SERVICE TAX

2019-TIOL-190-CESTAT-MAD

Shri Renuga Soft X Towels Vs CCE

ST - The assessee was exporting finished goods to various countries for which they had engaged sales agent there - For such services, assessee paid commission to the agents - Department took the view that service tax was liable to be paid on such amounts under BAS defined under section 65(19) of FA, 1994 and required to be paid by assessee on reverse charge mechanism - Undisputedly, issue of taxation in respect of commission paid to foreign agents was the subject matter of litigation before various fora till the constitutional validity of section 66A of the Act was upheld with effect from 18.4.2006 - There was reasonable cause for failure of assessee to discharge tax liability and hence the provisions of section 80 of the Act will be attracted - Therefore, there is a case for waiver of penalty imposed under section 78: CESTAT

- Appeals allowed: CHENNAI CESTAT

2019-TIOL-189-CESTAT-KOL

Sky Automobiles Vs Commissiner of CGST

ST - The assessee is engaged in business of Authorized Dealer of Maruti Suzuki Four Wheeler and also providing services of authorized service station and is registered with service tax under category of 'Authorized Service Station' and 'Business Auxiliary Service' - Pursuance to Department audit, an audit observation was issued demanding service tax on various issues such as service tax on DSE incentive, Registration Fee, Cancellation Charges and Legal Fee - During period 2013-2014 assessee has availed and utilized cenvat credit - SCN was issued - The assessee has not denied the fact that they have been availing cenvat credit on service tax paid on common input services for trading goods - However, it has been contended that trading of goods has come into the exempted category only since 31.03.2011 and therefore the explanation adding 'trading' in exempted service category cannot be made retrospectively applicable - It is also observed that assessee has reversed back the amount of common input service credit availed by them - The credit of service tax paid on services as enumerated under Rule 6(5) of CCR, 2004 are to be allowed - It can be noticed that Rule 6(5) starts of nonobstante clause 'notwithstanding', which would indicate that provisions of Rule 6(3) are not applicable for provisions of Rule 6(5) of CCR, 2004 - It is undisputed that service tax credit availed is on the services as mentioned in Rule 6(5), the credit of entire whole amount of service tax has to the assessee - When the differential amount has been paid by assessee under Rule 6 of CCR, 2004 and discharged the service tax has pointed out by department before issuance of SCN - Under provisions of 73(3) of FA, 1994, the proceedings should have been completed on payment of tax amount along with interest - The credit amount which has been reversed by assessee has neither been accepted or examined by department and the amount has been upheld without any verification - The demand for extended period of limitation is set aside - The penalty as imposed under Section 78 of FA, 1994 is also set aside and for the limited purpose of verification and re-quantification of demand for the normal period, the matter is remanded to the Adjudicating Authority: CESTAT

- Appeals partly allowed: KOLKATA CESTAT

2019-TIOL-188-CESTAT-BANG

Nvidia Graphics Pvt Ltd Vs CST

ST - The assessee is engaged in providing Information Technology Software Service and Business Auxiliary Services - They filed refund claims seeking refund of unutilized CENVAT credit paid on input services used for services exported by them during impugned period under Rule 5 of CCR, 2004 r/w Notfn 5/2006-CE - The refund was partly sanctioned on certain eligible input services and rejected amounts claimed relating to ineligible input services - The impugned order is not sustainable in law denying the refund on input services on account of lack of nexus - In view of definition of input service as contained in Rule 2(l) of CENVAT Credit Rules, all these input services on which refund has been denied are related to provisions of Export of Service - Further, for the subsequent period, the Department itself has allowed the refund on certain services and Tribunal in assessee's own case has allowed the refund on 'Renting of Immovable Property service' and 'Event Management Service' - All these services fall in definition of "input service" and assessee is entitled to claim refund subject to verification of documents - The original authority will verify the documents and then sanction the refund: CESTAT

- Appeals allowed: BANGALORE CESTAT

CENTRAL EXCISE

2019-TIOL-198-CESTAT-MUM + Case Story

Varron Industries Pvt Ltd Vs Commissioner of CGST

CX - Commissioner(A) rejected appeal on the ground that the mandatory requirement of pre-deposit u/s 35F of the CEA, 1944 has not been complied by the appellant - such rejection is proper in law, however, it is observed that the appellant has not produced any evidence in support of their stand that the requirement of pre-deposit of 10% of the disputed amount before filing appeal in Tribunal has been complied with - appellant, it seems, is very casual in its approach for seeking appellate remedy for resolving its dispute - it is expected that the person seeking justice from appellate forum should come forward with clean and clear evidences on facts - to discourage the uncaring attitude in filing appeal in a casual manner, cost is imposed of Rs.5000/- which is to be paid to the Prime Minister's Relief Fund within four weeks - upon showing compliance of such deposit, Commissioner(A) to take up appeal for a decision on merits - Appeal disposed of: CESTAT [para 3, 4]

- Appeal disposed of : MUMBAI CESTAT

2019-TIOL-187-CESTAT-BANG

Trivista Steel And Power Pvt Ltd Vs CCT

CX - The assessee is manufacturer of Sponge Iron and are availing cenvat credit facility under CCR, 2004 - During verification of records, it was noticed that assessee has availed cenvat credit during period from 01.05.2008 to 30.06.2008 on goods such as MS Beams, MS Joists, Angles, M.S.H.R. Plates and Channels as inputs and capital goods used for fabrication of supporting structures for the equipments - As the resultant structures were not covered under definition of 'capital goods' in terms of Rule 2(a) of CCR, 2004, it was held by Department that such credit availed is ineligible - In impugned order, Commissioner has made a mention regarding Chartered Engineer certificate alleged to have been produced by assessee but the same was not produced for the consideration of Commissioner (A) and in the absence of non-production of certificates, Commissioner (A) has come to the conclusion that the user test has not been complied with - This case needs to be remanded back to original authority for the purpose of verification of usage of subject inputs on the basis of various documents which the assessee may produce along with the certificate of a Chartered Engineer proving the usage of subject inputs - Accordingly, the case is remanded to the original authority for the said verification: CESTAT

- Matter remanded: BANGALORE CESTAT

2019-TIOL-186-CESTAT-MAD

Shanthi Gears Ltd Vs CGST & CE

CX - The assessee is manufacturer of gears, gear assembly and accessories and have availed CENVAT Credit of service tax paid on common input services during period from 2011-12 to 2014-15 - They also removed inputs such as spares to their customers on payment of duty on a value higher than the cost price - It was alleged that the said activity tantamounts to "trading" and that the assessee was not eligible for credit on the same - The issue involved in this case is no more res integra since this very issue has been considered by this Bench in assessee's own case for an earlier period - Therefore, going by the stare decisis of the same, appeal allowed with consequential reliefs: CESTAT

- Appeal allowed: CHENNAI CESTAT

2019-TIOL-185-CESTAT-DEL

Universal Offsets Vs CCE

CX - The assessee is engaged in making goods mentioned as "Envelope" - These envelopes are essentially supplied to telecom companies who used the same to keep the information brochure, sim card and other details relating to telephone connection - The Revenue held a view that these envelopes are to be considered as paper bags since these are neither used for correspondence nor contain paper stationery - The assessee claimed classification under CETH 4817 10 00/4911 99 90 - The start-up kit contains outer envelope, CIF/CAF form and leaflet containing details of telecom service - These are printed material - As the envelopes, they will be classified 4817 10 00 or when the leaflets and printed materials are cleared, the same will be classifiable under other printed matter under heading 4911 as products of printing industry - The assessee cleared to telecom companies and educational institutions, printed materials, like customer application form, customer identification form, admission form and claimed classification under CETH 4911 99 90 under the heading ‘other printed matter' - The issue of classification of application forms was discussed and clarified by Board vide circular dated 23.02.2017 that forms of telecom companies, educational institutions are loose sheets cut-to-size and are not covered under heading 4820 - Printing on these forms is not merely incidental - The clarification issued by the Board correctly explains the legal position and accordingly, the impugned order classifying the forms under chapter 48 is not sustainable - The appellant cleared some products as "carry bags" to M/s Britannia Industry, M/s Nestle India Limited - These packs were for carrying grocery items - These are essentially carry-bags made of thick paper with printings on both sides with the brand logo of certain consumer companies like "Maggi" - On perusal of the tariff classifications and the sample material, it is observed that the printing made on such carry-bags is merely incidental and accordingly they cannot be called as product of printing industry under chapter 49 - More appropriate classification will be as bags made of paper under heading 4819.

The assessee cleared "Dabur amla score card" and paid duty under heading 4909 - The product under consideration carries extensive printing with information and design and such printing cannot be considered as merely incidental to the primary use of the goods - The printing on paper gives the essential character for product and accordingly is classified as a product of printing industry under chapter 49 - The impugned order is not correct in this regard - The assessee manufactured plastic hangers to display products for sale and claimed classification under heading 4911 10 90 as other printed matter - These hangers are custom made and cannot be used for any other purpose except for display and hanging of the products, the details of which were printed on them - Accordingly, chapter 49 will be more appropriate for classification - The assessee generated waste and scrap of paper during course of producing various types of products - They have submitted the certificate of a Charter Accountant to claim that waste and scrap of paper is attributable to printing of educational books - In M/s Wimco Ltd - 2008-TIOL-2769-CESTAT-DEL , the Tribunal held that the waste and scrap of paper/paper board arising during the course of manufacture of empty match boxes will not attract excise duty - The emergence of such waste and scrap from duty paid paper and paper board is not as a result of manufacturing activity and no excise duty leviable on such item - The penalties are set-aside: CESTAT

- Appeals partly allowed: DELHI CESTAT

CUSTOMS

2019-TIOL-184-CESTAT-DEL

Ssapp Overseas Pvt Ltd Vs CC

Cus - COD of 206 days - The Order which is subject matter of appeal for which the impugned application has been filed was passed on 22.12.2017 and was received by assessee within less than 15 days - The maximum time available to assessee to file the appeal was till 31.03.2018 - The documents supporting the terminal illness as impressed upon by assessee reflects that the person got admitted on 10.04.2018 and expired on 12.04.2018 i.e. the pleaded event occurred post expiry of period of three months during which the appeal could have been filed - Admittedly, the person passed away was the father-in-law of Director of assessee but there is nothing on record to show his personal involvement that too to the extent of making it impossible for him to pursue his consultant (CA/ Advocate) for collecting the relevant documents and filing the appeal within the time frame fixed for the same - This particular observation is sufficient to hold that the reason mentioned for condonation of delay is not a sufficient cause for the delay to be condoned - The assessee has not specified the period of four months of his absence from his business thereby corroborating the negligence as already observed - Finally, keeping in view that delay is of more than 200 days which has not been appropriately explained, application is held to have no merits: CESTAT

- Application dismissed: DELHI CESTAT

2019-TIOL-183-CESTAT-HYD

CCE, C & ST Vs Sova Ispat Alloys Ltd

Cus - The issue that falls for consideration is; whether the goods imported by assessee needs to be classified as Manganese Ore or Manganese Concentrate and depending upon such classification it has to be decided whether the assessee will be eligible for benefit of Notfn 4/2006-CE as substituted by Notfn 12/2002 - Essentially, the notifications state for exemption of additional duty of customs - In a similar case vide final order dated 22.06.2017, the Bench went into the details of entire issue and held that in the absence of any evidence to show that the goods imported were concentrates, demands cannot be sustained - There is no evidence in the form of any test report of the Dy. Chief Chemist or any person to even remotely indicate that the goods imported by assessee are not Ores but Concentrates - The ratio of decision of Tribunal would squarely apply in the cases in hand - Following the same, impugned orders are correct and legal and does not require any interference: CESTAT

- Appeals rejected: HYDERABAD CESTAT