SERVICE TAX
2018-TIOL-2902-CESTAT-BANG
Deepak Cables India Ltd Vs CCT
ST - The department conducted search operations and recovered certain records - After completion of investigation, SCN was issued - It is the contention of department that assessee has availed benefit of Notfn 19/2003 ST and No. 1/2006 ST; in terms of said Notfnns, value of all goods plant, machinery, equipment, structures sold by assessee during the course of providing said services has to be included in gross value on which an abatement of 67% is provided and service tax is leviable on 33% of such value - In the instant case, contracts are of three types - Either for supply, civil works or erection or a combination of these but they are total contracts - The common items mentioned in all the contracts are erection, commissioning and installation; therefore, the contracts are to be considered as composite contracts and are on turnkey basis - Therefore, it can be argued that the contracts and the services rendered there upon are beyond the scope of levy of service tax - On a perusal of contract given by Karnataka Power Transmission Ltd. to the assessee, it is observed that the contracts are though composite are not indivisible - Hence, the ratio of Supreme Court in respect of Larsen and Toubro Ltd. - 2015-TIOL-187-SC-ST is not squarely applicable as pleaded by assessee.
Whether there is nexus between services rendered by assessee and transmission and distribution of electricity so as to make them eligible for exemption under Notfn 45/2010 ST - This exemption appears to be for all taxable services relating to transmission of electricity - Now it is to be decided whether the activities performed by assessee are in relation to the transmission of power - On this count, there are plethora of judgments, wherein it has been held that erection commissioning and installation comes within the ambit of the expression 'in relation to' - Therefore, the activity undertaken by assessee is to be held to fall in the ambit of 'in relation to' transmission of electricity in terms of Notfn 45/2010 as there is a clear nexus between the service rendered by the assessee and transmission and distribution of electricity - Therefore, exemption contained in said Notification is squarely applicable to assessee.
It was contended that assessee has availed the benefit of Notfn 19/2003 as amended by Notfn 1/2006 and hence, the demand was correctly quantified in the O-I-O - As liability of duty itself is not surviving in view of the exemption Notfn 45/2010, these issues do not require any consideration at this juncture: CESTAT
- Appeals partly allowed: BANGALORE CESTAT
2018-TIOL-2901-CESTAT-MAD
The Narasimha Mills Vs CCE & ST
ST - This appeal is filed by assessee with an inordinate delay of 1553 days - It is an admitted position that the assessee did not challenge the OIA and it was interested only in seeking immunity/amnesty from interest and penalty for which reason it opted for declaration under VCES - When the assessee could get into litigation by instructing its Counsel to file appeals after appeals up to the High Court, it cannot be assumed that it did not think of filing appeal even on merits nor that the assessee could plead ignorant when it comes to the filing of appeal on merits instead agitating before various forums - Evidently, the delay is inordinate and the explanation sought to be offered is not satisfactory or convincing - Having pursued appeals on the validity of declaration under VCES, nothing prevented the assessee who kept on filing appeals under VCES to file an appeal even on merits and this approach is nothing but elective and also indicates that the order impugned has been now appealed to this forum was at that stage accepted by them - Tribunal is unable to exercise any discretion in this matter since the assessee has failed to establish that it was alert or vigilant - It is not its case that it has otherwise averse to litigation or that there was no instruction at all to the Counsel with help to filing of appeals - The application seeking condonation of delay is rejected - Consequently, appeal also stands dismissed without going into the merits: CESTAT
- Appeal rejected: CHENNAI CESTAT
CENTRAL EXCISE
2018-TIOL-2906-CESTAT-MUM
Larsen And Toubro Ltd Vs CCE
CX - The goods in question are crane, diesel generator sets and other equipments for movement of heavy articles - These are essential in manufacturing process and there is no allegation in SCN that these were put to use at a place other than that of job-worker - It is inconceivable that the job-worker may find a use for these equipments in any other manufacture - The definition of input service in rule 2(l) of CCR, 2004 is of sufficient latitude to allow service used directly or indirectly in relation to manufacture of final products - That the said service has been procured is not in dispute and the facts establish that they have been used in relation to manufacturing process - Accordingly, there is no ground to deny CENVAT credit on this particular service under CCR, 2004: CESTAT
- Appeal allowed: MUMBAI CESTAT
2018-TIOL-2905-CESTAT-AHM
Swadeshi Textiles Pvt Ltd Vs CCE & ST
CX - Assessee is engaged in manufacture of interlining of textile product which is cleared under Exemption Notfn 31/2004-CE - During course of manufacture, they are procuring plastic granules and converting it into plastic powder and that plastic powder is used for manufacture of final product - Case of department is that the conversion from plastic granules to plastic powder is amount to manufacture of excisable goods - Assessee have not availed Cenvat Credit in respect of plastic granules, accordingly, they have scrupulously complied with provisions of Rule 6(1), therefore, according to provision under clause (vi) of Proviso to Notfn 67/1995-CE, assessee became eligible for exemption Notfn 67/1995-CE in respect of their intermediate inputs i.e. plastic powder - This issue has been considered by Division Bench of Mumbai of Tribunal in case of Funskool (India) Ltd. - In view of said judgment, the present case is squarely covered - Accordingly, the impugned order is set aside: CESTAT
- Appeals allowed: AHMEDABAD CESTAT
2018-TIOL-2904-CESTAT-HYD
CCE Vs KTC Kedia Chemicals Pvt Ltd
CX - Assessee manufactures mosquito coils - Based on this intelligence, it is found that assessee had not paid duty on them - A SCN was issued, the lower authority had held that the mosquito coils manufactured by them are liable for Central Excise duty classifiable under chapter 38081091 "Repellants for insects such as flies, mosquitoes" - The First Appellate Authority held that Chapter 3808 deals with miscellaneous chemical products in general and insecticides in particular - He found that the mosquito coils in dispute had essential oils like Tulsi, Vekhand, Zendu Flower power and other herbals which can, by no stretch of imagination, be called chemicals and therefore the coils cannot be called miscellaneous chemical products falling under chapter 38 of the Central Excise Tariff - It is true that chapter 38 titled "Miscellaneous chemical products" - However, it is a well established principle of classification that the chapter and section titles are only for ease of reference and do not determine the classification of the products - If the logic of First Appellate Authority has to be accepted all these entries in Central Excise Tariff are incorrect because they are not synthetic chemical products - Although, the chapter heading is "miscellaneous chemical products", nowhere does it indicate that they should necessarily be synthetic chemical products - Essential oils are also chemical by nature although they are extracted from natural sources - Therefore, the contention of First Appellate Authority that simply because coils contain essential oils they do not fall under chapter 3808 is incorrect and based on wrong appreciation of the facts and ignoring that the chapter titles do not determine classification - There is a separate heading tariff item 3808 to cover insecticides and fungicides, which includes not only those which kills insects but also those which repel them - The mosquito repellants are to be classified as insecticides chapter heading 38081091 and this heading squarely covers the product in question - First Appellate Authority has erred in holding that the mosquito coils in question are not classifiable under 38081091 - Impugned order set aside: CESTAT
- Appeal allowed: HYDERABAD CESTAT
CUSTOMS
2018-TIOL-2903-CESTAT-HYD
SP Soft Digital Media Pvt Ltd Vs CC
Cus - The assessee vide bill of entry imported "one demo skyline 11 CD manufacturing system equipped with one emould all-electric CD injection moulding machine as per invoice" - They claimed the benefit of exemption notfn 25/2002-CUS - It was held by lower authority that the benefit of notification is available only if the complete manufacturing machinery is imported, whereas, assessee had only imported injection moulding machine, metalliser, UV bonding and inspection station, leaving out printing machine and mastering equipment, therefore, assessee is not entitled to the benefit of notification - The exemption notification provided exemption to CD/CD-R/DVD/DVD-R manufacturing machinery or replication lines - It is not in dispute that replication line or manufacturing machinery comprises all the machines listed in exemption notification and assessee had imported some of the machinery and not others - There were case laws taking both views with respect to the benefit of exemption notification - Some took a liberal view while interpreting the entitlement of a beneficial exemption notification, while others took a strict view - The matter was finally referred to a five Member Constitutional Bench of Supreme Court in case of Dilip Kumar and Company and others - The decision of the Apex Court leaves with no option but to hold that the assessee is not entitled to the benefit of exemption notification: CESTAT
- Appeal rejected: HYDERABAD CESTAT
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