SERVICE TAX
2018-TIOL-1553-HC-KOL-ST + Case Story
Webel Technology Ltd Vs CST
ST - Taking photograph of a person in the process of preparation of Electoral Photo Identity Card (EPIC) would be self-service and would not attract Service Tax - petitioner cannot be said to have rendered any photographic services to an individual or to the person who had entered into the contract with the petitioner – department cannot take a different stand than the one which is binding upon it by virtue of CMC Limited - 2007-TIOL-803-CESTAT-BANG - impugned show-cause notice is, therefore, without any jurisdiction and is quashed - Petition allowed – question of vires of the provisions of the Finance Act, 1994 as assailed by the petitioner is kept open - Department directed to refund the deposits made pursuant to the interim order along with interest within four weeks – Petition allowed: High Court [para 13 to 15, 20, 21]
ST- Maintainability of Petition, Jurisdiction - Courts are ordinarily slow to interfere with a show-cause notice - However, if the show-cause is demonstrated to be without jurisdiction, then, a writ is maintainable - Moreover, the present writ petition is pending since 2008 - At this stage, to require the petitioner to reply to the showcause notice particularly when the liability of the petitioner to pay Service Tax is not attracted in the fact scenario of the present case, would be harsh: High Court [para 19]
- Petition allowed : CALCUTTA HIGH COURT
2018-TIOL-2457-CESTAT-MUM + Case Story CCE & ST Vs Royal Foodstuff Pvt Ltd
CX/ST - Since the respondent discharged service tax liability in the capacity of recipient of service, Rule 5B should be equated with Rule 5 of CCR for grant of refund of service tax paid on the taxable services - earlier order passed in respondent’s own case has not specifically discussed the issue of liability to pay service tax by recipient of service and its implication for claiming benefit through refund claim - said decision will not have any binding precedent for deciding case on hand - no infirmity in impugned order passed by Commissioner(A) - Revenue appeal dismissed: CESTAT [para 6 to 8]
- Appeal dismissed: MUMBAI CESTAT
2018-TIOL-2453-CESTAT-MUM
Corning Technologies India Pvt Ltd Vs CCT
ST - Appellant, engaged in the manufacture of optical fibers and optical fiber wires availed the services of handling contractors for lifting and disposal of hazardous waste from the factory - service tax paid thereon was availed as credit but the same was denied by lower authorities on the ground that the same is not conforming to the definition of Input service u/r 2(l) of CCR, 2004 - appeal to CESTAT.
Held: Fact is not under dispute that hazardous waste in the form of sludge, solid waste generated from effluent treatment plant was required to be removed from the factory in order to keep the environment free and unpolluted -Maharashtra Pollution Control Board, the regulatory authority for pollution control has also prescribed norms for disposal of hazardous waste from the factory - in view thereof, the services availed of handling contractor should be considered as input service for the purpose of availment of CENVAT benefit - Impugned order is set aside and appeal is allowed: CESTAT [para 6, 6.1]
- Appeal allowed: MUMBAI CESTAT
2018-TIOL-2452-CESTAT-MUM
Accelya Kale Solutions Ltd Vs CCGST & CE
ST - Refund - Rule 5 of CCR, 2004 - Claim of refund denied on the ground that no nexus has been established between the input and output services - appeal to CESTAT.
Held: On perusal of the statutory provisions read with clarifications dated 16.03.2012 furnished by TRU, it transpires that under the substituted rule 5 of the rules, there is no requirement of showing the nexus between the input service and the output service provided by the assessee; since the refund under the said amended rule is governed on the basis of receipt of export turnover to the total turnover, establishing the nexus between the input and output service cannot be insisted upon for consideration of the refund application - no merits in the impugned order denying the refund benefit - order set aside and appeal allowed: CESTAT [para 3, 4]
- Appeal allowed: MUMBAI CESTAT
2018-TIOL-2451-CESTAT-MUM
Accelya Kale Solutions Ltd Vs CCGST
ST - Refund claims filed u/r 5 of the CCR read with Notification 27/2012-CE(NT) were denied by the original authority on the ground that the input services on which refund has been sought have no nexus with the output service exported by the appellant - appeal to CESTAT.
Held: Fact is not under dispute that the appellant provides the entire output services to its overseas clients and none of the output services were provided to clients within the country; thus it cannot be said that the input services, on which refund benefit has been sought, were not utilized for providing the exported output service - Amended provisions of rule 5 have also been clarified by the TRU vide Circular dated 16.03.2012 and wherein it is stated that the nexus between the input service used in export of services should not be insisted upon and the benefit of refund should be granted on the basis of export turnover to total turnover demonstrated by the assessee - since department has not specifically objected to the fact of computation of export turnover to the total turnover by the appellant, as per statutory mandate read with TRU clarification, rejection of refund cannot be sustained - appeals allowed: CESTAT [para 6 to 8]
- Appeals allowed: MUMBAI CESTAT
CENTRAL EXCISE
2018-TIOL-2456-CESTAT-MUM
Precious Alco Petro India Pvt Ltd Vs CCE & ST
CX - Capital goods destroyed in fire - CENVAT credit on capital goods demanded and confirmed by invoking rule 3(5C) of the CCR, 2004 - appeal to CESTAT.
Held: A plain reading of the rule 3(5C) of CCR, 2004 reveals that CENVAT credit used in the manufacture of the finished goods is required to be reversed on remission of the CE duty allowed on the finished goods destroyed in fire - since recovery of credit on capital goods destroyed in such fire is not prescribed, the demand is not sustainable - impugned order to the said extent of recovery of CENVAT credit of Rs.1,35,960/- availed on the capital goods is set aside & appeal is allowed: CESTAT [para 6, 7]
- Appeal allowed: MUMBAI CESTAT
2018-TIOL-2455-CESTAT-MUM
Mercedes Benz India Pvt Ltd Vs CCE & ST
CX - Period involved is November 2014 to January 2015 - CENVAT credit availed of Rs.13,48,373/- on the strength of invoices/challans has been denied on the ground that the same is availed beyond the period of 6 months from issuance as stipulated u/r 4(7) of the CCR, 2004 - appeal to CESTAT wherein Appellant submits that the entire credit has been availed in the private records much before six months from the relevant date i.e., the date of issue of invoice, however, for preparation of the monthly returns, it was entered into the RG23A Part-II register after a delay of 1 to 2 months; that in any case they eligible to take credit since the period of six months has been substituted with one year by virtue of notification 6/2015-CE(NT) dated 01.03.2015.
Held: Invoices have been issued during the period May 2014 to July 2014 and credit was availed within one year from the date of issue of the documents, hence they fall within the time limit as prescribed in the notification 6/2015-CE(NT) dated 01.03.2015 - impugned order is set aside and appeal is allowed with consequential relief: CESTAT [para 6, 7]
- Appeal allowed: MUMBAI CESTAT
2018-TIOL-2454-CESTAT-MUM
Force Motors Ltd Vs CCT
CX - CENVAT - Rule 2(l) of CCR, 2004 - Appellant had availed credit of service tax paid on ‘Manpower Recruitment & Supply Agency Service' and ‘Training & coaching service' received by it - Credit denied on the ground that the said services do not have any nexus with the manufacture of final product and hence not ‘Input Service' - appeal to CESTAT.
Held: Use/Utilisation of the disputed services were within the factory premises of the appellant for complying with statutory requirements mandated under the Factories Act, 1948 read with Maharashtra Factories Rules, 1963 and as per which requirement, maintenance of garden and providing medical/clinical facilities to the employees within the factory premises is required to be adhered to by the manufacturer - credit is, therefore, admissible - appeal allowed: CESTAT [para 4, 5]
- Appeal allowed: MUMBAI CESTAT
CUSTOMS
DGFT PUBLIC NOTICE
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Enhancement of rates for certain HS codes in the Appendix 3B, Table 2 under MEIS
CASE LAWS
2018-TIOL-2450-CESTAT-MUM
Shriram Grape Growers Co-Operative Society Ltd Vs CC
Cus - Appellant had admittedly not fulfilled its export obligation mandated under the ‘100%EOU scheme' and was proceeded against for recoveries of duties foregone at the time of import and on procurement from domestic market - appeal to CESTAT.
Held: Duty liability on imported or indigenously procured capital goods is erased by sheer efflux of time - appellant has been functioning as an export-oriented unit since 1992 and capital goods procured in that year should be eligible for depreciation over the period that the unit has been in existence - as on the date of the impugned order, the unit has been in existence for over a decade and by application of the straight-line depreciation approved by CBEC, the value of capital goods would be ‘NIL' and consequently no duty liability would arise - letter of permission (LOP) had been issued for a period of 10 years and appellant has not sought any renewal thereafter -unit should have been appropriately de-bonded under the relevant rules and such de-bonding would have set in motion the process of duty recovery in accordance with the exemption notification - impugned order has no observations or findings on this score - on the date of initiating proceedings against the appellant, a different regime was in place and that regime relied upon the touchstone of net foreign exchange positive - considering the value of imports effected by the appellant, the obligation stands fulfilled - impugned order had failed to take notice of this - confirmation of duty and imposition of penalties do not appear to have emanated from the intent as well as the wording of law - impugned order set aside and appeal allowed: CESTAT [para 9, 10, 11, 12]
- Appeal allowed: MUMBAI CESTAT
2018-TIOL-2449-CESTAT-KOL
United Telelinks Bangalore Ltd Vs CC
Cus - The Department took a view that the subject goods were mis-declared to the extent that they are of Indian origin and the exporter declared himself to be the manufacturer of the goods - Duty demand was raised on grounds that the goods of Third Country origin are prohibited for export under Indo - Nepal Treaty - The Adjudicating authority dropped the proceedings as there was no attempt to export - In addition, personal penalty was imposed on the Authorised Signatory assessee-company - However, on appeal the Commr. (A) ordered for confiscation with release on 25% redemption fine of the value of such consignment - The grounds relied by the Commissioner was there was no bar to export the same to Nepal under the Export Policy - Hence, the present appeals.
Held - In the statement recorded the Revenue has mentioned that they never opened the sealed consignment as imported from Hongkong and the goods were removed for export to Nepal as such - The Indo-Nepal treaty prohibits contracting parties to re-exports of goods imported from Third Countries without manufacturing activity - Therefore, the provision of FTP is to be read with the provisions of Indo Nepal Treaty and in case of any conflict, the provision of Indo Nepal Treaty shall prevail - As the assessee have not denied mis-declaration - The confiscation of the Mobile consignment and imposition of redemption fine and penalty on the assessee is justified - However, penalty on Authorised Signatory of assessee-company is deleted : CESTAT (Para 1, 5, 6)
- Appeal dismissed: KOLKATA CESTAT
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