2018-TIOL-NEWS-200, Dated: Saturday, August 25, 2018

ST - Assessee is registered with department under category of "Management, Maintenance or Repair Service" - On investigation, it was observed that assessee have entered into composite maintenance contract for maintenance of Diesel Driven C650 Blast Hole drills with M/s.Hindustan Zinc Ltd. - The maintenance contract also included supply of spare parts by assessee - It was noticed that assessee had not paid service tax on 70% of maintenance charges received and had discharged service tax only on balance 30% - SCN was issued for demand of service tax along with interest and also proposing to impose penalties - The main allegation is that the assessee has artificially bifurcated the value of service part and cost of materials as 70% and 30% - It is not disputed that assessee has discharged sales tax/VAT on 70% of value being the cost of materials - It is also admitted that such supply of spares is necessary for provision of services - When VAT has been discharged by assessee on 70%, the contract being a composite contract and VAT/Service Tax being mutually exclusively, the further demand of service tax on the amount for which VAT has been paid by assessee cannot sustain - The issue is squarely covered by the decision in case of Safety Retreading Co. P. Ltd. 2017-TIOL-28-SC-ST - Following the same, demand is without any basis: CESTAT

ST - Assessee is aggrieved by demand of service tax under category of Commercial Training or Coaching Service - Based on intelligence that the assessee was conducting training courses viz., B.Sc. Degree course in Hotel Management and Catering and Diploma Course in Hotel Management and catering and that these courses were neither approved by competent authority nor affiliated with any University/deemed University, SCN was issued based upon investigations and statements recorded - Demand confirmed along with interest and also imposed penalties - The foremost dispute is with respect to identity of assessee as to whether it is an independent entity to whom the SCN has been issued - The records revealed that assessee from the very beginning have been stating that they are a unit of Valliammai Society, which is a registered non-profit society - SCN gives the list of institutions functioning under Valliammai Society, the details of University with which these institutions are affiliated and the details of the approval given by AICTE/Medical Council of India, Directorate of School Education - It is shown that the said college is affiliated to University of Madras for grant of B.Sc. degree - As regards income earned by M/s. SRM Hotel (P) Ltd., towards imparting training, they raised debit notes on assessee and in turn received payment from them - The Diploma in Hotel Management and B.Sc. Hotel and Catering Management conducted by SRM Deemed University is also offered - Thus, it is not clear whether the assessee is conducting B.Sc. degree course in two streams ie., one which is affiliated to the University of Madras and the other which is affiliated to SRM deemed University - The same requires verification - For this purpose, matter remanded to the adjudicating authority - Tribunal in similar set of facts, in case of Ashu export Promoters Pvt. Ltd. 2011-TIOL-1982-CESTAT-DEL had held that the exemption is eligible - Similar view was taken in case of IILM Film and Media School 2013-TIOL-879-CESTAT-DEL - In assessee's own case for a different period the demand of service tax on diploma course was set aside - In the result, the impugned order is set aside and the demand in respect of Degree Course is remanded to the adjudicating authority: CESTAT

CX - Issue relates to maintainability of appeal under Section 35G of CEA, 1944 - The argument is that the issue raised being one of classification, there could be no appeal before the High Court and the same would have to be challenged before Supreme Court under Section 35L of the Act - Assessee is a dealer of motor vehicles - The specific transaction which comes up for consideration has a direct nexus with the dealership of manufacturer of motor cars, specifically Maruti Udyog Limited who has floated two subsidiary Companies by name MIBL and MFL - The former facilitates insurance cover to new vehicles and the latter; finance for purchase of new vehicles - Out of the commission received from insurance companies and financial institutions, MIBL and MFL pay a commission to the assessee, since it is the assessee who facilitates such finance as also issuance of insurance - In the orders of Commissioner, said services rendered by assessee to MIBL and MFL were taken as BAS - The assessee however claims that they do not carry out any service, insofar as FA, 1994 is concerned, as BAS - Court respectfully follows the decision in case of Kerala State Beverages 2013-TIOL-1219-HC-KERALA-CX and noticed that it answers the specific contention as to the uniform rate being applied - The court found from Al-Hussam India Hajj & Umrah Services Management that the earlier judgment of Division Bench was followed and the appeal found to be not maintainable in context of FA, 1994 - Whether the activity carried on by assessee would come within the ambit of definition of service as defined under FA, 1994 - The issue would have to be agitated before Supreme Court under Section 35L as has been declared by Division Bench of this Court - The appeals are, hence, dismissed as not maintainable: HC

CX - Assessee has challenged the order in 2017-TIOL-2330-CESTAT-CHD passed by Tribunal - Assessee did not dispute the fact that the amount involved in present appeal is Rs. 41,65,284/- - As the amount involved is less than the limit prescribed in Circular issued by Central Board of Indirect Taxes & Customs (Judicial Cell), the present appeal be dismissed as not maintainable - Consequently, applications for condonation of delay in filing/refiling of appeal are also dismissed: HC

NOTIFICATIONS / CORRIGENDUM

ctariffadd18_042

Anti-dumping duty on Jute Products imported from Bangladesh - Pending completion of review, import from M/s. Natore Jute Mills, Bangladesh (Producer), M/s PNP Jute Trading LLC,USA (Exporter/ Trader) & M/s Aziz Fibres Limited, Bangladesh (Producer/ Exporter) to be provisionally assessed

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Anti-dumping duty on Ofloxacin imported from PR China - Corrigendum to Notfn. 40/2018-Cus(ADD)

CASE LAWS

2018-TIOL-1697-HC-P&H-CUS

Malwa Industries Ltd Vs UoI

Cus - The petitioner seeks a writ of certiorari quashing an order dated 13.02.2017 rejecting its claim for refund of duty with interest on the ground that it is barred by limitation - The respondents contend that the application for refund having been filed more than one year from the date of the order of the refund is barred by limitation in view of the provisions of section 27 of the Customs Act, 1962 - The petitioner paid the duty under protest - In view of the second proviso to Section 27(1) the period of limitation would, therefore, not apply to the petitioner's case for refund and interest - Even if duty is not paid under protest, the petitioner would be entitled to the period of one year as computed in accordance with sub section (1-B) - Thus, sub section (1-B) is applicable to cases where the second proviso does not apply - What is important and what is different in section 11B of Central Excise Act from section 27 of the Customs Act is that section 11B does not contain a provision similar to section (1-B) of section 27 of Customs Act, 1962 which opens with the words "Save as otherwise provided in this section" - Thus, Explanation (B) including clause (ec) thereof is not subject to Proviso - Under section 27 of Customs Act, sub-section (1-B) is subject to the second Proviso to sub-section (1) - The respondents' apprehension that if petitioner's submission is accepted, there would be no period of limitation is not well founded - An application for refund must be made within a reasonable period of time - What is reasonable period of time would depend on the facts of each case - This apprehension in any event cannot be the basis of denying a just claim on the ground of limitation - In the circumstances, impugned order is set aside: HC

- Writ petition allowed : PUNJAB AND HARYANA HIGH COURT

2018-TIOL-1696-HC-KERALA-CUS

CCE Vs Sarkar Plywood Pvt Ltd

Cus - The first respondent imported 'Imprex film faced plywood' using indigenous and imported raw materials and claimed rebate on input, for both the said raw materials - Same was rejected on procedural grounds that CVD on imported inputs and used in manufacture of final produce is paid under Section 3 of Customs Tariff Act, 1962 and hence that the first respondent is not eligible for grant of rebate under applicable notification - The first respondent took up the matter in appeal which was, however, dismissed and that he thus filed a Revision Application before the second respondent - The Revisional Authority has allowed the Revision Application filed by first respondent finding that the benefit of rebate or draw back or cenvat credit or cash refund of CVD suffered by it, could have been availed in case 'the right procedure had been followed' - It further concludes that in such circumstances, the Government 'feels that procedural irregularities should not have come in the way of neutralising the duties suffered when payment of duty and expert of goods is not disputed' - Since the order does not say what the procedural irregularities were and since the second respondent has not concluded as to how such irregularities have impacted the parties concerned, the conclusions therein cannot obtain favour of law- Said order cannot be allowed to continue in force in manner it has now been drafted and that it will be up to the second respondent to pass a fresh order on the Revision Application - Court have not considered the merits of contentions of parties: HC

- Writ petition disposed of : KERALA HIGH COURT