CCE & ST Vs Reliance Industries Ltd

Held: Tribunal, in the appellant's own case - 2013-TIOL-1900-CESTAT-MUM] & - 2016-TIOL-618-CESTAT-MUM, has settled the issue in their favour - although the said orders have been appealed against by the Department, it is a settled law that unless stay is granted by higher judicial forum, an issue which is decided by the co-ordinate Bench of the Tribunal needs to be followed in order to have certainty in fiscal matters - impugned order is, therefore, correct, legal and does not suffer from any infirmity and needs to be upheld - Revenue appeal is rejected: CESTAT [para 8.3, 8.4, 8.5]

- Appeal rejected: MUMBAI CESTAT

ST - Appellant was discharging service tax liability in respect of services received from overseas on reverse charge basis and taking credit of the tax paid - for the services received by them during the month of February 2009, they paid service tax and applicable cess at reduced rate as the bill for the services received by them was raised by the provider of service only on 28.02.2009 - on being pointed out, they paid the differential amount of service tax of Rs.74,92,646/- on 04.10.2012, took credit and intimated the department on 19.10.2012 but no interest was paid - demand raised for interest and confirmed - penalty equivalent to the tax paid was also imposed u/s 78 with benefit of reduced penalty if the same was paid along with interest within 30 days; penalty also imposed u/s 77 of FA, 1994 - appeal to CESTAT.

Held: Since the rate of taxation was reduced from 12% to 10% w.e.f 24.02.2009, the rate of taxation in respect of services provided prior to the said date has to be 12% and in respect of services received from that date @10% - appellant has already paid the differential tax due from them - from a plain reading of s.75 of FA, 1994, it is quite evident that interest is compensatory in nature and is required to be paid by the taxpayer in case of any default in payment of tax for the period of default - it is a settled legal position that interest is levied as statutory liability and arises on account of delayed payment of taxes - no separate notice is necessary for the purpose of recovery of interest and same has to be recovered along with tax as arrears of tax - demand for interest cannot be quantified till the arrears of tax are paid and it is consequently not possible to specify a definite figure in the recovery certificate, however, the notice for recovery of interest should be issued within a reasonable time from the date of payment of tax arrears - however, since the issue with regards to applicable rate of tax during the period February 2009 was itself not free from doubt and also the fact that whatsoever amounts were to be paid as taxes were admissible as credit to them, there is enough justification for invoking section 80 of FA, 1994 - consequently appeal filed is allowed to the extent of penalties imposed and order-in-original is upheld in respect of demand of interest: CESTAT [para 12, 15, 17.4, 18]

- Appeal partly allowed: MUMBAI CESTAT

ST - Appellant send their products namely Spacer Damper to Canada and China where the calibration testing on the said goods were conducted and the goods along with test certificate were sent back to the appellant - Appellant submitting that since the 'Technical Testing and Analysis' was performed only in the foreign country and no part of the said service was performed in India, therefore, in terms of rule 3(iii) of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, the said service is not taxable in the hands of the recipient in India - Revenue demanding ST under reverse charge mechanism - demand confirmed, hence appeal before CESTAT.

Held: After omission of clause (zzh) w.e.f 01.04.2011 from rule 3(ii) of the Rules, 2006, Technical testing and analysis service, even though only performed outside India will be liable to tax as per clause (iii) of Rule 3 of Rules, 2006 according to which the only requirement is that service are received by a recipient located in India for use in relation to business or commerce - prior to 01.04.2011, technical testing and analysis service on reverse charge basis is not taxable in terms of rule 3(iii) of Rules, 2006 - since interpretational issue is involved and various litigation has taken place on this issue, therefore, at the relevant time, issue was not free from doubt - since service tax paid/payable on services on reverse charge basis is available as CENVAT credit to the appellant, it cannot be said that there is any malafide intention in non-payment of service tax - accordingly, penalty is not imposable u/s 77 & 78 by invoking s.80 of FA, 1994 - however, demand of service tax in respect of Business Auxiliary Service is upheld - appeal is partly allowed: CESTAT [para 6 to 8]

- Appeal partly allowed: MUMBAI CESTAT

CX - Appellant allegedly manufactured 'packing kits' utilizing various CENVAtted inputs viz. corrugated cartons, M.S. Angles, M.S. Brace Plates, Rubber Sheets, Thermocol blocks, M.S. Nuts & Bolts, Polythene Bags, manuals and wooden boxes etc. and cleared the same on payment of appropriate duty - Revenue issued demand notice seeking recovery of the CENVAT credit availed of Rs.94,94,129/- with interest and penalty on the ground that the activity of assembly of various inputs into 'packing kits' does not amount to manufacture - demand confirmed, hence appeal before CESTAT.

Held: Issue is no more res integra in view of Bombay High Court decision in Ajinkya Enterprises - 2012-TIOL-578-HC-MUM-CX where it is held that once the duty paid on the final products is accepted by the department, CENVAT credit availed need not be reversed even if activity does not amount to manufacture under the CEA, 1944 - following the same, impugned order is set aside being devoid of merits and appeal is allowed with consequential relief: CESTAT [para 5, 6]

- Appeal allowed: MUMBAI CESTAT

CX - Valuation - Section 4 of the CEA, 1944 - In the case of clandestine removal, the value of the goods, unless specifically submitted by the appellant, is difficult to be ascertained - Revenue has computed the duty demand by taking into consideration the nearest ascertainable value and there is no discrepancy in the approach of the department - appeal being devoid of merits, is dismissed: CESTAT [para 6]

- Appeal dismissed: MUMBAI CESTAT  

CX - Classification of '3D's Choco filled snacks' - whether under residual heading 1905 9090 of CETA, 1985 @ Nil rate of duty as claimed by assessee or under SH 1905 3211 as 'communion wafers coated with chocolate or containing chocolate' attracting duty as proposed by Revenue - appeal before CESTAT.

Held: Product in question is not a wafer which, by its very definition, is a thin product of baking process/drying process which is a far cry from the solidity of the impugned goods - it appears that the adjudicating authority was more impressed by the reference to 'chocolate or containing chocolate' without paying attention to the dimension intended by the description - 'Communion' wafers are produced for religious purposes which is evident from the adjective preceding 'wafer' in the sub-heading - 'Communion' is a rite specific to the ritual of 'mass' celebrated in churches and no other meaning is assigned to that phrase in common parlance - Once the classification proposed by Revenue is found to be inappropriate, that claimed, while clearing the goods, will sustain even if it may appear to be inappropriate - Bench cannot, in its appellate capacity, direct or accord latitude for invoking s.11A by obliteration of proceedings leading to the impugned order - Bench also cannot decide on a classification that has not been pleaded before it - impugned order is, therefore, set aside and appeal is allowed: CESTAT [para 3, 5, 8]

- Appeal allowed: MUMBAI CESTAT

Fairdeal Shipping Agency Pvt Ltd Vs CC

Sagarika Sea Craft Ltd Vs CC & ST