SERVICE TAX

2019-TIOL-712-CESTAT-MUM + Case Story

Anisha Deepak Tank Vs CCE & ST

ST - VCES, 2013 - Once the issue has been decided by the Tribunal in favour of appellant, same cannot be reopened by any of the authorities below - It is not the case of the Revenue that the Tribunal order dated 29.12.2017 has been challenged by Revenue in appeal - unless the said order is set aside or stayed by the High Court, the Commissioner(A) has no authority to comment upon the jurisdiction of the Tribunal but has to follow it - since the VCES declaration has been upheld by the Tribunal and the order has not been challenged by Revenue, the SCDN dated 24.10.2014 cannot survive - impugned order is set aside and appeal is allowed with consequential relief: CESTAT [para 4, 5]

- Appeal allowed : MUMBAI CESTAT

2019-TIOL-704-CESTAT-MAD

Enmas Andritz Pvt Ltd Vs CGST & CE

ST - The assessee is engaged in providing consulting engineer service, transport of goods by road service, renting of immovable property service and intellectual property right service - During audit, it was noticed that assessee had engaged into contracts for designing, supplying and supervising the erection and commissioning of Recovery Boilers - The department was of the view that credit availed on input services is not eligible for the reason that said input services are not used for providing output services - It was also seen that the credit availed was purely related to trading activity - As trading activity undertaken by assessee is not taxable service, hence the assessee is not eligible to avail credit on alleged / impugned input service - This being so, assessee have clearly fallen foul of Rule 3 of CCR, 2004 since that is the particular provision which lays down the types of duties or taxes or cesses suffered on input, input services which alone can be availed as CENVAT credit - The impugned input services have all been availed in spite of assessee having been involved in trading activity - Thus, there cannot be any credit that could be availed by assessee ab initio and hence there is no need to examine the applicability of Rule 6 of CCR, 2004 to their case - In any case, trading activity has been made deemed exempted service only with effect from 1.4.2011 and therefore Tribunal is not able to appreciate the argument of assessee that as per the decision of High Court in Ruchika Global 2017-TIOL-1235-HC-MAD-ST trading is held to be exempted service even prior to 1.4.2011 and therefore credit availed on trading is admissible - The assessee cannot blow both hot and cold - No infirmity found in that portion of impugned order upholding the demand of wrongly availed credit along with interest thereon - Coming to the penalties imposed under section 78 of FA, 1994, this issue involves interpretation whether the availment of impugned credits are in order or otherwise - Assessee has reversed the entire credit - The High Court in Strategic Engineering (P) Ltd. 2014-TIOL-466-HC-MAD-CX has unequivocally held that mere taking of credit wrongly would not compel the assessee to pay penalty - Following the said decision, penalties imposed under section 78 is set aside - The appeal is partly allowed: CESTAT

- Appeal partly allowed: CHENNAI CESTAT

2019-TIOL-703-CESTAT-HYD

Jsw Steel Processing Centre Ltd Vs CCT & CE

ST - The appellant is registered for providing services under category of Business Auxiliary Services , Goods Transport Agency Service , Maintenance or Repair Services & Erection, Commissioning and Installation Services - Audit conducted by Department revealed that appellant availed credit on SAD paid upon import of goods as well as on supply of tangible goods - The Department later recovered such amount - Later, SCN was issued proposing to impose duty demand, followed by an O-i-O which appropriated certain amount of Cenvat credit with interest and imposition of penalty - Such demands were sustained by the Commr.(A).

Held - The provisions of Section 73 of the Finance Act 1994 clearly hold that if tax is paid with interest before issuing of SCN, then no SCN is to be issued - In the present case, it is seen that the appellant reversed the credit with interest as soon as the Department pointed out incorrect availment - Moreover, such reversal was made before issuing of SCN - Besides, though the Department alleged suppression of facts, it did not put forth any evidence to prove there to be any suppression or concealment of facts with intent to evade payment of duty - Hence imposition of penalty u/r 15(3) of CCR is not justified - The Commr.(A) also did not record any findings regarding suppression of facts with intent to evade payment of duty - Hence the O-i-A warrants being quashed: CESTAT (Para 2,5)

- Assessee's appeal allowed: HYDERABAD CESTAT

2019-TIOL-702-CESTAT-HYD

Vensa Infrastructure Ltd Vs CST

ST - The assessee had entered into works contract with various companies as also APIICL, KTPS and others for executing the jobs undertaken by them - The contracts which were perused by lower authorities indicated and as recorded in O-I-O that these contracts were EPC contracts - The period involved in this case is from 2006-07 to 2010-11 - A SCN was issued to assessee alleging suppression of facts and demanding service tax liabilities under category of "commercial or industrial construction services", "construction of complex services", "works contract services" and "transportation of goods by road services" - For the service tax liability on the amounts received as consideration for executing works contract prior to 01.06.2007, the amount of turn over considered by lower authorities in O-I-O is Rs 12.35 crores - It is on record that the work executed on these contracts is works contract and on perusal of the same it is so, and if that be so, the law which is settled by Apex Court in case of Larsen and Toubro Ltd 2015-TIOL-187-SC-ST would cover the issue in favour of assessee - Accordingly, service tax liability prior to 01.06.2007 on the turnover of Rs 12.35 crores is unsustainable - There is no allegation nor there is any finding as to the commercial nature of buildings or civil structure, constructed by assessee for APSHCL and APIICL - Thus, on this ground, the demands raised on assessee are set aside - As regards limitation, assessee approached APIICL on service tax issue and the letter written by APIICL indicates that assessee was informed that they being State Govt entity are not required to service tax liability - Assessee could have entertained a bonafide impression that once State Govt entity indicates/informs them that service tax liability is not dischargeable, they need not discharge any service tax liability - It is clear that any activity in relation to transmission and distribution of electric energy and any services provided in relation to such activity is exempt from service tax - It is nobody's case that KTPS is not producer of thermal electrical energy and electricity being an item that cannot be stored requires immediate transmission and distribution - This activity of rendering service to KTPS would be covered by retrospective Notfn 45/2010 - Service tax liability fastened upon assessee for services rendered to KTPS is also unsustainable: CESTAT

- Appeal allowed: HYDERABAD CESTAT

CENTRAL EXCISE

2019-TIOL-701-CESTAT-DEL

Shree Cement Ltd Vs CCE

CX - The assessee is engaged in manufacture of clinker and cement - Assessee have availed Cenvat credit of service tax paid on railway freights on the basis of photocopies of railway receipt and a certificate of payment of service tax issued by the railway authorities - The department has entertained a view that the documents on the strength of which the assessee have availed Cenvat credit of service tax paid by them on the statement of the freight for transportation of various inputs is not a valid duty paying document as provided under Rule 9 of CCR, 2004 - It can be seen that the legislative also has recognised the validity of certificates which are being issued by Railway Authorities certifying the payment of service tax by assessee - Thus, there has been no contravention of Rule 9 of Cenvat Credit Rules and the assessee have rightly availed the Cenvat credit of the service tax paid by them on the freight amount paid to the Railway Authorities - Substantial benefit cannot be denied to assessee only because certain procedural requirements as prescribed by the rules have not been followed in toto - All the particulars of service tax paid by assessee for available and same has been certified by concerned Railway Authorities, therefore, it will be travesty of the judgment if the Cenvat credit is denied to them only on such a flimsy ground - While holding the said view, Tribunal also take shelter of decision in case of Gabriel India Ltd. - The impugned order is devoid of any merits and same are set aside: CESTAT

- Appeals allowed: DELHI CESTAT

2019-TIOL-700-CESTAT-BANG

Reid And Taylor India Ltd Vs CC, CE & ST

CX - The appellant-company is engaged in manufacture & clearance of woollen/blended fabrics - During the relevant period, it availed benefit under Notfn No 29/2004-CE & Notfn No 30/2004-CE upon such clearances - The adjudicating authority raised duty demand on intermediate product of Polyesyer Tops, which were captively consumed in manufacture of final products - It was held that the assessee was ineligible to avail benefit under both notifications - Penalty was imposed u/s 11AC as well as under Rule 25 of CER 2002 - Moreover, amounts deposited by the assessee under protest as well as interest, were appropriated - Moreover, the Revenue commenced investigations into the existence of Polyester Top in the course of manufacture of the final products - Thereafter, SCNs were issued raising demand in respect of such Polyester Top captively consumed & used in the manufacture of final products, which were cleared after availing benefit under Notfn No 30/2004 - It was also held that benefit under Notfn No 67/95-CE could not be extended as the assessee did not fulfil the requisite conditions - The Revenue also claimed that benefit under Notfn No 30/2004-CE could not be allowed as the assessee procured & used only polyester tows and not polyester staple fibre - On adjudication, these findings were sustained - Hence the assessee's appeal.

Held - It is settled in earlier cases that reversal of credit taken and attributable to goods cleared by availing benefit under Notfn No 30/2004 before clearance would satisfy the condition of non-availment of credit as per the Notification - When a further circular dated 01.2.2007 was issued, the assessee began following the new procedure - Hence the assessee followed the correct procedure and benefit under the notification was correctly availed - In Forbes Gokak Mills Limited it was held that even though separate accounts are not maintained, the credit availed on duty free goods was reversed before removal of goods from the factory - Hence the condition of non-availment of input credit in respect of Notification 30/2004 is satisfied - Moreover, it is seen that as the assessee procured duty-paid tow, it is not required to pay any duty on final products - This follows from the decision of the Bombay High Court in Raymond Ltd. - Also, it is found that the goods arising at the intermediate stage of manufacture by the assessee are squarely covered by Notification No. 67/95 & fall under the exclusion at No. (vi) as they have discharged the obligation in terms of Rule 6(1) of CCR - Hence the benefit under Notfn No 67/95 cannot be denied: CESTAT (Para 1,5.2,5.3,6)

- Assessee's appeal allowed: BANGALORE CESTAT

2019-TIOL-699-CESTAT-AHM

Torrent Pharmaceuticals Ltd Vs CCE & ST

CX - Assessee is engaged in manufacture of PP Medicines - They had procured Carbidopa under concessional rate of duty under Notfn 6/2002 as amended against Annexure-45 - They used the said goods to manufacture finished goods as required under the Notfn, however, the said goods namely, Dudopa CR Tab manufactured by them was found to be not up to mark and the said product were rejected in quality Control - Consequently, said product was destroyed as per Annexure-I - The basic reason for denial of benefit and confirmation of duty is that disposition report contains row at the bottom having signature with date 20.07.2005 - Commissioner (A) has decided the said report solely on the ground that column in bottom shows date of 20.07.2005 whereas the actual report is claimed to have been made on 29.05.2007 - The defense of assessee is that the said proforma was made as a result of efforts of a team to draft the standards operating procedure for such disposition - The draft finalized by said team contains a row in bottom which shows the date when said proforma for making disposition report was approved - It has been argued that in all the disposition report said date and signature at the bottom would appear, as a part of the profroma, not as part of the report - However, it is seen that the said report and the said argument was not submitted before the lower authorities - Since it is new fact brought on record, matter remanded to the original authority to reconsider after taking into account the said argument and the said facts brought on record by assessee before the Tribunal for the first time - The impugned order is set aside: CESTAT

- Matter remanded: AHMEDABAD CESTAT

CUSTOMS

2019-TIOL-698-CESTAT-HYD

CC & ST Vs Sri Sainath Industry Pvt Ltd

Cus - The issue at hand pertains to the value adopted for Iron ore exported from India - During the relevant period, the assessee declared invoice price of USD 138 per DMT - The Revenue noted that the contemporaneous exports were made by other exporters at USD 166 per DMT & USD 175 per DMT - On assessment, the Revenue worked out the value for the determination of the export consignment after adopting price at USD 166 per DMT & after and after giving adjustment for percentage Fe content in the iron ore for re-determined the value of the iron ore exported to USD 155 per DMT - On appeal, the Commr.(A) set aside such findings - Hence the Revenue's appeal.

Held - The O-i-O records there to be contemporaneous exports having nearly the same Fe quantity, at price of USD 116.50 per DMT - Curiously, the adjudicating authority did not accept such price - Such approach of the adjudicating authority appears to be inconsistent with the provisions of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 - Hence the Commr.(A) justifiably quashed the O-i-O: CESTAT (Para 3,5,6)

- Revenue's appeal dismissed: HYDERABAD CESTAT

2019-TIOL-697-CESTAT-AHM

National Marine And Infrastructure India Pvt Ltd Vs CC

Cus - The assessee executed a work contract with one M/s. Swan LNG Pvt. Ltd. for carrying out dredging and reclamation in sea coast - The assessee imported Dredgers, Barge, self propelled multicat along with accessories, pipelines and pontoons required for dredging operation - The assessee also imported old and used pipelines and pontoons - The assessee declared the goods in the bills of entry under CTH 89011010 & 89051000 respectively and claimed exemption under Notification No. 12/2012-Cus - The Revenue rejected the claim holding that the assessee imported and cleared "complete dredgers, pipelines, pontoons and other equipment and accessories" vide bills of entry No. 8142628 & 8145408 - Thereafter, the assessee have imported Old and used Pontoons and Pipelines under bills of entry No. 8465433 & 8465442 - Thus, goods imported under both the bills of entries dated 07.02.2017 were imported separately cannot be a part of accessories of a complete Dredger already imported with Pipelines, Pontoons and other accessories vide bills of entry 10.01.2017 - The goods imported under bills of entry dated 07.02.2017 are classifiable under CTH 89079000 and 73049000/85015390 respectively - The Adjudicating Authority confirmed the Revenue's re-classification and raised customs duty and imposed penalty u/s 112 r/w 114A - Imported goods under bills of entry 07.02.2017 were confiscated.

Held - There is no difference in the nature of the goods imported with three dredgers and goods imported subsequently - Both the consignments were imported by the appellant for only one project - Since the dredger and its parts are huge in size and quantity, it is not possible to import the entire consignment at a time - Therefore, the entire goods were imported in piece-meal - Even though the same parts were imported along with three dredgers but the remaining parts which were imported subsequently were used for the same work in the same manner - The interpretation of Accessories (Condition) Rules, 1963 reveals that it is not merely a case that parts and accessories are imported physically with the dredger but entire consignment imported by the same assessee for the same single project but in two parts, it is to be interpreted that even second consignment of old and used pontoons, pipeline etc. are imported along with dredgers - Since the complete import, even though in two parts, is for one project, number of consignment of parts and accessories cannot be separated in terms of Rule 2(a) of GRI - All parts of Dredger has to be classified under the head Dredger i.e. 89051000 - The goods of bills of entry No. 8465433 and 8465442 both dated 07.02.2017 are correctly classifiable under heading CTH 89051000 and accordingly eligible to exemption Notification No. 12/2012-Cus: CESTAT (Para 5,7,12)

: AHMEDABAD CESTAT