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SERVICE TAX
2018-TIOL-1843-HC-DEL-ST + Case Story
Speedcrafts Ltd Vs UoI
ST - Business Auxiliary Services - production of goods or provision of services on behalf of the client - Finance Act, 2004 w.e.f 10.09.2004 - It would be too much to assume that a tax which did not exist at the time when the bid was submitted would also be a liability of the Petitioner - Petitioner was liable to the extent of the obligations which existed on the Bid date but not beyond that; that as service tax was imposed subsequently, the same would be reimbursable - for more than 15 years, the Petitioner has not deposited the service tax, but is merely raising a claim for the entire service tax amount and the interest therein - Since the entire issue is in the realm of fiction at this point inasmuch as the Petitioner has not deposited the service tax and obviously cannot claim reimbursement of an amount which it has not deposited, no monetary claim is allowable in this matter - if a demand is raised in future by the Service tax department, for the amount which is covered under this contract, upon the Petitioner depositing the said amount, it can approach the Railways for reimbursement at that stage - Petition disposed of: High Court [para 11, 13, 14, 15]
- Petition disposed of: DELHI HIGH COURT
2018-TIOL-2747-CESTAT-MUM
Tipsy Topsy Resorts Vs CCE
ST - Assessee by an agreement leased out their business to one M/s Traveline International for conducting hotel business during the period June 2007 to March 2011 - on the rent received per month, the assessee failed to pay service tax and which totals Rs.31,66,217/- - in adjudication, entire demand was confirmed with interest and penalty but Commissioner(A) reduced the demand to Rs.30,05,846/- and penalty to Rs.9,53,302/- - Revenue is in appeal against reduction in tax demand/penalty and assessee against confirmation of demand.
Held: No discrepancy in the reasoning given by the Commissioner(A) in absence of any evidence produced by the assessee-appellant rebutting the said findings, therefore, demand has been rightly confirmed - so also, as regards dropping of demand of Rs.1,60,371/- calculated on the notional interest amount of deposit observing that no evidence has been produced by Revenue to establish that the amount received as deposit had influenced the quantum of rent collected by assessee-appellant, there is no discrepancy in the said reasoning, hence Revenue's appeal on this ground fails - as for penalty reduction, the same is not reduced by exercising powers u/s 80(2) of the FA, 1994 but by giving a different reasoning and which has not been countered by the Revenue/assessee - impugned order-in-appeal is upheld and appeal filed by Revenue as well as assessee are dismissed: CESTAT [para 6, 7]
- Appeals dismissed: MUMBAI CESTAT
2018-TIOL-2746-CESTAT-MAD
Unicorn Hospitality Service Pvt Ltd Vs CCE & ST
ST - The assessee provided Guest House and Housekeeping services - Based on accounts audit, Department alleged that assessee collected service charges & rental income but had not paid service tax on them - It was also alleged that re-imburseable expenses such as internet usage charges & food/beverages provided in guest house, had also eluded taxation - SCN was issued raising duty demand & also appropriating amount already paid - Penalties were also imposed - In the adjudication order, the demand raised on rental income was dropped as it was to be exempt from taxation by virtue of CBIC circular No.334/1/2007 - The other duty demands were confirmed & equivalent penalty was imposed u/s 78 of the Finance Act 1994.
Held: As the duty demand was raised for non-production of requisite documents showing why such amounts should not be included in the taxable value, the matter merits remand in interests of justice - The assessee is directed to produce requisite documents & adjudication be completed within 3 months, considering that the matter has stretched for long: CESTAT (Para 1,4)
- Case remanded: CHENNAI CESTAT
CENTRAL EXCISE
2018-TIOL-1851-HC-MUM-CX
Commissioner of CGST and Central Excise Vs Allied Aviation Pvt Ltd
CX - This Appeal under Section 83 of Finance Act and 35G of CEA, 1944 arises from the order 2017-TIOL-511-CESTAT-MUM of the Tribunal - Circular/ Instructions issued by Central Board for Indirect Taxes and Customs, directing the Revenue not to file appeals to the High Court where the tax effect does not exceed Rs.50 lakhs - It also directs its Officers to withdraw the pending appeals where the tax effect is less than Rs.50 lakhs - Appeal dismissed, as withdrawn: HC
- Appeal dismissed : BOMBAY HIGH COURT
2018-TIOL-1850-HC-MUM-CX
ACC Ltd Vs CCE
CX - The assessee company, engaged in manufacture of Cement, availed Cenvat credit of duty paid on welding electrodes used for repair & maintenance of capital goods in the factory - The Revenue contested such availment of credit & raised duty demand to recover the same u/r 12 of CCR 2002 r/w Section 11A of CEA 1944 - Demands for interest u/s 11AB of the Act & penalty u/r 13 of CCR 2002, were raised as well - Such findings were upheld by the Commr.(A) - The Tribunal too dismissed the assessee's appeal on grounds that the gases & electrodes used for repairs were not used co-extensively with process of manufacture of final products & so could not be considered to have been used in connection with manufacture of final products - Nonetheless, the quantum of penalty was reduced - Hence the present appeals.
Held - The CESTAT decision relied on the Tribunal in the present case had subsequently been declared by several High Courts as being based on incorrect interpretation of law - The test laid down in the Apex Court's decision in J.K.Cotton Spinning and Weaving Mills Co. Limited vs. Sales Tax Officer, Kanpur would apply to the present case - The Tribunal ought to have delved into whether the welding electrodes were used by the assessee directly or indirectly in the manufacture of final products or in relation to manufacture of final products - The term 'in manufacture of final products' normally encompasses the entire process of converting raw materials into finished goods - Thus the question is whether the particular process in which the electrodes were used was integrally related to the ultimate manufacture of goods so that without that activity or process, the manufacture though theoretically possible, but would be commercially inexpedient - As the Tribunal erroneosly relied on the Tribunal's decision in Jaypee Rewa Plant v. CCE, Raipur it omitted to look into such factual aspects - Hence the Tribunal must adjudicate the matter afresh: HC (Para 1-4,13,14,17,18)
- Appeals partly allowed : BOMBAY HIGH COURT
2018-TIOL-1833-HC-RAJ-CX + Case Story
Commissioner of Central Goods and Service Tax Vs Medicamen Biotech Ltd
CX - CESTAT is correct in allowing CENVAT credit availed on raw material used for manufacture of exempted goods which have been exported under bond - Revenue appeal dismissed: High Court [para 8, 9, 11, 12]
- Appeal dismissed: RAJASTHAN HIGH COURT
2018-TIOL-1832-HC-MUM-CX + Case Story
Balmer Lawrie and Company Ltd Vs UoI
CX - Section 11 of the CEA, 1944 - Recovery of arrears of Revenue by Deputy Commissioner - as petitioner has an efficacious remedy available under the CEA, 1944, petition not entertained - since petition was filed immediately on 2 nd May 2017 after receiving the communication dated 18 th April 2017, time spent in prosecuting the petition is condoned - petitioner to file appeal within two weeks before Commissioner(A) complying with the conditions for filing appeal including s.35F of the CEA, 1944 pursuant to which appeal to be heard on merits - Petition disposed of: High Court [para 4, 5]
- Petition disposed of: BOMBAY HIGH COURT
2018-TIOL-2750-CESTAT-MUM
Nicholas Piramal India Ltd Vs CCE
CX -Appellant is a manufacturer of bulk drugs and vitamins -by the Union Budget 1997, in terms of rule 57F(17)(b) of CER w.e.f. 01.03.1997, credit balance lying unutilized in the books of accounts was frozen and not allowed to be carried forward - appellant did not carry forward the credit of Rs.1,35,41,134/- - thereafter, the appellant came across a judgment in the case of Kopran Ltd. wherein such unutilized credit was allowed - pursuant thereto, appellant took credit on 31.08.2006 - SCN issued disallowing such credit and confirmed by impugned order - appeal to CESTAT.
Held: Appellant had not challenged the lapse of such credit, thereby accepting the compliance with the said rule - availing such credit suomotu after nine years is bad in law - insofar as payment of interest is concerned, appellant has utilized portion of credit which was availed in the year 2006, interest is, therefore, rightly payable - Bombay High Court order in case of GL & V India Pvt. Ltd. - 2015-TIOL-1210-HC-MUM-CX relied upon -appeal rejected: CESTAT
- Appeal rejected: MUMBAI CESTAT
2018-TIOL-2749-CESTAT-AHM
Saurashtra Cement Ltd Vs CCE & ST
CX - The assessee is engaged in manufacture of Cement and developed their own Jetty at Porbandar for transportation of Coal which is their imported inputs - For efficient working of Jetty, they have availed service of Dredging on which they claimed CENVAT Credit - Case of department is that since the Dredging Services are availed outside the registered premises and the same is neither used for manufacture nor for removal of goods, it is not qualified as input service - Jetty is a captive active Jetty of assessee, which is exclusively used by assessee only - Since Jetty is used primarily for import of coal which is used in the manufacture of final product, Dredging Service is qualified as input service - As per Bombay High Court judgement in case of Ultratech Cement Ltd 2010-TIOL-745-HC-MUM-ST it was held that if the cost of input service is borne by assessee and the same stand absorbed in cost of final product, such services are qualified as input services and accordingly the CENVAT Credit is admissible - Considering the ratio laid down by High Court and the facts of present case, the Dredging Services used by assessee is an input service, hence, CENVAT Credit is admissible: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
2018-TIOL-2748-CESTAT-HYD
Ramco Cements Ltd Vs CCT
CX - Assessee is a manufacturer of cement and he has used welding electrodes in repairs and maintenance of machinery and availed CENVAT Credit of duty paid on welding electrodes during the period May, 2013 to May, 2015 - The department issued SCN seeking to deny this CENVAT credit on the ground that welding electrodes were not used in or in relation to manufacture of final products - The relevant period in current cases is May, 2013 to May, 2015 - Therefore, the definition of inputs under CCR, 2004 as amended in 2011 is relevant for the purpose - This definition, as may be seen, includes within inputs, "all goods used in the factory by the manufacturer of the final product" with some specified exceptions - It is not in dispute that the welding electrodes are used for repair and maintenance of capital goods within the factory of manufacturer and these capital goods are used for manufacture of final product although the relationship is remote and not direct - So by no stretch of imagination can it be said that these welding electrodes have no relationship whatsoever with the manufacture of final product - Therefore, in terms of amended definition of inputs under CCR, 2004 as is applicable to the relevant period, the welding electrodes can definitely be called inputs - Assessee is entitled to input credit on welding electrodes used in repair and maintenance of machinery in his factory: CESTAT
- Appeal allowed: HYDERABAD CESTAT
CUSTOMS
NOTIFICATIONS
ctariffadd18_044
Anti-dumping duty on 'Graphite Electrodes of all diameters' imported from PR China discontinued - Notf. 4/2015-Cus (ADD) rescinded
ctariffadd18_043
Circumventing ADD on Glass Fibre imports from PR China - Anti-dumping duty imposed on Glass Chopped Strands (CSM) imported from M/s Asia Composite Materials (Thailand) Co.Ltd, Thailand - to remain in force till 31st August 2021
CASE LAWS
2018-TIOL-2745-CESTAT-MAD
Tarajyot Polymers Ltd Vs CC
Cus - The assessee is aggrieved by rejection of refund claim filed under Notfn 102/2007-Cus. as amended - One of the reasons for rejection of refund of SAD is that the invoice did not contain endorsement as required under para 2(b) of notfn declaring that no Cenvat credit is admissible on SAD paid - The said issue stands covered by decision in case of Chowgule & Company Pvt Ltd 2014-TIOL-1191-CESTAT-MUM-LB - Following the same, rejection of refund claim on this ground is unjustified - The second reason for rejection of refund claim is that description of goods in Bill of Entry does not match with the description of goods in sales invoice - The mere mention of grades of plastic granules in sales invoice cannot be a ground to deny the substantive benefit of refund, when there is no dispute that assessee has sold the very same goods that have been imported - The issue stands covered by decision in case of Shri Ram Impex India (P) Ltd. 2014-TIOL-01-CESTAT-MAD - Following the same, rejection of refund on this ground is not correct, same is set aside - When there is no dispute to discharge of VAT/Sales Tax, the department cannot reject the refund claims stating that there is no evidence to show that the liability to pay sales tax is fixed on assessee as per agreement - Rejection of refund on such ground is without basis, same is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2018-TIOL-2744-CESTAT-MAD
Woodern Style Plus Exports Vs CC & CE
Cus - Assessee filed shipping bills for export of 100% Polyester Face Scarf at the declared price of USD 4.9 per piece - Samples were drawn from said consignment and sent to Headquarters Valuation Committee for fixing the value of the same - As per the opinion of Valuation Committee, value of the goods were Rs.42/- per piece - Proceedings were initiated against assessee, inasmuch as, the value adopted by Revenue was on lower side, the assessee was not interested in export of the goods and, accordingly, withdrew the consignments - SCN resulted in confiscation of the same with redemption fine and penalty - Apart from the report of Valuation Committee, there is no other evidence to show over-valuation of cargo - Even the status of Valuation Committee does not stand disclosed i.e., as to who were the members of the said Committee, how they arrived at the value, what was the basis of the findings and what was the technical and expert qualification of said members - As such, impugned orders are not sustainable: CESTAT
- Appeal allowed: CHENNAI CESTAT
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