2018-TIOL-3881-CESTAT-DEL

Aroon Aviation Services Pvt Ltd Vs CST

ST - The assessee was engaged in providing cleaning of coaches services to Indian Railways for a period w.e.f. 1.4.2011 to 31.3.2011 - The department has served the SCN alleging that such cleaning is taxable under 'Cleaning services' under Section 65(105)(zzzd) of the Act - Since the period in dispute is prior to 2012 i.e. prior to incorporation of concept of negative list when onwards these services have been covered under Section 65(105)(zzzd) and made taxable - Hence, the definition of cleaning service as was existing prior to year 2012, is relevant for the present adjudication - A mere perusal of the definition and interpretation thereof makes it clear that it is not merely an object or premise but the object or premise of commercial or industrial building or premises thereof - No doubt, railways is a commercial concern but as is already been settled in case of R K Refreshment and Enterprises Pvt. Ltd. 2018-TIOL-817-CESTAT-DEL , the coaches are rolling stock of railways and hence, they were not covered strictly under the definition in pre-negative list era - Impugned order set aside: CESTAT

- Appeal allowed: DELHI CESTAT

2018-TIOL-3880-CESTAT-MAD

Mahaveer Generics Vs CCE

ST - The assessee was providing services to Cipla under an agreement which was identical to the one which had been the subject matter of dispute in an earlier proceeding where the department had sought to bring their activities under the fold of C&F service - This dispute has been finally laid to rest by High Court of Karnataka which held that the activities of assessee would be only under C&F service - In a situation where the department has initiated proceedings demanding service tax liability against a person for a particular period, under a particular service, in the normal course, it would be expected that the department would issue periodical SCNs till the matter is finally settled - There is no evidence that this has been done - At the same time, after the Tribunal decided the earlier matter in favour of assessee had withdrawn the registration under that service and on 30.7.2004, they had taken a fresh registration as 'commission agent' under BAS - Assessee was discharging service tax liability from 9.7.2004 only on the plea that as commission agent their services would be exempted from tax liability for period from1.7.2003 when BAS was introduced till 8.7.2004 when Notfn 13/2003-ST outlived its existence in respect of assessee - The assessee was continuing to function under an agreement which was identical to the earlier one when department had demanded tax liability from them under C&F service - This being so, Department should have continued to issue protective periodical SCN on the very same C&F service - This was not done - On the other hand, it is evident that the department got its wake up call only when the assessee started discharging tax liability as commission agent - This being so, the initiation of present proceedings after a gap of time, even when the assessee was working under identical agreement, can only be said to be proceedings which are hit by limitation - The impugned order cannot then sustain and is set aside in toto on this ground alone - As the main assessee succeeds on limitation, the consequent domino effect will help the case of the remaining assessees also, on the very same grounds: CESTAT

- Appeals allowed: CHENNAI CESTAT

2018-TIOL-3879-CESTAT-HYD

CCCE Vs Usha Kiran Movies Ltd

ST - Revenue has sought the intervention of Bench for setting aside the O-I-A - It is the case of Revenue that the respondent in these appeals i.e. Usha Kiran Movies Limited had collected/billed some amounts to their sister concerns towards the cost of security services, maintenance & repair services and supply of manpower - Respondent Usha Kiran Movies Limited is owned by Ramoji Film City and has employed security personnel to safeguard the property and has created various infrastructure facilities like roads, supply of electricity, street lights, water supply, drainage and other facilities required for smooth functioning of any unit in the film city - It is the case of Revenue that assessee has charged additionally service charges from group sister concerns, hence, it would amount to rendering of services - This charge of Revenue has been discarded by first appellate authority looking at various records produced by assessee - Few records were shown which indicates that assessee has not charged any amount in addition to proportionate actual salaries and wages and other expenses related to the personnel deployed by them - In absence of any contrary evidence, assessee has a case in their favour, as correctly decided by first appellate authority - The orders of first appellate authority in these two appeals are correct and legal and does not suffer from any infirmity.

The first appellate authority had set aside the demands raised on the ground that services rendered by assessee would not be covered under taxable services in respect of amount collected or charged by assessee from various sister concerns towards security agency services - In short, the amount deposited by assessee during the investigation is not towards any tax liability but has to be considered as deposit with authorities - The first appellate authority has correctly recorded that assessee had filed various declarations from the parties concerned that the said amount was not reimbursed by them to assessee - Such categorical finding of fact has not been disputed by Revenue in their grounds of appeal - The entire grounds of appeal only submits that the assessee has not passed the hurdle of unjust enrichment as the amount deposited was mentioned in the expenditure portion and the said amount automatically is recovered indirectly from various customers - Tribual in case of Cummins India Limited 2007-TIOL-1959-CESTAT-MUM has considered the argument that the amount being shown as expenditure in their Profit & Loss Account does not establish recovery from customers - Since in the case in hand, assessee had furnished declarations from parties/group companies/sister concerns to whom allegedly the incidence of duty is passed on, the ratio of said judgment squarely covers the case in favour of assessee - The impugned order is correct and legal and does not require any interference.

In these cases, specifically the question that arises is with regard to unjust enrichment - Assessee had filed CA's certificate before the lower authorities - It is noticed from O-I-A that the first appellate authority has summarily dismissed the claim of assessees that certificate issued by CA does not confirm whether the service tax borne by assessee had further passed to any other person - The certificate issued by CA cannot be dismissed summarily by the first appellate authority unless it is countered effectively - The assessee is entitled for refund of amounts which have been collected from them by assessee as correctly held by adjudicating authority - The impugned order is set aside: CESTAT

- Appeals disposed of: HYDERABAD CESTAT

2018-TIOL-3883-CESTAT-CHD

Nandan Auto Tech Ltd Vs CCE

CX - The assessee is engaged in manufacture of alloy steel forgings and availing Cenvat credit on inputs used in manufacture of their final products - The DRI issued SCNs to the merchant exporters for recovery of various export incentives claimed by them from time to time on the ground that they have indulged in fraudulent exports during period 1.4.2001 to 28.8.2003 - The sole allegation against assessee is made on the basis of report of the UAE/Dubai, Customs wherein the goods found to be scrap but the assessee cleared the goods and the same were found at port in containers and the samples were drawn at port - On the basis of sample, it was found that the said goods were casting/forging manufactured by assessee - Therefore, it cannot be said that the assessee did not manufacture the goods during impugned period - Moreover, in assessee's own case in another proceeding, a SCN issued to assessee to deny the credit on furnace oil - In the SCN, there was no allegation against assessee that they were not manufacturer - Therefore, the allegation of Revenue against the assessee that they are not manufacturer is made on the basis of assumption and presumptions - The Commissioner has rightly dropped the demand - With regard to demand of duty on goods, which were destroyed and sold scrap by assessee on which the assessee has paid duty - In that circumstance, the sale value is to be considered cum duty price as the assessee discharged duty correctly - Considering that during the adjudication, no option of reduced penalty given to the assessee in terms of proviso to Section 11AC of the Act, option given to deposit penalty of 25% of duty confirmed within a period of one month from the date of receipt of this order, failing which the assessee is liable to pay penalty equal to the duty - Penalty reduced to Rs.25,000/- imposed on Shri Viond Kumar Gard, Managing Director of the assessee: CESTAT

- Appeals partly allowed: CHANDIGARH CESTAT

2018-TIOL-3882-CESTAT-AHM

Polygel Technologies India Pvt Ltd Vs CCE & ST

CX - The case of department is that the assessee have supplied the goods to their sister concern which is related in terms of Section 4 of CEA, 1944 - The Revenue has raised the demand by loading 10% on transaction value charged by assessee in respect of their final product which were sold to their sister concern - The department has not worked out that what is the actual cost of manufacture, on the contrary the assessee have submitted a CA Certificate wherein the cost data was certified which shows that the value as per cost certificate is less than the value charged by assessee to their customer - They have further obtained a certificate from Cost Accountant which has endorsed the certification of the Chartered Accountant regarding cost of manufacture plus 10% notional profit - The Certificate was discarded by lower authorities only on the ground that the cost data was certified by Chartered Accountant whereas the same should have been certified by Cost Accountant - Firstly, when the assessee produced Cost Accountant Certificate that will suffice, secondly, there is no statutory provision in Valuation Rules that regarding cost of production, Cost Accountant Certificate has to be produced - The department has not made any effort to bring on record that the cost of the product produced by assessee is incorrect - Therefore, in absence of any evidence from Revenue, the value adopted by assessee cannot be disputed - Accordingly, the demand of differential duty is not sustainable: CESTAT

- Appeal allowed: AHMEDABAD CESTAT

CUSTOMS

NOTIFICATION

dgft18pn063

Extension of validity period of Advance Authorisation

cnt100_2018

CBIC amends jurisdiction of Chief Commissioner of Customs, Mumbai Zone II

CASE LAWS

2018-TIOL-3878-CESTAT-BANG

CC Vs Tile Italia Mosaics Pvt Ltd

Cus - The assessee has imported two consignments of "Polished Porcelein Vitrified Floor Tiles" claiming the origin to be from Sri Lanka - The only issue raised in grounds of appeal by Department is that the issue clarified that Sri Lankan authorities that the supplier do not import raw-materials for manufacture of Porcelein Tiles, but they import semi-finished tiles, which has essential character of a finished tile for classification purpose - The Department opined that this is contrary to the condition under Rule 7(b) of Customs Tariff (D.O.F.T.A) on S.L. & I) Rules 2000 which states that the finished products obtained are to be classified in a heading at the four digit level of the HSN different from those in which all the non originating materials used in its manufacturing are classified - However, in the remand proceedings, Commissioner (A) has observed that the benefit of Notification is available to assesese, it appears that, though not explicitly stated the Commissioner (A) held that the Notfn 72/2005 is very much applicable even if the goods originated in China and that the products did not reach the stage in China whereupon anti-dumping duty could be imposed - As the issue of anti-dumping has not been specifically raised in the grounds of appeal, Tribunal is inclined to discuss the issue deeming it to be closed - The impugned order is upheld: CESTAT

- Appeal dismissed: BANGALORE CESTAT

2018-TIOL-3877-CESTAT-AHM

Salora Components Pvt Ltd Vs CCE & ST

Cus - The assessee, a 100% EOU have imported raw material and capital goods without maintainability in terms of notfn 52/2003 - They have converted their EOU unit to DTA unit and filed the bills of entry in respect of stock of capital goods as well as inputs available at the time of conversion to DTA claiming exemption under notfn 25/99-Cus and 25/2002-Cus - The revenue objected on the claim of exemption under notfns and also enhanced the value of goods which was applied in into bond bill of entry at the time of import of such goods - As regard the challenge to assessment of ex-bond bill of entry as regard enhanced value which was done in into bond bill of entry, into bond bill of entry is only for the purpose of in bonding of goods in the Custom bonded warehouse - On the basis of into bond bill of entry, neither the goods are cleared for their consumption nor any payment of duty is made - Therefore, the assessment of into bond bill of entry is deemed to be provisional assessment - It is observed that in the into bond bill of entry, value was enhanced over the amount of invoice value without any evidence which is not legal and proper - Therefore, consequently, the enhanced value adopted in ex-bond bill of entry is also not correct - The original value of goods should be taken as per invoice and not on the basis of enhanced value adopted in into bond bill of entry as well as ex-bond bill of entry - Therefore, the enhancement of value is set aside.

As regard the entitlement of the exemption notfn 25/99-Cus and 25/02-Cus, the lower authorities have denied this exemption only on the ground that assessee have not followed the Customs Rules, 1996 - The goods were imported by 100% EOU which were cleared under notfn 52/2003-Cus - Even as per this notification, the goods are cleared on presentation of the exemption certificate issued by the jurisdictional officer and on that basis, the movement of goods from the port up to the factory of assessee is done under bond - More or less the similar procedure is followed either in notfn 52/2003 or under notfn 25/99-Cus and 25/2002-Cus - Therefore, the movement of goods imported by assessee from Custom port up to the factory as well as use thereof is completely within the monitoring of the department - Even in the case of procedure prescribed under Customs Rules, 1996, similar procedure is followed - The substantial benefit of notfn 25/99-Cus and 25/2002-Cus cannot be denied - The assessee is entitled for exemption under said notfns - Accordingly, the impugned order is set aside: CESTAT

- Appeals allowed: AHMEDABAD CESTAT