SERVICE TAX
2018-TIOL-364-SC-ST ASST.CIT Vs Verizon Communication India Pvt Ltd (Dated: September 14, 2018)
ST - The dispute at hand pertains to export of services - The High Court noted from Master Supply Agreement that recipient of the service is Verizon US & it is obliged to pay for the services provided by Verizon India - Payment for the service was received by Verizon India in convertible forex & the recipient of the service was Verizon US - In the present case there is no privity of contract between Verizon India & the customers of Verizon US - Such customers may be the 'users' of the services provided by Verizon India but are not its recipients - As per Rule 3 of Place of Provision of Service Rules, 2012, the place of provision of telecommunication service is the location of service recipient - Thus Department was unjustified in characterizing the arrangement of provision of services as one between related persons i.e., Verizon India and Verizon US inasmuch as in doing so the Department was applying a criteria that was not stipulated either under the Export of Services Rules or Rule 6A of the ST Rules - Even for the period after 01.07.2012 the provision of telecommunication service by Verizon India to Verizon US satisfied the conditions under Rule 6A (1) (a), (b), (d) and (e) of the ST Rules and was, therefore, an 'export of service' - Amount received for the export of service was not amenable to service tax - Denial of refund of CENVAT credit and raising of demand of service tax on amounts received not sustainable in law - Refund as claimed together u/r 5 of CCR, 2004 with the interest due thereon will be processed and issued to Verizon India by the Department without delay.
Held - Delay in filing SLP is condoned - Matter tagged with SLP(C) No.29712 of 2014: SC - Notice issued: SUPREME COURT OF INDIA
2018-TIOL-363-SC-ST
CST Vs J Mitra And Company Pvt Ltd
ST - The issues involved in the present case are whether Business Auxiliary Service rendered by the assessee to their clients located abroad classifies as export of service - Also whether giving out industrial endoscopes on hire qualifies as Supply of Tangible Goods for use - The Tribunal held that the assessee had been appointed by foreign client as its exclusive agent in India for promoting sales & services provided by it - Hence BAS provided by assessee is meant for use & consumption by client - Simply because such services are provided in India does not nullify the fact that such service is provided for client located abroad - Thus such activity qualifies as Export of service - Regarding the other issue, Tribunal held that if effective control and possession of goods is passed on to the customer, then it may come under the category of sale - Otherwise such activity classifies as "supply of tangible goods for use service" where the effective control and possession of Endoscope lies with the operator - Hence the matter was remanded to examine each transaction.
Held - Delay condoned - Tag with C.A.No.6556/2015: SC
- Notice issued: SUPREME COURT OF INDIA
2018-TIOL-1947-HC-MAD-ST
CGSCT & CE Vs Dymos India Automotive Pvt Ltd
ST - The assessee is engaged in manufacture PU foam meant for automobile seat cushion - Department made a verification of records of assessee and noted that assessee availed CENVAT credit of basic excise duty, education cess and secondary and higher education cess as input with respect to service tax amount towards 'commercial or industrial construction service' during 2008-09 for payment of service tax towards 'renting of immovable property services' - The Tribunal took note of allegations in SCN ie. the assessee was not eligible for input service credit availed under the head 'commercial or industrial construction activities' - The Tribunal, after referring to definition of 'input service' as it stood at the material time under Rule 2(3) of the said Rules, pointed out that the first limb of definition made it clear that in the case of service provider, the service tax paid would be eligible input service, if the service is used for providing output service - The assessee contended that they were both manufacturer and provider of output service, that for the portion of the building used for manufacturing activity, the assessee was eligible for credit of service tax paid on construction services, that there was no dispute on this credit and that the dispute was confined to the quantum of credit availed on construction services on that portion of the building leased out to the HLIPL - In view of the decision in case of Lakshmi Technology & Engineering Indus Ltd. 2011-TIOL-700-CESTAT-MAD and also Navaratna S.G. Highway Property Private Limited 2012-TIOL-1245-CESTAT-AHM, construction service is an eligible service for credit for providing output service of renting of immovable property and without construction of building, the renting of immovable property cannot be provided - Conclusion of the Tribunal is well founded - There is no error in the decision taken by Tribunal: HC
- CMA dismissed: MADRAS HIGH COURT
2018-TIOL-1938-HC-MAD-ST
Asst.Commissioner of GST & Central Excise Vs Sakthi Sugars Ltd
ST - Revenue is in appeal against order of Tribunal in 2017-TIOL-4341-CESTAT-MAD - Appellant has placed a communication stating that on account of the monetary limits in these appeals, which are lesser than the threshold limit fixed by the Board's circular dated 11.7.2018, seeks permission to withdraw the appeals - Appeals stand dismissed as withdrawn: HC
- Appeals dismissed: MADRAS HIGH COURT
2018-TIOL-2879-CESTAT-MAD
Dhanalakshmi Engineering Works Vs CCE & ST
ST - Assessee is doing job work for customers and primarily engaged in making various machinery spares and components used in different industries like Paper machinery, Wind turbines and Electrical Switch Gears - The customers send the items like Rolls, Cylinders and various components to the assessee for machining operations - They do the grinding operation on said items and return the same to the customers - Allegation in SCN is that the activity of assessee would fall under BAS - The assessee is doing job of surface grinding of cylinders supplied by their customers and after completion of job they are returned to clients - The original authority held that no new product emerges from the job work operations and therefore the activity does not amount to manufacture and will fall under BAS - However, Commissioner (A) observed that the process undertaken is incidental or ancillary to the manufacturing activity and will not fall under the scope of BAS but will fall under scope of Management, Maintenance or Repair Services - There is no allegation raised in SCN that assessee's activity would fall under Management, Maintenance or Repair Service and the demand is raised in the SCN under the head BAS - Therefore, the confirmation of demand under different service cannot sustain - The Commissioner (A) has travelled beyond the SCN to confirm the demand under Management, Maintenance or Repair Service - Demand cannot sustain, same is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2018-TIOL-2878-CESTAT-AHM
Deep Chemicals Vs CST Service Tax
ST - The assessee is engaged as clearing & forwarding cum repacking agent for M/s Tata Chemicals Ltd., and holds registration under C&F service - The Department alleged that the assessee did not pay tax on packing charges received - Duty demand was raised with interest & penalties - On appeal, the Commr.(A) only allowed part relief.
Held: The assessee simply repacks salt from bulk packs into retail packs - Such activity is not incidental or anciliary to completion of manufactured product - Also regarding reference to the Standards of Weights and Measure Rules, Section 2(f) of the CEA 1944 does not lay down criteria that any activity in compliance of such rules would amount to manufacture - The activity of packaging salt is covered under Packaging Service u/s 65(25) of the Finance Act 1994 - Not being manufacture activity, it will attract service service tax - Hence the demands are upheld: CESTAT (Para 1,4,5)
- Appeal dismissed: AHMEDABAD CESTAT
2018-TIOL-2877-CESTAT-BANG
Golflinks Software Park Pvt Ltd Vs CCE & CST
ST - The issue involved is; whether the services such as architects service, construction service, management consultancy service, real estate agent service and erection and commissioning service used for construction of premises are admissible input services for taking CENVAT Credit as against the output service of assessee i.e. renting of immovable property and other related services on which Service Tax has been discharged - From the definition under Rule 2 (l) of CCR, 2004, it is clear that input service is not limited to services for providing output service but it also includes services for setting up the premises of provider of output service - All the input services involved are used for setting up the premises - In view of decision in case of Musaddilal Projects Ltd. 2017-TIOL-2304-CESTAT-HYD when the assessee was engaged in providing taxable services under the category of renting of immovable property, they could not be denied CENVAT Credit thereon - The Tribunal also held that even if such input services are procured before obtaining Service Tax registration, such credit could not be denied as there is no restriction for availment of such credit - Further, the assessee relied on the decision in Mysore Holding Pvt. Ltd. 2016-TIOL-2993-CESTAT-BANG in which it has been held that CENVAT Credit on input services relating to construction activity, is allowable to real estate developers holding the Service Tax registration - In the case of Maharashtra Cricket Association 2015-TIOL-2418-CESTAT-MUM , it has been held that architect and designed services used as input services to provide the output service of renting of immovable property were eligible services and CENVAT could not be disallowed applying the Board Circular dated 04.01.2008, which was contrary to statute law - This decision is squarely applicable to the assessee - Issue is squarely covered in favour of assessee: CESTAT
- Appeal allowed: BANGALORE CESTAT
2018-TIOL-2874-CESTAT-HYD
Hetero Labs Ltd Vs CCT
ST - The assessee is manufacturer of pharmaceutical drugs and they have branches and associate companies in other countries - These Branches and the Associate companies are located in their own premises and maintain their infrastructure with manpower and are registered as permanent establishments in the jurisdiction of respective countries - SCNs were issued alleging that the assessee had incurred expenditure in convertible foreign currency on various services received from abroad - The demand is sought to be made on the ground that there is a difference between the ledger amounts and the amounts reflected in Service Tax returns filed by assessee - The amounts in the Ledger reflects the amounts transferred by assessee to their branch offices or associate companies in foreign currency - The Department viewed these as payments made for services rendered by overseas service provider and consumed by assessee in India - As has been held by Supreme Court in case of Ranbaxy Laboratories Limited 2011-TIOL-105-SC-CX , it is a well settled proposition of law that a fiscal legislation has to be construed strictly and one has to look merely at what is said in the relevant provision; there is nothing to read in; nothing to be implied and there is no room for any indent ment - The order fastening a liability on the assessee has to pass this test - There are various items of expenditure such as salaries, office expenses etc. which need to be classified by department in the first place to show how these amount to services rendered by service provider abroad and received in India and how they are liable to charge to service tax under reverse charge mechanism - Where the assessee is supposed to have received the services and is liable to pay service tax under reverse charge mechanism, it is essential that the department say what services were received by them and how they were unclassifiable and how they were liable to be charged under reverse charge mechanism and compute their tax liability accordingly - This is an original work to be done with respect to each of the specific items of expenditure on which service tax is proposed to be charged - Matter remanded to the original adjudicating authority with a specific direction to compute the demand after specifying how each of the items of expenditure are chargeable to service tax: CESTAT
- Matter remanded: HYDERABAD CESTAT
2018-TIOL-2873-CESTAT-MUM
CCGST Vs TA Associates Advisory Pvt Ltd
ST - Refund - Rule 5 of CCR, 2004 - LB in the case of Span Infotech - 2018-TIOL-516-CESTAT-LB has held that export of service is completed only on receipt of consideration in foreign exchange and, therefore, the date in FIRC is relevant - order of Commissioner(A) confirming the refund orders passed by the adjudicating authority holding refund date as the date of receipt of payment in foreign exchange by service provider (respondent) needs no interference - Revenue appeals dismissed: CESTAT [para 2, 3]
- Appeals dismissed: MUMBAI CESTAT
2018-TIOL-2863-CESTAT-MAD
Indian Overseas Bank Vs CCE & ST
ST - Assessee is engaged in proving Banking and Financial services - On investigations, it was revealed that assessee is maintaining Nostro and Vostro Accounts with foreign banks to help their customers dealing in export and import business and for paying/collecting bank charges for such services - The assessee is utilising the services of SWIFT, Belgium, for securely and reliably exchanging financial information relating to banking transactions - According to the department, these transactions appeared taxable under category "Banking and Financial Services" for which the assessee is liable to pay service tax - Assessee is not contesting the demand in respect of Nostro transactions and is confining the challenge in this appeal on Nostro only on the penalty imposed - The assessee has discharged the service tax along with interest on being pointed out by department - Taking note of this as well as the fact that the issue whether assesse is liable to pay service tax under reverse charge mechanism was contentious for a long time, and was settled by decision of Apex Court in Indian National Shipowners Association 2008-TIOL-633-HC-MUM-ST, the penalty imposed in regard to Nostro transactions is unwarranted and same is set aside.
With regard to demand of service tax on SWIFT transactions, it can be seen that SWIFT is not used to send any money - It is used only for sending secured information/data - The said activity very much falls under sub-clause (vii) of Banking or other financial services and is a taxable activity - However, taking note of the fact that the demand has been made under reverse charge mechanism, the period prior to 18.04.2006 requires to be set aside - For the very same reasons discussed in the case of Nostro transactions, penalty for the period after 18.04.2006 is unwarranted and same is set aside - Thus, in respect of SWIFT transactions, the demand for the period after 18.04.2006 is upheld whereas the penalty on this issue is set aside.
The assessee has explained the transaction with regard to Vostro account - This is in the nature of a provision of service and not under reverse charge mechanism - The assessee has to maintain Vostro account in Indian Rupees - From the manner of operation and working of Vostro, assessee retains charges for providing the service - The account is maintained in Indian Rupees, but the inward remittances are in foreign convertible currency received from the Bank located outside India; the assessee retains the charges in Indian currency out of the inward remittance received from Bank located outside India - Therefore the condition that receipt in foreign currency in effect satisfied - The very same issue has been clarified by the Board vide Circular No. 111/5/2009-ST - Being export of services, the demand made on Vostro transactions cannot sustain and same is set aside: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
2018-TIOL-2862-CESTAT-KOL
Industrial Handling Vs CCE
ST - The assessee is a proprietory firm, engaged in providing material handling services to factories, mining, project sites, worksites - The Revenue took a view that assessee evaded duty by not registering under "Support Services of Business or Commerce" - Duty demand was raised - The demand was confirmed along with interest and penalty u/s 75 & 78 of Finance Act, 1994 respectively.
Held - The activity of supply of material handling equipment, such as, cranes is not leviable under the category of "Support Service of Business or Commerce" and this activity has come under the scope of service tax under a category of "supply of tangible goods" w.e.f. 16.05.2008 - Following the decisions of Indian National Shipowners Association vs. UOI & Paradise Investments vs. CCE the demand is set aside - Hence, the order under challenge is set aside : CESTAT (para 2, 4, 5, 6, 7)
- Appeal Allowed: KOLKATA CESTAT
2018-TIOL-2861-CESTAT-MAD
Kumar Enterprises And Kumar Labour Contract Vs CCE & ST
ST - The assessee was providing service of loading & unloading storage materials, filling raw materials in tanks/tankers, inventory, warehousing, storage & transportation to M/s Hindustan Unilever Ltd. at its factory - The assessee also provided such services to godowns leased by M/s HUL and also at godowns leased by the assessee - The assessee was registered under Manpower Recruitment Agency service & paid service tax under this category - The Department opined that such service was more appropriately classifiable under Cargo Handling service - SCN was issued raising differential demand for duty with interest & imposition of penalties - On adjudication such demands were confirmed & equivalent penalty u/s 78 was imposed - On appeal, the Commr.(A) upheld such demands while setting aside the penalty - Hence the cross appeals.
Held - In respect of agreements entered into by the assessee with M/s HUL for services provided at its factory and also at its godown, it has been held in various decisions of the Tribunals that activity of loading, unloading, packing, unpacking, recycling & shifting of cargo within the factory premises will not come within the purview of Cargo Handling Services - However, the services provided at the godowns of M/s HUL and the assessee's own godowns will not benefit from these decisions and so will fall within ambit of Cargo Handling Service u/s 65(23) of the Finance Act 1994 - Also considering the Apex Court's decision in UOI Vs Intercontinental Consultants & Technocrats Pvt. Ltd., the matter is remanded to ascertain whether the remaining demand classifies as reimburseable expense exigible to service tax: CESTAT (Para 1,5.1,5.2,5.3)
- Assessee's appeal partly allowed: CHENNAI CESTAT
CENTRAL EXCISE
2018-TIOL-1948-HC-MAD-CX + Case Story
R Arvind Vs DCST
CX - Expression used in s.35 of CEA, 1944 is "presenting" the appeal as against "entertain" in s.35F of CEA, 1944 - pre-deposit made belatedly after a period of seven months from date of filing appeal - as long as appeal is lodged within the prescribed period of limitation (including condonable period), it cannot be solely dismissed on the ground that mandatory pre-deposit was not made before the expiry of limitation period - Writ Petition allowed - Order of Commissioner(A) set aside and matter remanded for decision on merits and in accordance with law: High Court [para 7 to 10]
- Matter remanded: MADRAS HIGH COURT
2018-TIOL-1943-HC-MUM-CX
Ganpati Alloys Vs CCE, C & ST
CX - The assessee is engaged in manufacture of M. S. Ingots - On 2nd August, 2004, there was a flood in Daman and the factory of assessee was submerged in water - The assessee informed the Revenue about damages to the goods and documents/ records due to the flood - Thereafter, during audit, it was noticed that assessee had taken Cenvat credit, not supported by original copies of Cenvat Invoices - Consequently, a SCN was issued - The Tribunal by its order dated 3rd May, 2010 passed in the first round had restored the SCN to the adjudicating authority for denovo adjudication - This remand as is evident from the order was on the basis that there were more documents which were to be produced by assessee in support of its case - The order dated 3rd May, 2010 of the Tribunal was accepted by assessee - However, during denovo adjudication proceedings, assessee did not produce any new documents in support of its case - It, in fact, sought to rely on those documents, which were already produced during the earlier round - In absence of any new documents being made available, the occasion to verify the same, as directed by earlier order dated 3rd May, 2010 of the Tribunal, could not arise - The second round of proceedings before Commissioner, were circumscribed by directions given in that order dated 3rd May, 2010 for denovo adjudication by Tribunal - Thus, in the absence of any further documents being submitted during denovo proceedings, impugned order dated 23rd November, 2015 calls for no interference: HC
- Appeal dismissed: BOMBAY HIGH COURT
CX - The impugned order dated 12th February, 2016 records the fact that personal hearing was held on 4th November, 2015, 18th November, 2015 and 9th December 2015 but none appeared on behalf of the petitioner - This led to the passing of impugned order, which is admittedly appealable to the Tribunal under the Act - The issue in this petition revolves on the issue of determination of whether hearing was granted before the passing of impugned order - The same will be appropriately dealt by the Authorities under the Act - Therefore, there is no warrant to exercise extraordinary jurisdiction in the facts of this case: HC
- Petition dismissed: BOMBAY HIGH COURT
2018-TIOL-1941-HC-P&H-CX
Pr.CCE & ST Vs Modern Insecticides Ltd
CX - Appeal filed against order of Tribunal in 2016-TIOL-2336-CESTAT-CHD - The amount involved is Rs. 20,22,405/- - In terms of Instructions issued by Central Board of Indirect Taxes & Customs dated 11.7.2018, the monetary limit fixed for filing appeals in the High Court stands raised to Rs. 50 lakhs, which is applicable even in pending cases - As the amount of tax involved is less than Rs. 50 lakhs, same may be permitted to be withdrawn: HC
- Appeal dismissed: PUNJAB AND HARYANA HIGH COURT
2018-TIOL-1939-HC-MUM-CX
Commissioner Of CGST & Central Excise Vs Bharat Bijlee Ltd
CX - Impugned order is the subject matter of appeal which has been admitted by Supreme Court - This could only be on Supreme Court being satisfied that the issue arising in the appeal is with regard rate of duty or valution i.e. pertaining to orders appealable under the Act before it - In case of APM Terminals (I) Pvt. Ltd. and Eon Hinjewadi Infrastructure (P) Ltd., it is held that that the jurisdiction of this Court to entertain appeals under Section 35G of the Act is determined by order passed by the Tribunal and not on the basis of the question framed by the appellant - Thus, this Court does not have jurisdiction to entertain the appeal - Therefore, the motion is dismissed as impugned order is already a subject matter for consideration in an appeal before Supreme Court: HC
- Motion dismissed: BOMBAY HIGH COURT
2018-TIOL-2880-CESTAT-MUM
Man Industries Ltd Vs CCE & ST
CX - Issue involved is whether the appellants are entitled to refund of Education Cess and Secondary & Higher Secondary Education Cess when they availed area based exemption under Notification 39/2001-CE dated 31.07.2001.
Held: Admissibility of refund of Education CESS & SHE Cess paid by appellant along with excise duty under area based exemption notification no. 39/2001-CE has been considered by the apex court in the case of SRD Nutrients Pvt. Ltd. - 2017-TIOL-416-SC-CX and it has been held that EC & SHE Cess would partake the character of excise duty itself and, therefore, refund is admissible as the same was paid along with excise duty and when the excise duty itself was exempted from levy - impugned orders set aside and appeals allowed with consequential relief: CESTAT [para 4]
- Appeals allowed: MUMBAI CESTAT
2018-TIOL-2876-CESTAT-BANG
Motherson Sumi Systems Ltd Vs CCT
CX - The assessee is a 100% EOU engaged in the manufacture and export of Wiring Harness - It claimed refund of unutilized Cenvat credit of service tax paid under Rule 5 of CCR - The Revenue opined that assessee were ineligible to claim refund and rejected it - The Original Authority partly allowed the refund and sanctioned recrediting of the amount to the account - However, on appeal the Commr. (A) rejected the claim for refund.
Held: The assessee availed the credit on the basis of invoices issued by their HO which is also registered as ISD and as per Rule 9 of the CENVAT Credit Rules, the CENVAT credit can be availed on the basis of an invoice, a bill or challan issued by an ISD under Rule 4A of the Service Tax Rules, 1994 - The assessee availed the credit on the basis of the invoices issued by the ISD which satisfied the requirement of Rule 9 of CCR - Further the eligibility to Cenvat credit can only be questioned by the tax authorities under whose jurisdiction, the ISD is registered and not by the tax authorities where the assessee is registered- The Range Officer has conducted due verification and after that recommended for sanctioning of the refund - Keeping these points in view the order under challenge is set aside : CESTAT (para 1, 2, 4)
- Assessee's appeal allowed; BANGALORE CESTAT
2018-TIOL-2872-CESTAT-MUM
Grauer And Weil India Ltd Vs CCE
CX - CENVAT credit - Duty paid on computer installed at their factory office and Kandivali office was disallowed as CENVAT credit and penalty and interest imposed - appeal to CESTAT.
Held: Board has in Circular 943/04/2011-CX dated 29.04.2011 clarified that even goods such as furniture and stationery used in an office within the factory are goods used in the factory and are used in relation to the manufacturing business and hence credit of same is allowed - appellant has submitted that these computers were used within the factory of production for various activities in relation to the manufacture of the final products - in view of the Board Circular and the explanation given by the appellant, credit is admissible - impugned order is set aside and appeal is allowed: CESTAT [para 3, 4]
- Appeal allowed: MUMBAI CESTAT
2018-TIOL-2871-CESTAT-MUM
Mysore Petrochemicals Ltd Vs CCE
CX - CENVAT - Registration is not an essential requirement for availment of credit as Input Service Distributor - Statutory requirement under the law relating to pollution control mandate 'gardening' , hence gardening service, by no stretch can be termed to be covered by exclusionary provision - ' rent-a-cab ' service employed for transportation of employees to their work place is a necessary requirement for furtherance of business, credit admissible - impugned order set aside and appeal allowed: CESTAT [para 4, 5, 6]
- Appeal allowed: MUMBAI CESTAT
2018-TIOL-2870-CESTAT-MUM
Ridhi Creation Vs CCE
CX - Commissioner(A) has upheld the demand confirmed on the appellant on the ground that the section 11C notification 24/2009-CX(NT) grants exemption only to packing materials and since labels are not to be categorized as packing materials, the benefit of the exemption notification is not available to the appellant.
Held: Tribunal has in the case of Purab Printers - 2015-TIOL-1768-CESTAT-MUM extended the benefit of notification 8/2003-CE holding that there is no reason not to consider a label as a sticker especially in view of the fact that metal labels are also mentioned in clause 4(e) - impugned order set aside and appeal allowed: CESTAT [para 5, 6]
- Appeal allowed: MUMBAI CESTAT
2018-TIOL-2866-CESTAT-MUM
Colgate Palmolive India Ltd Vs CCE
CX - Whether the provisions of unjust enrichment is applicable in respect of refunds arising out of finalization of provisional assessments pertaining to period prior to 25.6.1999 even if the assessments are finalized after 25.6.1999 - Where the provisional assessment is pertaining to the period prior to the amendment of Rule 9B vide Notfn 45/99-CE(NT) and finalization of assessment completed after the said date refund arising out of such finalization of assessment will not hit by unjust enrichment as the provision of unjust enrichment shall not be applicable - As regards the reliance placed by lower authority in the case of Rapas Ltd., said decision is no longer good law as the same has been overruled by Larger Bench of Bombay High Court in subsequent judgment reported as New India Industries Ltd. 2003-TIOL-65-HC-MUM-CX - The said judgement was also followed by Bombay High Court in case of Corn products Company (India) Ltd. - In the facts of the present case Section 11B is not applicable - Therefore, question of proving whether the duty liability has been passed on to the buyers does not arise - In respect of the refund claim of assessee, the provision of unjust enrichment is not applicable - Accordingly they are entitled for refund without passing the test of unjust enrichment, therefore the impugned order is set aside: CESTAT
- Appeal allowed: MUMBAI CESTAT
2018-TIOL-2865-CESTAT-MAD
Chettinad Cement Corporation Ltd Vs CCE
CX - The assessee had entered into a MOU with TNEB whereby they had to install the silos collection system at MTPP that will be the property of TNEB and the operations and maintenance is to be handled by assessee - In turn, assessee was entrusted the work of operation and maintenance of Dry Fly Ash collection from silos at MTPP to the Saravana & Co. Ltd., who raised bills for the work claiming of operation and maintenance service with service tax - Further, at TTPP the assessee was given the work of operation and maintenance of fly ash collection system to Sh. A. Jayapal, who also raised similar bills for operation and maintenance charges with service tax, which in turn was availed by assessee - Both the lower authorities have proceeded on the understanding that the credit amounts availed relate to the services only of operation and maintenance of fly ash collection system installed by assessee at MTPP and TTPP - There is definitely a distinction between eligibility of Cenvat credit in respect of credit availed on inputs and capital goods and those availed in respect of input services - On very similar facts, the Tribunal in Ultratech Cement Ltd. 2013-TIOL-1221-CESTAT-DEL has held that credit availed on service tax paid for removal of non-excisable coal fly ash emerging from captive power plant is admissible - The cenvat credit has been denied by both the lower authorities in these appeals only on the ground that was only operation and maintenance service was installed - However, assessee contends today that the work orders issued by them also incorporated collection of fly ash and its loading and transportation to their manufacturing premises - In the circumstances, for the limited purpose of ascertaining the contention made by assessee, the matter is being remanded to the original authority - Coming to the matter of penalty, it is evident that the credit had been availed pursuant to activities carried out by the contractors as a resultant of MOUs entered by assessee with TNEB, MTPP and TTPP - These are very much in the public realm and that there would be no reason for assessee to misstate or suppress any information in this regard - Imposition of penalties in these cases are not justified, for which reason all penalties are set aside: CESTAT
- Appeals allowed: CHENNAI CESTAT
2018-TIOL-2864-CESTAT-MAD
Dymos India Automotive Pvt Ltd Vs CCE
CX - Assessee is a manufacturer of car seats for M/s. HMIL - The premises of assessee is located within the premises of M/s. HLIPL - The assessee had procured capital goods for use in manufacture of car seats namely 'H-point Machine and Static Load Tester' - However, said machines were not installed within the factory of assessee but within the premises of HLIPL - Assessee however availed Cenvat credit related to these machines amounting to Rs. 24,18,478/- - It appeared to the Department that availment of credit by assessee was not in order - It was also noticed that assessee had availed Cenvat credit on "Auto Ware House System" a complete automated storing system - In respect of credit amount of Rs. 24,18,478/-, that has been denied by adjudicating authority only for the reason that the imported goods have not been installed in factory premises of the assessee, but in an adjacent unit - Assessee stood merged with HLIPL w.e.f. 01.04.2009, and as a result both these premises became a common entity from that date - Asessee has availed credit under cover of invoice dated 01.11.2008, which was around five months prior to the date of the said merger - However, at the same time if the assessee had not taken the credit on or around 01.11.2008, but only on or after 01.04.2009, the availment of credit would not have excited any controversy - Therefore assessee's right to avail the credit on the said capital goods is very much available w.e.f. 01.04.2009 and the availment of credit prior to that date does not extinguish such eligibility - At the most, there will arise an interest liability for the period 01.11.2009 to 01.04.2009 ie., for the period between the date when the credit was availed and the effective date of merger of two entities - This being so, availment of Cenvat credit by the assessee cannot be disturbed, however, the assessee will require to discharge interest liability at applicable rates, for the period 01.11.2008 to 01.04.2009 - On the second dispute involving credit amount of Rs.1,35,27,963/-, the importation of these goods have been made under project imports for which specific Chapter Heading 98.01 exists in the Customs Tariff - It appears that there was a dispute on the issue of classification of goods - In the case of Intelligent Conveyors & Stockers Ltd., it had been inter alia held that 'Automated Vertical Storage System or Vertical Carousel Storage System would be classified as material handling equipment under CETH 8428.00 and not as furniture under CETH 9403, which decision was affirmed by Apex Court - In the circumstances, no infirmity found in the availment of credit of Rs. 1,35,27,963/- relating to goods imported under project imports under CTH 9801 - The impugned order will not sustain and is therefore set aside in entirety: CESTAT
- Appeals allowed: CHENNAI CESTAT
CUSTOMS
NOTIFICATIONS
Trade Notice 33
Activation of E-com module for SEIS, based on ANF 3B notified vide Public Notice 15/2015-2020 dated 28.6.2018
cnt81_2018
CBIC notifies Customs exchange rates effective from September 21, 2018
cnt80_2018
CBIC amends exchange rate for South African Rand
cnt79_2018
Customs Tariff Determination of Origin of Goods under the Comprehensive Economic Cooperation Agreement between the Republic of India and Republic of Singapore Rules, 2005 further amended
CASE LAWS
2018-TIOL-1944-HC-MUM-CUS
Atul Shipping Agency Pvt Ltd Vs CC
Cus - The two assessees are CHAs - The impugned order of Tribunal has upheld the penalty imposed under Section 112(a) of the Act upon both assessees on the basis of not complying with a public notice issued on 10th March, 2005 which required that all CHAs and Members of trade who are involved in import of livestock and its products to strictly comply with requirement of quarantine clearance and the fulfillment of Exim Policy, failing which, clearance was not allowed - The grievance of assessee before the Tribunal was that all the Bill of Entry with which both assessees are concerned, were filed before 10th March, 2005 when public notice was issued - Merit found in said submission, inasmuch as the submission of assessee which is the fundamental to their challenge of order in appeal before the Tribunal, is not considered - The Respondent is not able to show any reason, why the impugned order should be sustained - Therefore, substantial question of law, is answered in affirmative - The impugned order set aside appeal of assessee restored to the Tribunal for fresh disposal after following the principles of natural justice: HC
- Appeals disposed of: BOMBAY HIGH COURT
2018-TIOL-1940-HC-MUM-CUS
YIWU Safe Import & Export Trading Co Ltd Vs CC
Cus - The petitioner seek permission to reexport the goods which have been exported by them into India from China - The need to reexport the goods has arisen, as the importer has abandoned the same inasmuch as he has not filed a Bill of Entry for Clearance of goods - It would be appropriate if the Commissioner of Customs (Import) would expeditiously dispose of applications dated 23.06.2018 and 04.07.2018 - This after granting a personal hearing to petitioners on their applications in both the petitions - Therefore, Commissioner of Customs (Import) is directed to dispose of both the applications for reexport of goods in accordance with law: HC
- Writ petitions disposed of: BOMBAY HIGH COURT
2018-TIOL-2875-CESTAT-KOL
CC Vs Vinod Company
Cus - Lower Adjudicating Authority has assessed the bills of entry on provisional basis under Section 18 (2) (a) of Customs Act, against the PD Bonds for declared price, being in doubt - As assessment in these cases have been done by rejecting the declared invoice prices on a notional value for which no evidence, whatsoever, had been provided to the importer either at the time of import and or at the time of finalisation of provisional assessment, the same is contrary to the Provisions of Section 14 of Customs Act, 1962 read with Customs Valuation Rules, 1988 - The Commissioner (A) had therefore, rightly set aside the assessment orders and ordered that assessment of imported goods under various bills of entry, to be made at the declared price - Order of Commissioner (A) upheld: CESTAT
- Appeal rejected: DELHI CESTAT
2018-TIOL-2869-CESTAT-MUM
CC Vs Siemens Ltd
Cus - Import of various electrical switchgear products - additional duty was assessed on the declared value and not on the retail selling price applicable u/s 4A of the CEA, 1944 - differential duty sought to be levied for a period beyond the normal period prescribed u/s 28 of the Customs Act, 1962 - proceedings dropped by adjudicating authority on the ground of limitation, hence Revenue in appeal.
Held: Proceedings initiated against the respondent under the CEA, 1944 was settled by the decision of the Bombay High Court in the year 2008 - 2008-TIOL-141-HC-MUM-CX and can be said to have attained finality only then - that the decision of the Bombay High Court upheld the contention of the investigating authority does not in any way dilute the existence of a dispute which had to be resolved by a judicial process - in these circumstances, scope for alleging suppression, misrepresentation or any of the other qualifications to justify the invocation of the extended period does not exist - no merit in Revenue appeal, hence dismissed: CESTAT [para 7]
- Appeal dismissed: MUMBAI CESTAT
2018-TIOL-2868-CESTAT-DEL
Nitin Spinners Ltd Vs CC
Cus - The assessee is a EOU, engaged in the manufacture of cotton yarn and knitted fabrics - It applied for conversion and was granted license under EPCG scheme - Before de-bonding, assessee paid the entire duty & Jurisdictional Dy. Commr. issued a no dues certificate - However, a SCN was issued demanding duty - The demand was confirmed by adjudicating authority on grounds that the depreciation should be calculated at the applicable rate prevalent at the time of import of capital goods and not at the rate applicable at the time of de-bonding - On appeal, the Commr. (A) deleted part of the duty demanded on capital goods but upheld the remaining amount.
Held: As the Revenue issued no dues certificate, payment of duties was in knowledge of the Revenue - In the present case, the SCN was issued beyond the period of one year - Therefore, following the decision of the Tribunal in the case of Century Yarn vs. CCE &Century Denim vs. CCE the demand is deleted on the ground of limitation - Hence, the order challenged is set aside : CESTAT (para 1,5)
- Revenue's Appeal Dismissed: DELHI CESTAT
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by Shailendera Kumar 
