SERVICE TAX

2019-TIOL-161-CESTAT-DEL

Anant Steels Pvt Ltd Vs CCE & ST

CX - The assessee is engaged in manufacture of MS Ingots and TMT Bars - A search was conducted at the factory and office premises of assessee as well as certain other premises on the basis of some intelligence that assessee was involved in central excise duty evasion by resorting to suppression of actual quantum of production of MS Ingots/TMT bars and, thereafter, clandestine removal of TMT bars under parallel set of central excise invoice - During searches, various documents were recovered by department being parallel invoices, private records in form of Weighment Register, Dispatch Diary, Material Receipt Slips and Files seized and statements of various persons were recorded - Relying upon the same, a SCN was issued - The Commissioner in adjudication order, instead of dealing with contentions and evidence led by assessee, has tried to justify the entries recorded in weighment register, by merely relying upon the retracted statement of Shri Mayank Bansal - Oral evidence cannot override the documentary evidence brought on record - During course of hearing, assessee have demonstrated that as per the said weighment register on some days the prduction of ingots has been shown to be more than 200 MT, going upto 248MT as well, which is not possible even going by the case of department - For this reason also, the demand of duty on the basis of weighment register is not sustainable - As regards to demand confirmed against assessee on TMT bars, alleged in SCN to have been cleared on parallel invoices which as per the Commissioner was duly corroborated by entries recorded in ‘executive/dispatch diary' resumed from residential premises of Shri Deepesh Mahapatra - Strangely, the names stated in invoices are different from the names recorded in said executive/dispatch diary - No such inquiry was conducted from any of the persons/firms whose names were reflected in executive/dispatch diary - Further, the parallel invoices were issued in the name of Balaji Metals which is located at Pithampur whereas the persons/firms reflected in the executive/dispatch diary are from Bediya/Indore and, therefore, it is not possible to clear goods on the basis of parallel invoices issued for Pithampur to Bediya/Indore - In the absence of same, the Commissioner was not justified in confirming the demand of duty on the quantities reflected in said parallel invoices, same is fit to be set aside.

As regards to the duty demand confirmed by Commissioner on TMT bars alleged to be cleared during period 29.04.2010 to 12.07.2010, on the basis of entries reflected in ‘executive diary' seized from the office premise of assessee as well as two statements of Shri Manoj Huddar who was working as accountant in the office of assessee during the period February 2010 to December 2011, said executive diary was prepared in handwriting of Shri Manoj Huddar who was removed from employment by assessee due to mis-conduct - However, there were contradictions in his two statements - Further, the said diary contained exhaustive information, still nothing has been brought on record, not any investigation was conducted in this regard to corroborate the entries in the said diary - Shri Huddar had also stated that he was directed to maintain the said diary by Smt. Neera Bansal (Director), however, no question was put to Smt. Neera Bansal in this regard - Even though certain entries in executive diary were made in name of Shri Yogesh Shah of M/s Balajee Metal, still Shri Shah was not even confronted with the said executive diary, even though his statement was recorded during the course of investigation - It was under these circumstances, assessee during course of adjudicating proceedings, had prayed for opportunity to cross-examine Shri Manoj Huddar - However, the Commissioner, on one hand had denied the opportunity to assessee to cross examine Shri Huddar and, on the other hand, has relied upon the contents of said diary to confirm the huge demand against assessee which is not permissible as per settled law.

No inquiries have been conducted from raw material suppliers, transporter or the buyers to establish clandestine manufacture and sale by assessee - Even though the allegation is that assessee had, in such manner, sold TMT bars, no unaccounted money was recovered during course of search from any of the premises - It has been consistent view of Tribunal that allegation of clandestine removal cannot sustain merely on the basis of uncorroborated entries in private record as held in Hindustan Coca Cola Beverages Pvt. Ltd. - 2006-TIOL-1081-CESTAT-MUM - The demand of duty on assessee, therefore, is not sustainable - As demand of duty itself is not sustainable, no interest or penalty could be imposed on assessee as well as on other assessees on whom penalties were imposed under Rule 26 of CER, 2002: CESTAT

- Appeals allowed: DELHI CESTAT

2019-TIOL-160-CESTAT-KOL

Brahmaputra Consortium Ltd Vs CCE & ST

ST - The assessee was awarded a contract by M/s North Eastern Coal Fields - The contract was for production of Carbonaceous Shale (CS) and removal of Hard Shale (HS) - These materials were required to be removed from the mining area upto the railways siding as per the terms of contract - The Department was of the view that activity carried out by assessee in terms of contract, would be liable for service tax under category of Site Formation and Clearance, Excavation and Earthmoving and Demolition Services - The service tax was not initially paid by assessee, but what amount they received from M/s North Eastern Coal Fields, the same has been paid to the Government Account - The liability for service tax is not in challenge during present proceeding, but the plea of assessee is that the interest as well as penalties may be waived - The assessee was no doubt under bonafide belief that the activity may not be liable for payment of service tax as the activity of mining was included as a separate service tax w.e.f. 01.06.2007 only - Keeping in view the disputed nature of service tax and bonafide belief of assessee, this is a fit case to waive penalties under Section 80 of FA, 1994 - No interference required with the levy of service tax which is admitted by assessee - By following the decision in case of National Mining Company Ltd. - 2008-TIOL-319-CESTAT-KOL , the payment of interest is also upheld: CESTAT

- Appeal partly allowed: KOLKATA ITAT

2019-TIOL-159-CESTAT-KOL

Gayatri Projects Ltd Vs CCE & ST

ST - A SCN was issued to assessee by department demanding service tax under commercial or industrial construction service for period from 10.9.2004 to 31.3.2008 by invoking extended period of demand - The demand has been made after extending 67% of abatement from value as per Notfn 15/2004-ST and as per S. No. 7 of Notfn 1/2006-ST - It is on record that assessee has paid the service tax initially but on advise of their client i.e. NALCO they stopped the payment of service tax on being told that proposed work is within the ambit of definition of dam, which covers pond and services have been relatable to water resources and therefore the service would not come under the category of commercial or industrial construction service - The assessee's contention is that the scope of work includes supply of material along with provisions of service in construction raising height of the ash pond, the situation being so, the activity would come under work contract service, which is not leviable to service tax prior to 1.6.2007 in view of Supreme Court decision in case of L&T - 2015-TIOL-187-SC-ST also period subsequent to 1.6.2007 this issue is part of the work contract service and not CICS - As demand raised under CICS, same is not sustainable and therefore, assessee's contention that they are not leviable to service tax is required to be upheld - The issue is settled in their favour: CESTAT

- Appeal allowed: KOLKATA CESTAT

2019-TIOL-158-CESTAT-ALL

Commissioner of CGST & CE Vs Bahadur And Company

ST - The issue at hand is whether the construction of residential flats under a particular scheme would attract levy of service tax under 'Works Contract Service' - The Commr.(A) allowed such benefit to the assessee, having relied on the Tribunal's decision in Commissioner of Customs, C. EX. & S.T., Allahabad vs. Ganesh Yadav.

Held: The Revenue's sole objection to the precedent relied upon by the Commr.(A), is that it has not accepted the judgment in that case and that an appeal againmst such judgment is pending before the jurisdictional High Court - However, the Revenue failed to place any details about such appeal, or as to whether it has been admitted by the High Court or if any stay has been granted on the Tribunal's decision - In such circumstances, no fault is found in the Order-in-Appeal under challenge: CESTAT (Para 2,4)

- Revenue's appeals dismissed: ALLAHABAD CESTAT

 

 

 

CENTRAL EXCISE

2019-TIOL-157-CESTAT-BANG

Adhikari Engineering Vs CCT

CX - The assessee is a manufacturer of motor vehicle parts and during month of May 2012, they had short paid the duty - The same was not paid within 30 days from the due date and hence they had forfeited the facility of utilizing the CENVAT credit as per Rule 8(3A) of Central Excise Rules - They had utilized cenvat credit during period July 2012 to March 2014 and the short payment of duty was paid in cenvat account instead of cash - The lower authority held that the assessee was liable to pay duty in account current and ordered for recovery of the same along with interest and equivalent penalty - The Division Bench of Delhi Tribunal in case of GEI Industrial System Ltd. - 2016-TIOL-3175-CESTAT-DEL after considering the various decisions of High Courts and also the fact that Supreme Court has granted a Stay Order in the case of Indsur Global Ltd. and has come to the conclusion that the ratio adopted by various High Courts and by Tribunal in similar set of facts is still binding and has allowed the appeal of assessee - Therefore, respectfully following the ratio of Division Bench decision of Tribunal in said case as well as the decision of Tribunal in case of Manipal Springs Ltd. and in the case of Southern Ispat and Energy Ltd. , the impugned order is not sustainable in law: CESTAT

- Appeal allowed: BANGALORE CESTAT

2019-TIOL-156-CESTAT-MAD

Gkn Driveline India Ltd Vs CGST & CE

CX - The assessee-company, engaged in the manufacture of motor vehicle parts, availed Cenvat credit on inputs - During the period of dispute, the Revenue alleged thatthe assessee availed ITC on insurance service & used the same for payment of duty, but without informing the Department & not reflecting it in ER-1 returns - It was also alleged that this service had no indirect or direct nexus with manufacture & so was invalid input service - Duty demand as raised for recovery of such credit, with interest u/s 11AA of CEA 1944 & equivalent penalty u/r 15(1) of CCR 2004 r/w Section 11AC of CEA - Later, the Commr.(A) sustained the demand but set aside the penalty.

Held: A similar issue was resolved by the Tribunal in Optimus Global Service Ltd. Vs. C.S.T. wherein it was held that insurance services helped overcome difficulties under the Workmen's Compensation Act in case of some hazard - It also held that such services were utilized to ensure welfare of workers as per the Factories Act - Hence the credit was allowed - Following such findings, the credit in the present case is allowed & the demands are set aside: CESTAT (Para 1,5)

- Assessee's appeal allowed: CHENNAI CESTAT

 

 

 

 

CUSTOMS

NOTIFICATION

dgft18not054

Incorporation of Appendix - V under ITC (HS) 2017, Schedule-I (Import Policy) - regd

cnt04_2019

CBIC amends tariff value of edible oils r

dgft17cir017

Additional extension of six months in the Export Obligation Period (EOP) (beyond permissible extension period in Para 4.42 of the HBP) to advance authorizations issued upto 30.06.2016 involving import of Raw cashew (SION E 8) - relaxation of Policy/Procedure

CASE LAWS

2019-TIOL-155-CESTAT-HYD

CC Vs Kimmi Steels Pvt Ltd

Cus - The assessee is an exporter of iron ore which is subject to export duty - There are three test reports by CRCL, accredited Testing agency at the load port and the Chinese authorities at destination port - The case is similar to the case of Taurion Iron & Steel Company Pvt Ltd - 2009-TIOL-907-CESTAT-BANG - The legal position has changed after the decision of the Constitutional Bench of Supreme Court in case of M/s Dilip Kumar & Co and others - 2018-TIOL-302-SC-CUS-CB as it has been settled that any exemption notification must be construed strictly and any benefit of doubt must go to the revenue - In this case, there are two doubts namely regarding the authenticity of the sample drawn by independent test agency without presence of the customs officers and the other is whether the test report of the CRCL is on wet basis or dry basis - The benefit of both these doubts will go in favour of the revenue for the simple reason that exemption notification has to be strictly construed - Impugned order is set aside: CESTAT

- Appeal allowed: HYDERABAD CESTAT

2019-TIOL-154-CESTAT-KOL

Mid East Integrated Steels Ltd Vs CCE, C & ST

Cus - The assessee is a 100% EOU, who is a manufacturer of pig iron and scrap thereof - These goods are removed in part for sale in DTA on payment of duty in terms of Proviso to Section 3 (1) of CEA, 1944 - The goods are sold as per the contract with buyers in which the goods are to be delivered at nearby railway siding and assessee charges certain additional amount towards shifting of goods upto railway siding and loading the same into the railways wagons - Revenue was of the view that in such cases place of removal of goods is to be considered as railway siding and loading charges recovered from the buyers are to be included in value of goods for the purpose of charging duty - An identical issue for an earlier period has came up before the Tribunal, which was decided vide Final Order dated 31.08.2017 - By following the said decision of Tribunal, the transaction value as applicable at the place where sale takes place, but it is seen from the impugned order that Commissioner (A) has taken a view that the calculation for Education Cess has not been correctly made by original authority - He has granted relief for the mode of calculation of Education Cess by following the Ministry of Finance's Clarification No.D.O.F.34/3/2004-TRU - Revenue has challenged such findings of Commissioner (A) - The finding of Commissioner (A) granting relief in said calculation on Education Cess has been rightly made - Consequently, no merit found in the appeal filed by Revenue, same is rejected: CESTAT

- Appeal rejected: KOLKATA CESTAT