ST - The assessee is engaged in manufacture of insulated wire and cables - During financial year 2006-07, assessee decided to raise funds for diversification / expansion of their business activities in India and for this purpose, they have taken external commercial borrowings from overseas market - During audit, it was noticed that assessee have not discharged their service tax liability under category of Banking and Other Financial services as defined under section 65 (105) (zm) of FA, 1994 - The assessee have availed services of certain foreign based agencies for receiving external foreign commercial borrowings (ECB) from abroad - It has not been denied by assessee that services received by them are classifiable under category of Banking and Financial Services as provided under section 65 (105) (zm) - It is categorically been provided that even if a part of borrowings have been used abroad for the business purposes, the facts remain that recipient of services is based in India and therefore, as per the provisions Section 66A of FA, 1994 read with relevant rules, the assessee should have discharged their service tax liability in India, on the amount of commission paid by them as the value of services received by them from abroad - Thus, assessee is legally liable to pay service tax on service of foreign institutions availed in getting their ECBs - As regards to limitation, it cannot be inferred that since a particular office of a specific jurisdiction came to know of certain facts and therefore, the office where cause of action actually rests, has also became aware about the whole issue - Since the noticee is already registered with Central Excise department and is also regularly filing his Excise and Service tax returns, they cannot plead ignorance about the provisions of reverse charge mechanism for payment of service tax on the services received from abroad - So far as the SCN pertains to Jaipur II Commissionerate, it had apparently been dropped saying that "the activity in question was enacted at Delhi and for which the concerned Commissionerate has already issued SCN and therefore, the SCN issued for same period on same issue for Bhiwadi Unit has been withdrawn - Even when the assessee has become aware that in July, 2007 itself that there may be certain legal issues regarding service tax liability on the services availed by them from abroad, however, they have not stirred themselves to final take certain conclusive steps, in making compliance of service tax law - There are valid grounds with department to invoke extended time proviso under Section 73(1) of FA, 1994: CESTAT

- Appeal disposed of: DELHI CESTAT

ST - The assessee has filed an application seeking rectification of mistake in Final Order passed by Tribunal - The assessee has stated that said order pertains to refund of unutilised CENVAT credit for the period January 2007 to June 2007 - They had further stated that in said Final Order, Tribunal has not considered the grounds raised by assessee vide miscellaneous application filed on 19/03/2015 regarding eligibility of 100% CENVAT credit refund of management, maintenance or repair service; architect service / consulting engineering service, management consultant service; real estate agent service; security agency service; banking service and erection, commissioning or installation service used for taxable service and exempted service in terms of Rule 6(5) of CCR, 2004 - This Tribunal while disposing of the case of assessee vide its order has not considered these additional grounds which were raised by assessee by filing miscellaneous application on 19/03/2015 - Further, as per Rule 6(5) of CCR, 2004, all these services have been specifically covered in said rule and all these services have been rendered in connection with taxable services as well as exempted services and therefore they are entitled to 100% credit of the refund in terms of Rule 6(5) of CCR, 2004 - In view of the ratio of decision in GTL Infrastructure Ltd. - 2016-TIOL-2108-CESTAT-MUM and also the fact that additional grounds were not considered while disposing of the case of the assessee, the application of ROM allowed, as mistake is apparent on the record - Accordingly, the Final order is amended to the extent that the original authority will also consider these findings while deciding the refund claim of assessee - ROM application is accordingly allowed: CESTAT

- ROM application allowed: BANGALORE CESTAT

CX - The assessee is engaged in providing taxable output service apart from engaging in trading activity i.e. sale of imported goods and is entitled to avail the benefit of CENVAT Credit under CCR, 2004 - The Department entertained a view that assessee is availing CENVAT credit on common input services which are used for trading activities whereas the assessee's contention is that they are availing no credit on inputs used exclusively for trading activities - The assessee vide his letter has informed the department that they have opted to claim CENVAT on common input services in accordance to formula specified in Rule 6(3A) - Further, assessee has taken CENVAT credit as per the formula prescribed in Rule 6(3A) - The finding of Commissioner that there is no intimation to department regarding the trade activity as per Rule 6 of CCR, 2004 is not tenable because the assessee specifically stated in their intimation to the department on 27.08.2014 which has been misconstrued by Commissioner (A) - Further, this Tribunal in case of Cranes and Structural Engineering held that non-filing of intimation is only a procedural irregularity and would not come in the way of reversal of proportionate credit - It is well settled that when an assessee manufactures both dutiable and exempted goods and the credit taken on inputs used in manufacture of exempted goods and is reversed with interest, then the question of payment of amount of 8%/6%/7% of the value as per Rule 6(3)(i) of the CENVAT Credit Rules does not arise in law - Assessee have not even taken the CENVAT credit on that portion of input services which were attributable to trading/exempted category and the same is evident from the intimation letter and the calculation sheets attached thereto - The question of paying amount as per Rule 6(3)(i) does not arise in law and the impugned order is not sustainable in law: CESTAT

- Appeal allowed: BANGALORE CESTAT

CX - The present application for Rectification of mistake has been filed against the final order dated 27.10.2017 - The application for rectification has been considered in view of directions of Supreme Court - The apex court has directed this Tribunal to examine the assessee's plea that it has been wrongly recorded in the Order that the blinds in question are movable property and can be removed/ dismantled - It is seen that Bench has examined the processes of manufacture and concluded in initial part that the Blinds can be said to have come into existence in the factory and these blinds are installed at the site of the customer - Such being the case, whether the blinds become movable or immovable property after they are mounted/ installed at the site of the customer, is not material to decide the liability to excise duty - As such the observation in the later part that the blinds are in the nature of movable rather than immovable property is only an observation in passing - To make the conclusion abundantly clear Tribunal delete the following passage of the Final Order: "These blinds are in the nature of curtains and cannot be said to become immovable properties when they are mounted on the wall and the roller blinds can be unbolted and removed at any time which renders these blinds to be in the nature of movable rather than immovable property" - The Final Order has been passed after consideration of all arguments and materials which were part of the appeal and those submitted during the course of hearing - The Final Order reflex the cumulative effect of the consideration of the entire material - The fact that the impugned order has been sustained includes sustaining the findings of the lower authority in full including reasoning for the imposition of penalty - No reason found to recall the Final Order other than the amendment carried out as above: CESTAT

- Appeal allowed: DELHI CESTAT

CX - The assessee is engaged in supply of leaf springs to various manufacturers of motor vehicles, such as, Ashok Leyland and Tata Motors - During 2014, they got an order from Government of India's Defence Equipment - The order for supply of leaf springs to the assessee was awarded after they have won a tender which was published by Defence vehicles factory, Jabalpur - The Department has entertained a doubt that assessee was clearing leaf springs to Jabalpur vehicles factory by availing benefit of exemption Notfn 64/95-CX, however, they have not followed the procedure as provided under Rule 6 of Cenvat Credit Rules - The law is very clear that if any input, input services or capital goods find place in manufacture of goods which are exempted from payment of central excise duty in that case, the manufacture is legally required to reverse back the 6% of the value of clearances from the accumulated Cenvat credit - Since the assessee have not maintain separate account of Cenvat credit availed on exempted as well as dutiable final products, hence, legally they are required to reverse back the 6% of value of clearances of the exempted goods from the Cenvat credit - At later stage, since the assessee have reversed back an amount of Rs. 72,80,640/- for the period covered under SCN dated 03/06/2015 and an amount of Rs. 17,20,620/- for the period covered under SCN dated 10/03/2016, there is enough compliance of law as held by Tribunal in case of Mercedez Benz India (P) Ltd. - 2015-TIOL-1550-CESTAT-MUM - No malafide intention found on the part of assessee for intentional attempt to evade or mis-use Cenvat credit and therefore no ground found for imposition of penalty under Rule 15 of Cenvat Credit Rules readwith Section 11AC of CEA, 1944: CESTAT

- Appeal partly allowed: DELHI CESTAT

CUSTOMS

NOTIFICATION

cnt99_2018

CBIC notifies Customs exchange rates w.e.f Dec 21

CASE LAW

2018-TIOL-3815-CESTAT-DEL