SERVICE TAX
2018-TIOL-3281-CESTAT-MUM + Case Story
Fertin Pharma Research And Development India Pvt Ltd Vs Commissioner of CGST
ST - Scientific or Technical consultancy service provided for the development of drugs to the overseas recipient of service is an 'export of service' – refund admissible of accumulated credit u/r 5 of CCR, 2004: CESTAT [para 6, 8]
- Matter remanded : MUMBAI CESTAT
2018-TIOL-3272-CESTAT-BANG
Abb Ltd Vs CCE & CST
ST - The assessee company is engaged in manufacturing turbochargers, electric motor, transformer, coupling capacitor & relays - It also provides services such as 'management, maintenance or repair service, business support service, erection, commissioning or installation service or consulting engineer's service - During the period of dispute, the Department received intelligence that the assessee was also engaged in trading in electronics under trade name of 'ABB' & that it availed cenvat credit on certain inputs & services used in its trading activities - Hence duty demands were raised with interest & penalties for various periods, seeking recovery of such credit availed.
Held: The Department was aware of the assessee's trading activity as details of these activities were recorded in the balance sheet for such period - Hence there is no suppression of facts with intent to evade payment of duty - Besides, period involved is prior to amendment made to Rule 2(e) of CCR 2004 - Besides, extended period of limitation is not invokable & penalty is not imposable since issue of availing credit on trading activity was mired in litigation & so there was confusion on the issue - Hence credit be reversed for normal period of limitation only: CESTAT (Para 2,6)
- Assessee's appeals partly allowed: BANGALORE CESTAT
2018-TIOL-3271-CESTAT-MAD
Hindustan Unilever Ltd Vs CCE & ST
ST - The assessee company sold its edible oils & vanaspati business to another entity - As per the agreement, the oil & vanaspati would be sold through the assessee's marketing network for a three-year period - A 'Commission Agency Agreement' was entered into wherein the assessee received goods from the other entity & sold the same on commission basis - The assessee availed GTA service & paid service tax where payable - The Department opined that the activities were incorrectly classifed as BAS and that they were instead classifiable under C&F service - The Department also noted that the freight paid by the assessee was higher than the taxable value declared in the ST-3 returns - Duty demands were raised with interest under C&F service and GTA services - Penalty u/s 78 was imposed too.
Held: As per agreement, the assessee is only acting as commission agent responsible for transporting the other entity's products in designated territory - Hence the responsibility to transport these products are does not lie with the assessee - For taxability within C&F services, both activities of clearing & forwarding must be present rather than just one of them - Hence the assessee's activities do not classify as C&F service - Moreover, even though some of the assessee's activities resemble those classifiable under 'Commission Agent', it differs from the activities of C&F agent in the sense that a commission agent is not concerned with clearing goods from principal's premises to its own depots - It is also not concerned with fowarding of goods to customers - Besides, in Circular dated 11.07.97, the Board clarified that a C&F agent performed all activities in respect of goods right from their clearance from principal's premises to its own storage premises & delivery to customers - Hence the assessee's activities do not classify as C&F service & are correctly classifiable as commission agent for BAS - Thus the demands merit being set aside: CESTAT (Para 1,5.4,5.5,5.6,5.7,6)
- Assessee's appeal allowed: CHENNAI CESTAT
2018-TIOL-3270-CESTAT-MAD
CST Vs Ultratech Concrete
ST - The assessee company manufactures concrete - It used 'Transit mixer' to transport 'Ready mix concrete' - The Department opined that the same would attract service tax under GTA service - Duty demands were raised with interest & penalties - Such demands were set aside by the Commr.(A) on grounds that the use of transit mixer could not be construed as a service & that it was more appropriately classifiable under Supply of Tangible Goods Service.
Held: The assessee has been contending since the beginning that the vehicles were only hired & no GTA service was provided - Before the Commr.(A), the assessee claimed that it had entered into agreements for hiring transit mixer & not for receiving transportation service - Considering the terms of such agreement, it is seen that the transit mixer was hired for three years with full possession & control vested with the assessee - In this case, the findings of the Commr.(A) merit being upheld: CESTAT (Para 1,5)
- Assessee's appeal allowed: CHENNAI CESTAT
CENTRAL EXCISE
2018-TIOL-3269-CESTAT-MAD
Sundram Fasteners Ltd Vs Commissioner of GST & Central Excise
CX - Assessee was issued SCN proposing to disallow credit on various input services and for recovery of the same along with interest and for imposing penalties - The period involved are for the period prior to 1.4.2011 - The definition of input services prior to 1.4.2011 had a wide ambit as it included the words ‘activities relating to business' - In respect of Group Health Insurance, the group health insurance service prior to 1.4.2011 as well as after 1.4.2011 is eligible for credit - With regard to rent-a-cab service, the said services are not used for activities relating to manufacture - The demand in respect of rent-a-cab service is upheld along with interest and penalties thereof - Assessee has submitted that commercial construction service were availed for the purposes of modernization and renovation of factory and office premises - Assessee would be able to furnish documents to establish the same, therefore matter remanded on this issue to the adjudicating authority - With regard to commercial construction services which have been availed prior to 1.4.2011, the credit is eligible.
The authorities below have disallowed credit on coating service (job work) - Assessee has submitted that the goods were sent for processing of job work and during disputed period, the job worker was not liable to pay service tax for the reason that processing work did not amount to manufacture - Later Notfn 25/2012 came into force with effect from1.7.2012 which exempted service tax on such processing work done by the job worker - These services have been availed prior to 1.7.2012 and therefore the disallowance of credit by the authorities below relying upon the notification is incorrect and unjustified.
As regards to disallowance of credit on air-conditioner maintenance service, Tribunal in the case of Sarita Handa Exports (P) Ltd. 2016-TIOL-2559-CESTAT-CHD has held that credit is eligible for services availed for maintenance of air-conditioner - Further, the inclusive part of definition of input service mentions that the services availed for repair and maintenance is eligible for credit - For these reasons, disallowance of credit on air-conditioner maintenance service is set aside: CESTAT
- Appeals partly allowed: CHENNAI CESTAT
2018-TIOL-3268-CESTAT-MAD
Perfetti Van Melle India Pvt Ltd Vs CCE
CX - The assessee company manufactured & sold toffees contained in jars & pouches - It affixed MRP on them and paid duty u/s 4A of the CEA 1944 - The Department opined that the goods were not intended for retail sale & were not required to carry MRP as they were exempted u/r 34(b) of the Standard of Weights and Measures (Packaged Commodity) Rules, 1977 - It was also stated that as the jars & pouches were wholesale packs, they did not merit valuation u/s 4 of the Act - SCNs were issued, raising duty demands with interest & equivalent penalty u/s 11AC r/w Rule 25 of the CER 2002 for various periods.
Held: it must be noted that the issue of whether or not the platic jars & pouches containing individual toffeesd are to be assessed u/s 4 & 4A of the Act, has been mired in controversy for quite some time - There are Tribunal's decisions giving diverse views on the issue - This issue was eventually settled by the Apex Court in its decision in Commissioner Vs. Central Arecanut & Cocoa Marketing & Processing Co-op Ltd. - Before the date of this judgment, the ratio laid down by the Apex Court in Continental Foundation Jt. Venture Vs. C.C.E would apply to the present case - In such case, the proceedings initiated for the period 2002-2006 would be hit by limitation - Only the demands raised in four periods between 2007-2009 would survive - Regarding penalties, as the matter involves interpretation of law, they merit being set aside: CESTAT (Para 2,5.1-5.6)
- Assessee's appeal partly allowed: CHENNAI CESTAT
2018-TIOL-3267-CESTAT-BANG
Otto Bilz India Pvt Ltd Vs CCT
CX - The assessee company manufactures Tapping Adapters and Chucks - Upon audit, the Department noted that the assessee availed credit based on debit notes, in contravention of provisions of Rule 9 of CCR 2004 - Also that credit had been availed on common input services without maintaining separate records in contravention of Rule 6(3) - Also that credit was availed on sales rejects but the same were not repaired or returned but were stored as scrap - Duty demands were raised for reversal of credit & were upheld by the Commr.(A).
Held: Regarding credit availed on debit notes, all the debit notes have been placed on record - All of them contain the details for availing credit - Invoice numbers are also mentioned, owing to which the goods received & sent can be ascertained - The O-i-A travelled beyond the scope of SCN as there is no allegation that the goods were not returned to the factory - Credit availed on common input services related to trading activity must be reversed - Regarding credit availed on the goods returned from EOU, the charging of duty by supplier cannot be questioned at the recipient's end - Hence two of the three demands are dropped while one is sustained: CESTAT (Para 1,5)
- Assessee's appeal partly allowed: BANGALORE CESTAT
CUSTOMS
2018-TIOL-3266-CESTAT-AHM
Space Industries Ltd Vs CC
Cus - The Revenue claimed that the tax value involved in the matter exceeds Rs 100 crores - The counsel for the assessees claimed that other connected appeals may exist too.
Held: Considering such circumstances, the application for early hearing merits being allowed: CESTAT
- Revenue's applications allowed: AHMEDABAD CESTAT
2018-TIOL-3265-CESTAT-AHM
Petronet LNG Ltd Vs CC
Cus - The limited issue to be decided is, whether refund claim filed by assessee is governed by Section 27 of Customs Act, 1962 and consequently it is time-barred or otherwise - Though the amount of refund claim is related to duty paid and the said amount is customs duty including the duty on the actual receipt quantity, therefore, the entire amount paid by assessee is nothing but customs duty only irrespective to the fact that certain portion of the duty was not payable - The departmental authority has no legal authority to process and sanction the refunds going out of Section 27 of Customs Act, 1962 - The Tribunal being creature of the statue and under Customs Act have to deal with any refund case within four corners of the Customs Act, since the provisions for refund is only provided under Section 27 of the Customs Act, 1962 - This Tribunal also cannot by-pass the same and decide the refund claims under general law - The demand of duty on short imported goods stands set-aside as per the order of Commissioner (A) and as a consequence, assessee become eligible for refund of the said amount - Therefore, in terms of clause (b) of sub-Section (1B) of Section 27, the period of one year shall be computed from the date of Commissioner (A) order - Accordingly, the refund application filed beyond one year from that date is clearly time barred - The departmental authority has no legal authority to sanction the refund filed beyond limitation - Accordingly, the impugned order is upheld and the appeal is dismissed: CESTAT
- Appeal dismissed: AHMEDABAD CESTAT |
