2019-TIOL-NEWS-079, Dated: Thursday, April 04, 2019

Larsen And Toubro Grahak Sahakari Sausthan Maryadit Vs CST

ST - Applicant has filed ROM applications against the Tribunal order - 2016-TIOL-3271-CESTAT-MUM seeking rectification of two errors that allegedly crept in the order.

Held: It is seen that the demands relating to the period April 2011 to March 2012 had been netted after granting abatement as prescribed under notification 1/2006-ST before determining the tax liability, however, for the earlier period the same was not extended - it is only proper that the same be done now - so also, in view of the Allahabad High Court decision in Indian Coffee Workers Co-op Society Ltd . - 2014-TIOL-499-HC-ALL-ST , penalties imposed u/s 78 of the FA, 1994 are set aside - impugned orders are modified to the extent specified and the present order is to be read as corrigendum to the earlier order dated 29.11.2016 - Applications allowed: CESTAT [para 3, 7, 8]

- Applications allowed: MUMBAI CESTAT

2019-TIOL-946-CESTAT-MUM

Jain Irrigation Systems Ltd Vs CCE

ST - Appellant filing a miscellaneous application seeking rectification of mistake in the Tribunal order dated 25.09.2017 remanding the matter to the adjudicating authority - inasmuch as applicant submitting that they had cited the apex court decision in Nizam Sugar Ltd. - 2006-TIOL-56-SC-CX in the context of the demand being time barred and as regards the issue of taxability on the services related to International Finance Corporation, they had cited the Tribunal decision in Coastal Gujarat Power Ltd. in support - Upon considering the submissions, Bench allows the miscellaneous application and directs the adjudicating authority to consider both the submissions while reconsidering the matter in denovo proceedings: CESTAT [para 4]

- Application allowed: MUMBAI CESTAT

2019-TIOL-945-CESTAT-MUM

Ajit India Pvt Ltd Vs CST

ST -Appellant engaged in production, supply and installation of structural glazing, sliding doors and windows to residential buildings - contracts entered into with builders and with individuals - work involves fabrication of required components for structural glazing/windows at their factory and installation at various sites - there was no separate contract for installation work - appellant also engaged in activity of anodizing of aluminium sections on job work basis and repairs of old buildings - SCN issued alleging that the activity would come under the ambit of ‘completion and finishing services in relation to residential complex' and not under ‘erection, commissioning and installation'; that appellant is required to pay service tax w.e.f 16.06.2005 and no abatement was available - demand confirmed - appellant contending that they had paid VAT on the entire transaction treating the same as a Works Contract; that the contract was composite and there was no separate element of service or sale; that there cannot be any demand for the period prior to 01.06.2007; that the demand is time barred as they had, way back on 2 nd June 2006, informed the Superintendent (Prev.) regarding the activity undertaken by them and their view regarding their liability to service; that entire facts were before the Revenue and hence no suppression can be alleged.

Held: Conclusion reached by Commissioner(A) is erroneous; that just because VAT is paid at composite rate, it cannot be said that there is no sale of goods involved; it is seen that major amount charged by the appellant relates to value of material; in view of Tribunal decision in Vistar Constructions P Ltd. - 2016-TIOL-3508-CESTAT-DEL , the activity is not taxable for the period prior to 01.06.2007; that after 01.06.2007 the activity would be classifiable under Works Contract Service but since demand has not been raised under the correct head, the same cannot be sustained; that since the practice was in complete knowledge of Revenue, extended period of limitation cannot be invoked - demand set aside and appeal is allowed: CESTAT [para 4.1 to 4.3, 5, 6]

- Appeal allowed: MUMBAI CESTAT

CX - The officers of the DGCEI visited the business premises of the assessee, whereupon certain records were recovered, such as registered containing details of date-wise production, clearance of chewing tobacco, customer details, day books, ledgers & invoices - Statements were also taken from two employees of the assessee, both of whom allegedly admitted clandestine removal of chewing tobacco - Statements of the assessee firm's managing partner also admitted clandestine manufacture & clearance of chewing tobacco under the brand Super deluxe/Deluxe - Hence SCN was issued - The assessee filed reply to SCN, pointing out that the statements relied upon by the Revenue, had been retracted - On adjudication, duty demand was raised with interest & equivalent amount of penalty along with personal penalty on two employees - On appeal, the Commr.(A) upheld the duty demands but reduced the quantum of the penalties imposed - On further appeal, the Tribunal noted that the retraction of statements was an attempt to wriggle out from statements given earlier, thus revealing their loyalty to their bosses - Hence the Tribunal upheld the demands while also restoring the penalties imposed by the adjudicating authority - Hence the present appeals.

Held: The orders passed by the first appellate authority are well-reasoned and are based on the factual position of the case - Besides, it has been passed in a unique manner in which the relevant statements and documents have been photocopied in the order itself so as to show continuity - Thus, the High Court cannot act as a second appellate authority to sit over findings recorded by the first appellate authority and the Tribunal - Hence the duty demand is upheld - Regarding penalty, the assessee challenged levy of the same - The Revenue did not file an appeal against the findings of the Commr.(A) reducing the quantum of penalty - Hence the Revenue cannot challenge such reduction of penalty in the appeal filed by the assessee - Thus the Tribunal lacked the jurisdiction to restore the penalty as imposed by the adjudicating authority - Hence in this regard, the Tribunal's order warrants interference - Moreover, it is seen that the assessee admittedly is not carrying on any business & much of it has been banned or is regulated by various Central and State Acts - The assessee's counsel also pleads of the assessee undergoing financial distress - Moreover, it is seen that the particular trade of manufacturing chewing tobacco is a cottage industry in and around the area in which the assessee operates - Besides, statements taken from the spouse of one employee, reveals her to be illiterate person who did not know wherefrom her spouse brought the tobacco and that she simply packed it in plastic pouches and sealed them with a candle - Hence, some leverage merits being granted to the assessee considering the nature of trade & trade practices - Hence the penalty is set aside entirely, while duty is upheld: HC (Para 6,7,8,10,11,12,14)

CX - The issue involved is regarding inclusion of freight charges borne by customer of assessee separately in assessable value as per CVR, 2000 - The assessee is having two streams of sale one at the factory gate and other to the various projects undertaken by them for which the sale is made through depot - It is on record that in all such cases, the freight element has been borned by the customer - The assessee has not paid any amount towards the freight charges - CBEC itself has clarified in their circular that in such a situation the freight charges are not to be included in the assessable value - This issue is also decided by various Court and Tribunal that when the factory gate price is available and freight is borned separately by customer, the same is not includible in the assessable value - It is also on record that the demand has been raised as per the audit objection and the entire activity of assessee was known to the department - Based on the decision in M/s Pragati Concrete Products (P) Ltd. 2005-TIOL-205-CESTAT-BANG and Arviva Industries (I) Ltd. , the extended period invocable in this case - The same view has also expressed in cases of Tigrania Metal & Steel Industries, Cadila Laboratories P Ltd., Sunshine Tube (Pvt.) Ltd. and Jaishri Engineering Co. (Pvt.) Ltd. - Therefore, the entire demand is also time barred as the extended period is not available to the department: CESTAT

CX - The assessee is located in state of Jammu & Kashmir and availing the benefit of exemption of Notfn 34/08 - In this case, for the period 2008-2009, assessee filed the refund claim on 07.04.2009 and took the self credit on the same day - As per the Notification, assessee is required to file refund claim in terms of Notfn 34/08 in the month of April and the last date of sanctioning refund claim is 15th May but there is no bar for sanctioning the claim on the date when refund claim has been filed - Admittedly, the refund claim applied by assessee was not found with any deficiency and the said amount has been sanctioned to assessee on 12.07.2010 which is much much later the last date of sanctioning the refund claim - The assessee is entitled to claim refund on the day when they have applied for refund claim - No interest is payable by assessee, therefore, no penalty can be imposed - In these set of facts, the interest and penalty imposed on the assessee is set aside: CESTAT

Cus - The petitioners sought a Mandamus for release of consignments and a further direction to the respondents to issue a 'Detention Certificate' for waiver of Demurrage and Container Detention Charges in terms of Regulation 6(1)(l) of Handling of Cargo in Customs Areas Regulations, 2009 - The identical issue has been considered in case of M/s.Royal Impex - 2019-TIOL-596-HC-MAD-CUS - The said order is applicable to the present case on all fours - The petitioners will remit the entire duty component of consignments imported by them in cases where such duty is leviable along with a bank guarantee for the 10% of invoice value - In cases where the duty impact is neutral, the petitioners shall furnish a bank guarantee for the 10% of the invoice value - Upon satisfaction of aforesaid conditions, the consignments shall be released forthwith - The authorities are at liberty to initiate proceedings in respect of transactions in question and if done, petitioners shall appear, be heard and file their submissions pursuant to which orders shall be passed by authorities in accordance with law - The petitioners have also prayed for waiver of demurrage charges incurred in respect of detained consignments - In the light of Rule 6(l) of Handling of Cargo in Customs Areas Regulations, 2009, which provides that Customs Cargo Provider shall not, subject to any other law for the time being in force, charge any rent or demurrage on the goods seized or detained or confiscated by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be, there shall be a waiver of demurrage charges: HC