SERVICE TAX
2018-TIOL-3717-CESTAT-HYD
Ichibaan Automobiles Pvt Ltd Vs CST
ST - The assessee is providing ‘rent a cab' services in Hyderabad and was registered for payment of service tax - During audit, it was pointed out that they had availed CENVAT credit on the basis of invoices issued by dealers who were not registered either as first stage or second stage dealers during relevant period - Whether the assessee can claim CENVAT on the basis of invoices issued by dealers who are not registered at the time of issuing the invoices - The second issue to be decided is if the assessee is not entitled to CENVAT Credit whether he can claim the benefit of abatement of value under notfn 1/2006/ST by virtue of the fact that they have not availed CENVAT Credit - As far as the issue of Credit of CENVAT on the basis of invoices issued by the unregistered dealers is concerned, such documents are not valid documents for taking CENVAT Credit under Rule 9 of CENVAT Credit Rules - These rules were framed by Government under the Act and all the officers of Department as well as the Tribunal are creatures of law cannot modify them - This issue is also no longer res integra as in the case of Hindustan Unilever Ltd - 2018-TIOL-1042-CESTAT-CHD, the Tribunal has consistently held that no CENVAT Credit is admissible on invoices issued by the unregistered dealers - Therefore, assessee is not entitled to CENVAT Credit on the basis of invoices issued by unregistered dealers in view of restrictions under Rule 9 of CENVAT Credit Rules - Therefore, assessee has violated CCR, 2004 by availing credit on the basis of ineligible documents and the same is recoverable from them - By taking credit of ineligible document the assessee have rendered themselves liable to penalty - As far as the abatement under notfn 1/2006-ST in terms of value is concerned, Commissioner (A) has held that there is no provision in notification to allow retrospectively the abatement of value and he cannot modify the provisions of this notification: CESTAT
- Appeal rejected: HYDERABAD CESTAT
2018-TIOL-3716-CESTAT-HYD
Larsen And Toubro Ltd Vs CCE & CC
ST - The assessee paid the duty under protest and later applied for refund claiming benefit of notfn 06/2006 with necessary documents to support their claim - Both the department and assessee appealed against this O-I-O - On the first issue of eligibility of exemption notfn, there is no dispute that assessee has entered into contract with HMWSSB for supply and laying of the pipes and that they had paid the duty under protest - It is also not in dispute that they have subsequently obtained the Certificate from District Collector which has been examined by lower authority and found in order while deciding on the refund claim - Therefore, assessee is entitled to benefit of exemption notfn - Since the assessee is entitled to full exemption under notfn they are required to reverse CENVAT credit in terms of Rule 11 (3) of CCR, 2004 from the date on which they have started claiming the exemption notification - In this case, the date is 01.03.2007 - The lower authority has erroneously shifted this date to 21.04.2007 without any legal basis - As far as the issue of unjust enrichment is concerned, assessee has entered into a composite contract which included supply of pipes as well as laying and commissioning - The bill of materials as per the contract indicates the cost of pipes plus the applicable excise duty and determines the amount payable for pipes after deducting the duty element - Further, the CA’s Certificate produced by assessee also indicated that they have absorbed the cost of excise duty paid by them and they have not passed on the same to their clients - The first appellate authority has relied on the judgment of Apex Court in case of Solar Pesticides Ltd - 2002-TIOL-57-SC-CX-LB and held that unless it is proved that the assessee has not passed on the burden of excise duty either directly or indirectly the amount should be credited to consumer welfare fund and not given to the assessee - The assessee has not passed on the burden of the excise duty either directly or indirectly to their clients and satisfies the requirement to claim refund without being hit by the clause of unjust enrichment in terms of the law laid down by Apex Court in the case of Solar Pesticides - Therefore, their application for refund is not hit by the principle of unjust enrichment: CESTAT
- Appeal allowed: HYDERABAD CESTAT
CENTRAL EXCISE
2018-TIOL-2569-HC-MUM-CX
ACG Associated Capsules Pvt Ltd Vs CCE
CX - The asssessee is engaged in manufacturing of Empty hard gelatin Capsules and other Capsules and has its manufacturing units located at three places - The Department noticed that assessee had claimed input credit of services related to guest houses maintained by them - It was further noticed that, these guest houses were situated at various places - According to Department, these guest houses were not utilized for the purpose of assessee's manufacturing activity and the assessee, therefore, could not have availed input credit in relation to such services - If the guest houses were utilized by assessee for extending benefit to the employees, for the personal use or consumption, the assessee was not entitled to avail CENVAT credit thereof - The case of assessee, however, is that, none of the guest houses were used for personal use or consumption of employees - In order to test this premise, Tribunal itself formulated the test that those guest houses which are situated next to the manufacturing unit of assessee, would qualify for the benefits and the rest would not - This, may appear to provide a rough and ready formula, the same is not entirely satisfactorily - In the circumstances, while the Tribunal has already remanded the issue for fresh consideration, court do not interfere with the remand order - However, the tests laid down by Tribunal in impugned judgment, would not apply - All contentions of both the sides are kept open: HC
- Appeal disposed of: BOMBAY HIGH COURT
2018-TIOL-3720-CESTAT-ALL
Kobelco Construction Equipment India Pvt Ltd Vs CC & CE
CX - Whether the assessee is liable to pay Central Excise duty on the activity of packing, repacking, labeling, re-labeling of spare components and assemblies of Hydraulic Excavators for the period in dispute - Further, another issue is, whether the assessee is liable to pay service tax under Consulting Engineer's Services, Intellectual Property Services and Repair & Maintenance Services and also whether penalties have been rightly imposed under Section 77 and 78 of the Act and also under Section 11AC of the Act read with Rule 25 of CER 2002 - So far the demand of Excise duty is concerned, assessee was not liable to pay any Excise duty on the activity of packing, repacking, labeling, re-labeling of spare components and assemblies of Hydraulic Excavators prior to 28.05.2012 when the FA, 2012 received the assent of President - Said amount of excise duty relating to aforesaid activity having been paid on 07.07.2011 i.e much before coming into effect of FA, 2012, assessee is not liable to pay any interest and the penalty under Section 11AC read with Rule 25 of CER, 2002 is also set aside - So far the demand of penalty on the service tax is concerned, there is no element of fraud, suppression or contumacious conduct or falsification of records on the part of assessee, hence the assessee is not liable to pay any penalty under Section 78 or under Section 77 of FA, 1944 - Accordingly, same is set aside under both the Sections: CESTAT
- Appeal allowed: ALLAHABAD CESTAT
2018-TIOL-3719-CESTAT-MAD
KSB Pumps Ltd Vs CCE & ST
CX - Assessee is manufacturer of industrial valves and parts thereof - It appeared to department that assessee had cleared industrial valves to M/s. Thermax Ltd. without payment of duty availing exemption as per Notfn 33/2005-CE against a Certificate issued by Ministry of Non-Conventional Energy Sources to M/s. Rake Power Ltd. - Assessee submits a paper book containing copies of the invoices to emphasis that goods have been supplied to consignee M/s. Rake Power Ltd. indicated in the invoices "on account" of M/s. Thermax Ltd. - There is no dispute that the impugned goods have been used for purpose of intended by Notification and has covered by Certificate issued by Ministry of New and Renewable Energy - It is amply clear that the goods have in fact been consigned only to M/s. Rake Power Ltd. and have been used for purpose intended - Hence notification benefit cannot be denied - The impugned order cannot be sustained: CESTAT
- Appeal allowed: CHENNAI CESTAT
2018-TIOL-3718-CESTAT-DEL
Rajesh Bansal Vs CCE
CX - The assessee was engaged in manufacture of Ordinary Portland Cement (OPC) - Upon scrutiny of seized documents, the Department issued SCN demanding Central Excise duty which was computed on the basis of electricity consumption of 72.36 units required for manufacture of one metric tonne of cement - The finding of Commissioner is contrary to the findings in assessee's own case by Tribunal dated 25.06.2015 - Thus, the impugned order is bad and not sustainable - Accordingly, the appeals are allowed and the impugned order is set aside: CESTAT
- Appeals allowed: DELHI CESTAT
CUSTOMS
2018-TIOL-447-SC-CUS
CCE & ST Vs Sanjivani Non-Ferrous Trading Pvt Ltd
Cus – Valuation – Respondent had imported various varieties of Aluminium Scrap and filed bills of entry along with invoices and purchase orders declaring transaction value for the purpose of payment of customs duty – declared value was rejected by the assessing officer and reassessment was done by increase the AV – Tribunal set aside the order of the Commissioner(A) and allowed the appeals of the importer by observing that as provided by s.14 of the Customs Act, 1962, the assessable value has to be arrived at on the basis of the price which is actually paid and in a case where the price is nnot the sole consideration or if the buyers and sellers are related persons, then after establishing that the price is not the sole consideration, the transaction value can be rejected and taking other evidences into consideration, the AV can be arrived at; that since no such exercise had been done, the enhancement of AV was rejected – Revenue in appeal before the Supreme Court.
Held: Tribunal has categorically mentioned that as per the provisions of s.14 of the Customs Act and the principles laid down in the case law [PNP Polytex P Ltd. - 2016-TIOL-219-CESTAT-MUM.] interpreting this provision, the assessable value has to be arrived at on the basis of the price which is actually paid and which is the basic principle enshrined in section 14 and which can be culled out from the catena of judgments of the apex court - law, thus, is clear - As per Sections 14(1) and 14(1-A), the value of any goods chargeable to ad valorem duty is deemed to be the price as referred to in that provision - Section 14(1) is a deeming provision as it talks of ‘deemed value' of such goods - Therefore, normally, the Assessing Officer is supposed to act on the basis of price which is actually paid and treat the same as assessable value/transaction value of the goods - In order to invoke the provision of rule 4(2) of the Customs Valuation Rules, it is incumbent upon the Assessing Officer to give reasons as to why the transaction value declared in the Bills of Entry was being rejected; to establish that the price is not the sole consideration; and to give the reasons supported by material on the basis of which the Assessing Officer arrives at his own assessable value -Tribunal has clearly mentioned that this declared price could be rejected only with cogent reasons by undertaking the exercise as to on what basis the Assessing Authority could hold that the paid price was not the sole consideration of the transaction value - Since there is no such exercise done by the Assessing Authority to reject the price declared in the Bills of Entry, Order-in-Original was, therefore, clearly erroneous – no merit in Revenue appeals, hence dismissed: Supreme Court [para 7, 10, 12, 13, 15]
2018-TIOL-2568-HC-MUM-CUS
CC Vs Coromandal Fertilizers Ltd
Cus - The assessee had purchased certain DEPB scrips from market in relation to which investigation of Department revealed that the DEPB licenses were obtained by seller by fraud - On the strength of such DEPB scrip, the assessee had cleared imported goods - The Department has not brought any evidence on record to suggest that the assessee was party to the fraud - In fact, possibly there is no such allegation in the SCN also - Under similar circumstances, the Division Bench of Punjab & Haryana High Court in case of Vallabh Design Products 2016-TIOL-246-SC-CUS had held in favour of assessee - Some what similar view has been expressed by Division Bench of this Court in Taparia Overseas Pvt. Ltd. 2003-TIOL-144-HC-MUM-CUS - The Court held that the cancellation of valid license would only operate from the date of cancellation or from suspension thereof - The goods imported prior to cancellation of license would be validly imported - In the circumstances, no question of law arises: HC
- Appeal dismissed: BOMBAY HIGH COURT
2018-TIOL-3721-CESTAT-DEL
CC Vs Aggarwal Trading Comapany
Cus - The assessee had filed a refund claim under special refund mechanism as provided for under the exemption Notfn 102/2007-Cus - The claim is with respect to special additional duty of Customs (SAD) leviable under sub-section 5 of Section 3 of Custom Tariff Act, 1975 - This Notification exempts the goods falling within the first schedule to the Customs Tariff Act, 1975 when imported into India for subsequent sale, from the whole of the additional duty of Customs leviable thereupon in accordance of the above mentioned Section 3(5) of Customs Tariff Act - This Notification stands amended vide Notfn 93/2008 vide which a time period of one year from the date of payment for filing of refund claims by an importer under the aforesaid Notification was introduced - Commissioner (A) has held that the amendment since introduced for the first time by a Notification but without a statutory amendment, the same cannot prevail - No doubt, the said Notification is silent about any time period for filing the said claim - But the Notification exempts the goods in first schedule of Customs Tariff Act from being leviable to the additional duty of Customs - However, the Notification itself mandates the deposit of the said additional duty at the time of importation of the goods and thereafter to get the refund - From this perusal, one thing becomes abundantly clear that the importer has the knowledge of his entitlement to file the refund of additional duty of Customs at the time of the payment of said duty itself i.e. at the time, the product being in first schedule is imported - Resultantly, for claiming the refund of additional duty nothing else has to happen or to be done by the asseesse after the payment of said additional duty of Customs - The refund claim of additional duty due to the exemption flowing out of Notfn 102/2007 has to be filed within one year in view of subsequent Notfn 93/2008-Cus which still holds good and also in view of Section 27 of Customs Act, 1962 - The Commissioner (A) has committed an error while giving an expanded interpretation qua limitation to favour assessee: CESTAT
- Appeal allowed: DELHI CESTAT
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