SERVICE TAX

2018-TIOL-3651-CESTAT-HYD

Coromandel Shipping Agencies Pvt Ltd Vs CCCE & ST

ST - The assessee-company, engaged as a CHA, also provides service of Steamer Agency - During the period of dispute, the Revenue alleged that certain services provided by the assessee were classifiable as 'Cargo Handling Services' for period 16.8.2002 to 30.06.2003 and as 'Port Service' for period 01.07.2003 onwards - The Revenue based these observations upon noting that the assessee was also engaged in handling chemicals, transporting them & seeking permission from Port authorities for entry of cargo - It was also noted that the assessee was handling import & export cargo, unloading of cargo into barges & loading of cargo into trucks before despatch to different destinations - Duty demand was raised with interest & penalties u/s 76 & 77 of the Finance Act 1994.

Held: The activity of handling cargo & processing are classifiable under 'Cargo Handling Services' if rendered in isolation - In the present case, these functions are performed by the CHA in addition to its duties as a CHA - The Board recognizes all these activities as part of the CHA activities - In such case, the consideration received must be added to the assessable value for CHA services - The assessee claimed to have not charged anything extra for these services over & above what its services providers charged from it - Considering the decision of the Apex Court in Intercontinental Consultants & Technocrats Pvt. Ltd., it must be ascertained whether the amounts collected from the assessee's clients is the same as charged by service providers - Any difference becomes consideration for services rendered as CHA & must be included in taxable value - Thus the activities of the nature of CHA services in the form of cargo handling are not separate taxable service falling under CHA service or Port Service - It is composite service rendered by CHA - The re-imburseable amounts charged from the clients are not includible in the taxable value - Hence the matter warrants remand for re-quantification of duty - Penalties are set aside: CESTAT (Para 2,3,9,10)

- Assessee's appeal partly allowed: HYDERABAD CESTAT

2018-TIOL-3650-CESTAT-MAD

Hydromet India Ltd Vs CGST & CE

ST - The Department raised demand for GTA service received by the assessee - Demands for interest were also raised & penalties were imposed u/s 76 & 78 of the Finance Act 1994 - Subsequently, the adjudicating authority also imposed penalty u/s 78 - Such findings were sustained by the Commr.(A).

Held: The assessee deserves an opportunity to produce evidence showing that the service tax liability has been discharged by the service provider - To such end, the matter warrants remand to the adjudicating authority: CESTAT (Para 1,4)

- Case remanded: CHENNAI CESTAT

CENTRAL EXCISE

2018-TIOL-2530-HC-MUM-CX + Case Story

Vatan Textile Ltd Vs UoI

CX - Section 35F of the CEA, 1944 - Pre-deposit - Contention of the petitioner company that it was declared as sick unit cannot be considered for waiving pre-deposit - conduct of the party cannot be ignored by the Court or Tribunal while using discretionary power - due to the orders made by this Court of allowing the petitions, the Tribunal gave more concession, even when the appellant company did not deserve, and the pre-condition amount was reduced - petitioner has apparently misused the process of law and has successfully avoided the payment of huge amount of duty, penalty and interest for more than 10 years - Petitions dismissed: High Court [para 7, 8, 9, 11, 12, 13]

- Petitions dismissed: BOMBAY HIGH COURT

2018-TIOL-3657-CESTAT-MUM + Case Story

Luk Plastcon Ltd Vs CCGST & CE

CX - Whether a delay of 215 days in filing appeal can be condoned on payment of cost - Difference of Opinion - file placed before President for reference to third Member for resolving the difference of opinion: CESTAT 

- Reference made: MUMBAI CESTAT

2018-TIOL-3648-CESTAT-MAD

Rane Brake Lining Ltd Vs CGST & CE

CX - The assessee company manufactures Railway Brake Blocks, Disc Pads & Clutch Facings - It availed Cenvat credit on inputs, capital goods & input services - The Revenue disallowed Cenvat credit on service tax paid on Director Sitting Fees & premium for product liability insurance - Such disallowance was upheld by the Commr.(A).

Held: The Product liability insurance is not post-manufacturing activity as it addresses financial risks faced by manufacturer - Credit must also be allowed on service tax paid on director sitting fees, since the director is obliged to attend meetings - Hence the credit was incorrectly disallowed on both input services: CESTAT (Para 1,5,6)

- Assessee's appeal allowed: CHENNAI CESTAT

Shiv Hari Plywood Ltd Vs CCE

CX - The assessee company manufactured Plywood & Block board - Verification of its stock during the period of dispute revealed some shortage of final product - Search of the assessee's depots revealed that duty-paid goods were cleared to such depots at a particular price - However, statements from the managers of some depots claimed that they cleared the goods at prices higher than those at which they were cleared to the depots - This was collaborated by statements of buyers - Duty demand was raised on this count as well as for the goods found short - However, the Tribunal later qushed such order for violation of principles of natural justice & remanded the matter back to the adjudicating authority - On remand proceedings, the assessee alleged that its reply to SCN was not considered by the adjudicating authority & it was not allowed to cross-examine the depositor of the statements - Assessee seeks fresh remand of the case.

Held: The findings of the adjudicating authority are self contradictory in the sense that they acknowledge the reply to SCN filed by the assessee, yet state that no reply was filed - Considering that the matter dragged on for 18 years, the adjudicating authority is directed to dispose it off at the earliest while giving proper opportunity of hearing: CESTAT (Para 2-4,7,8)

- Assessee's appeal allowed: ALLAHABAD CESTAT

2018-TIOL-3646-CESTAT-MAD

Ferro Cast Industries Vs CCE & ST

CX - The assessee have used scrap as their raw materials and invoices issued by first stage dealer to them describes the goods as scrap - It is also not disputed that assessee have paid excise duty for the goods described in the invoices - The allegation of Department is that since the first stage dealer has received only MS Wires and Coils from the manufacturer, they cannot issue CENVAT invoices to the assessee describing the goods as scrap - When the invoices had clearly stated the description of the goods and the duty paid, assessee cannot be expected to go behind the accounts maintained or transactions made by the first stage dealer so as to ensure whether the credit availed is correct or not - There is nothing brought out from the evidence so as to establish that assessee have any role in offence, if any, committed by M/s. Leadsman Enterprises and other first stage dealers - Apart from certain assumptions based on the statements given by M/s. Leadsman Enterprises, there is no cogent evidence to prove that assessee have availed wrong credit - The Allahabad High Court in case of Juhi Alloys Ltd. - 2014-TIOL-2693-HC-ALL-CX had occasion to consider a similar issue and had observed that Sub-clause (3) of Rule 9, though states that the manufacturer/producer of excisable goods shall take all reasonable steps to ensure that the goods on which he has taken CENVAT Credit has been suffered appropriate duty, does not mean that manufacturer/producer of excisable goods has to go to such an extent so as to make enquiries with regard to the records maintained by the first stage dealer - The demand raised cannot sustain: CESTAT

- Appeal allowed: CHENNAI CESTAT