SERVICE TAX
2018-TIOL-2972-CESTAT-AHM Concept Motors Pvt Ltd Vs CST & ST
ST - The assessee is authorized car dealer for Hyundai Motors - It also provided Business Auxiliary Service in connection with sale of loan products of ICICI Bank - It received commission from the bank for such activity - It was also receiving referral fees from HDFC for sale of general insurance policies to car buyers - The Department raised duty demands on both amounts received.
Held: The issue of taxability of the commission received from the bank is settled by the Tribunal in M/s Pagariya Auto Center Vs. CCE - Also as such issue was very much in doubt, the extended limitation cannot be invoked - Hence demand in this regard is set aside - Regarding the demand on the referral fees, the service provided by the assessee falls under the definition of Insurance Auxiliary Services - In this regard, the Revenue raised the demand under the wrong head of BAS - Hence the demands are set aside: CESTAT (Para 1,5,6)
- Appeal allowed: AHMEDABAD CESTAT
2018-TIOL-2971-CESTAT-AHM
Express Kargo Forwarders Pvt Ltd Vs CST & ST
ST - The assessee company provides Business Auxiliary Service - The Department alleged that the assessee also provided service of Air cargo agent but did not pay service tax on it - Demand was raised by invoking extended limitation & penalty was imposed - Later, the Commr.(A) set aside the penalties but sustained the demand.
Held: The assessee is booking the space on behalf of shipper for particular consignment - For this arrangement the assessee is charged the shipper & after retention certain percentage of commission remaining amount is remitted to the airlines towards booking of space - Such activity classifies as BAS provided to the airlines & on which demand is sustainable - Besides, the Commr.(A) noted that the issue of taxability was not free from doubt and that the assessee had bona fide doubt regarding taxability - Hence extended limitation is not invokable & demand raised therein is set aside - However, demand for normal period is sustained: CESTAT (Para 1,4,5)
- Appeal partly allowed: AHMEDABAD CESTAT
2018-TIOL-2970-CESTAT-HYD
CCT Vs Sree Rayalaseema Alkalies And Allied Chemicals Ltd
ST - The issue is regarding eligibility to avail CENVAT credit of various input services like Storage and Warehousing Services, Travel Agent service, Cargo Handling service, Technical Testing and Analysis services, Commissioning and Advertising Agency services, Consulting Engineer services and Insurance Auxiliary services as also Business Auxiliary services - Both the lower authorities have concluded that the CENVAT credit cannot be allowed of the service tax paid on the services for the reason that invoices/duty paying documents were not produced in the name of branch office service provider was unregistered - Since the payments were from Centralized account, being factory, CENVAT credit should not be denied is proposition which has been decided by Tribunal in case of Mahidra & Mahindra Ltd. 2015-TIOL-125-CESTAT-MUM - The ratio of the decision of Tribunal covers the point raised in these appeals in favour of assessee - The decision of High Court of Bombay in case of Ultratech Cement Ltd. also covers the various issues raised as to input services being not covered under 2(l) for the period prior to amendment of the definition of input services is also not considered by the lower authorities - The CENVAT credit sought to be denied in all these appeals are eligible and needs to be allowed to the assessee - As regards to the service tax credit denied mainly on the ground that assessee did not produce relevant documents, without expressing any opinion on the merits of the case, in all these appeals, impugned orders are set aside and matter remanded to reconsider the issue after following the principles of natural justice - As regards the appeal filed by Revenue, it is noticed that the First Appellate Authority has correctly upheld the claim of assessee as eligible to avail CENVAT credit and has appreciated the facts correctly in as much he has allowed the CENVAT credit in respect of services rendered by Travel Agency services, Business Auxiliary services, Chartered Accountant services, Maintenance & Repair services and Technical Testing services: CESTAT
- Revenue's appeal rejected: HYDERABAD CESTAT
2018-TIOL-2969-CESTAT-MAD
Scope International Pvt Ltd Vs CCE & ST
ST - The assessee is a wholly owned subsidiary company of M/s. Standard Chartered Bank, U.K. and is engaged in business of providing back-end support to certain branches of bank spread across the globe including India - During audit, it was noticed that assessee had availed Cenvat Credit of service tax paid on certain input services which according to Department was not eligible for credit - Further, it was also noticed that they had been imparting service of Commercial Coaching and Training Services in India as well as abroad and are liable to pay service tax on forward as well as reverse charge basis - The credit on various input services, namely, outdoor catering services, Rent-a-Cab services, Cargo Handling, Event Management, were disallowed by adjudicating authority on the ground that these services have no nexus with the output services of assessee - Assessee has stated the necessity of availing such services and their nexus with output services - These services qualify as input services - Further, period involved is prior to 01.04.2011 when the definition of input services had a wide ambit as pointed out by assessee - Disallowance of credit on these input services is unjustified and is set aside - As regards to demand of service tax on Commercial Coaching and Training Services, it is clear that assessee has imparted training services in India as well as abroad - Part of the demand falls prior to 18.04.2006 - It is settled position of law, as rendered by Apex Court in case of Indian National Shipowners Association - 2008-TIOL-633-HC-MUM-ST, that an assessee would be liable to pay service tax under reverse charge mechanism for the services provided abroad only w.e.f. 18.04.2006 - The demand prior to 18.04.2006 cannot therefore, sustain - Assessee have conducted training in India post 18.04.2006 for which an amount is liable to be paid by them - As per the impugned order, assessee have paid up this liability along with interest - The issue whether an assessee is liable to pay service tax on reverse charge basis was under litigation and there was much confusion with regard to the said issue during the relevant period - For the same reason, being an interpretational issue, no penalties can be imposed on assessee in regard to the amount pertaining to Commercial Coaching and Training Services imparted in India post 18.04.2006 - It is submitted by assessee that training sessions conducted for employees in India and abroad are distinct training sessions and are not part of a single training programme - Thus, the service is performed entirely outside India and, therefore, does not attract the levy of service tax and the demand pertaining to the training conducted outside India to the tune of Rs. 2,90,569/- is set aside: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
2018-TIOL-2968-CESTAT-DEL
Shree Balaji Multi Commodities Pvt Ltd Vs CCE
ST - The assessee is engaged in providing forward contract services such as brokerage charges, transaction charges and turnover charges - The Revenue opined that assessee was not including the amounts collected by it in taxable value of services - Duty demand was raised - The Original Authority confirmed the demand along with interest and penalty - On appeal, the Commr. (A) modified the demand on grounds that that since the transaction charges or turnover fee is not liable to tax till 15th May, 2008 the demand was set aside & remaining was confirmed - Hence, the present appeal.
Held: With respect to services related to commodity exchange, the assessee has duly deposited the tax - Further, the liability w.r.t. consideration of brokerage charges has been discharged - Since Brokerage/commission is a consideration which was paid by the client for the provisions of Forward Contract Services and that the same stands paid - The demand is deleted - Moreover, in respect of transaction charges the duty has been discharged by NCDEX - The confirmation of demand of the Service Tax, which has already been discharged by the exchange on whose behalf the assessee collected those charges and remitted to the exchange is set aside - The penalty imposed in this respect under section 78 is also set aside - Therefore, the assessee is eligible to avail credit - Hence, the order under challenge is set aside and entire demand is dropped: CESTAT (para 1, 6, 7, 8)
- Assessee's appeal allowed: DELHI CESTAT
CENTRAL EXCISE
2018-TIOL-2967-CESTAT-MUM Supereme Industries Ltd Vs CCE
CX - Appellant engaged in manufacture of PVC Pipes and fittings and availing benefit of exemption notification 6/2002-CE for clearances to Water treatment plants/projects at Surendranagar, Gujarat - Exemption denied on ground that pipes fittings were used between the 1st storage tank point to various village storage tanks i.e. beyond 1st storage tank, hence not admissible; demand confirmed of Rs.1,32,94,993/- along with penalty and interest - appeal to CESTAT.
Held: Issue is no longer res integra and covered by the Tribunal decision in Electrosteel Casting Ltd. - 2009-TIOL-1880-CESTAT-KOL (as upheld by Supreme Court) and wherein it is held that there is no restriction placed in the notification that the water is to be delivered only to the first storage point and that it is department which has actually supplied the words "first" before the expression "storage facilities" and denied the exemption - Notification as interpreted on the basis of the language used therein cannot restrict the exemption being extended to pipes used for delivering water upto subsequent storage points which are part of the water treatment project - following the said precedent, impugned order is set aside and appeal is allowed: CESTAT [para 6, 7]
- Appeal allowed: MUMBAI CESTAT
2018-TIOL-2966-CESTAT-MAD
Super Spinning Mills Ltd Vs CCE
CX - The assessee company manufactures Cotton yarn - The assessee transferred its business to its sister unit & such transfer also saw transfer of capital goods between both units - The Department treated such transfers as removal of capital goods - Duty demands were raised with interest & penalty u/r 15(1) of CCR 2004 - The Commr.(A) sustained the demand but set aside the penalty - Later, the Tribunal remanded the matter - On de novo adjudication the reiterated the demands while waiving off penalty.
Held: Rule 3(5) of CCR requires a manufacturer of final products to pay an amount equal to credit availed on inputs & capital goods removed - But such removal is not on account of sale to other buyers or stock transfer - In the present case, capital goods have been moved only on account of closure of a unit and were transferred to another unit - Rule 10 of CCR 2004 is designed to cater specifically to such situations - Hence applying the maxim Generalia Specialibus Non Derogent the provisions of Rule 10 override general provisions regarding removal of capital goods in Rule 3(5) & will have a direct bearing on such removals - Hence the demands are set aside: CESTAT (Para 1,6.1-6.4,7)
- Appeal allowed: CHENNAI CESTAT
2018-TIOL-2965-CESTAT-AHM
SS Strips Pvt Ltd Vs CCE
CX - The assessee company manufactured stainless 'pattis' and 'pattas' by cold rolling process - It opted for Compounded Levy Scheme u/r 15 of CER, 2002 - Permission was allowed in respect of seven cold rolling machines - The assessee claimed that only a few machines remained operational and that all seven were inoperational for 2 months in the AY in question - Hence no duty was paid on the inoperational machines - However, duty demands were raised with interest & imposing penalties.
Held: The Notfn No 17/07 provides concessional duty rates subject to conditions - The scheme provides no exemption if assessee chooses to close some machines or to not operate some machines - The scheme only prescribes that the duty shall be paid on the number of machines 'installed' in the factory - Thus, having opted to avail concession on number of machines installed, the assessee cannot claim benefit on machines which were closed during the relevant period: CESTAT (Para 2, 4.2,4.3,4.4)
- Appeals allowed: AHMEDABAD CESTAT
2018-TIOL-2964-CESTAT-HYD
Pavani Polymers Ltd Vs CCCE & ST
CX - The assessee is a manufacturer of pet pre-forms, jars and bottles and was availing benefit of SSI exemption under Notfn 9/2003 - Besides manufacturing goods on their own account, they were also doing job work and clearing the goods so manufactured without payment of duty under Notfn 83/1994-CE - A SCN was issued stating that there is no evidence to the effect that the assessees have filed undertakings as stipulated in said Notfn - Demand confirmed along with interest and imposed penalty equal to the duty demanded - The five member constitutional Bench of Supreme Court put to rest all doubts about interpretations of Exemption Notification in the case of M/s Dilip Kumar & Co. - Exemption notification requires the supplier of raw material to give an undertaking to the jurisdictional authorities of Central Excise having jurisdiction over the assessee that they will pay the relevant excise duty - The SCN alleges that assessee has not produced necessary declarations and when asked they have produced photo copies of some undertakings filed before the jurisdictional Asst. Commissioner or Dy. Commissioner having control over the job worker - It further alleges that some details in respect of the supplier of raw material such as Central Excise Registration Number, etc., were not available and hence they are not verifiable - Even in documents produced before or during the appeal, copies of declarations filed by supplier of raw material were clearly addressed to the Superintendent of Central Excise, Visakhapatnam - Similarly, the declarations filed by M/s Matha Pet Bottling Industries are addressed to Superintendent of Central Excise, Vijayawada and declarations of M/s Surya Pet bottles are also addressed to the officers in Visakhapatnam - Clearly, these declarations were not filed with the officers having jurisdiction over the assessee - Revenue has a strong case as far as the allegation that assessee has not fulfilled conditions stipulated in Notfn 83/1994-CE is concerned - However, while confirming the demands, Commissioner has gone beyond the ground mentioned in SCN and confirmed demands citing some enquiries conducted by him - Matter remanded back to the original authority with a specific direction to adjudicate the matter solely based on grounds mentioned in SCN and the documents available in this regard: CESTAT
- Matter remanded: HYDERABAD CESTAT
2018-TIOL-2963-CESTAT-DEL
Prakash Industries Ltd Vs CCE & ST
CX - M/s Prakash Industries Limited is engaged in the manufacture of sponge iron, M.S. Ingots, billets and bloom - They have two units (PIL-I) and the second unit (PIL-II) - M/s Vivek Steels, Raipur is unregistered trading firm who have issued challans/ bills in respect of bloom, billets/ ingots manufactured by PIL to various parties of Nagpur - From the investigation conducted by Revenue, it is noted that iron ore is the primary raw material used in manufacture of sponge iron - It was noticed that out of 11.6 lakh MT of ore received in the railway siding, only 8.96 lakh MT has been accounted for in assessee's factory - The assessee has been repeatedly claiming that the balance amount was sold on cash sales basis from the railway siding and this quantum of ore never reached the factory - It is further claimed that the sale proceeds in cash also have been accounted in the books of accounts - The adjudicating authority has recorded in the impugned order that the assessee has failed to produce any proof of sales of such iron ore or payment of VAT/ Sales tax thereon - In view of this, the claim of cash sales of such enormous amount of iron ore cannot be accepted at face value.
On the basis of documents the total quantum of sponge iron manufactured but not accounted has been arrived at 92.142 MT - The total quantum of finished products manufactured therefrom has been worked out and the excise duty demanded on such quantum of finished products - The assessee has not challenged the recovery of such documents - Accordingly, findings of the lower authority upheld in this regard.
As regards to shortage of 5007.290 MT of sponge iron found during physical verification, since the shortage stands admitted, no reason found to interfere with the demand raised on the finished products on the basis of shortage - Demand of Central Excise duty upheld which stands confirmed by Adjudicating Authority against PIL-I, alongwith the penalty imposed.
With regard to levy of penalties on Directors as well as various employees, adjudicating authority has elaborately discussed the roles played by various employees of assessee in the suppression of actual production and clearance of finished products without accounting and without payment of duty - In respect of Sh. G. L. Mohta, full time Director, it has been recorded that inspite of a large number of summons issued to him to appear before the investigating Officer to record his statement, he has chosen to ignore the same - Penalties imposed on all the employees including Director upheld.
Penalties have been also imposed on various alleged buyers of finished products - Such buyers have been identified only from the details found in trading invoices - No evidence found in record that such buyers have actually received the goods - No statements have been recorded from any of the buyers - Adjudicating authority has failed to discuss the role played by them, if any, in the impugned order - Accordingly, penalty imposed on these persons is not justified and hence set aside.
As regsrds to appeals filed by Revenue, the Revenue appears to be aggrieved only from the fact that the overall demand of Central Excise duty against PIL-I stands reduced from about Rs. 46 crore in the first round of litigation before the adjudicating authority to Rs. 17.90 crore - They are also aggrieved by similar reduction in penalties imposed - Adjudicating authority has carefully recalculated the total demand and restricted the same on the basis of documentary evidence recovered during investigation - He has dropped the demand, originally raised frivolously in SCN, on the basis of estimated production worked out on basis of total electricity generated - There is no basis for upholding such frivolous demand in impugned order: CESTAT
- Assessees's appeals partly allowed: DELHI CESTAT
2018-TIOL-2962-CESTAT-DEL
Birla Corporation Ltd Vs CGST CC & CE
CX - The assessee company is engaged in manufacture of Cement & Cement clinker - It availed Cenvat credit on input goods, services & capital goods utilized - It purchased coal for which it received supplementary invoices charging additional Excise duty & Cess on 'royalty charges' & 'stowing excise duty', 'paryavaran upkar', 'vikas upkar', 'forest fee' & 'Entry tax' - Such duties were paid & on which the assessee availed Cenvat credit by recording in Cenvat register - The Department contested such availment on grounds that Cenvat register is not valid documents for availing credit as per Rule 9(1)(b) of CCR, 2004 - Duty demands were raised with interest & imposition of penalty for recovery - The Revenue issued another SCN alleging that credit could not be availed on the supplementary invoices on grounds that duty in that respect had been short-paid.
Held: The Tribunal in South Eastern Coalfield Ltd. had settled a similar issue where the assessee therein had been given liberty to approach the Tribunal again pursuant to the final verdict in this regard by the Apex Court - Besides, there is no element of fraud or suppression of facts on part of the assessee in the present case - Hence the assessee is allowed to avail credit on the supplementary invoices: CESTAT (Para 2,3,4,7)
- Appeal allowed: DELHI CESTAT
CUSTOMS
NOTIFICATIONS
ctariff18_072
Import duty on parts/components used in manufacturing of specified textile machinery reduced to Nil
ctariff18_071
Capital goods used by the IT/ Electronics industry subject to actual user condition - exemption extended for manufacture of Mobile Handsets, Li Ion Cell for use in battery of mobile hand sets, speaker and receiver of mobile hand sets, data cables, OFC, PCB
cuscir34-2018
Electronic sealing-Deposit in and removal of goods from Customs bonded Warehouses
cnt84_2018
Tariff Values of All Edible oils and Gold reduced; that of Silver hiked
dgft18not038
Amendment of import policy of Petcoke
CASE LAWS
2018-TIOL-2961-CESTAT-DEL
Olympic Exports Vs CC
Cus - The assessee imported electrical tricycle without battery in CKD condition along with spare parts and filed Bill of Entry claiming classification under CTH 87039010 of CTA, 1975 - The assessing authority held that said goods cannot be allowed to be cleared as importation is in violation of Import Export Policy - More specifically, it is held that new vehicle imported is not meeting the requirement of Centre Motor Vehicle Rules (CMVR), 1989 - Accordingly, original authority ordered confiscation of imported goods under section 111(d) of Customs Act, 1962 and imposed penalty on assessee under Section 112 (a) of Customs Act, 1962 - View of assessee is that the products will be assembled in India to make a vehicle - Such narrow view of issue will not lead to proper appreciation of licensing condition - Admittedly, the goods imported are motor vehicle brought in CKD condition, for the ease of import and transport - Necessarily, these items are to be used as motor vehicle in India and are governed by Motor Vehicle Rules - There is no dispute on this aspect - When assessee intended to import 'motor vehicle', requirement of Motor Vehicle Rules are to be complied - The Policy stipulations clearly make out that various conditions including Type Approval Certificate by the competent authority is a mandatory requirement for any vehicle imported into India - Present vehicle was imported having electric capacity of more than 250 watt which as per mandatory requirement is to be registered with the Motor Vehicle Authority - Considering these stipulations of Policy and conditions of CMVR, imported goods are in violation of Import Policy Notes, applicable during the relevant time - Accordingly, no reason found to interfere with impugned order - Penalty reduced from Rs. 5,00,000/- to Rs.1,00,000/-: CESTAT
- Appeal partly allowed; DELHI CESTAT
2018-TIOL-2960-CESTAT-ALL
Kumar And Sons Vs CC
Cus - the main appellant imported some goods declared as CPO (industrial grade/CPO non-edible grade) - Some part of the goods were confiscated & concessional rate of duty u/s 110 of the Customs Act was denied - Duty demand was imposed for alleged evasion, with interest & equal penalty u/s 112 & 114A - Penalties were also imposed of the dealers of the assessee's goods.
Held: The Department primarily relied on the statements of one witness - However, such person was not allowed to be cross examined by the appellants - Hence the evidence recorded from him must be eschewed & cannot be relied upon to take an adverse view against the appellants - There is no other evidence pointing towards any adverse inference against the appellants - Admittedly, the main appellant maintained proper records & filed timely reports of raw material received, used & lying in stock - The appellant also paid requisite Sales tax & VAT - Hence no violtion on part of the appellnt can be alleged under the Customs Act r/w Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 - The allegations levelled by the Department are presumptive & unsubstantiated - The demands raised on the appellant & co-noticees are unsustainable & are set aside: CESTAT (Para 1,5,6)
- Appeals Allowed: ALLAHABAD CESTAT
2018-TIOL-2959-CESTAT-AHM
CC Vs Raj Traders
Cus - Limited issue raised in Revenue's appeal is that the Commissioner in impugned order wrongly refrained from imposing penalty under section 114AA of Customs Act upon Shri Gurvinder Singh Kocher, Vimal Shah & Anmol Sethi relying on 27th report of standing committee on finance (2005-06) - Section 114AA nowhere suggests that penalty is imposable only in cases of export of goods and not on import of goods - It is seen that the penalties under section 114AA on Shri Vimal Shah and Shri Anmol Sethi was not imposed only on the ground of report of standing committee on finance but also on the ground that a separate penalty cannot be imposed on the proprietors when penalty on the proprietorship concern has been imposed - This very important finding was not challenged by revenue in the present appeal - Moreover it is a settled law that a separate penalty cannot be imposed on the proprietor when the penalty on proprietorship firm has been imposed - Therefore, the penalty under section 114AA cannot be imposed on Shri Vimal Shah, proprietor of Raj Trader and Shri Anmol Sethi, proprietor of Ideal Impex also on this ground: CESTAT
- Revenue's appeal dismissed: AHEMDABAD CESTAT
|
By PG James 
