SERVICE TAX

2018-TIOL-2265-HC-MUM-ST

Reliance Infrastructure Ltd Vs UoI (Dated: October 12, 2018)

ST - The basis of impugned SCN is that the transmission or distribution of electricity i.e. (wheeling services) by an electricity distribution utility such as Petitioner when made available by it to third party for consideration, would not fall within the negative list of services as provided under Section 66D of the Act - It also records that the Report of High Level Committee has been accepted by Finance Ministry - Therefore, though the impugned notice is issued by Additional Director General, it is answerable to the Commissioner, CGST and CX - However, the Adjudicating Authority is also an officer of Ministry of Finance who would be bound by the report of the High Level Committee which has been accepted by Ministry of Finance - Thus, prima facie, responding to the notice would be empty formality - In fact, this plea has been specifically raised by petitioners while contending there is no efficacious alternate remedy available to the parties, as the issue under consideration stands accepted by Ministry of Finance - The Affidavit in Reply opposing the admission of Petition does not dispute the apprehension on the part of petitioner - Thus, the impugned notice is stayed till the final disposal of this Petition: HC

- Stay granted : BOMBAY HIGH COURT

2018-TIOL-3243-CESTAT-MUM + Case Story

CST Vs Equant Technology Services Indai Pvt Ltd

ST - There is not much difference between the pre-amended and post-amended definition of 'exempted services' contained in Rule 2(e) of CCR, 2004 - explanation added w.e.f 31.03.2011 has only clarified that "exempted services includes trading" - grounds urged by Revenue that inclusion of 'trading' in the explanation indicated that it was not considered as 'exempted service' during the disputed period does not hold good - reversal of credit attributable to input services used for trading activities is not in conformity with rule 6(3)(c) of CCR, 2004 - Commissioner has correctly interpreted the statutory provisions and confirmed the adjudged demand - Revenue appeal is, therefore, dismissed: CESTAT [para 5, 7]

ST - Rule 6 of CCR, 2004 - Trading - Limitation - assessee had never informed the department regarding availment of CENVAT Credit in respect of the input services used/utilised for providing both output service and the trading activities undertaken by it - Since upon acquiring the knowledge regarding availment of irregular CENVAT Credit, the department initiated show cause proceedings against the assessee, Bench is of the view that such proceedings are not barred by limitation of time - intention of the assessee was manifest in defrauding the Government Revenue - demand rightly upheld for extended period - Assessee appeal dismissed: CESTAT [para 6, 7]

- Appeals dismissed : MUMBAI CESTAT

2018-TIOL-3229-CESTAT-BANG

Toyota Kirloskar Motor Pvt Ltd Vs CCE, C & ST

ST - The assessee company is engaged in manufacture & sale of cars -It permitted two companies to sell lubricants to dealers purchasing cars from the assessee - The two companies were allowed to use the assessee's brand name on the lubricant bottles - The assessee received some amount as commission from such transaction - The Department sought to tax such commission under 'Clearing & Forwarding Agency' service - Later the Commr. of Sales Tax issued a fresh SCN holding that the commission amount was correctly taxable under 'Business Auxiliary Service'.

Held: The the order passed by the Commr. transgressed the madate of the SCN initially issued to the assessee - While the initial notice raised demand under C&F service the review order raised demand under BAS - For this reason, the Commissioner's order be set aside - Besides, the findings of the Commissioner denying exemption under Notfn No 13/2003-ST are unacceptable considering the Tribunal's decision in Brindco Sales Ltd. vs. CST, Delhi - Hence the review order is not sustainable on merits or on limitation: CESTAT (Para 1,4,4.1)

- Assessee's appeal allowed: BANGALORE CESTAT

2018-TIOL-3228-CESTAT-MUM

VM Salgaocar And Brother Pvt Ltd Vs CCE

ST - Refund - Notification 41/2012-ST -Commissioner(A) while upholding the adjudication orders held that the place of removal in the case of export of iron ore is the port of export and, therefore, Technical testing analysis agency service procured by appellant from importing country should not be eligible for the benefit of refund of service tax paid thereon - appeal to CESTAT.

Held: It is an admitted fact that as per contractual norms, appellant had engaged the overseas agency for Inspection and certification of quality/quantity of exported Iron ore and service tax on such services was paid by appellant under reverse charge basis - rebate claim is not only available in respect of taxable services used for export of goods but also to taxable services used beyond the place of removal - case of appellant falls within the purview of ‘specified service' - denial of refund is contrary to provisions contained in notification 41/2012-ST - impugned orders set aside and appeals allowed: CESTAT [para 4, 5]

- Appeals allowed: MUMBAI CESTAT

CENTRAL EXCISE

2018-TIOL-2262-HC-AHM-CX

Cambay Chem Ltd Vs CCE, C & ST

CX - Credit of input duty availed on Fuel used for exempted final products – Issue involved is squarely covered by the judgment of Supreme Court in case of Gujarat Narmada Fertilizers Co. Ltd. 2009-TIOL-96-SC-CX - In that view of matter, appeal would require dismissal without any further discussion - Appellant however submitted that the decision of Supreme Court in case of Gujarat Narmada Fertilizers Co. Ltd. is referred to the larger bench - Same view was expressed in case of Maruti Suzuki Ltd. 2009-TIOL-94-SC-CX by the Supreme Court - Mere reference of larger bench would not in any manner dilute the force of the judgment of Supreme Court - This is what the Division Bench of this Court in case of Gujarat Narmada Valley Fertilizers Co. Ltd. has held and observed: HC

- Appeal dismissed : GUJARAT HIGH COURT

Impact Solutions Vs UoI

CX - On assessment during the period of dispute, duty demands were raised against the assessee - The assessee approached the Commr.(A) and also made the 7.5% pre-deposit of duty - However, the Department proceeded to attach the assessee's bank account & other immovable property - The assessee contested such attachment on grounds that the filing of appeal & pre-deposited had preceded the attachment & so obviated the need for attaching the properties - The Department claimed that the attachment had been made before the date of filing appeal & payment of pre-deposit - When the assessee first approached this court, it was held that the best course of action would be to await the Commr.(A)'s decision.

Held - The assessee intends to appeal before the Tribunal against the order passed by the Commr.(A) - Meanwhile, in light of the decision of the Kerala High Court in Sherin Hi Fabs Vs. Assistant Commissioner of Service Tax, Cochin the attachment of property be vacated - Matter adjourned for hearing on Oct 30, 2018: HC (Para 1,4)

- Assessee's writ petition allowed : BOMBAY HIGH COURT

CESTAT Vs Thyssenkrupp Industries India Ltd

CX - In view of decision of Apex Court in Jayant Juneja, NRB Bearing Ltd and B.V. Jewels 2004-TIOL-83-SC-CUS , where the demand is set aside on account of being barred by the limitation, there is no necessity or occasion to consider the merits of the dispute: HC

- Appeal admitted : BOMBAY HIGH COURT

2018-TIOL-2259-HC-AP-CX

Metal Marketing Agency Vs CCE & ST

CX - Whether the impugned order of the Tribunal to the extent of confirmation of penalty under rule 26 of the Central Excise Rules, 2002 [Rules] is correct and proper when the appellants had not dealt with the goods physically in any manner and when there was no proposal for confiscation of the goods in the show cause notice and when no goods are held liable for confiscation : HELD - The contention of the appellants that rule 26 can be invoked only when a person has dealt with the goods physically does not hold water in the light of the fact that rule 26 uses the expression “in any other manner deals with any excisable goods” - providing blank challans/invoices to a company to enable them to remove the manufactured goods clandestinely will fall under the category “in any manner dealing with the goods” - the decision of the Larger Bench of the Tribunal in the case of Steel Tubes of India Limited [2007-TIOL-1720-CESTAT-DEL-LB] is rightly distinguished by Tribunal as the Larger Bench did not focus on the expressions “in any way concerned in transporting, removing, depositing, keeping, concealing, selling and purchasing or in any manner deals with any excisable goods” - to ward off penalty, the appellants should have come out clean -no logical explanation is offered as to why and how they parted with blank challans/invoices -therefore, the question of law has to be answered against the appellants - as a consequence, the appeals are liable to be dismissedbut the quantum imposed by the Tribunal appears to be little excessive and the same could be reduced to the extent of the amount already paid - the appeals are accordingly disposed of, answering the question of law against the appellants, but reducing the penalty to the extent of 50% of the amount ordered by CESTAT and which amount is stated to have been already paid : HIGH COURT [para 12, 14, 15, 16, 18]

- Appeals disposed of: ANDHRA PRADESH HIGH COURT

2018-TIOL-3232-CESTAT-MUM

Henkel Adhesive Technologies India Pvt Ltd Vs CCE

CX - ROM filed by both, Revenue and assessee, seeking rectification of typographical error in order. Held: Expression - "In these circumstances, it was open for the Commissioner(A) to confirm the demand of interest" is replaced as "In these circumstances, it was not open for the Commissioner(A) to confirm the demand of interest." - Order is rectified accordingly: CESTAT [para 5, 6]

- Applications allowed: MUMBAI CESTAT

2018-TIOL-3231-CESTAT-MUM

Ciens Laboratories Vs CCE

CX - Valuation - Section 4 of the CEA, 1944 - Physician Samples - Appellant discharged CE duty on Cost Construction basis whereas Revenue sought to demand duty on the basis of MRP.

Held: Insofar as clearances of Physician samples on 'sale basis' are concerned, the assessment is to be done in terms of s.4(1)(a) of the CEA, 1944 and when samples are manufactured on job work basis, the assessment is to be done in terms of the decision of the apex court in the case of Ujagar Prints - apex court decision in Sun Pharmaceuticals Ltd. - 2016-TIOL-10-SC-CX relied upon - demand on the basis of MRP cannot be sustained - appeal allowed: CESTAT [para 5]

- Appeal allowed: MUMBAI CESTAT

2018-TIOL-3230-CESTAT-MUM

CCE AND ST Vs Atlas Copco India Ltd

CX - Condonation of Delay - AR submitting that O-in-A bearing number V/PI/259/ST/2017-18 indicated the matter as being 'ST', which is the abbreviation form of nomenclature for service tax matters and for which the permissible limit for filing appeal was four months for the department; however, the matter is a Central Excise case for which the limitation period is of three months and hence the delay - delay sought to be condoned.

Held: As per Explanation appended to the Limitation Act, 1963, 'the fact that the appellant or the applicant was misled by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section' - applying this principle to the present case, it appears that the applicant Revenue was misled by the nomenclature given in the order of Commissioner(A) - delay of 21 days in filing appeal is, therefore, condoned: CESTAT [para 4, 5]

- Application allowed: MUMBAI CESTAT

2018-TIOL-3227-CESTAT-MUM

Eaton Tech Pvt Ltd Vs CCE

CX - Appellant, STPI unit, is engaged in export of Information Technology software related service and is also registered under service tax - Refund claim filed for the period 01.07.2009 to 30.09.2009 were rejected on the ground that the appellant filed the claim for the services utilized by them prior to approval from the approval committee and thus does not satisfy the condition of notification 9/2009-ST letter of approval of services.

Held: From the provisions contained in section 26(1)(e) of the SEZ Act read with rule 30(10) of the SEZ Rules, 2006, it can be seen that no Service tax is payable on the services provided by a service provider to a SEZ unit - Section 51 of the Act also makes an overriding provision that SEZ Act shall have effect even if there is anything inconsistent in any other law for the time being in force - Notification 9/2009-ST have been issued only to operationalize the exemption/immunity available to SEZ unit and cannot bar the refund claim of the appellant - some portion of the refund was rejected on ground of excess claim in respect of some invoices and/or there is discrepancy in the invoices - for scrutiny thereof, the matter is remanded to the adjudicating authority: CESTAT [para 4]

- Matter remanded: MUMBAI CESTAT

CUSTOMS

2018-TIOL-2264-HC-MUM-CUS

CC Vs J Sons Foundry Pvt Ltd

Cus - Issue is with regard to appropriate classification of imported goods, i.e. whether the goods have to be classified as declared by the importer or as claimed by the Revenue - The Supreme Court in case of Navin Chemicals Mfg. & Trading Co. Ltd. 2002-TIOL-460-SC-CUS has inter alia held that the words "the determination of any question having a relation to the rate of customs duty or the valuation of goods for the purposes of assessment of duty" inter alia would include an issue of classification of goods - Therefore, in terms of Section 83 of FA, 1994 read with Section 35G(1) of CEA, 1944, the appeal on issue of classification is not maintainable before this Court - The remedy for the appellant, if any, is to file an appeal to the Supreme Court under Section 35L(1)(b) of CEA, 1944 as made applicable to FA, 1994 by Section 83 thereof - Thus, the appeal is dismissed as not maintainable before this Court: HC

- Appeal dismissed : BOMBAY HIGH COURT

Pr.CC Vs Navneet Didwania

Cus - The Appeal was admitted on 24th September 2018 - This application seeks stay of impugned order dated 24th April 2017 to the extent the amount of Rs. 10,00,000/- which has been deposited by Respondent should continue to remain with the Revenue till the final disposal of appeal - Admission of an appeal merely indicates that question as urged gives rise to debatable issues - This by itself would not warrant a stay of the order dated 24th April 2017 passed by the Tribunal - So far as the grant of ad-interim stay dated 8th November 2017 is concerned, the aforesaid order was passed when the Applicant sought time to remove office objections - At that time, an ad-interim stay was granted restraining the Respondent from recovering any amount from Revenue - This ad-interim order dated 8th November 2017 came to an end on 14th December 2018 - No extra ordinary circumstances are pointed out which would justify depriving the Respondents, the fruit of its success before the Tribunal founded in the impugned order dated 24th April 2017: HC

- Notice of Motion dismissed : BOMBAY HIGH COURT

Rajaram Johra Vs CC

Cus - (i) Whether in the facts and in the circumstances of the case, the Tribunal was right in suo motu restoring the order of the Additional Commissioner of Customs, Adjudicating Authority, when there was no appeal filed by the Department under section 129A or cross appeal under section 129A(4) of Customs Act is correct in law and(ii) Whether on the facts and in circumstances of the case, the Tribunal was right in holding that the Department has discharged the burden of proof is correct in law: HELD - the power of the appellate Tribunal is exercisable under section 129B(1) only against the decision or order appealed against - admittedly, the Department did not file an appeal against the order of the Commissioner (Appeals) permitting the redemption of the seized gold - in such circumstances, the Revenue should not be said to be aggrieved by such a direction granting redemption and the Tribunal clearly erred in dismissing the appellant's appeal and restoring the order passed by the original authority - order passed by the Tribunal is set aside and the matter is remanded for a fresh decision on the appellant's appeal to test as to whether the Commissioner (Appeals) was right in fixing the market value of the gold on the date when he passed the order, when according to the appellant, the market rate prevailing on the date of seizure should be taken into consideration -the remand is restricted to that aspect - Appeal allowed by way of remand: HIGH COURT [para 12, 13]

- Matter remanded:MADRAS HIGH COURT

2018-TIOL-3242-CESTAT-MUM + Case Story

Sneha Impex Vs CC

Cus - Specifically for such goods as are covered by section 4A of Central Excise Act, 1944 with its own definition of value, the general provisions of value in Customs Act, 1962, i.e. section 14 and the attendant rules, would not apply - In the absence of any machinery provisions to alter the retail selling price declared by the importer and the lack of provision for recovery in the event of any subsequent alteration of retail selling price, no proceedings can be initiated against the appellant in the circumstances narrated in the show cause notice as well as the orders of the lower authorities - Raising and confirmation of demand of differential additional duty of customs by revising the retail selling price is not permissible - recovery of duties under section 28 of Customs Act, 1962 fails - impugned order set aside and appeal allowed: CESTAT [para 3 to 5]

- Appeal allowed : MUMBAI CESTAT

2018-TIOL-3234-CESTAT-AHM

Global Cambay Marine Service Pvt Ltd Vs CC

Cus - The appellant Company M/s GCMSL is engaged in activity of supply of Ship Store, Water Bunker and other item to the vessels calling at various port of Gujarat - From the fleet vessels they have, one utility boat named MV, Al-Vard used by them in towing of sea playing vessels - The investigation by DRI revealed that GCMSPL illicitly imported diesel oil in the Tug Al-vard - There is no dispute regarding the demand of customs duty and penalty on appellant company GCMSPL - They are only contesting the quantum of redemption fine in respect of diesel and vessel and personal penalties imposed on individuals - As regard confiscation of goods and redemption fine, the total quantity of diesel seized was admittedly 103.657 MT on which amount of duty comes to Rs. 8.78 lakhs only - Therefore, the redemption fine of Rs. 13 lakhs imposed on confiscation of diesel oil is not justified, therefore, redemption fine on this count deserved to be reduced - The lower authority has confiscated the quantity of 46.343 MT of diesel oil and imposed redemption fine of Rs. 6 Lakh - This quantity was not available as the same was disposed of therefore, the goods which were not available for seizure the confiscation of non-existent goods cannot be made and no redemption fine can be demanded as held by Larger Bench of Tribunal in case of M/s Shiv Kripa Ispat Pvt Ltd 2009-TIOL-388-CESTAT-MUM-LB which was approved by Supreme Court - As regard the redemption fine on confiscation of the tug, firstly, the valuation of tug was wrongly taken as Rs. 6.75 crores whereas it’s admitted insured value declared is 1.90 Crores - Secondly, once the equal to duty amount redemption fine was imposed on the goods, the redemption fine of Rs. 1.75 Crore in respect of tug is exorbitant and not justified - In view of the ruling of Apex Court in case of 2002-TIOL-850-SC-CUS-LB, total benefit were sought to be derived by assessee is Rs. 13 lakhs, which is of duty amount however, the assessee deposited not only the duty amount but also interest and 25% penalty, therefore, redemption fine on tug is very exorbitant and the same needs to be reduced substantially - As regard the personal penalties imposed on the employees, namely, Sh. P P Radhakrishnan and Sh. Hanzel A Malik, the employees do not have belief that the goods are liable for confiscation, moreover, they are mere employee of the company working on fixed salary basis and there is no evidence on record that they were benefited by any act of evasion of duty by the company, therefore, the employees are not liable for penalty - As regard the appeal of Sh. Zoharbhai A Mallampattiwala, since the appellant is expired, his appeal shall stand abated: CESTAT

- Appeals partly allowed: AHMEDABAD CESTAT

Him Logistics Pvt Ltd Vs CC

Cus - The applicant is a Customs Broker since year 2004 - It is apparent from his application that in the financial year 2018 itself, he has filed 13,000 Bill of Entry / shipping bills - It is mentioned that as far as impugned consignment is concerned, it is one more consignment of same importer, who was already filing Bills of Entry for clearance of the goods through the applicant and that the previous consignments have duly been cleared - There is no apparent objection to this submission except that each case has its own facts - Accordingly, it is prima facie apparent that documents have been complete with reference to the said previous consignments - It is also an apparent and admitted fact that for the impugned consignment also the importer, the CHA and even the introducer are same - Thus application of the applicant makes it prima facie clear that he has not contravened regulation 11 A and 11 D of CBLR, 2004 as is alleged - In view of Him Logistics Pvt Ltd. 2017-TIOL-53-HC-DEL-CUS and Yogesh Kumar 2017-TIOL-416-HC-DEL-CUS, revocation of his license invoking regulation 11 of CBLR 2013 is not justified - Since the applicant, prima facie seems to have complied with the obligation cast upon him, revocation of his license is unproportionate penalty - In view of the arguments on behalf of the applicant that the order under challenge has not properly appreciated the fact of compliance of Regulation 11C of CBLR 2013 on part of the applicant the revocation is prima facie opined to be harsh order causing prima facie irreparable loss not only to the CHA but to his employees as well - These observations are opined sufficient for staying the operation of revocation of CHA license - However, it is clarified that the finding in present order will have no bearing at the time of final disposal of appeal in case the department is successful in proving any allegation of impugned SCN: CESTAT

- Stay granted: DELHI CESTAT