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SERVICE TAX
2019-TIOL-815-CESTAT-MAD
Citi Bank Na Vs CCE & ST
ST - Assessee is engaged in providing 'Banking and other Financial Services' - During audit, it was noticed that assessee short paid service tax and short paid education cess - It was also noticed that in relevant ST-3 returns for the subject period, adjustment was made for the period from June, 2005 to August, 2005 - The said adjustments were shown as excess service tax paid in previous months - The issue that arises for consideration is whether the adjustment made by assessee is sustainable - The liability to pay service tax on commission received on mutual fund distribution activity was on the service provider upto 01.04.2005 - The assessee was discharging service tax on commission received for mutual fund distribution - Notfn 7/2005 – ST w.e.f. 01.04.2005 the liability to pay service tax on such commission was shifted to the service recipient - However, assessee discharged the service tax for the months April and May, 2005 - On realizing wrong payment made by them, they adjusted the said service tax towards liability for the subsequent months, ie. June, 2005 to August, 2005 - They have reflected the adjustment made in their ST-3 returns for the said period in October, 2005 - The Tribunal in case of General Manager (CMTS) had occasion to analyse the issue wherein such adjustment was made - It was observed there in that when the assessee has paid service tax in excess of its actual tax liability, the Government cannot retain the excess tax paid by the assessee by refusing such adjustment against its tax liability during other months - Similarly in M/s. Plantech Consultants Pvt. Ltd. 2015-TIOL-2497-CESTAT-MUM , it was held that even though the assessee had not intimated the jurisdictional superintendent if they had declared the adjustment made by them in their ST-3 returns, the adjustment cannot be considered illegal - If the assessee has made excess payment, the same can be adjusted towards the liability for subsequent months - The demand cannot sustain: CESTAT
- Appeal allowed: CHENNAI CESTAT
2019-TIOL-814-CESTAT-DEL
BG India Energy Pvt Ltd Vs CCE
ST - SCN was issued to assessee alleging that the debit note(s) issued in lieu of invoice for BAS provided, does not fulfil the requirement of Rule 4A of Service Tax Rules - It is also alleged that assessee does not fulfil the requirement of Export of Service Rules, 2005 and other law applicable - As per the requirement of Export of Service Rules, 2005 read with the explanatory Circular No. 111/05/2009-ST , as the services provided by assessee are in the nature of Business Auxiliary Service, the export of services is complete as the principal is located outside India with whom there is contract of service and such principal have paid for such services to the assessee in convertible foreign exchange, which is not disputed - So far as the clause "used outside India" is concerned, the said clause is deleted w.e.f. 27.2.2018 - Thus, the assessee is entitled to rebate as claimed by them and the same shall be allowed subject to arithmetical correction if any - The adjudicating authority is directed to disburse the rebate within a period of 75 days from the date of receipt of copy of order, as the matter is of the year 2006: CESTAT
- Appeal allowed: DELHI CESTAT
CENTRAL EXCISE
2019-TIOL-822-CESTAT-MUM
Resource Engineering Pvt Ltd Vs CCE
CX - Appellants are engaged in manufacture of Plate Heat Exchangers affixed with brand name 'SWEP' and Traps with brand name 'RIFOX' - SCNs were issued seeking to deny the SSI exemption 8/2003-CX on the ground that the brand name was not owned by them - original authority confirmed the demands but Commissioner (A) dropped the demand relating to the brand name "SWEP" and remanded the matter for computation of duty in respect of the goods bearing brand name 'RIFOX' since the duty demand was a combined one - following the o-in-a, original authority recalculated the duty demand on goods bearing brand name 'RIFOX' - appeal against this duty confirmation was rejected by Commissioner(A) on the ground that since the earlier order-in-appeal was not challenged, the appeal against the confirmation of demand by the adjudicating authority is not maintainable - it also held that the Appellant in previous round of proceedings had nowhere stated that they used brand name 'Rifox India' and the evidence produced by them before him is afterthought - appeal to CESTAT.
Held: Reasoning by Commissioner(A) is agreed with - Once the Appellant chose not to file appeal against Order-in-Appeal when the case was decided against them and the matter was remanded to the adjudicating authority only for limited purpose of recalculation of duty demand, they cannot challenge the merits in appeal before Commissioner (Appeals) as the Order-in-appeal has attained finality - Impugned order upheld and appeal dismissed: CESTAT [para 3, 4]
- Appeal dismissed: MUMBAI CESTAT
2019-TIOL-813-CESTAT-DEL
Diamond Cements Vs CGST, CE & CC
CX - The issue is with regard to disallowance of cenvat credit on marketing and festival expenses incurred by assessee for Rs. 44,758/- and towards marketing and sales promotion expenses Rs. 1,38,966/- being expenses towards hire of mobile vans - So far the first issue of disallowance of cenvat credit of Rs. 44,758/- is concerned, said issue is covered in favour of assessee by the ruling of Toyota Kirloskar Motor Pvt. Ltd. 2011-TIOL-941-HC-KAR-ST and accordingly the same is held to be allowable - So far the second issue is concerned of Rs. 1,38,966/-, admittedly assessee have used the motor vans for business purpose/ sales promotion/ marketing, and accordingly they have taken entire cenvat credit of Rs. 1,38,966/- - So far the issue of exclusion clause for hire of motor vehicle is concerned, Tribunal relies on the findings of coordinate Bench of Tribunal in case of Marvel Vinyls - 2016-TIOL-3071-CESTAT-DEL - So far the charging of interest is concerned under Rule 14 of CCR, assessee shall be liable for interest only on such portion of cenvat credit which they have utilized - Accordingly this issue is remanded to Adjudicating Authority who shall calculate the interest payable under Rule 14 - The assessee is directed to file the calculation which according to them is payable before the Adjudicating Authority for his appraisal - The penalty imposed under Rule 15 r/w Section 11AC is set aside, as the issue is wholly interpretational in nature: CESTAT
- Appeal allowed: DELHI CESTAT
2019-TIOL-812-CESTAT-DEL
Periwal Polymers Pvt Ltd Vs CCE ST
CX - The assessee is engaged in manufacture of PVC components - For the purpose of manufacture of their final product, they have been using inputs, such as, DOP & DBP - This raw material was purchased by assessee from M/s Ritzy Polymers which were clearing their products on payment of duty availing the Area Based Exemption Notfn 56/2002-CE - M/s Ritzy Polymers, being a manufacturer of plasticizers and thinners started commercial production on 06.09.2004 and started clearing goods, after availing the benefit of Area Based Exemption vide Notfn 56/2002-CE - The department has entertained a doubt that benefit of Cenvat Credit in respect of duty paid on goods manufactured in factory working under Notfn 1/2010-CE was not allowed by Central Government under Rule 12 of CCR, 2004 as the said Notfn 1/2010 was not incorporated in Rule 12 of CCR, 2004 till 19.01.2014 - Thus, Department was of the view that cenvatable invoices issued by M/s Ritzy Polymers, Jammu cannot be used by assessee for availing Cenvat credit of the same - The assessee have legitimately purchased the inputs on payment of appropriate amount of Central Excise Duty leviable thereon and after receipt of such goods, assessee have availed Cenvat credit of such duty paid by them as per provisions of Rule 3 of CCR, 2004 - Once the duty has been paid on legitimately purchased inputs, assessee is very much entitled for availing credit of the same and it will not make any difference whether the goods have been procured from a unit which is based in area-based exemption or otherwise - Provisions of Rule 12 of CCR, 2004 allow the benefit of Cenvat credit to the down-stream buyers of inputs inspite of the facts that manufacturer based in Area Based Exemption Notification will be entitled for a refund of part of duty paid by him on such clearances - Thus, Commissioner (A) has wrongly interpreted the provision of Rule 12 of CCR, 2004 and Rule 12 does not debar the down-stream buyers of inputs cleared from area based exemption from availing the Cenvat credit of duty which have been paid by them at the time of purchase of such inputs - Since the refund has already been allowed of duty paid by supplier treating as if the clearances to have been effected under Notfn 56/2002 which has a definite mention under Rule 12 of CCR, 2004 and, therefore, the basic ground of department that clearances were under Notfn 1/2010 gets defeated and no cause of action found for Jurisdictional Commissioner of assessee to deny any Cenvat credit to them - There is no ground of invoking extended time proviso under Rule 14 of CCR, 2004 as necessary ingredients for invoking extended period of demand are not present in their case and thus, demand is barred by period of limitation - No merit found in the impugned order and thus, the same is set-aside: CESTAT
- Appeals allowed: DELHI CESTAT
CUSTOMS
2019-TIOL-811-CESTAT-DEL
Friendly Video Vision Vs CC
Cus - The assessee, a 100% EOU is engaged in the import of Video tape for manufacture and export of blank video cassettes out of it - They had raised two issues, one about jurisdiction of officer who issued SCN and another about the said SCN being hit by principle of limitation - The goods manufactured in EOU of assessee had left the warehouse and had reached Mumbai Customs after having been given "Let Export Order" by Delhi Customs and it was an intelligence by Delhi Customs only on the basis of which goods were intercepted detained and subsequently seized - The proper Officer of Excise has jurisdiction till the goods are warehoused and are released for clearance, but beyond this stage, the proper officer is the one under Customs Act - Otherwise also, in case of exports, the Customs procedure finds conclusion at the Customs because thereafter the goods actually leave the Indian Territory - Stage clearance of warehoused goods onwards is a function under Customs Act, the proper Officer is definitely the Officer of Customs - The situation stands clarified vide Circular No.126 stands modified vide Circular No.27 of 10.05.1996 - It has been clarified that there is no overlapping of jurisdiction but a clear cut demarcation of function to be performed by Central Excise Commissionerate and Customs formation - Since the goods were intercepted at Mumbai Customs area, they had already reached into jurisdiction of Customs Commissionerate - The Commissioner, Customs was competent /"proper Officer" to issue the impugned SCN - As per Section 124 of Customs Act, period of 6 months has to reckon from the date of seizure - Resultantly, the SCN is well within the limitation period - Impugned order is upheld: CESTAT
- Appeal dismissed: DELHI CESTAT |
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