SERVICE TAX

2018-TIOL-2223-HC-MUM-ST + Case Story

Zee Entertainment Enterprises Ltd Vs Commissioner of CGST and Central Excise

ST - Remand - Section 35C of the CEA, 1944 - The word "may if it thinks fit", is not an arbitrary or subjective satisfaction of the Tribunal but a satisfaction reached through the filter of reasons in the context of the grievance of the parties before it - although the Tribunal is undoubtedly entitled to remand a matter for fresh consideration, the same cannot be at its whim and fancy or mere ispi dixit but a conclusion based on reasons - party in whose favour the order is passed is certainly prejudiced if the order in its favour is being set aside without any reasons - giving of reasons by authority is now an undisputed part of Rule of law - Order set aside and matter remanded to Tribunal for decision afresh: High Court [para 9 to 12]

- Matter remanded: BOMBAY HIGH COURT

2018-TIOL-3204-CESTAT-MUM

Knorr Bremse Technology Centre India Pvt Ltd Vs CST

ST - Appellants are engaged in providing Software Development Services to various customers located outside India - refund claims filed by them in terms of rule 5 of CCR, 2004 r/w notification 27/2012-CE(NT) were rejected on the ground that the same were barred by limitation - department computed the period by considering the end of the quarter whereas claim of the appellant was that the limitation would commence from the date of receipt of the foreign remittance for the quarter - appeal to CESTAT.

Held: Issue is no more res integra and is settled by the Larger Bench of the Tribunal in the case of Span Infotech Pvt. Ltd. - 2018-TIOL-516-CESTAT-BANG-LB - held therein that in respect of export of services, the relevant date for purposes of deciding the time limit for consideration of refund claims under rule 5 of the CCR may be taken as the end of the quarter in which the FIRC is received - following the said precedent, matter remanded to the adjudicating authority to compute the time limit - appeals allowed by way of remand: CESTAT [para 6, 7]

- Matter remanded: MUMBAI CESTAT

Infospace Consultancy Pvt Ltd Vs CCGST

ST - Appellant did not discharge its tax liability within stipulated time frame and the same was deposited into the Government exchequer subsequently but before the issuance of SCN - Original authority imposed penalty u/s 76 which was upheld by the Commissioner(A) - appeal to Tribunal seeking waiver of penalty under section 80 of the Finance Act, 1994 and on the ground that the service particulars were duly reflected in the books of accounts and in the periodical returns filed and that due to acute financial crunch, service tax was not deposited within the statutory tme limit.

Held: Fact is not in dispute that the service tax for the disputed period was paid by the appellant before issue of SCN and the interest amount was paid subsequently but before adjudication of the matter - Issue regarding imposition of penalty u/s 76, under similar set of facts, is no more res integra , in view of the decision of Tribunal in the case of Virtual Marketing [ST/146/2008, Order no. A/89999/16/STB dated 2nd September 2016] - following the same, by extending the benefit of section 80 of the FA, 1994, penalty imposed on the appellant u/s 76 is set aside and appeal is allowed to such extent: CESTAT [para 6, 7]

- Appeal partly allowed: MUMBAI CESTAT

Royal Sundaram Alliance Insurance Company Ltd Vs CCE & ST

ST - The assessee is engaged in providing general insurance servives & extends motor insurance policy for motor vehicles against theft, damage & third party liability - To fulfil its obligation under the policy, the assessee offers cashless facility for repairing vehicles - To this end, it enters into arrangements with garages having cash-less facility - The assessee pays repair charges directly to the authorized service station & the policy does not cover expenses such as depreciation - The assessee availed credit for payment of service tax on insurance services provided - Such credit was availed based on invoices issued by the authorized service station on which the assessee's name is written or endorsed - Such availment of credit was challenged by the Department.

Held: An identical issue was settled by the Tribunal in M/s. United India Insurance Co. Ltd. Vs. C.C.E. & S.T., LTU, Chennai wherein the assessee was permitted to avail credit - Following the relevant findings in this case, the issue in the present case stands settled in favor of the assessee: CESTAT (Para 3.1,5)

- Assessee's appeal allowed: CHENNAI CESTAT

CENTRAL EXCISE

2018-TIOL-3201-CESTAT-DEL

Ultratech Cement Ltd Vs CCE

CX - The assessee company manufactures Cement & Clinker & availed Cenvat credit on inputs - Based on certain intelligence, the Department alleged that the assessee took credit based on supplementary invoices raised by subsidiary companies of M/s Coal India Ltd., on account of differential Excise duty paid for Royalty Stowing Excise Duty, Clean Energy Cess & Transit Fee - The Department alleged that such availment of credit contravened the provisions of Rule 9(1)(b) of CCR 2004 - Duty demands were raised for reversal of credit.

Held: The issue of eligibility for Cenvat credit based on supplementary invoices issues by Coal companies has long been disputed - Hence the possibility of confusion cannot be ruled out considering that the issue is already sub judice - Suppression is entirely different from confusion and cannot be alleged without any deliberate act of the assessee - Mere failure to ascertain about the exclusion part of Rule 9(1)(b) is not suppression or collusion - Moreover, supplementary invoice issued by Coal companies which are Government undertakings cannot mechanically lead to presumption of suppression or collusion - Hence the demands are set aside: CESTAT (Para 2,6)

- Assessee's appeal allowed: DELHI CESTAT

2018-TIOL-3200-CESTAT-MUM

Parksons Packaging Ltd Vs Commissioner of Central Goods & Service Tax

CX -Input Service - Rule 2(l) of CCR, 2004 - CENVAT credit of service tax paid on Hazardous Waste Management Service is admissible - Tribunal decision in Kanoria Chemicals & Industries Ltd. - 2015-TIOL-1934-CESTAT-AHM relied upon- Impugned order set aside and appeal allowed: CESTAT [para 4]

- Appeal allowed: MUMBAI CESTAT

M M Poonjiaji Spices Ltd Vs CC & CE

CX - Appellant, a 100% EOU, during the period March 2005 to February 2006 cleared pickles under the brand name "Poonjiaji", "Ashirwad", "Kitchen King" into the Domestic Tariff Area (DTA) by discharging concessional rate of duty @9% by applying Sr. no. 4 of Notification 23/2003-CE - Alleging that the products attract normal rate of duty of @16% in terms of Sr. no. 3 of the impugned notification, as the pickle was cleared bearing the brand name and in unit containers, a SCN was issued demanding CE duty - demand confirmed with penalty and interest and Commissioner(A) upholding this order - Appeal to CESTAT.

Held: Commissioner(A) by taking into consideration the fact that benefit of Sr. no. 4 of the notification 23/2003-CE is not available to pickles being cleared in unit containers affixed with the brand name upheld the order of the adjudicating authority - no contrary evidence has been placed by the appellant - impugned order is, therefore, upheld and the appeal is dismissed: CESTAT [para 5, 6]

- Appeal dismissed: MUMBAI CESTAT

CUSTOMS

2018-TIOL-3198-CESTAT-MUM

Responsive Industries Ltd Vs Commissioner of CGST and CE

Cus/CX - Assistant Commissioner (Adj.) by his letter conveyed to the appellant that the adjudicating authority was not inclined to grant cross examination of the witnesses - Appeal filed against this letter before CESTAT.

Held: Said communication of the Assistant Commissioner cannot be considered as an order/decision by the Commissioner of Customs as an adjudicating authority inasmuch as such letter is silent about the mode of direction being given by the adjudicating authority and also there is no available record to show that some order was passed or decision taken by the Commissioner and the same was merely communicated/conveyed by the Assistant Commissioner - since section 129A(1) of the Customs Act, 1962/35B(1) of the CEA, 1944 recognizes the decision or order passed by the Commissioner of Customs/Central Excise as adjudicating authority alone, for entertaining the appeal by the appellate Tribunal, the letter dated 03.05.2018 of the Assistant Commissioner cannot be considered as an appealable order for filing of appeal before the Tribunal as per the mandate of the statutory provisions referred - appeals are dismissed as not maintainable: CESTAT

- Appeals dismissed: MUMBAI CESTAT

CC Vs Genus Electrotech Ltd

Cus - The issue involved is classification of Washing Machine Parts (Wash Motor) - The claim of Revenue is that the same should be classified as parts of washing machine under CTH 84509010, whereas the assessee claimed classification under CTH 85012000 - Commissioner in his entire finding decided the classification only on basis of Section XVI of Customs Tariff Act - As per his finding, the wash motor imported by assessee is an independent motor and not as a part of washing machine - In terms of Section note 2(a) of Section XVI the Commissioner held that its classification as motor under CTH 85012000 - The Revenue strongly submits that first the nature of good has to be ascertained that whether it is motor of general nature or it is specifically designed only to be used as a part of washing machine - Commissioner (A) has not given any finding particularly with reference to the nature of goods and whether the said motor is covered under the description of Tariff Entry provided under 85012000 - Unless and until the nature of goods is ascertained, it is not proper to decide whether the goods can be classified by taking recourse of either note 2(a), 2(b) or 2(c) of Section XVI of Customs Tariff Act - Therefore, finding of Commissioner (A) is only with reference to section note without asserting the nature of goods is not proper - Matter remanded to Commissioner (A) for first examine the nature of goods, thereafter to decide whether the wash motor imported by assessee is covered under description of motor under CTH 85012000, only thereafter it can be decided whether it falls under 85012000 or 84509010: CESTAT

- Matter remanded: AHMEDABAD CESTAT