2019-TIOL-NEWS-019 Part 2, Dated: Tuesday, January 22, 2019

SERVICE TAX

2019-TIOL-255-CESTAT-HYD

DTDC World Wide Express Ltd Vs CCE, C & ST

ST - Appellant, a courier company, provided services as co-loaders to another courier company and not to individual customers - SCN issued seeking service tax on the charges collected under the head Business Auxiliary Services - appeal to CESTAT.

Held: CESTAT in the case of United Business Xpress India P Ltd - 2016-TIOL-3491-CESTAT-DEL has held that service of co-loaders cannot be taxed under BAS since the service tax under Courier service stands discharged by the first courier agency and insofar as consideration for last leg delivery of parcels received from such first courier on principal to principal basis, it cannot be said that appellants have carried out any service on behalf of others - following the said decision, appeal is allowed by setting aside the impugned order: CESTAT [para 4]

- Appeal allowed : HYDERABAD CESTAT

2019-TIOL-254-CESTAT-MAD

Professional Couriers Vs CGST & CE

ST - Assessee is engaged in courier activity and is registered with service tax department under category of 'Courier Services' - Assessee was collecting certain charges as 'crossing over charges', raised on their sub-franchisee agencies located in other parts of Tamil Nadu for purpose of enabling further movement of documents, which originated from their sub-franchisees' end - It appeared to department that the activities of assessees falls under BAS/BSS - The activity involved is a continuous service of courier by single network and transaction is between the same network for completion of courier service, hence the service is being given to self - All these outlets will function as defacto TPC offices - There is no allegation that documents booked by TPC Madurai are not booked in the name of TPC but in the name of some other courier agency - It is evident that various franchisees spread over Tamil Nadu and assessees based in Chennai, are operating in hub-and-spoke business model - The documents from each of these TPC franchisees may be sent to TPC hub at Chennai wherefrom they will be further sent onwards to various other TPC hubs in other parts of country for further distribution - This being the case, crossing over charges are being collected only for intra-movement of courier packages within the hub-and- spoke arrangement, namely with TPC network in Tamil Nadu - The impugned services within the TPC network is nothing but a continuation or culmination of courier services only - It then cannot be alleged that TPC receiving or giving of services within its own network of the assessee will render them liable to service tax levy - In the event, upholding of demand under BSS by lower appellate authority cannot be sustained and is therefore set aside: CESTAT

- Assessee's appeal allowed: CHENNAI CESTAT

2019-TIOL-253-CESTAT-DEL

Rathi Tiles Pvt Ltd Vs CCE

ST - The assessee is engaged in manufacture of marble slabs and tiles - They receive marble blocks from mines and cleared the final products from their factory - The dispute is regarding the payment of service tax on freight charges paid by assessee for transport of marble slabs from the mines to assessee's factory - he payment of freight is made by assessee to individual truck owners who do not issue any invoice/ document/ consignment note for transport of such marble blocks - The only document which is generated by assessee by way of debits notes indicating the freight paid for such transport - The issue which stands settled in various cases is that as long as no consignment note is issued in terms of Rule 4B of STR, 1994 by transporter, the service tax liability under category of GTA service does not arise - The debit notes issued by assessee indicating the freight payable cannot be considered as a consignment note as per Rule 4B ibid - The liability for payment of service tax under GTA cannot be sustained against assessee in the absence of consignment notes: CESTAT

- Appeals allowed: DELHI CESTAT

2019-TIOL-252-CESTAT-DEL

CCE Vs Shakti Industries

ST - The assessee is engaged in providing taxable services namely, BAS - As per the intelligence gathered by Department, assessee was providing services of supplying bed rolls to Indian Railways, Jodhpur under a contract during the period w.e.f. 14.01.2005 to 29.02.2008 - The Department vide a SCN alleged the said services to have been covered under "Customer Care Services" specified under BAS, chargeable to service tax w.e.f. 01.03.2003 - What the assessee in this case was doing was supplying the cleaned linen to Railways where, after the job of that particular day for contractor stands over - It is also apparently clear that assessee was not required to come in contact with the passengers which means no service he was rendering whether on behalf of the Railways, to the passengers/ the service recipients of Railways - There is no single term and condition in said agreement which may prove that the assessee was rendering Customer Care Services - He was simply providing the dry cleaning services absolutely on commercial terms to Railways - The services provided by assessee has rightly been held to be service provided by him to the Railways and not to the passengers on behalf of the Railways - No infirmity found in the impugned Order: CESTAT

- Appeal rejected: DELHI CESTAT

CENTRAL EXCISE

2019-TIOL-256-CESTAT-HYD

Gowthami Solvent Oils Ltd Vs CC, CE & ST

CX - Products which arise during the course of refining of rice bran oil viz. fatty acides/wax and cleared as gum are eligible for benefit of exemption notification 89/95-CE - Larger Bench decision in Ricela Health Foods Ltd. - 2018-TIOL-3625-CESTAT-DEL followed - impugned orders set aside and appeals of assessee allowed - consequently, Revenue appeals dismissed: CESTAT [para 7, 8]

- Assessee appeals allowed/Revenue appeals dismissed : HYDERABAD CESTAT

2019-TIOL-251-CESTAT-MUM

GTC Industries Ltd Vs CCE

CX - Application seeks rectification of mistake in final order, in which, according to applicant, there is no reference to the Circular of CBEC advising the valuation to be adopted and is silent on the plea that adjustments should precede computation of interest.

Held: Computation of duty liability requires valuation prescribed in the law that is binding on all functionaries under the control of CBEC - likewise, computation of interest is also to be determined in accordance with law - Bench, in disposing of the appeals, did not find it necessary to reiterate the obvious that the lower authority should follow the provisions of law - no reason to entertain the ROM application, hence rejected: CESTAT [para 3]

- Application rejected: MUMBAI CESTAT

2019-TIOL-250-CESTAT-DEL

Mahindra Steel Service Centre Ltd Vs CGST CE & CC

CX - The assessee is engaged in manufacture of Transformer Core Stack as well as cutting of silicon steel coil (CRGO Coils) from wider size to smaller size - They have been availing cenvat credit on inputs under CCR, 2004 - The department on an enquiry noticed that for the period w.e.f February 2014 to June 2015 the assessee have cleared CRGO Coils by classifying the product under 72251100 and 72261100 as final product, CRGO Coils 7225110 are being received as inputs by assessee - The main product of assessee, is the manufacture of transformer core stack for which the CRGO Coils is main input - It becomes clear that unused input if cut into any other form but since is not used in manufacture of final product of assessee, the same can be nothing more than the clearing of unused input/ raw material - From no stretch of imagination, same can be called as manufacture - The adjudicating authorities have rightly concluded that assessee has removed the inputs as such and has failed to reverse the equal cenvat credit which has been taken on said inputs and thus has contravened the provision of Rule 3 (5) of CCR, 2004 - The assessee rather, while removing the inputs as such was required to pay cenvat credit taken by them - Department has committed no error while taking the average value for calculating the reversal of cenvat credit - With respect to this SCN dated 27.10.2015, assessee has submitted that adjudicating authority below has failed to consider the documents of assessee wherein it has been specifically shown that the cenvat credit availed by assessee is much less than the duty paid by him - The matter is remanded back to Additional Commissioner however for the limited purpose for computation: CESTAT

- Matter remanded: DELHI CESTAT

019-TIOL-249-CESTAT-BANG

Jk Tyre And Industries Ltd Vs CCT

CX - The assessee is manufacturer of pneumatic tyres and other parts and had opted for provisional assessment under Rule 7 of CER, 2002 in respect of goods cleared for year 2015-16 on the ground that transaction value can only be determined after confirming various discounts that are offered at later dates and not known at the time of clearances from the respective factories - The adjudicating authority held that netting off (adjustment) of duty paid in excess and the short paid for every month cannot be undertaken since the amount claimed to be paid excess by the assessee was hit by unjust enrichment - This issue is no more res integra and has been settled by various decisions of Tribunal wherein it has been consistently held that in a case of provisional assessment, doctrine of unjust enrichment is not applicable - Here it is pertinent to refer to the finding of Division Bench in assessee's own case in the order dated 11.04.2018 - By following the ratio of said decision in assessee's own case, the impugned order is not sustainable in law and therefore the same is set aside: CESTAT

- Appeal allowed: BANGALORE CESTAT

CUSTOMS

NOTIFICATIONS

03/2019-Cus (NT/CAA/DRI)

Appointment of Common Adjudicating Authority by DGRI

02/2019-Cus (NT/CAA/DRI)

Appointment of Common Adjudicating Authority by DGRI

01/2019-Cus (NT/CAA/DRI)

Appointment of Common Adjudicating Authority by DGRI

CASE LAW

2019-TIOL-248-CESTAT-BANG

Ajith P Vs CC

Cus - The assessee is a graduate in Mechanical Engineering carrying out profession of valuers of land, building, plant & machinery since 2004 - They are empanelled as Chartered Engineer by respondent in category of Mechanical as per Public Notice No. 26/2014 - An importer M/s. Best Mega International had imported Digital Multifunction Machines and the same was examined by assessee and submitted the report and there is no allegation that the value arrived by assessee while examining the goods are not acceptable to Department - Thereafter, the Department found that assessee in connivance with the importer has not properly examined the goods as the goods were falling under e-waste or Hazardous waste - The said finding was not accepted by Department and Department after conducting the investigation issued a SCN to the assessee - The assessee has carried out the inspection of goods as per the direction of Commissioner in presence of Customs Officials who have also accepted the report and has countersigned the same - Said goods have also been inspected by other Chartered Engineer whose report is almost identical and they have also not certified the impugned goods as e-waste - The assessee after inspection has given the report that remaining life of machine is more than 5 years and in the past also these kinds of machines were imported and were cleared - No material was available on record which clearly points out the intelligence on the part of assessee to perform his duty negligently - The report of Chartered Engineer is not binding on Department and the Department is free to order for fresh valuation if they found that he has not done his job properly - In view of these facts, the impugned order regarding suspension is not sustainable in law and therefore same is set aside: CESTAT

- Appeal allowed: BANGALORE CESTAT