payment of service tax to bank for various services rendered by the bank - Further, Rule 4A of STR, 1994 clearly covers the case of assessee and the same has been considered in case of Prudential Process Management Services India Pvt. Ltd. 2016-TIOL-287-CESTAT-MUM and M/s. Vodafone Essar Spacetel Ltd. 2016-TIOL-249-CESTAT-KOL - Therefore, assessee's case is squarely covered in their favour on merit - Though the assessee has taken the limitation point in both the appeals, but Tribunal is not giving any findings on the limitation when both the appeals are allowed on merits: CESTAT - Appeals allowed: BANGALORE CESTAT

Wheels Tourists Operator Vs CGST & CE

ST - Assessee is engaged in business of providing Tourist Transport Service and render services mainly to travel agency service and corporate entities - Apart from this, they also render services to the individual clients directly - The issue that arises for consideration is whether the activity of providing cab to other travel agents for rendering services to foreign tourist would fall under the definition of rent-a-cab service - Commissioner has noted that assessee provided their vehicles to another tour operator and collected hire charges - It is thus concluded by Commissioner that hiring of vehicles is nothing but renting of vehicles - The facts reveal that the assessee was collecting hire charges - The issue has been decided in case of Sachin Malhotra 2014-TIOL-2039-HC-UKHAND-ST and R.S. Travels 2008-TIOL-1311-CESTAT-DEL - The said decision has been followed by this Bench in Om Sakthi Travels - Further, the said decision is a later decision than the decision of Gujarat High Court in case of Vijay Travels - Therefore, following the decision in case of Sachin Malhotra and R.S. Travels as well as decision in Om Sakthi Travels, demand cannot sustain: CESTAT - Appeals allowed: CHENNAI CESTAT

CENTRAL EXCISE

East India Udoyg Ltd Vs CCE

CX - Issue arises for consideration is as to whether the export of goods made under provisions of Rule and Notification is only a procedural mistake or it is the non-compliance of conditions mentioned in Notification which would deny them the benefit contained therein - Commissioner (A) has held that the non-compliance of condition mentioned in Notification Rule made them ineligible for the benefit as contained therein on the basis of ratio of Supreme Court in case of M/s Union Aluminum Co. Company wherein it is held that non-observance of even a procedural condition is not be condoned, if likely to facilitate to the commission of fraud and administrative inconvenience - Similarly Tribunal in case of Avis Electronics 2002-TIOL-394-CESTAT-DEL-LB has observed that when a particular thing is directed to be performed in a manner prescribed by rule, it should be performed in a manner and not otherwise - As the goods procured vide the annexure 45 have not been used for intended purpose, there is violation of Rule 6 of (Removal of Goods at Concessional Rate of Duty) - This is not the only technical infraction of conditions of Rule, but it is non-compliance of condition of Rule 6 in totality - Therefore, no infirmity found in impugned order and same is upheld: CESTAT - Appeal rejected: DELHI CESTAT

2018-TIOL-2308-CESTAT-BANG

Bundy India Ltd Vs CCT & CE

CX - Assessee is engaged in manufacture of parts and accessories of Motor Vehicles - As per the audit reports, there was a difference in purchase amounts shown by assessee in CENVAT Credit Register and Trial Balance which led the auditors to conclude that assessee had availed excess cenvat credit - In the SCN, there are no specific allegations of violation of the Act and Rules and the entire SCN is based on the audit report without verifying all the documents which assessee claims to have in its possession - Assessee has claimed that they have cancelled the invoice involving Central Excise duty and the said machinery is still in assessee's premises which was not verified by the Department - Further, assessee has claimed that they have all the documents / invoices in their possession on basis of which, the assessee has taken cenvat credit and they are ready to show the documents to Department if the case is remanded back to the original authority - Department has claimed excise duty on a stock transfer invoice which was cancelled but no intimation was given to the Department - Therefore, case is remanded to the original authority to verify the documents in the possession of assessee on the basis of which cenvat credit has been claimed and also to verify the machinery which is in their possession and regarding which the invoice was cancelled: CESTAT - Matter remanded: BANGALORE CESTAT

2018-TIOL-2307-CESTAT-MAD

CX - A SCN was issued to assessee proposing to deny exemption and to recover duty on tractors procured by assessee availing concession of duty under notfn 22/2003 alleging that tractors are not capital goods as defined under CCR, 2004 - Commissioner (A) has observed that procurement of raw materials and the process for such procurement is integral part of manufacture - That tractors used for transportation of raw materials and also for returning the remnant sand to the beach is part of the manufacturing process and that without such activity, assessee cannot carryout the manufacturing activity - The definition of capital goods given in CCR, 2004 relates to 'capital goods' on which credit can be availed - In Kejriwal Bee Care Ltd., the Tribunal observed that when the notification does not provide the definition of capital goods, the same has to be construed as used in common parlance - Impugned order calls for no interference: CESTAT - Appeal dismissed: CHENNAI CESTAT

CUSTOMS

DGFT PUBLIC NOTICE/ NOTIFICATION

Amendment in Appendix 1B, Hand Book of Procedure 2015-20

dgft18not023

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

CASE LAW

Bhansali Chemicals Mfg Division Vs CC

Cus - Assessee imported Ammonium/ Sodium/Potassium Persulphates on payment of customs duties - During audit, it was noticed that assessee did not pay anti-dumping duty on the import of such goods - The demand notices were issued for non-payment of ADD - The only ground raised by assessee is that the department ought to have challenged the assessment before demanding ADD - Tribunal fail to understand the legal basis for raising such a contention - The provisions of Customs Act are very much clear that notice under Section 28 can be issued for the duty which is not levied - There is no ground to interfere with the impugned order: CESTAT - Appeal dismissed: CHENNAI CESTAT