SERVICE TAX
2018-TIOL-2391-CESTAT-MAD Sri Rama Vilas Service Ltd Vs CCE
ST - The assessee is a manufacturer of motor vehicle parts & excavating machinery - It sold two super deluxe coach buses availing central excise duty exemption under Notification No. 5/2005-CE - They Department took a view that assessee received the chassis and constructed super deluxe coach body which are exempted goods - Therefore, the activity of body building on the chassis would fall under Business Auxiliary Service - Duty demand was raised along with interest and penalty - The Commr.(A) upheld the demand but set aside the penalty.
Held - Precisely, section note (5) of Chapter 87 of CETA, 1985 clears the position of assessee that they are not job workers and are engaged in manufacture of body for motor vehicles - They hold registration under CEA for manufacture of bodies - Merely, because excisable goods are exempt from excise duty, they cannot be treated as service - Hence, the order challenged is set aside since it is based on wrong interpretation of CEA, 1944: CESTAT (Para 1, 4, 5). - Appeal allowed: CHENNAI CESTAT
2018-TIOL-2390-CESTAT-MAD
CST Vs Skylift Cargo Pvt Ltd
ST- The assessee is rendering CHA service, cargo handling service, business auxiliary service and GTA services - On audit, the Revenue noticed that assessee did not pay service tax on terminal handling charges, amount collected as transport charges from their clients, local transport charges, airway bill as well as freight charges for the period in dispute - Duty demand was raised - The Revenue confirmed the demand but dropped the penalties u/s 76 of the Finance Act on grounds that activity undertaken by assessee was not service rendered to customers and IAAI provides storage space and the charges are paid for the same - However, the Commr. (A) set aside the demand on these services on grounds of being barred by limitation but upheld the demand in respect of transport charges - Hence, the present appeal by Revenue.
Held - After reading the order of the adjudicating authority as well as comparing it with the allegations in the SCN - It is seen that even the Revenue was under total confusion as to how these charges fall under BAS - There is no clarity on the issues as they were all under litigation - The issue whether the incentives or discounts received for booking of cargo space is subject to levy of service tax was under litigation and in the assessee's own case vide Final Order No. 42242 to 42244/2017 wherein the issue was decided in favour of the assessee - Likewise, the reimbursable expenses whether subject to levy of service tax was also under litigation and was finally settled by the SC in the case of Union of India Vs. Intercontinental Consultants and Technocrats Pvt. Ltd. -As the matter was under litigation, the assessee was under bona fide belief that they are not liable to pay service tax and had not discharged the service tax - Hence, the order challenged is upheld : CESTAT (Para 2, 7) - Revenue's appeal dismissed: CHENNAI CESTAT
2018-TIOL-2389-CESTAT-MAD
Relic International Pvt Ltd Vs CCE
ST - The assessee are providing services of C&F agent services to an entity for marketing their products - It did not pay service tax on these services - The Revenue took a view that assessee was liable to pay service tax on C&F agency services as well as under Commission Agency Services - In the present case, the assessee incurred various costs and expenses for providing the services which the Revenue included in total taxable value - Duty demand was raised and confirmed along with interest and penalty - The Commr. (A) upheld the order - Hence, the present appeal.
Held - The issue related to reimbursable expenses cannot be made part of total taxable value - This has been clarified by the SC in Intercontinental Consultants and Technocrats Pvt. Ltd. case - Moreover, the assessee is under bonafide belief that they are not liable to pay service tax and was eligible for the exemption under Notification No. 14/2004-ST - Therefore, the penalties are set aside and order challended is modified - Hence, the case is remanded to requantify the demand after excluding the reimbursable expenses as claimed by the assessee : CESTAT (Para 1, 5, 6, 7) - Appeal Partly Allowed: CHENNAI CESTAT
CENTRAL EXCISE
2018-TIOL-2388-CESTAT-MAD
SKI Carbon Black India Pvt Ltd Vs CCE
CX- The assessee is engaged in manufacture of Carbon Black using Carbon Black Feed Stock (CBFS) as raw material - It availed ITC on inputs as these inputs were used for manufacture of steam which was used for generation of electricity & further wheeled out to the Electricity Board - The Revenue opined that assessee was not eligible for credit on CBFS which was used for generation of electricity which was wheeled out - Duty demand was raised & credit was disallowed as well as recovery proceedings initiated - The Commr. (A) confirmed the demand along with interest & penalty.
Held - For manufacture of carbon black, the CBFS has to be put to process of burning in the reactor & in such process, lean gas emerges - The assessee uses such gas for generation of steam and electricity - The SC court affirmed the judgment of Bombay High Court in Rallis India Vs UOI by observing that it was only a technological necessity that these lean gases were to be used to generate heat for generation of electricity - This ratio has been relied upon by the Allahabad HC in the case of Hi-Tech Carbon wherein similar situation had come up for consideration - Therefore, the ratio laid down by the SC & Allahabad HC would be applied in the present case - Moreover, in assessee's own case for a subsequent period in order-in-original dt. 24.3.2016, the Tribunal accepted the contention of the assessee that the credit could be denied only if CBFS is used in the manufcature of lean gas & thereby for generation of electricity - However, that is not the case at hand, it is clear that CBFS is used for manufcaturing carbon black - This order has been accepted by the Revenue and has attained finality - Therefore, the demand is illegitimate - Hence, the order challenged is set aside: CESTAT (Para 1, 4, 5, 6) - Appeal allowed: CHENNAI CESTAT
2018-TIOL-2387-CESTAT-KOL
CCE & ST Vs SMC Power Generation Ltd
CX - The assessee is engaged in the manufacture of Sponge Iron - The Revenue noticed that assessee availed irregular availment of Cenvat credit on Angle, Channel, CTB Bars, Cement, Welding Electrode during the period in dispute - Duty demand was raised and proceedings were initiated for recovery of Cenvat credit - However, the Commr. (A) set aside the Adjudication Order to the extent of denying the credit on subject goods and welding electrodes - Hence, the Revenue filed this appeal.
Held - The issue at hand was whether Cenvat credit can be allowed on structural items & such items are capital goods - In assessee's own case Order dated 28.08.2017 the Tribunal deliberated on this issue in the case of Mangalam Cement Ltd. vs. CCE - Applying the 'user test' it can be concluded that the structural steel items have been used for the fabrication of support structures for capital goods - Various capital goods, such as kiln, material handling conveyor system, furnace cannot be suspended in mid air - They will need to be suitably supported to facilitate smooth functioning of such machines - Therefore, the goods fabricated, using such structural items, will have to be considered as parts of the relevant machines - The definition of capital goods includes, components, spares and accessories of such capital goods - Thus, the structural items used in the fabrication of support structures would fall within the ambit of 'capital goods' as contemplated under Rule 2(a) of the CCR- Hence, the assessee is entitled to Cenvat credit : CESTAT (Para 1, 4, 5) - Revenue's appeal dismissed: KOLKATA CESTAT
2018-TIOL-2386-CESTAT-AHM
Sicgil Industrial Gases Ltd Vs CCE & ST
CX- The issue involved was whether the assessee were eligible to avail Cenvat credit of duty paid on 'Dry Ice Vehicle' against the invoices issued in other period but credit availed during the period in dispute - The Revenue took a view that availed Cenvat credit in 2015, against the invoices issued in the year of 2009, hence, not admissible to credit - Furthermore, the assessee availed depreciation on vehicles simultaneously under Section 32 of the IT Act, 1961 - In addition, the vehicles were used in transporting the goods outside the factory premises - These cannot be considered as capital goods being not used in the factory premises.
Held - In consonance with the Revenue's opinion read with definition of capital goods under Rule 2 (a) of CCR, 2004 reveals that the goods should be used in the factory premises - This is not the case, hence the subject goods cannot be said to be eligible to the credit of excise duty paid on such vehicles - The credit of duty paid on capital goods is inadmissible : CESTAT (Para 3, 4, 6, 7) - Appeal dismissed: AHMEDABAD CESTAT
2018-TIOL-2376-CESTAT-DEL + Case Story
Admannum Packagings Ltd Vs CGST, CE & CC
CX - Section 37C of the CEA, 1944 - There is no proof of delivery of O-I-O on assessee - The Department is presuming that since the O-I-O which was dispatched by Division office on 07.03.2016 was received by their Range office within 10 to 15 days, therefore, the same ought to have been received by assessee also within the same period being in same city - Admittedly there is no acknowledgement available on the record of Revenue supporting the assumed date of service by Department - The Revenue's only ground for holding the said order as having been received by assessee is that the same was sent by speed post and does not stand received back by Revenue - The issue whether dispatch of order by speed post by itself is sufficient to reflect upon the fact of receipt of same or not was considered by Larger bench of Tribunal in case of Margra Industries Ltd. 2006-TIOL-1223-CESTAT-DEL-LB in which it was held that it cannot be presumed that the dispatch of order by speed post, in absence of any proof of delivery, results in communication of the order - The said order of Tribunal has been further followed in the matter of Sunrise Industrial Corporation - Impugned Order set aside & matter remanded - Commissioner (A) to hear the assessee on merits and dispose of the appeals in accordance with law: CESTAT - Matter remanded: DELHI CESTAT
CUSTOMS
NOTIFICATION
ctariffadd18_038
Anti-dumping duty on import of 'Methylene Chloride' from United States of America and European Union to continue till 20 October 2019
CASE LAWS
2018-TIOL-2385-CESTAT-KOL Confederation Overseas Clearing Vs CC
Cus - The assessee has a Customs Broker License issued by the Commissioner of Customs, Calcutta - They were permitted to operate in Mumbai Customs - The operations of the assessee in Mumbai was managed by the Authorised Signatory Customs pass holders of the assessee - The assessees filed several bills of entry which, on investigation by Mumbai Customs, were found to have been filed in the name of fictitious importers - The IEC numbers of fictitious firms were fraudulently used by the real importer - The goods covered by the bills of entry were found to be mis-declared in terms of description as well as the value - In addition, the Authorised Signatory was involved in cases of smuggling in gold ornaments and was arrested and detained under COFEPOSA - The assessee came before the Tribunal aginst revocation of license.
Held - To establish that the assessee has contravened CHA Regulations, the Licensing Authority has given elaborate findings - In addition, sub-letting of the CHA license in Mumbai is in contravention of Regulation 12 of CBLR, 2013 - The assessee has been found to have failed in carrying out proper verification of the antecedents of the importers thereby facilitating smuggling of goods by filing documents in the name of fictitious firms - Therefore, the revocation of assessee's Customs Broker License along with forfeiture of full amount of Security deposit is legitimate - Hence, the order challenged is upheld: CESTAT (Para 9, 10, 11, 12, 13) - Appeal dismissed: KOLKATA CESTAT
2018-TIOL-2384-CESTAT-MAD
Godrej Consumer Products Ltd Vs CC
Cus - The assessee are engaged in trading of diapers which they imported in various sizes - It paid SAD u/s 3(5) of Customs Tariff Act, 1975 on import of baby diapers - Subsequently, these diapers were sold on payment on applicable sales tax, VAT - It filed claim of refund of SAD as per Notification No. 102/2007-Cus - However, the refund was rejected by both the authorities on grounds that the sales invoice did not bear the endorsement that Cenvat credit of SAD was inadmissible - Hence, the present appeal.
Held - The issue whether the rejection of refund on the ground that the invoices have not fulfilled the conditions as per para 2(b) of the Notification has been settled by the decision of the Larger Bench of the Tribunal in the case of Chowgule & Company Pvt. Ltd. Vs. Commissioner of Customs - However, the applicability of this decision has not been considered by the lower authorities - Moreover, the sales invoices haven't been completely produced by the assessee- Therefore, the case is to be remanded to the adjudicating authority for assessee to furnish the invoice - Hence, the order challenged is set aside: CESTAT (Para 1, 5, 6) - Matter remanded:
CHENNAI CESTAT
|
