SERVICE TAX
2018-TIOL-2423-HC-HP-ST
Omen Electrical and Gas Appliances Company Vs UoI
ST - The petitioner is aggrieved by order passed by Joint Commissioner, Central GST Commissionerate, Shimla - Vide the said order, demand of services tax has been confirmed with interest - Likewise, penalty equivalent to services tax too has been levied - Respondents has taken a preliminary objection that the impugned order is appealable under Section 85 of FA, 1994 - In fact, the forwarding letter attached with the impugned order itself recites that if either party is aggrieved of impugned order, it may file an appeal within 60 days - Once the petitioner has got efficacious alternative remedy of statutory appeal, the same ought to have been availed by it before invoking the writ jurisdiction of this Court - The writ petition is accordingly disposed of by relegating the petitioner to avail the alternative remedy of appeal under Section 85 of FA, 1994 - Since the time limit to file the appeal might have expired, the prayer of petitioner for condonation of delay in filing appeal deserves acceptance - Consequently, Appellate Authority is directed that in case petitioner files appeal within a period of two weeks, the delay in filing the appeal may be condoned and the appeal may be decided on merit and in accordance with law - It would meet the ends of justice, if petitioner is asked to make such pre-deposit in respect of liabilities other than the penalty equivalent to the amount of service tax: HC
- Petition disposed of : HIMACHAL PRADESH HIGH COURT
2018-TIOL-3437-CESTAT-MAD
Vestal Communication Vs CCE
ST - The assessee company provided services to cellphone exporters on behalf of M/s BPL Mobile Cellular Ltd. - It also collected bill amounts from customers - For this, the assessee received commission & incentives - The Department opined that such amounts were taxable as Business Auxiliary Service & raised duty demands with interest & imposed penalties u/s 76, 77 & 78 of Finance Act 1994 - On appeal, the Commr.(A) set aside the penalty imposed u/s 78 with upholding the remaining demands.
Held: Considering the decision in Daya Shankar Kailash Chand Vs CCE & ST Lucknow no service tax can be levied on purchase & sale of SIM cards - However, commission & incentive received from BPL Ltd., is taxable under Business Auxiliary Service - Also, extended limitation cannot be invoked where there is no suppression of fact on part of the assessee - Penalty imposed u/s 76 is set aside since there is reasonable cause behind failure to discharge tax liability - Hence matter remanded to re-quantify duty demanded: CESTAT (Para 1,4.1-4.6)
- Assessee's appeal partly allowed: CHENNAI CESTAT
2018-TIOL-3436-CESTAT-HYD
ITC Ltd Vs CCCE & ST
ST - The assessee company is engaged in manufacturing Tobacco products & also in exporting unmanufactured Tobacco - The assessee hired containers, which would be stuffed and then transported for export - The assessee paid service tax under GTA service & later claimed refund as per Notification No.41/2007-ST and Notification No.17/2009-ST, dated 07.07.2009 - Both exempt service tax payable under RCM through refund of service tax paid on such services used for export of goods - However, the Department sanctioned only half the refund on grounds that exemption is not available for transport of empty containers to the factory or place of removal.
Held: The Notification No.17/2009-ST superseded Notification No.41/2007 & Sl.No.6 of this notification covers, "services provided to exporter in relation to transport of export goods directly from the place of removal to inland container depot or port or airport, as the case may be, from where the goods are exported" - Besides, the conditions laid down in the Notification have also been fulfilled - It must be seen whether the word "in relation to transport of export goods" covers also the transport of the empty containers to the factory of manufacturer before sending the stuffed containers to the port or inland container depot - This question was answered by the Apex Court in CC, Mumbai Vs M/s Dilip Kumar & Co and others [Civil Appeal No.3327/2007] - 2018-TIOL-302-SC-CUS-CB - Hence the assessee is entitled to refund of service tax paid on GTA services availed for transporting empty containers from the container yard to the factory for export - Moreover, the terms "in relation to transport of export goods" clarify that the empty containers were brought to the factory for the purpose of and in relation to the transport goods for export - Hence the order in challenge be set aside: CESTAT (Para 2,6,7)
- Assessee's appeals allowed: HYDERABAD CESTAT
CENTRAL EXCISE
2018-TIOL-2422-HC-P&H-CX
PR.CCE & ST Vs Neelam Steel
CX - Appeal has been preferred under Section 35 G of CEA, 1994 assailing an order in 2016-TIOL-195-CESTAT-DEL - Assessee stated that various submissions were made before Tribunal that they had not exported the goods to Nepal, but the Tribunal has not discussed any material and the conclusion drawn is contrary to material on record - Accordingly, prayer was made for withdrawal of appeal with liberty to assessee to file an appropriate application seeking rectification of order that the issues/submissions were raised before Tribunal but the same had not been discussed by it - Appeal dismissed as withdrawn: HC
- Appeal dismissed : PUNJAB AND HARYANA HIGH COURT
2018-TIOL-3435-CESTAT-MUM + Case Story
Shruti Art Pvt Ltd Vs CCE
CX - LIC Logo printed on diaries does not establish any connection between the goods and the logo, hence the same cannot be said to be in the course of trade - it cannot be said that LIC is in the trade of selling the LIC diaries - benefit of SSI exemption notification 8/2003-CE available: CESTAT [para 5.3, 6, 7]
- Appeal allowed: MUMBAI CESTAT
2018-TIOL-3434-CESTAT-BANG
Hyva India Ltd Vs CCE
CX - Assessee is engaged in activity of body building on duty paid motor vehicle chassis supplied to them by M/s. Tata Motors Ltd.(TML) - They entered into an agreement with TML and were availing credit of duty paid by M/s. TML and they have also procured raw materials by their own account - The assessee charged a consolidated sales consideration for the body built on chassis which included the cost of raw materials procured by assessee; body building costs and the profit margin - They were arriving at assessable value by adding the price of body plus cost of chassis in terms of Section 4(1)(b) read with Rule 6 of CEVR, 2000 - They are also paying VAT on their own consideration of sales on the value of body building cost plus excise duty - Thereafter, Department issued SCNs proposing re-determination of assessable value of goods cleared by them in terms of Rule 10A of CEVR, 2000 read with Section 4(1)(a) of CEA, 1944 - The issue is covered by decision of Tribunal - 2013-TIOL-166-CESTAT-MUM and Bombay High Court in their own case - However, assessee has made a case for themselves as far as the quantification of duty and setting aside penalties are concerned - Assessee have requested for re-calculation only excluding the duties as taxes and cess paid by them or M/s. TML their principal manufacturer - The request can be accepted - The assessee have submitted that whereas the Department only excluded the element of excise duty from the assessable value, for quantification of demand, assessee submit that transaction value of M/s. TML is to be adopted after deducting in addition to the excise duty Sales Tax/VAT paid by M/s. TML and CST paid by assessee - Therefore, the point raised by assessee is valid for arriving at the duty liability - As such, matter remanded to the Original Authority - Penalties are, however, set aside: CESTAT
- Appeals partly allowed: BANGALORE CESTAT
2018-TIOL-3433-CESTAT-ALL
Mirc Electronics Ltd Vs CCE
CX - The assessee company, engaged in manufacturing parts of washing machine, refrigerator & television, supplied such components to M/s LG Electronics India Pvt Ltd., M/s Onida Savak Ltd., M/s Moser Baer, M/s Samsung & M/s Panasonic - The Department opined that M/s LG & M/s Onida were related parties of the assessee - The issue at hand is whether the other two appellants, namely M/s LG & M/s Onida are related to the assessee u/s 4(3)(b) of the Act - Also whether the goods cleared by the assessee to them must be valued as per Rule 8 & 9 of the Central Excise Valuation Rules 2000 for payment of duty on such goods - The transaction values declared by the assessee were rejected - Demands for differential amount of duty were raised with penalties being imposed on the assessee as well as the other two appellants u/r 26 of CER 2002 r/w Rules 209A of CER 1944.
Held: Considering facts and material on record, it is seen that the assessee is self-sufficient and carried out manufacturing activities independently & cleared their goods so manufactured upon transaction value after amortizing value of moulds in the price - Also considerign the nature & transactions for sale of plastic components & considering all the agreements between the assessee & M/s LG, it is seen that the assessee manufactured Plastic Moulded Components for & on their own behalf - This is also evidenced by the fact that M/s LG retained a right to reject the goods if not in accordance with specifications and quality - Other terms & conditions also show that the agreement was between two independent companies & not between employer & employee - The Department could not produce any evidence to nullify the terms of the agreement - Besides, the assessee's balance sheets reveal it to have earned considerable amount of profit - In fact it received sales consideration over & above price settled with the other two appellants - The Department also could not establish that the other two appellants had any managerial, administrative or financial control over the assessee - Besides, all the moulds supplied by the appellants were accompanied by proper invoice & each challan providing value of mould supplied - The assessee worked out the Amortizing cost of the moulds and added the same to the 'agreed price' for determining transaction value u/s 4 of the CEA 1944 - Hence it is seen that the transactions between the appellants and the assessee are on principal-to-principal basis - Hence the demands raised be set aside: CESTAT (Para 1-4,10-16)
- Assesssees' appeals allowed: ALLAHABAD CESTAT
2018-TIOL-3432-CESTAT-HYD
Royal Line Resources Ltd Vs CCT
CX - The assessee company exported Mill scale & claimed rebate of duty - Such exports were made from the premises of the assessee's supplier - The application seeking rebate was however filed before a different commissionerate, instead of the one having jurisdiction over the assessee's supplier - The goods were exported to the other commissionerate, which then sanctioned the rebate - The Department opined that the rebate was incorrectly sanctioned since the mandate of Notfn No 19-2004-CE (NT) were not satisfied - It was also noted that the rebate should have been sanctioned by the commissionerate having jurisdiction over the factory/warehouse of manufacture - It was held that the exporting commissionerate did not have jurisdiction over the warehouse - On appeal, the Commr.(A) disallowed the rebate earlier granted.
Held: The issue at hand pertains to rebate of Excise duty on goods exported from India - The Tribunal is not vested with the jurisdiction to adjudicate appeals against orders passed by the Commr.(A) on such matters, as is mandated under first proviso to Section 35B: CESTAT (Para 2,3,7)
- Assessee's appeal dismissed: HYDERABAD CESTAT
CUSTOMS
2018-TIOL-2424-HC-KERALA-CUS
Rishabh Exports Vs CC
Cus - The petitioner, an importer, faced an allegation of "short levy of Anti-Dumping Duty" - The Tribunal dismissed the appeal for petitioner's failure to comply with mandatory pre-deposit under Section 129E of Customs Act, 1962 - Earlier, dealing with an identical issue; whether a statutory appeal on a substantial question of law under Section 130 lies even against an interlocutory order-stood decided in judgment dated 31st August 2018, this Court has held that the petitioner's recourse must be under Section 130- a statutory appeal before a learned Division Bench - Therefore, no merit found in the writ petition and accordingly same is dismissed: HC
- Petition dismissed : KERALA HIGH COURT
2018-TIOL-2418-HC-MAD-CUS
PPN Power Generating Company Pvt Ltd Vs CC
Cus - W.P. No.6492/2018 filed seeking directions to the respondents to finalise the assessments pertaining to all imports made by the petitioner under the project import scheme in F.No.S37/11/99 Gr.6 within a reasonable time - W.P. No.6493/2018 is filed seeking directions to the respondents to refund the security deposit of Rs.84 lakhs made by the petitioner along with interest, return the bank guarantees executed by the petitioner for an amount of Rs.13.28 crores and cancel the bond executed by the petitioner for an amount of Rs.638.05 crores - W.P. No.14365/2018 is filed challenging the proceedings dated 22.5.2018 in F.No.S.Misc.69/2018-Group.6 issued by the second respondent with consequential direction to the second respondent to refund the security deposit of Rs.84 lakhs, return the bank guarantees executed by the petitioner for an amount of Rs.13.77 crores and cancel the bond executed by the petitioner for an amount of Rs.638.05 crores after finalizing the provisional assessments:
Held: W.P. No. 14365/2018 - there is no dispute to the fact that DRI has conducted an investigation and filed a report alleging that the petitioner has undervalued the goods which has resulted in loss of differential duty to the tune of Rs.9.54 crores - the said report is taken as basis for issuing the present impugned communication dated 22.5.2018 - in the absence of any statutory time limit fixed for making the provisional assessment and when the second respondent has issued the impugned communication and called upon the petitioner only to give their explanation, this Court does not think that, at this stage, it should interfere with such communication or the proceedings pending before the second respondent, since an order of adjudication is yet to be passed - it is for the petitioner to make their reply to the said letter and explain all their stand in detail so that the second respondent will be in a position to finally make the provisional assessment without loss of any further delay - as this Court is inclined to direct the second respondent to pass a final order pursuant to the impugned communication, after hearing the petitioner, the prayer sought for in other two writ petitions viz., W.P.Nos.6492 and 6493 of 2018 , cannot be considered, at present - in any event, those prayers were already clubbed with the prayer sought for in W.P.No.14365/2018 - accordingly, all these writ petitions are disposed of in the following terms : (a) the petitioner shall furnish their reply to the impugned proceedings dated 22.5.2018 within a period of two weeks from the date of receipt of a copy of this order (b) on receipt of such reply, the second respondent shall give an opportunity of personal hearing to the petitioner by fixing a date within a period of two weeks thereafter (c) on completion of such personal hearing and on perusing the materials placed by the petitioner, the second respondent shall complete the provisional assessment within a period of four weeks thereafter (d) if the petitioner succeeds before the second respondent, the cash deposit, bank guarantees and other bond shall be released forthwith (e) on the other hand, if the petitioner fails to succeed before the second respondent, the second respondent shall not invoke the bank guarantees within the time prescribed for filing an appeal against the said order (f) in that event, it is open to the petitioner to seek appropriate interim relief before the Appellate Authority including for release of bank guarantee by making interim application, after complying with the statutory requirements of pre-deposit : HIGH COURT [para 10, 11, 14, 15]
- Writ Petitions disposed of: MADRAS HIGH COURT
2018-TIOL-2417-HC-AHM-CUS
BPS Minerals Export Pvt Ltd Vs UoI
Cus - Import of Yellow Peas - Petitioner has challenged a notification dated 25.4.2018, a trade notice dated 18.5.2018 and a further notification dated 30.8.2018 issued by the respondents - petitioner contending that (i) through the trade notice dated 18.5.2018, the GOI could not have made amendments or changes in the notification dated 25.4.2018 - accordingly, in case of those importers like the petitioner who has already made advance payment in part for the imports, policy change brought about by virtue of notification dated 25.4.2018 would have no application (ii) the restrictions were withdrawn by notification dated 29.8.2018 - though the same may have been re-imposed on 30.8.2018, at least for one day, no restrictions prevailed - the case of the petitioner should have been cleared on such date
Held: In the case of Kinshuk Overseas Pvt. Ltd. Vs UOI passed in Special Civil Application No.8433 of 2018 = 2018-TIOL-2400-HC-AHM-CUS and connected petitions, this Court had occasion to examine these policy changes in the background of facts where the petitioners' therein were the importers had not only placed import orders coupled with advance part payment before 25.4.2018, but were also granted registration for import which registrations were sought to be cancelled - this Court had observed that the Trade Notice dated 18.5.2018 is merely clarificatory - it does not change or amend the original notification dated 25.4.2018 - the term "already imported" as defined in the original notification was merely clarified as to mean that only 100% advance payment would qualify for such shipment - this notification no way provided that only part payment would be sufficient for an importer to fall within such category - i n case of the present petitioners, even registration was not granted - the petitioner's first contention, therefore, must be rejected - regarding the second contention, the petitioner cannot argue that in this window of one day, the petitioner's imports should have been cleared - the petitioner had not made the imports during the period when even if we accept the petitioner's contention to be true, such restrictions did not apply - the petitioner's additional contention is that 100% advance payment itself is unreasonable and restrictive of petitioner's fundamental right to do the business - such condition is not a universal condition for all imports - it is adopted only for a limited period between 1.4.2018 to 25.4.2018 in the context of the notification of GOI to shift the item in question from 'free to import' to 'restricted item' - the insistence of verification of full advance payment is confined to any claim of importer that he falls within the description of import already made - this contention of the petitioner is, therefore, rejected - petition is dispose of: HIGH COURT [para 9, 10, 11, 12]
- Special Civil Application disposed of: GUJARAT HIGH COURT
2018-TIOL-3431-CESTAT-AHM
CC Vs Reliance Port And Terminals Ltd
Cus - The assessee company imported Grout Bags, Class G Cement and Polyisocyanurate Insulate Foam through their air cargo complex - It availed benefit of EPCG scheme under Notfn No 97/2004-Cus - The DRI alleged that the assessee imported 'consumables', which had subsequently been excluded from the scope of such notification & so denied benefit under EPCG scheme - Duty demand was raised for recovery of benefits availed, the goods were confiscated & option of redemption fine was given - Penalties were imposed on the assessee & other individuals - On appeal, the Commr.(A) held the assessee to be eligible for EPCG benefit - The demands were set aside as being time barred.
Held: The goods were imported during 2007-08 whereas SCN was issued in 2011 by invoking extended period - The term 'consumables' was deleted in the exemption entry under EPCG scheme & so there is no mis-declaration or suppression of facts by the assessee - The Revenue also made no case on grounds of limitation - Hence the demand is hit by limitation - Thus the O-i-A warrants no intervention: CESTAT (Para 1,4)
- Revenue's appeal dismissed: AHMEDABAD CESTAT |
