SERVICE TAX
2018-TIOL-3861-CESTAT-DEL
CGST, CE, CC & ST Vs Diabetes Thyroid Hormone Research Institute Pvt Ltd
ST - Assessee is performing clinical trial to new drugs for various manufacturing companies - Said activity was opined to be covered under category of technical testing and analysis services as defined under Section 65(106) of FA, 1994 - However, vide Notfn 11/2007 ST and a subsequent Notfn 25/2012 ST, such services are exempted from Service Tax on the services provided or to be provided by the technical research organization approved to conduct clinical trials by the Drug Controller General of India - Perusal of both these Notifications makes it a mandate that the exemption is for such technical testing and analysis service as are provided or to be provided by a Clinical Research Organisation approved to clinical trials by the Drug Controller General of India - Thus, it becomes clear that the claimant of exemption of this Notification should be a Clinical Research Organisation - The adjudicating authority, while appreciating the set guidelines, has observed that clinical research organization is a social unit of people like sponsor, principal investigator, investigator, volunteers, trial sites and data analyst which is meant to pursue a goal with different assigned roles, responsibilities and authority to carry our different tasks when all these are acquired together having sole objective to carry out clinical research - It has also been emphasized by adjudicating authority itself that it is only in its collective form that the Clinical Research Organisation comes into existence - Thus, findings in the order under challenge itself are very much differentiating a CRO than from a trial site - Still, the Commissioner has held the assessee as a CRO despite the apparent fact that as per the mandatory contracts for the purpose to be entered into by the sponsor, the assessee is mentioned as trial sites - Not only this, in addition thereto, CRO is also named in contract itself, i.e., J.S. Icon Clinical Research India Ltd. - Once two different entities are apparent from the contract itself, distinguishing the assessee to be called as mere trial site with someone else as the CRO and the exemption of the impugned Notifications is available only to the CRO, the Commissioner (A) has wrongly allowed the assessee to avail the said exemption - The order under challenge is, therefore, opined to suffer infirmity, and accordingly, is hereby set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2018-TIOL-3860-CESTAT-DEL
CST Vs IILM Institute For Higher Education
ST - Assessee is being run by a charitable society registered under Societies Registration Act and had been running B.Sc. in Management/MBA, M.Sc. in International Business, PGDM/PGP/MBA and diploma in design courses under the aegis of IILM University, Chattisgarh - It is Department’s case that the said university was disfunctioned vide the Order of Apex Court dated 11.02.2005 but still the assessee was found running the mentioned courses against collecting fees for providing the courses, resultantly, were alleged to have been providing the services of commercial training or coaching as defined under Clause 26 and 27 of Section 65 read with Sub-Clause zzc of Clause 105 of Section 5 of Finance Act, 1994 - Though the contention of assessee is that they are recognized universities under IGNOU and AICT and PTU all being the state functionaries, the assessee also becomes the university recognized by law - There is no single document produced by assessee to show that IILM has ever been recognized as deemed university by any of the universities constituted under law - Mere approval in their favour by any such government university for conducting certain courses by distant education or by permitting them to do so under convergence scheme cannot cloth them with the title of deemed university - The copies of degrees as produced on record shows that the students getting education from assessee have been granted degree by IILM i.e. assessee only - The degree is not issued by university constituted under the force of law - The adjudicating authority has not committed any error while holding the assessee to have been rendering the services of commercial training or coaching centre - The demand to that extent is confirmed - As regards to the only course which is vocational in nature, since the definition itself clarifies that vocational training institute is nothing but a commercial training or coaching centre and the assessee have already been held to have been rendering commercial training or coaching centre services, no infirmity found with the Order under challenge - The assessee while challenging the levy qua this cost have claimed the exemption in their favour under Notfn 24/2004-ST but the perusal of said Notfn clarifies that the same is not applicable to assessee - Vocational training institute as per the explanation of said Notification is held to mean an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training offering courses in designated trades as notified under the Apprentices Act, 1961 - There is nothing on record to prove said affiliation - The exemption has rightly been declined by adjudicating authority - The demand to this vocational course is also therefore confirmed.
The assessee being an education imparting institute cannot be presumed to have acquired a wrong interpretation of the legal provisions or notifications or circular still taking the benefit thereof is definitely a deliberate non-disclosure of correct fact and as such suppression of fact - The impugned order is set aside to the effect of holding the assessee to be under bonafide doubt while doing away the penalties - Consequentially, the demand of the impugned order is confirmed alongwith the proportionate interest and penalty: CESTAT
- Revenue's appeal allowed: DELHI CESTAT
2018-TIOL-3859-CESTAT-MAD
Prakatana Pvt Ltd Vs CCE
ST - The assessee was providing Advertising Services to M/s. Amurtanjan Ltd., they have entered into an agreement with one M/s. Optimum Media Solutions (OMS) for providing Advertising Services such as, estimates, planning and releasing advertisements in the media on behalf of the Amurtanjan - It appeared to department that in the invoices on which assessee took Cenvat credit, OMS had paid service tax only on the commission entitled to the latter; however, while raising invoices on the assessee, they had also indicated service tax paid by them as well as that paid by the broadcaster with an indication "Add Service Tax charged by broadcaster" - It was alleged that these invoices of OMS are not proper documents for taking credit and hence, proceedings were initiated for recovery of service tax credit for the period Mar/07 to Mar/08 - No infirmity found in the manner of passing of Cenvat credit - In any case, OMS was merely acting as a conduit for transfer of the amount from the broadcaster to the assessee - The ratio of M/s. Zapak Digital Entertainment Ltd. 2016-TIOL-3323-CESTAT-MUM, is applicable on all fours to the case on hand - Following the same, issue held in favour of assessee - The impugned is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
CENTRAL EXCISE
CX - The petitioner's appeal was dismissed for non deposit of statutory amount as specified in Section 35F of CEA, 1944 r/w Section 83 of the Act - There is no bar under Section 84 of the Act in filing an appeal without the predeposit being made - This if seen in context of Section 107(6) of Central Goods and Services Act, 2017 which prohibits filing of appeal in absence of statutory deposit - Section 84 of the Act r/w Section 35F of Excise Act does not prohibit filing of appeal without necessary deposit - It only prohibits the appellate authority from entertaining the appeal on merits, therefore, where an appeal is dismissed for nondeposit and such deposit if made within a reasonable time of dismissal then, the appellate authority should exercise its inherent power to recall the order of dismissal and hear the petitioner's application on merits - This is a procedural review and not a review on merits of the case - Therefore, even in the absence of such power of recall being provided in the statute, every quasi judcial authority has inherent powers to exercise this power of recall in its inherent jurisdiction in the interest of justice - This has been so held by Supreme Court in Grindlays Bank - Therefore, the respondent no.2 should have recalled his order by allowing the petitioner's application - Impugned orders quashed and set aside - The appeal of petitioner is restored to the file of Commissioner (A): HC
- Petition disposed of : BOMBAY HIGH COURT
2018-TIOL-2682-HC-MAD-CX + Case Story
CCE Vs Delta Power Solutions India Pvt Ltd
CX - Unutilized credit lying in the books of account on account of closure of factory should not be denied only on the ground that they did not meet other procedural requirements of Rule 5 of CCR, 2004 r/w notification 27/2012-CX(NT) - Revenue directed to implement the said directions of the Tribunal - Revenue appeal dismissed on the ground of low tax effect: High Court [para 4, 5, 7]
- Appeal dismissed: MADRAS HIGH COURT
2018-TIOL-3858-CESTAT-MUM
Sigma Solvents Pvt Ltd Vs CCE
CX - Rule 8(3A) of the CER - Appellant had defaulted in discharging their duty liability - Proceedings were initiated against the appellant for violation of provisions of Rule 8(3A) which stipulates that when there is a default in duty payment of more than 30 days all the subsequent clearances were to be made on cash payment only without utilizing CENVAT credit - dispute relates to utilisation of CENVAT credit in discharging a part of their monthly duty liability for the subsequent clearances during the aforesaid period - Issue has been dealt by various benches and in GEI Industries Ltd. - 2016-TIOL-3175-CESTAT-DEL wherein after taking note of the development of law in this regard and pendency of the appeal against constitutional vires declared by the Gujarat High Court - 2014-TIOL-2115-HC-AHM-CX it is held that merely because the duty has been paid through CENVAT credit during the said period, it cannot be treated as non-duty paid clearance - following the said precedent, the impugned orders are set aside and the appeals are allowed with consequential relief: CESTAT [para 6, 7]
- Appeals allowed: MUMBAI CESTAT
2018-TIOL-3857-CESTAT-MUM
Thermax Babcock And Wilcox Ltd Vs CCE
CX - Matter involved was referred to the Larger Bench and it was held vide order dated 27.11.2017 - 2017-TIOL-4390-CESTAT-MUM-LB that since the principal manufacturer did not pay duty and did not follow the procedure and conditions of notification 214/86-CX, the job worker as a manufacturer is liable to pay duty on the job worked goods - nonetheless, once the issue is referred to the Larger Bench for resolution, allegation of suppression of facts and misdeclaration cannot be sustained - accordingly, impugned order is set aside and appeals are allowed with consequential relief, strictly on limitation: CESTAT [para 6, 7]
- Appeals are allowed: MUMBAI CESTAT
2018-TIOL-3856-CESTAT-MUM
Wellman Hindustan Ltd Vs CCE
CX - Valuation - Section 4 of the CEA, 1944 - Issue is whether the subject goods viz. Poly viscose yarn/polywool yarn are required to be assessed under rule 6(b)(i) or under rule 6(b)(ii) of the Valuation Rules, 1975.
Held: It is not disputed that the same variety of goods which are sold in the market were also used captively by the appellant - in these circumstances, the lower authorities have rightly assessed the goods u/r 6(b)(i) of the Valuation Rules, 1975 by taking into consideration the value of the comparable goods sold by the appellant - following the precedent decision of apex court in Essel Propack Ltd. Civil Appeal no. 4386 of 2008 decided on 22 July 2016, impugned order is upheld and the appeals, being devoid of merit, are dismissed: CESTAT [para 5, 6]
- Appeals dismissed: MUMBAI CESTAT
CUSTOMS
2018-TIOL-2681-HC-MAD-CUS
Big Bags International Pvt Ltd Vs CC, CE & ST
Cus - The petitioner-Company had exported Flexible Intermediate Bulk Container Bags (FIBC) in capacity of manufacturer exporter and claimed 100% duty drawback on all Industry rates - During disputed period, because of huge exports orders, the petitioner had sourced the goods from another manufacturer and exported the same, under claim of 100% duty drawback as merchant exporter on all Industry rates - A SCN was issued on petitioner to show cause against the demand and recovery of duty drawback along with interest under Rule 16 of the Customs, Central Excise Duties and Service Tax Drawback Rules 1995 read with Section 75A(2) of the Customs Act and also the proposed penalty - There is no dispute to the fact that the order of Adjudicating Authority, which was confirmed in appeal has not reached its finality, as admittedly, the rectification petition filed by petitioner is still pending before the first respondent and that the same is posted for hearing on 31.01.2019 - Therefore, the order to be passed in rectification petition will certainly have a bearing on subject matter in issue and therefore, this Court is of the view that in all fairness, the respondents can await till an order is passed in the rectification petition - Accordingly, without expressing any view on the merits of contention raised by petitioner as against the order of adjudication, which is subject matter of rectification petition, this writ petition is disposed of, only by directing the respondents to keep the detention notice in abeyance, till the disposal of the rectification petition by the first respondent: HC
- Writ petition disposed of: MADRAS HIGH COURT
2018-TIOL-2680-HC-MAD-CUS
Leona Worldwide Logistics Vs CC
Cus - The petition is filed against the order passed by respondent revoking the Customs Broker Licence of petitioner, forfeiture of security deposit and imposing penalty - Though an appeal remedy is available against the order impugned in this writ petition, the petitioner seeks to maintain the writ petition on the ground of violation of principles of natural justice - The respondent neither disclosed his mind or decision of disagreement with the findings of the Inquiry Officer with regard to the charge made in respect of Regulation 11(m) nor called upon the petitioner to file their objection with regard to such disagreement - Without disclosing the disagreement and without calling upon the person against whom the charges are levelled to show cause on such disagreement, if an order is passed by imposing punishment by disagreeing with the report of the Inquiry Officer, certainly, it should be construed as the one passed clearly in violation of principles of natural justice, as the petitioner was totally prevented from placing their objections on such disagreement, even though the Inquiry Officer has found that the petitioner is not guilty of such charge - At this juncture, it is useful to refer to the decision of the Delhi High Court in Him Logistics Pvt. Ltd. 2015-TIOL-2555-HC-DEL-CUS - The Court is of the view that the petitioner should be given an opportunity to place their objections as against the disagreement of the respondent in respect of the charge levelled in relation to Regulation 11(m) - Accordingly, punishments imposed in impugned proceedings are set aside: HC
- Writ petition allowed: MADRAS HIGH COURT
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