SERVICE TAX
2018-TIOL-2826-CESTAT-DEL
Olam Agro India Ltd Vs CCE
ST - The assessee is engaged in agri-business and is a major exporter of agricultural products such as cocoa beans, rice, sesame seeds and cotton - The lower Authorities have ordered payment of Service Tax in respect of Agency Commission and Corporate Guarantee Commission - It was noticed that M/s Olam Agro India Ltd, Singapore, the parent company has executed corporate bank guarantee in favour of banks in India for facilitation of lending of funds to the assessee and in lieu of said guarantee, assessee paid 1 per cent of value of guarantee as commission to their parent company at Singapore by way of foreign exchange remittance and their parent company provided them debit notes on quarterly basis - The copies of said debit notes clearly indicate the transactions with regard to lending facilities in India and therefore through Corporate Guarantee Commission, assessee is chargeable to Service Tax - Merely because the name of guarantee has been changed from 'Bank' to 'Corporate' it cannot be said that it won't fall under BAS as defined under Section 65 (105) of FA, 1994 - Agency Commission has been paid by assessee to Foreign Commission Agents towards procurement of export orders for assessee for export of rice - The demand for Service Tax has been raised against them on reverse charge basis under BAS - The contention of assessee is that they will be entitled to the benefit of Notfn 13/2003-ST - This notfn exempts Service Tax payable on Commission Agent Services in relation to agricultural produce - By following the decision of Tribunal in Kohinoor Foods Ltd. demand for Service Tax on Agency Commission set aside: CESTAT
- Appeals partly allowed: DELHI CESTAT
2018-TIOL-2825-CESTAT-ALL
NCS Pearson India Pvt Ltd Vs CC&CE
ST - The assessee is engaged in providing electronic tests delivery services to certain organizations - On audit, it was observed that services were actually delivered to and consumed by various "Test Centers" located in India on behalf of a US entity - The Revenue opined that the services rendered by the party on behalf of US entity cannot be considered as export and are chargeable to service tax under section 66 of the FA, 1944 - Duty demand was raised - The Adjudicating Authority confirmed the demand along with interest
Held: The issue is no longer res integra in view of Microsoft corporation (India) & Paul Merchants Ltd. v. CCE, Chandigarh - It is concluded that the services are delivered or used outside India and thus are export of services - In these cases, although, there was a company registered in India and rendered services in India in terms of an agreement with the service recipient which was outside India, the services has to be held as export of services, having been delivered outside India - Hence, the order under challenge is set aside : CESTAT (para 1, 6, 7, 8)
- Appeal Allowed: ALLAHABAD CESTAT
2018-TIOL-2821-CESTAT-MAD
CCE Vs Numeric Power Systems
ST - The assessee company manufactured UPS systems & it paid Excise duty which was inclusive of installation charges - During the relevant AY, the Department enquired whether pre-delivery inspection charges & after sales services were includible in the assessable value - While the assessee reponded by mentioning that such charges were included in assessable value, the Department issued SCNs raising duty demand on such installation charges for the period in question as well as for subsequent periods - On adjudication, it was held that as there had been no suppression of facts, extended period of limitation could not be invoked - Also that the assessee had already paid Excise duty on such values & so service tax could only be collected for time period when rate of service tax was higher than Excise duty already paid - Hence demand for differential amount of tax @ 2% was raised with interest while the penalty was set aside.
Held: Where the assessee's have been informing the Department about payment of Excise duty on installation charges in the assessable value and are paying service tax on the same, no suppression of facts can be alleged to warrant imposing extended limitation - In M/s Allegers Medical Systems Ltd. , the Tribunal held that where installation charges are included in assessable value & excise duty is paid and also where there is no separate contract for installation charges, no service tax demand is sustainable - Hence demand for service tax on 33% of sale value is unsustainable - Also, Excise duty cannot be adjusted against service tax - Hence the SCN lacks legal footing - Hence the adjudication order warrants no interference: CESTAT (Para 1,1.1,5,7,8)
- Appeals dismissed: CHENNAI CESTAT
CENTRAL EXCISE
2018-TIOL-1908-HC-RAJ-CX + Case Story
Commissioner Of Central Goods & Service Tax Vs Prem Jain Ispat Udyog Pvt Ltd
CX - Revenue has challenged the CESTAT order dropping the demand of Rs.30.85 lakhs valuation of seven parchis which were found would come to less than 50 lacs and in view of the Circular of the Department dated 11.7.2018 laying down new monetary limits for filing appeals before the High Court, the High Court was not inclined to interfere in the appeal - in view of the revised monetary limits laid down by Circular dated 11.07.2018, appeal cannot be sustained: High Court [para 5, 8]
- Appeal dismissed: RAJASTHAN HIGH COURT
2018-TIOL-2824-CESTAT-AHM
Novodigm Ltd Vs CCE & ST
CX - The assessee, a 100% EoU, imported certain inputs which were stored in drums under exemption Notfns No 22/2003-CE & 52/2003-CUS - The Revenue raised duty demand on the empty drums.
Held: The drums are made of plastic and are durable in nature and so are re-used by the assessee - Hence clearance of such empty drum is liable for duty under Notfns No. 22/2003-CE and 52/2003-CUS - As it is, the issue is no longer res integra and stands settled by the Tribunal in Commissioner of Customs, Bangalore v. Suretex Prophylactics (I) Limited and M/s Sanmar Speciality Chemicals Ltd. - As there is no mala fide intent of the assessee to evade payment of duty, the penalty is set aside: CESTAT (Para 1,4,5,6)
- Appeal partly allowed: AHMEDABAD CESTAT
2018-TIOL-2823-CESTAT-MAD
Comper Products Company Vs CCE
CX - Assessee is engaged in manufacture of both plain computer stationery as well as printed computer stationery - Department was of the view that printed computer stationery falls under Chapter Heading 48.20 attracting duty while the assessee classified the said goods under Chapter Heading 49 to hold that the goods are not chargeable to duty and the clearances in all units would be within SSI limit - An identical issue was considered by Tribunal in case of Data Processing Forms Pvt. Ltd. wherein the forms have been scanned and made part of the said judgment - The items impugned in present appeal are identical to the items that were in dispute in case of Data Processing Forms Pvt. Ltd. - The said decision has been affirmed by Supreme Court also - The issue for consideration therefore being the same the decision rendered in Data Processing Forms Pvt. Ltd. is applicable in all fours to the present case - Following the decision in case of Data Processing Forms Pvt. Ltd. , impugned items do not fall under Chapter 48.20 but would only fall under Chapter 49 - The demand of duty therefore cannot sustain and same is set aside - The impugned order is set aside: CESTAT
- Appeals allowed: CHENNAI CESTAT
2018-TIOL-2822-CESTAT-MAD
Larsen And Toubro Ltd Vs CCE & ST
CX - The assessee outsourced manufacturing of electrical goods - These goods were cleared by the vendor by paying duty u/s 4 of CEA, 1944 for the period in dispute - The assessee took a view that goods should have been valued under section 4A on MRP - Differential duty demand was raised.
Held: The issue at hand is improper discharge of duty liability by assessee - The matter is sub judice before the Apex Court - However, the assessee accepted the order of differential demand and paid up the same along with interest and also the penalties imposed on the Financial Manager - Therefore, at this stage the penalties under Rule 26 of CCR is deleted - Hence, the order under challenge is set aside : CESTAT (para 1,3 )
- Appeal Allowed: CHENNAI CESTAT
CUSTOMS
NOTIFICATION
ctariff18_061
Import from Singapore to become further cheaper - India extends tariff concessions to more goods
ctariffadd18_047
Anti-dumping duty on Tetrafluoroethane - Notification rescinded
CASE LAWS
2018-TIOL-2820-CESTAT-BANG
Bhagawan Mahaveer Jain Collage Vs CC
Cus - The assessee have imported computers by availing benefit of concessional rate of duty in terms of Notfn 51/96-Cus - The Department on the basis of an objection raised by Accountant General of India, issued a SCN demanding a differential duty alleging that the computers were being used by students and faculty members for preparing articles/projects which did not appear to be research work - It is seen that Circular 28/2004-Customs have put a condition that when Notfn 51/96-Customs is availed by privately funded college or educational institution, the benefit of Notification can be considered on the basis of Essentiality Certificate issued by the university to which the said college or educational institution is affiliated on 'case to case' basis provided that the said university fallen under the eligible criteria of importers under the said Notfn - The Essentiality Certificate has been issued and the importer is affiliated to Bangalore University and Bangalore University is registered with the DSIR - Therefore, the importer is eligible to import the said items under concessional rate as the conditions of the Notfn have been satisfied - No fraud was alleged - Demand notice for an extended period only on strength of a letter written by the university to the A.G., Audit party is not sustainable - The imports made on the strength of said certificate are liable to be held as legal and valid: CESTAT
- Appeal allowed: BANGALORE CESTAT
2018-TIOL-2819-CESTAT-HYD
CC & CE Vs Alfa Exports (EOU)
Cus - The assessee company exported 25000 MT of Iron Ore fines - Of this quantity, 2000 MT was detected as being moisture content - The assessee later claimed that owing to global recession, the market price of Iron Ore had crashed and that after lengthy negotiation, the buyer agreed to buy the goods albeit at a considerably reduced price - The RBI permitted the assessee to reduce the invoice price of the consignment on condition that no export incentives be availed - With reduction in assessable value, the assessee claimed refund of duty by re-working the assessable value based on realization of exports - However, such refund was denied on grounds that the assessee had not challenged the assessment - On appeal, the Commr.(A) held in favor of the assessee.
Held: The price payable by the buyer was not final and was subsequently lowered - Such price was accepted by the RBI - Besides, such reduced price was correctly accepted by the Commr.(A) as the price payable for the consignment exported - However, it is also noted that the shipping bill had yet not been finalized by the AO - Considering the necessity of such exercise, the matter warrants remand to the AO who shall finalize the shipping bill and refund the differential duty paid: CESTAT (Para 2,9,10)
- Case remanded: HYDERABAD CESTAT
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