SERVICE TAX

2018-TIOL-3015-CESTAT-MAD

Lakshmi Cargo Company Ltd Vs CST

ST - The assessee is engaged as a CHA - During the relevant AY, the Department noted that the assessee had excluded certain reimburseable charges from the gross receipts - Hence it opined that such charges would also be taxable - Two SCNs were issued raising separate duty demands - On adjudication, some demands were dropped, considering that the assessee acted as 'pure agent' in some cases - However, duty demand was upheld for charges such as bank commission, EDI & bond paper charges, on grounds that these documentation expenses were operative charges - Demand for interest was raised as well & penalties u/s 76 and 78 of the Finance Act 1994 was imposed - Hence the present cross appeals.

Held - The expenses in question are reimbursed at actuals by the assessee's clients - Hence they classify as 're-imburseable expenses' as per mandate of the Apex Court's decision in UOI Vs Intercontinental Consultants & Technocrafts Pvt. Ltd. - Hence such expenses are not includible in value of taxable services: CESTAT (Para 2,6)

- Assessee's appeals allowed: CHENNAI CESTAT

2018-TIOL-3014-CESTAT-DEL

CGST CC & CE Vs Mahakaushal Transport Company

ST - The assessee company provided certain services such as Hiring of backhoe/pay loader siding including mechanical unloading, hiring of pay-loader for loading or coal wagon at different siding of M/s Western Coal Ltd and removal of all types of material by hiring of equipment such as HEMM, tippers, loading, transportation and dumping at specified places - The assessee paid service tax on such activities under GTA service and also availed rebate - Duty demands had been raised against the assessee - Subsequently, the Revenue's appeal was dismissed by the Tribunal on grounds of the tax value being lower than the monetary limits prescribed in the relevant CBIC Instruction for filing appeal it.

Held: The matter is no longer res integra and stands settled by the Apex Court in Commissioner Central Excise & Service Tax, Raipur V/s Singh Transporters wherein it was held that the activity of transporting of the coal from the pithead of the mines to railway sidings within the mining area is classifiable under Transport of Goods by Road Service - Hence the Department's appeal lacks merit: CESTAT (Para 1,6,7)

- Appeal dismissed: DELHI CESTAT

CENTRAL EXCISE

NOTIFICATION

etariff18_21

Central Excise duty rates on Petrol and High-speed diesel reduced by Rs.1.50 per litre

CASE LAW

2018-TIOL-3013-CESTAT-MAD

PR CIT Vs Suryadev Alloys And Power Pvt Ltd

CX - The issue involved is; whether credit is admissible on MS items used for fabrication and erection of structural support of capital goods - The demand has been confirmed mainly relying upon the decision in case of Vandana Global Ltd. - 2010-TIOL-624-CESTAT-DEL-LB - Said decision was rendered without referring to the decision of Apex Court in case of Rajasthan Spinning & Weaving Mills Ltd. - 2010-TIOL-51-SC-CX - In a later decision, the jurisdictional High Court in case of India Cements as well as in case of Thiru Arooran Sugars Ltd. - 2017-TIOL-1357-HC-MAD-CX has held that credit is admissible on MS items and HR sheets used for fabrication of capital goods / structural supports of capital goods - Another issue is whether the credit is admissible on welding electrodes and tubes and pipes - The very same issue was considered by Apex Court in Ramala Sahkari Chini Mills Ltd. - 2010-TIOL-102-SC-CX wherein it is held that said words used in definition of inputs does not have restricted meaning - The period involved in all these appeals except E/442/2011 is prior to 7.7.2009 - The amendment in definition of inputs restricting the use of MS items for structural support of capital goods was inserted only on 7.7.2009 - In Appeal E/442/2011, the goods on which credit is availed was received in factory prior to 7.7.2009 - On the date of receipt of goods the restriction brought forth by the amendment dated 7.7.2009 was not in existence - Taking into consideration these facts and applying the decision in case of India Cements and Thiru Arooran Sugars, disallowance of credit is unjustified - The demand cannot sustain and same is set aside: CESTAT

- Appeals allowed: CHENNAI CESTAT

CUSTOMS

NOTIFICATION/ INSTRUCTION

cus_instruction15_2018

Clarification in relation to applicability of provisions of Customs Act to Cruise Tourism

cnt85_2018

CBIC notifies forex exchange rates for various currencies for import & export purposes

CASE LAWS

2018-TIOL-3017-CESTAT-ALL

Bhawani Enterprises Vs CC

Cus - All the appeals arising from the same impugned order passed by Commissioner wherein the Commissioner has enhanced the value of goods imported by M/s Bhawani Enterprises along with imposition of penalties upon them as also on the other appellants - The appellants are not contesting the valuation for purpose of clearance of goods as they have given up their right to pay the duty on higher value and to clear the goods on payment of redemption fine - As such, the challenge in present appeals is only to imposition of penalties, which stand imposed upon assessee on the allegations and findings of undervaluation of imported goods - As regards undervaluation,it is found that whereas the description of goods in appellants invoice show different grades, the goods described in so called contemporaneous bills of entry referred to different grade numbers - Admittedly, grades are given to indicate the quality of a particular product and in case of variance in the grade, qualities are bound to differ - As such, goods cannot be held to be contemporaneous - There is virtually no evidence for establishing the value of goods on lower side so as to enhance their value - As such, no justification found for enhancement, which has led the revenue to impose penalties upon assessees - Consequentially, the penalties imposed upon all the assessees are set aside: CESTAT

- Appeals allowed: ALLAHABAD CESTAT

2018-TIOL-3016-CESTAT-MAD

Biesse Manufacturing Company Pvt Ltd Vs CC

Cus - The assessee company is engaged in manufacturing and selling wood working machines in Indian as well as foreign markets - The assessee firm was found to be related to the overseas supplier - It was also found that 80% of the components were sourced indigeneously while 20% were imported from both related & unrelated suppliers - The Department noted that though the assessee itself was a manufacturer, its overseas suppliers used to procure the goods needed by the assessee from thrird party suppliers - Further, the related supplier would supply such components at or around the same price at which it was bought from third party suppliers abroad - The adjudicating authority noted that the assessee could obtain the components from the same price as bought from the third party suppliers by the appellant's related company abroad only because the appellants are related, which facility would not be extended to any unrelated buyer in India - Hence it was alleged that such relationship influenced the price & so directed loading of 10% to the transaction value of goods supplied by related supplier.

Held - It is undisputed that the buyer & seller are related as per Rule 2(2) of the CVR 1988 - The foreign supplier procured the goods from third party suppliers & sold them to the assessee at more or less the same price and in addition to ocean freight - Hence in an international transaction, the freight cost incurred by the foreign supplier in procuring the goods within country of origin or the margin of profit must be added to local purchase cost to arrive at selling cost to Indian buyer - The assessee failed to eatablish that the foreign supplier sold identical or similar goods to other importers in India at the same price & so did not satisfy the requirement of Rule 43A & B of the CVR 1988 - Hence the order in challenge is upheld: CESTAT (Para 1,7,8,9)

- Appeal dismissed: CHENNAI CESTAT