SERVICE TAX

2018-TIOL-3914-CESTAT-DEL

BSNL Vs CC & ST

ST - The assessee is engaged in providing taxable "telephone services" - During an audit, Department observed that assessee have taken credit on duty of excise paid on office equipments, tables, chairs, split air conditioners, power plant battery, HDPE cables, equipments, miscellaneous window cooled sets, air conditioner EA sets, W/C diesel EA as detailed in Annexure A of SCN and the remaining 50% credit has been taken by assessee during next Financial Year deeming all those Articles as capital goods and utilizing the same and discharging Service Tax liability on taxable services rendered by them - Most of the articles of Annexure A are equipments or appliances to be used in office of assessee or any office, hence cannot be categorized as such component/ spare/ accessory of the goods which are rendering output service, and hence, are not the goods on which Credit can be availed - However, some other articles of Annexure-A such as optical fiber cables, HDPE cables, batteries used for running servers and the air conditioners used in server rooms to maintain the requisite temperature of servers are opined to be the articles which are actually used for providing the output services of telecommunication - These are the articles which are specific for telecom agency and in absence thereof, the transmission and receiving of signals and conversion thereof into electrical signal, what precisely is the telecommunication is not possible - Thus, OFC, HDPE, batteries and ACs for server rooms are the inputs used in providing output service - Hence, the assessee is entitled to claim Cenvat Credit on these items only - The original adjudicating authority has not committed any error while permitting the credit on these items and reducing the recovery to that an extent - Rest of the articles being clearly the office equipments and being clearly out of the definition of being called as capital goods or the components, spares or accessories thereof, the credits have rightly been denied - No infirmity found in the order, same is accordingly upheld - The benefit of authorities relied upon by assessee have already been extended in favour of assessee by adjudicating authority - There is no such other finding in those authorities which are applicable to satisfy the grievances of assessee: CESTAT

- Appeal dismissed : DELHI CESTAT

2018-TIOL-3913-CESTAT-HYD

CCE & CC Vs Neha Constructions Pvt Ltd

ST - The assessee is engaged in providing some services to M/s RINL and JSWSL and have been receiving payments for such services - During manufacture of steel products in RINL and JSWSL, many varieties of scrap like steel scrap, maintenance scrap, reheated/defective bloom scrap, CI scrap and slag scrap are generated - RINL and JSWSL awarded the work relating to scrap recovery processing and transportation to assessee through work orders - The assessee has been carrying on this work - The SCN proposed to charge service tax on these services under head "Business Support Service" - The activity undertaken by assessee is removal of scrap and slag generated during the manufacturing premises of steel manufacturers i.e. RINL and JSWSL - It is evident from the O-I-O that on similar issue in case of M/s Ferro Scrap Nigam Limited for the services rendered to Bokaro Steel Plant, a SCN was issued seeking to classify them as "business auxiliary service" which has not been upheld during adjudication proceedings - When this failed, DGCEI sought to classify the same under business support service which was a later thought - It has been rightly observed that the Commissioner in impugned order that 11 services were specifically covered in business support service viz: evaluation of prospective customers, telemarketing, processing of purchase orders and fulfilment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operational assistance for marketing, formulation of customer service and pricing policies, infrastructural support services and other transaction processing - The term "infrastructural support services" was explained as providing office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security" - The original authority has rightly observed that the activities undertaken by assessee do not fall in category of services mentioned in business support service or closely associated with them - Therefore, no infirmity found in impugned order - In conclusion, appeal is liable to be rejected and the impugned order upheld: CESTAT

- Appeal rejected : HYDERABAD CESTAT

 

 

CENTRAL EXCISE

2018-TIOL-3909-CESTAT-HYD

Ccl Products India Ltd Vs CCT

CX - The assessee, a 100% EoU, engaged in manufacturing Instant/Soluble Coffee classifiable under Chapter 21 of Schedule I to CETA 1985 - It availed credit on various input goods & services - The assessee availed 'product recall liability insurance' - Based on its ER-2 returns, the Revenue alleged that such credit was wrongly availed since insurance on goods storage, marine/transit insurance, telecom services, rental charges of buildings was unrelated to factory or removal of goods - Although the adjudicating authority partly allowed some of the services, it was held that the 'product liability insurance' and 'product recall liability insurance' were utilized after clearance of final products & after the place of removal and after storage up to the place of removal - The Revenue alleged that they did not classify as valid input services - Duty demand was raised with interest & equivalent penalty u/r 15(1) of CCR 2004 - Such findings were sustained by the Commr.(A).

Held - The risk covers defects in the product, if any, upon which the assessee must recall the product & incur losses in the process - Hence insurance is for covering financial losses & is not a post-manufacture activity - Raising of capital by taking insurance falls within the definition & is not opposed to manufacturing activity, since the insurance policies address the financial risks of the manufacturer - Hence disallowance of credit is unjustified: CESTAT (Para 2,6)

- Assessee's appeal allowed : HYDERABAD CESTAT

2018-TIOL-3916-CESTAT-ALL

Chemicos Vs CCE

CX - The assessee is engaged in manufacture of petroleum oils/spirits and organic composite solvents/thinners - Shri Avdesh Gopal Agarwal is proprietor of assessee's firm and the firm was availing SSI exemption under Notfn 9/2000-CE and its succeeding notifications - Local Central Excise officers visited the factory premises of assessee and carried out certain investigations relating to alleged misclassification of two of their products Chemisol – 35 and Chemisol – 38 - On the basis of investigations, the departmental officers were also of the, prima facie view that M/s Mascot Chemicals was a 'dummy' firm and, therefore, the clearance value of both the assessee firm and M/s Mascot Chemicals were to be clubbed together to determine the duty liability under SSI exemption and duty evaded for financial years 2000-01 to 2003-04 - Admittedly, one unit is proprietary unit of Shri Avdhesh Gopal Agarwal and the other unit is a partnership unit of Shri Avdhesh Gopal Agarwal and his wife Mrs. Niti Agarwal - Both the units are located at far off places and are fully equipped to manufacture goods being manufactured by them - When the two units are independent of each other and are manufacturing their own goods and doing the business independently as a separate legal entity, the clubbing of clearances cannot be done for the purpose of denial of small scale exemption notfn - As long as the proprietary and the partnership unit are completely independent units having independent factory and are fully equipped with machinery to manufacture the goods, same cannot be held to be a dummy of another - The expression 'Dummy' itself leads to the fact the unit which is being held as a dummy unit is not fully equipped unit to manufacture the excisable goods - The clearances of the two units in question cannot be clubbed as held by Tribunal in number of decisions - Reference can be made to the Tribunal's decisions in Poona Radiators and Oil Coolers 2016-TIOL-3276-CESTAT-MUM - Further, the Supreme Court in case of Electro Mechanical Engineering Corporation 2008-TIOL-177-SC-CX has held that even if, certain employees of the firms are common and the premises are adjoining to each other but in the absence of any evidence to prove mutuality of interest or flow back of funds from one unit to other, the clearances of the goods cannot be clubbed - The mere fact of Shri Avdhesh Gopal Agarwal being proprietor of one unit and partner of other unit by itself is not sufficient to hold the clearances from both, to be clubbed and to deny the benefit of small scale exemption notification - No justifiable reason found to uphold the impugned order: CESTAT

- Appeals allowed : ALLAHABAD CESTAT

2018-TIOL-3915-CESTAT-CHD

Dujodwala Resins And Terpens Ltd Vs CCE & ST

CX - The assessee is engaged in manufacture of camphor, disproportioned Resin, Rosins/Rosin Derivatives an Turpentine/Turpentine derivatives and located in State of Jammu & Kashmir - The assessee was availing credit on inputs and inputs services in due course of business - The case of assessee is that no SCN has been issued to them for the amount paid under protest and for recovery of interest from assessee - Therefore, the proceedings against them are not sustainable - Admittedly, no refund claim has been filed by assessee for refund of amount, therefore, the amount is not subject matter for consideration by this Tribunal at this stage - If the assessee desires to take refund of such amount, assessee is required first to file refund claim before the adjudicating authority for amount paid under protest or adjusted under protest which the assessee has not done and till date, the said protest has not been adjudicated by adjudicating authority by issuance of SCN - Therefore, the refund claim cannot be entertained by this Tribunal at this stage.

With regard to deduction of interest, for appropriation of amount already reversed and to demand interest, SCN is required to be issued as it is pre condition under Section 11A of CEA, 1944 for demanding the said amount as held by Supreme Court in case of Madhumilan Syntex 2002-TIOL-512-SC-CX - Admittedly, in this case, no SCN has been issued to assessee for appropriation of amount paid under protest or to demand interest for delay reversal of credit, the amount of interest cannot be recovered from assessee - Therefore, appropriation of amount is against the law - Accordingly, the said amount is to be refunded to assessee within 30 days: CESTAT

- Appeal partly allowed : CHANDIGARH CESTAT

 

CUSTOMS

NOTIFICATIONS

dgft_trade_notice_40_2018

Restriction on Import of Peas from 01.01.2019 to 31.03.2019

cnt102_2018

CBIC revises Customs tariff value for several commodities

CASE LAWS