SERVICE TAX
2018-TIOL-2989-CESTAT-BANG
NSP Electronics Ltd Vs CST
ST - The assessee, manufacturer and exporter of printed circuit board, was making payment to their overseas agencies as commission for providing services - On the ground that as per Rule 2(1)(d)(iv) of STR, 1994, if the service provider is a non-resident or from outside India and do not have any office in India, then the service tax has to be discharged by service receiver, department directed the assessee to pay service tax on the aforesaid services received by them - After considering the decision of Bombay High Court in case of Indian National Ship Owners' Association- 2008-TIOL-633-HC-MUM-ST, issue is settled in favour of assessee as the period involved is prior to 18.04.2006 when there was no service tax liability on recipient of service - Further, in the case of Canara Bank - 2010-TIOL-147-CESTAT-BANG, Division Bench of Tribunal has held that if services are received from outside India, same is not taxable in the hands of recipient prior to 18.04.2006 - Further, the ratio of decision of Indian National Ship Owners' Association is fully applicable in the present case and by following the ratio of said decision, impugned order is not sustainable in law and the same is set aside: CESTAT
- Appeal allowed: BANGALORE CESTAT
2018-TIOL-2988-CESTAT-MAD
David Constructions Vs PR CST
ST - Assessee is engaged in business of providing maintenance and repair services and construction of commercial and industrial construction services - During audit, it was noticed that assessee had not included value of some invoices for the purpose of service tax calculation which lead to short payment of tax - It was also noticed that assessee had made the payment towards tax belatedly, but had not paid the interest thereon - The main grievance of assessee is that since it had paid the service tax as well as interest much before the issuance of SCN, the observation of adjudicating authority that but for the audit the fact of non-payment of service tax would not have come to the notice of the department, was incorrect - There is no allegation of short payment of tax nor is it the department's case that the tax was paid belatedly and that nothing was discovered during the course of audit with regard to the non-payment of service tax or the short levy of the same or short payment of the same having erroneously refunded - Since the controversy rests solely on the adjudicating authority's observation vis-à-vis the assessee's claim of having paid service tax with interest before SCN - Therefore, matter requires re-verification especially in the light of the fact as to the pleadings that the assessee had paid service tax along with applicable interest before issuance of SCN and therefore, if it is found correct, then there may not be any necessity for alleged contravention of Section 78: CESTAT
- Matter remanded: CHENNAI CESTAT
2018-TIOL-2987-CESTAT-BANG
BSNL Vs CCE & ST
ST - The assessee is engaged in providing telecom services - Though the service is provided through Telephone exchanges, billing & accounting is done centrally at the District General Manager's Telecom Office - The bills with service tax were being collected at various customer service centres, DTOs/CTOs, Banks & Post Officers - Owing to difficulty in collecting & paying the tax by the due date, the assessee resorted to provisional calculation - Short paid duty was duly paid in full subsequently with interest - Excess payments would be adjusted against subsequent ones - During the period of dispute, the assessee claimed refund of tax paid in excess - The same was sanctioned subject to payment of interest on delayed payment of duty arising from the fact that the assessee should not have resorted to suo motu adjustments - Duty demands for interest was raised - The Assistant Commissioner denied the adjustment made by the assessee as being violative of the Rule 6(4A) of STR, 1994 - Further the Assistant Commr appropriated the refund amount Rs 13,98,063/- being an amount paid in excess for the month of November 2005 towards the service tax due and short paid for a certain month and also demanded interest u/s 75 - Such levies were sustained by the Commr.(A).
Held - The Department should have considered the practical difficulties on account of which the assessee has devised the system of paying in advance and subsequently adjusting the excess payment - Besides, the Department raised no objection to this from the very beginning - Hence the demand for interest is unsustainable: CESTAT (Para 2,7,8)
- Appeals allowed: BANGALORE CESTAT
CENTRAL EXCISE
2018-TIOL-2993-CESTAT-DEL Maa Banjari Ispat Pvt Ltd Vs CCE & ST
CX - The assessee company is engaged in the manufacture of MS Ingots - During the period of dispute, the Department raised duty demand with interest & penalty on allegation of clandestine manufacture of removal - Personal penalty u/r 26 of CER 2002 was imposed on the assessee company's Director.
Held: The Department also found names of other manufacturers noted in a diary recovered from a third party - Though the assessee was also named, it did not admit its liability - It pointed out lack of any evidence to show movement of goods from assessee's premises to those of any other entity - The Department put forth no clinching evidence to prove clandestine removal - It is settled law that no such allegations can be made without corroborative evidence - Such findings cannot also be based on third party evidence which are not clinching evidence clearly showing clandestine manufacture & removal of goods - As the entire demands are based on such third party evidence merely naming the assessee & without there being any clinching evidence, they merit being set aside - Personal penalty is set aside as well: CESTAT (Para 1,9,10,11,13)
- Appeals allowed: DELHI CESTAT
2018-TIOL-2992-CESTAT-HYD
CC, CE & ST Vs Safe Parenterals Ltd
CX - Assessee is manufacturer of P or P Medicaments and manufacturing "Oxytetracycline Injectable Solution (Veterinary)" on Loan License basis to M/s Indian Immunologicals Limited - They claiming exemption from payment of duty under Sl. No. 57 of exemption Notfn 06/2002 - On audit of assessee's records, it was noted that assessee is not eligible for said exemption notification - The notification granted exemption only to the formulations mentioned in list No. 2 - The ingredient used by assessee "Oxytetracycline" is not mentioned in products for the manufacture of entry No. 57 - It is the case of assessee and accepted by First Appellate Authority that Oxytetracyline is a derivative of Tetracycline Hydrochloride - No force found in said arguments also as, it is in respect of the benefit of notification as said list No. 2 does not indicate that the derivative of Tetracycline Hydrochloride are also sought to be exempted - On merits, First Appellate Authority was incorrect and the impugned order is unsustainable - On limitations, First Appellate Authority has come to a correct conclusion that the entire demand is hit by limitation - On perusal of price list/price declaration filed, under Rule, 173 C of erstwhile CER, 1944, it was filed by assessee on 24.07.2002 and indicates that it is effective from 23.07.2002 and notice that the product in question in these appeals are indicated as being sought to be cleared without payment of duty claiming exemption under Notfn 06/2002 as indicated at Sl. No. 57 - It is also a fact that their ER1 monthly returns indicate number of notification as 06/2003 - On specific query from the Bench to the both sides, as to whether there was any notification 06/2003 exempting any goods, for which, the answer was negative - First Appellate Authority was correct in coming to a conclusion that the entire demand is hit by limitation: CESTAT
- Appeals rejected: HYDERABAD CESTAT
CUSTOMS
NOTIFICATION
dgft18not039
Amendment of import policy of certain items under Chapter 29 and 30 of ITC (HS), 2017, Schedule-I (Import Policy) CASE LAWS
2018-TIOL-2991-CESTAT-MUM Giriraj Steel Vs CC
Cus - Refund of SAD - Claim rejected on the ground that the appellant was unable to establish that the incidence of duty had not been passed on to their customers - CA certificate was also considered unacceptable because of the crediting of the entire sale value as income in the P & L account without making a provision for the refund amount as receivables - appeal to CESTAT.
Held: Tax invoice reveals that no portion of the price recovered from the customers was stated to include special additional duty collected as countervailing duty at the time of import -It is also clear that there is a CA certificate to the effect that the incidence of duty has not been passed on - It is but natural that proceeds of sale would be reflected in the books as receipts earned from sale - It is only in the balance sheet that certain portion of these receipts are recorded as provisions for receivables - Even if such a provision is not made, the reflection of such receipt of refund as income at the time of receiving the amount would make it amply clear that SAD collected from them has not been passed on - impugned order set aside and appeals allowed with consequential relief: CESTAT [para 4, 5]
- Appeals allowed: MUMBAI CESTAT
2018-TIOL-2990-CESTAT-BANG
Nalapurappatil Abdulla Vs CC
Cus - Assessee have imported used Toyota Land Cruiser - On examination of vehicle by Customs, it was found that the vehicle was Toyota Land Cruiser Amazon TD whereas the invoice described the same as Toyota Land Cruiser and does not mention the words "Amazon TD"; there were some discrepancies in Bill of Lading and invoice; therefore Department sought to reject the declared assessable value and enhanced it on the basis of list price taken from the website of Toyota UK - Commissioner(A) has given a clear finding that the adjudicating authority has not exactly ruled out the applicability of Rules 4 to 8 - However it was obvious that these rules are not applicable - Hence the reliance on Rule 9 is involved is of import of used car any reference to identical or similar goods is not possible - Therefore, Department was in its right to recourse the Rule 9 of the Customs Valuation Rules, 2007 - Having established the fact of wrong description, the burden has shifted to the import in the absence of any documentary evidence to substantiate the correctness or otherwise of the invoice, valuation under Rule 9 is quite acceptable - Department has placed reliance on the list price as is available on the internet from Toyota UK since the car was imported from UK, it was obvious that the Department has taken the listed prices from the UK website - Due discount of depreciation was allowed to arrived at the value of the car at the time of import - Going by the ratio of judgment of this Bench in D'Souza Lawrence, redemption fine is reduced to Rs.2 lakhs and penalty to Rs.50,000/- while maintaining that the other parts of impugned order are sustainable - Therefore, the appeal is allowed to the extent of reduction of redemption fine and penalty: CESTAT
- Appeal partly allowed: BANGALORE CESTAT
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