2018-TIOL-3891-CESTAT-KOL

BOC India Ltd Vs CCE & ST

ST - The assessee is a manufacturer of various gases including oxygen, nitrogen and argon - They entered into an agreement with M/s Tata Steel Ltd., situated adjacent to their manufacturing factory, for supply of oxygen gas through pipe lines - As per the agreement entered, assessee installed pipe line supply systems within the premises of its customers - Department was of the view that Fixed Facility Charges recovered from customers was consideration for service of transportation of gas through pipe lines and the same will be liable to payment of service tax under category of "transport of goods through pipe lines or other conduit" defined under Section 65 (105)(zzz) of FA, 1994 - Gases are being supplied through pipe lines by assessee to the customer, which is situated in adjacent premises - For this quantum of gases supplied, Excise duty is paid on quantity measured through meter at boundary wall between the two factories - It is submitted on behalf of assessee that all the expenses including portion of facility charges attributable to gas upto the delivery point i.e. boundary wall, is includiable in assessable value for payment of service tax - Accordingly, it has been argued that no service tax liability arises for facility services, which is already included in assessable value - It is further submitted that for the portion of facility charges attributable to supply of gases within the factory premises of customers, the service tax stands already paid - An identical dispute pertaining to assessee's own other unit in BOC India 2005-TIOL-190-CESTAT-KOL came up before Delhi Bench of the Tribunal - The facts in that are slightly different inasmuch as the delivery of gases was not through pipe lines, but through tankers - The ratio of such decision can be applied to the present case - The issue regarding inclusion of fixed facility charges for transportation of gases through pipe lines was clarified by CBEC in respect of M/s Inox Air Products Ltd. - It was clarified that such fixed facility charges are to form part of transaction value for purposes of Central Excise duty - By following the decision in an identical circumstance, by the Delhi Bench of Tribunal, there is no justification for demand of service tax: CESTAT

- Appeal allowed: KOLKATA CESTAT

2018-TIOL-3890-CESTAT-HYD

RR Stones Pvt Ltd Vs CCE, C & ST

ST - Assessee had filed different refund claims with authorities for refund of various service tax paid by them to service provider on goods exported - The said refund claims were for the service tax paid on GTA services which were utilised by assessee for removal of his goods from factory premises to CFS and subsequently on stuffing the cargo to the port - The matter was listed and heard on 03.05.2018, with a direction to the assessee to produce various documents to co-relate the clearances effected from their premises to the goods exported - On careful verification of randomly selected transaction, claiming the refund of service tax paid on GTA services, assessee had raised an invoice for clearance of Potash Feldspar Powder by an invoice wherein container numbers were mentioned, Port of Loading and destination was also mentioned alongwith name of the consignee - Subsequently, this consignment was brought to CFS and allowed the goods brought in and let export order was given on 18.1.2012, invoice was mentioned on the shipping bill - Subsequently, the said cargo was transhipped from CFS to Port by Ambal Transport and it is noticed that all the documents, invoices raised by CFS and invoices raised by transport company indicated the shipping bill number and container numbers, in which the goods were loaded - There is a definitive of co-relation of the goods cleared from the factory premises and transported for export by transporters - Just because the transporter's documents did not indicate the invoice number of assessee vide which the goods were cleared, should not be the reason for denying assessee from the benefit he is legitimately due - Undisputedly, assessee is eligible for refund of the amount of service tax paid on transport services for the goods sought to be exported - This view is taken by Tribunal in case of Hindustan Gum & Chemicals Ltd. - High Court of Delhi in the case of Wipro Limited 2013-TIOL-119-HC-DEL-ST has taken a view that the condition mentioned in notification if can be satisfied by co-relation, the benefit should not be denied to an assessee - There is a definitive co-relation from the randomly selected document, it was found that the goods which were cleared for export, were taxed under GTA service and assessee is eligible for such refund, the impugned orders are unsustainable: CESTAT

- Appeals allowed: HYDERABAD CESTAT

2018-TIOL-3889-CESTAT-MAD

Vodafone Essar Cellular Ltd Vs Commissioner of GST & Central Excise

ST - The assessee is engaged in providing telecommunication services - They hold Centralized Service Tax Registration for the State of Tamil Nadu other than Chennai - On scrutiny of records, it was noticed that assessee had availed ineligible credit on inputs and input services - SCN was issued for period 10.09.2004 to 31.03.2008 - The first issue that arises for consideration is with regard to credit availed on Tower and Shelter Materials under category of inputs - The said issue stands decided by decision of High Court of Bombay in case of Bharti Airtel Ltd. - 2014-TIOL-1452-HC-MUM-ST - This Tribunal in assessee's own case has followed the decision of Bharti Airtel Ltd. as well as Larger Bench decision in Tower Vision India Pvt. Ltd. - 2016-TIOL-539-CESTAT-DEL-LB and held that assessee is not eligible for such credit - However, the Tribunal had set aside the demand for extended period as well as the penalties for normal period - For this, Tribunal had relied upon the decision in Vodafone Mobile Services Ltd. - 2017-TIOL-1904-CESTAT-HYD - It is stated that assessee vide their letter addressed to Superintendent of Central Excise had intimated their activities regarding tower and pre-fabricated buildings - Thus, the assessee had disclosed all the details as required by Department as and when called for, apart from disclosing the credit availed in their ST-3 returns - There is no iota of evidence to establish that the assessee is guilty of suppression of facts with intent to evade service tax - Thus, the extended period cannot be invoked and the penalties imposed are unjustified.

The next issue is with regard to the credit availed on SIM Cards - The allegation of Department is that since the assessee have sold SIM Cards, the credit availed on such SIM Cards has to be reversed by them - The Apex Court in case of Idea Mobile Communication Ltd. - 2011-TIOL-71-SC-ST has held that the value of SIM Card provided to distributors/franchisees for further sale to customers is includible in taxable value of services - In assessee's own case, the demand for levy of VAT on sale of SIM Cards was dropped by Deputy Commissioner of Commercial Taxes by holding that sale of SIM Cards is not goods sold or intended to be sold to the customer - The credit availed by assessee on SIM Cards is eligible and the demand for reversal cannot sustain.

The third issue that arises for consideration is credit availed on various input services - The services of erection, construction and installation of towers and shelters was availed by assessee for providing output service of telecommunication - These services have direct nexus with output service and therefore, is eligible for credit - The Tribunal in assessee's own case has allowed the credit - For this reason, the credit on this service is eligible - In view of decision in case of Bajaj Finance Ltd. 2017-TIOL-4355-CESTAT-MUM, it was held that assessee is entitled to CENVAT Credit on input services which were used for repossession of vehicle by recovery agent - Here, the assessee have used the facility of Bill Collectors/Agents for recovery of bills from customers - Thus, the said credit availed on such collection charges is eligible -

The assessee has availed credit on subscription paid to club - It is not established by assessee as to why or how such services are related to the output services provided by them - Therefore, the credit availed on subscription paid to club does not qualify as input service and therefore, the disallowance of credit on such service is upheld - The demand in respect of the amount which pertains to extended period is set aside - Thus, only that part of the credit which pertains to the normal period would sustain: CESTAT

- Appeal partly allowed: CHENNAI CESTAT

2018-TIOL-3888-CESTAT-MAD

Global Pharmatech Pvt Ltd Vs CCE

CX - The assessee is engaged in business of manufacture of Pharma products and is availing CENVAT credit on inputs and input services under provisions of CCR, 2004 - SCN was issued proposing to disallow credit availed on service tax paid on rental charges for their Mumbai office for period January 2012 to March 2015 - The assessee has explained that they are mainly engaged in undertaking manufacturing of pharmaceutical products on loan license basis or contract manufacturers for other companies - The Mumbai office operates as a procurement office for Hosur factory - Therefore, procurement of orders / products being the starting point for manufacturing activities is performed at the Mumbai office without which there can be no manufacturing activity at its factory in Hosur - The Tribunal in case of Carrier Air Conditioning and Refrigeration Ltd. 2016-TIOL-450-CESTAT-CHD had analyzed a similar issue and held in favour of assessee - The High Court of Bombay in case of Deepak Fertilizers and Petrochemicals Corpn. Ltd. 2013-TIOL-212-HC-MUM-CX had held that the assessee would be eligible for credit on services used in relation to storage of inputs outside the factory - The other decisions cited by assessee also have held the issue in favour of assessee - Following the ratios laid down in said cases, the denial of credit is unjustified - The impugned order is set aside: CESTAT

- Appeal allowed: CHENNAI CESTAT

2018-TIOL-3887-CESTAT-ALL

Apollo Pipes Ltd Vs CCE

CX - The assessee is engaged in manufacture of PVC Pipes, Tubes and Fittings - As assessee does not have facility of weighing empty and loaded trucks inside the factory, they had obtained permission from competent jurisdictional Authority to take final product outside the factory premises for weighment purposes, before their clearance from the factory - After weighment, the goods are brought back to the factory and are cleared to the respective buyers under cover of invoices issued under Rule 11 of Central Excise Rules, 2002, on payment of appropriate duty of Central Excise - The Department was of the view that differential quantity arrived at by them by comparison of weight shown in weighment slips with those indicated in respective invoices had been removed clandestinely without payment of duty - The allegation of clandestine removal is based on difference in weight recorded in weighment slips and those in corresponding invoices - The other discrepancy detected by investigating officers is the so called existence of unaccounted stock of finished goods which has formed basis for seizure and confiscation of such goods and imposition of penalty on assessee - As regards difference in weight recorded in excise invoices, it is seen that assessee had explained the reasons in reply to SCN and also in appeal memo submitted before lower Appellate Authority that the difference is due to change in ordered quantify by buyers at the time of removal of goods - From the charts showing supply of goods to concerned buyers and the summary of such supplies submitted on behalf of assessee, it is seen that discrepancy is only with reference to three regular buyers, two stray buyers and gate sale against cash payment - Therefore, in absence of any corroborative tangible evidence of clandestine removal, it appears to be improper to hold the assessee guilty of clandestine removal of goods solely on the basis of difference in weight recorded in excise invoices - There is nothing on record to justify rejection of cogent explanation offered by assessee before lower authorities as regards difference in weight found in weighment slip and a few corresponding excise invoices - As regards payment of duty in course of investigation, it is seen that Delhi High Court in Degipro Import & Export Pvt. Ltd. 2017-TIOL-955-HC-DEL-CX has adversely commented upon the practice of collecting duties in course of investigation, without issuing SCN - Therefore, it will not be proper to treat payment of duty as admission of guilt and the department cannot be allowed to rely on the irregularity committed by them - It is settled law that one cannot take benefit of its own wrong.

As regards allegation of existence of unaccounted stock of final product, believed to be kept for clearance without entering in books, it is found that the manner of stock verification is not in conformity with the normal accounting of such goods - Therefore, the quantity of goods found in excess of recorded stock of goods as calculated by department in Annexure-I to the Panchnama is unverifiable and hence appears to be incorrect - Under the circumstances seizure and subsequent confiscation of incorrectly calculated stock of finished goods is unsustainable in law - There is absolutely no evidence of removal of goods without payment of duty by assessee save and except presumptions - The allegation of clandestine removal of excisable goods in this case is not proved - In view of un-sustainability of duty demand and confiscation of goods, the order of imposition of penalty is also unsustainable and set aside: CESTAT

- Appeals allowed: ALLAHABAD CESTAT

2018-TIOL-2704-HC-MAD-CUS

Cus - The grievance of petitioner is that the 4th respondent is illegally releasing the container belonging to petitioner against the terms of regulations - Therefore, the petitioner seeks for action against the 4th respondent at the hands of the 1st to 3rd respondents - Since, the prayer sought for in this writ petition is limited for issuing a direction to the 3rd respondent to initiate proceedings and as it is now stated by the 1st to 3rd respondents that already investigation has commenced, this Court is not inclined to express any view on the merits of the contention made by the petitioner or the 4th respondent, since it is for them to cooperate with investigation and allow the Adjudicating Authority to pass appropriate orders after completion of such investigation - Therefore, Writ Petition is disposed of, however, by granting liberty to petitioner and 4th respondent to co-operative with the investigation, including by filing an application for interim relief, if any, pending investigation: HC

- Writ Petition disposed of : MADRAS HIGH COURT

2018-TIOL-3886-CESTAT-ALL

CCE & ST Vs Bhushan Steel Ltd

CX - Assessee is engaged in manufacture of Precision Pipes/Tubes - The same was being cleared by assessee to their depots on payment of duty - At depots such goods were being sold after cutting the same and as per the requirement of their customers - The remanant pipes were being sent back by depots on the basis of invoices by showing the duty payment on the same and as such duty payment by depots was being availed as credit by assessee - Revenue's only grievance is that such remanant pipes emerging at the depots end were of lesser value than the value of regular pipes and as such lesser duty should have been paid by depots, in which case lesser credit would be available to assessee - Revenue is not denying the fact that the issue is covered by earlier order of Tribunal in same assessee's case but submits the view adopted by Tribunal is not correct - The issue stands decided by Tribunal by relying upon the earlier Supreme Court's order - As long as Tribunal's order has not been set aside by higher Appellate Forum, same holds the field - As such, no infirmity found in impugned order of Commissioner (A) - As regards second part of order relatable to availability of Cenvat Credit on welding electrodes, issue is covered by various decisions of High Courts - The Appellate Authority was justified in following the earlier order of Tribunal being 2015-TIOL-2941-CESTAT-DEL in assessee's own case and no infirmity can be found in the same - No reason found to interfere in impugned order: CESTAT

- Revenue's appeal rejected: ALLAHABAD CESTAT

2018-TIOL-3885-CESTAT-BANG

K C M Appliances Pvt Ltd Vs CC

Cus - The assessee is engaged in trading of various consumer products - In course of their business, they filed Bills of Entry for clearances of goods namely "Enamel Ware" classifiable under CETH 7323 9490 and Aluminium Non-stick cook wares under CTH 7615 1021 of Central Excise Tariff - All the goods were cleared on payment of merit rate of duty after the Bills were assessed by officers of assessee - Subsequent to clearance, they realized that the imported goods are eligible for benefit of exemption Notfn 2/2011-CE as amended by Notfn 19/2012-CE and that due to oversight, they have failed to avail such benefit, which resulted in excess payment of C. V. duty - There is no dispute regarding exemption available to assessee under said Notfn - The refund claim has been denied only on account of the fact that assessee has not challenged the assessment, the assessee is not entitled to refund by amending Bill of Entry in terms of Section 149 of Customs Act - On the same principle, Tribunal has considered the issue whether an assessee is required to challenge the assessment in order to claim the refunds under Section 27 of Customs Act - By following the ratio of Bharat Electronics Ltd. , appeals of assessee allowed by way of remand to the original authority with a direction to consider the refund of assessee without insisting on the requirement for reassessment under Section 149 - The assessee's claim for refund may be validated under Section 27 and paid to them - Accordingly, the appeals are also disposed of by way of remand: CESTAT

- Matter remanded: BANGALORE CESTAT

2018-TIOL-3884-CESTAT-BANG

N L Logistics Pvt Ltd Vs CC

Cus - The assessee purchased the goods vide High Seas Sale Agreement and filed Bill of Entry but on perusal of the same, the Department found that there is a requirement of EPR certificate and is mandatory but the assessee did not furnish that certificate and in the absence of that certificate, the goods were confiscated and released in favour of assessee for the purpose of re-export on payment of redemption fine and penalty - When the original importer has produced the EPR authorization even in August 2018, then the Commissioner should have considered the request of assessee for amendment of Bill of Entry in the name of M/s. Sato Argox India Pvt. Ltd. and should have cleared the goods so as to avoid demurrage and damage to the goods - The Customs Officer has power to confiscate the goods if the necessary certificate is not produced and allow the re-export on payment of fine and penalty - The imposition of redemption fine and penalty of Rs.4 lakhs and Rs.50,000/- respectively appears to be on higher side - Accordingly, redemption fine is reduced to Rs.2 lakhs and penalty to Rs.25,000/- - As far as request of assessee under Section 149 of the Customs Act is concerned, the concerned officer has not taken any decision on the request of assessee as well as on the request of original supplier - Since the goods are suffering demurrage and damage, Department is directed to consider the request of assessee to amend the Bill of Entry under Section 149 of Customs Act: CESTAT

- Appeal disposed of: BANGALORE CESTAT