2019-TIOL-NEWS-097, Dated: Thursday, April 25, 2019

ST - During the relevant period, the appellant company filed claim for refund on grounds that a project involving setting up sewage treatment plant under contract for the Haryana Development Authority, was exempt from tax as per Notfn No 25/2012-ST - The appellant claimed to have erroneously paid service tax due to its over-sight - Such tax was paid partly through cash and partly through Cenvat credit - The Revenue opined that the refund claims were filed after the prescribed period of one year & so were hit by limitation - Hence an SCN was issued proposing to reject the refunds - On adjudication, the appellant did not contest the date of payment of service tax or the date of filing for refund - It only claimed that the refund was liable to be granted as the service tax was not required to be paid - Such claims were rejected by the adjudicating authority as well as by the Commr.(A) - Hence the present appeal.

Held: It must be seen whether or not the limitation period u/s 11B of the CEA 1944 which is also applicable to service tax cases, would apply in the present case - From a catena of judgments, it is clear that every refund claim, whether or not involving tax paid erroneously, is to be governed by the provisions of Section 11B - Every refund claim arises on the premise that the tax was not required to be paid - In such case, not adhering to limitation provisions would entail every refund claim becoming payable - This would make the limitation provisions u/s 11B to be redundant & infructuous - The constitutional jurisdiction exercised by High Courts for granting refund beyond the limitation period cannot be exercised by the Authorities working under the Act - The Tribunal is a creature of the Act is not empowered to venture beyond the provisions in the Act - Hence the refund claim is barred by limitation, having been filed beyond one year from the relevant date & has correctly been rejected: CESTAT

ST - During the relevant period, proceedings were initiated against the appellant-company for non-payment of tax with interest in respect of freight charges paid by the appellant - The SCN issued in this regard alleged that the appellant was required to pay tax in respect in respect of services received from GTA as it was a partnership firm - Duty demand was raised upon adjudication & the same was later confirmed by the Commr.(A) - Hence the present appeal.

Held: An identical issue was settled by the Tribunal in Andal Motors Vs CCE Salem 2018 (10) G.S.T.L. 369 (Tri.-Chennai) where the assessee therein being a proprietary concern as well as a consignee of GTA services, was found to not be falling under the category of 'corporation, society or cooperative society' - In that case, it was also noted that the assessee therein was registered under CST & TNVAT & such registration was issued to the proprietor of the firm - It was observed that the assessee therein had incorrectly been assigned as a 'Proprietary Limited Company' which was an entity which did not exist - Following such findings in Andal Motors., the demands raised in the present case are set aside: CESTAT

CX - The assessee has primarily raised issues relating only to non-granting of refund on grounds of unjust enrichment. However we note that the impugned order of the Tribunal has rejected the appeal on merits of refund claim as well as on account of unjust enrichment - The impugned order notes that quantum of trade discount as now claimed, was not available at the time of assessment while removing CNG Cylinders to Oil Marketing Companies (OMC) for further sale to ultimate consumer - The refund is being sought on seeking reassess a completed assessment by virtue of retrospective effect being given to a trade discount declared post removal of CNG Cylinder - This discount was not known prior to removal - It held that this exercise on the part of assessee in seeking to reassess the goods, is not permissible without having originally opted for provisional assessment - Thus, the refund claim itself is not sustainable in view of the decision in MRF Ltd. 2002-TIOL-257-SC-CX-LB, where it has been held that the fluctuation in price subsequent to removal does not affect the liability to excise duty - Therefore, refund of amount paid as duty, due to lower prices is not permissible - Besides, the impugned order of Tribunal has taken a view that the burden of duty has been passed on to the final customer - This view is in accord with the decision of Supreme Court in Addition & Co. Ltd. 2016-TIOL-146-SC-CX-LB, where it has been held that where the duty paid has been passed on to the ultimate consumer, the mere issuing of credit note to the buyer will not rebut the presumption of unjust enrichment under Section 12B of the Act - Both the questions urged by Revenue do not give rise to any substantial question of law: HC

CX - The issue is to decide as to whether the assessee was correct in debiting the amount pertaining to retrospective amendment vide FA, 2003 by making adjustment in Cenvat Credit Account or otherwise and denial of refund on account of AED and Education Cess under Notfn 32/99-CE - Along with these, there was some incidental denial of unutilized balance of cenvat credit causing short payment of duty along with interest - Regarding the issue on payment of amount as per retrospective amendment, same could be done either through PLA or through Cenvat Credit Account - In this connection, Tribunal rely upon the decision of Tribunal in case of SCT Ltd. - Similar view has been taken by this Tribunal in case of Nehru Steel - Considering the same, it is found that there is no irregularities committed by assessee while debiting the amount on account of retrospective amendment of Notfn 32/99-CE through Cenvat Credit Account - Regarding the refund on account of Education Cess, same is covered by decision of Tribunal in assessee's own case for the different period by relying upon the judgement of Supreme Court in the case of SRD Nutrients Pvt. Ltd. - 2017-TIOL-416-SC-CX - The purpose of Notfn 32/99-CE was to make the entire production within North Eastern Region to be total tax free zone by that aforesaid Notification - If it is held that the assessee is not entitled for refund of AED paid, as per Notfn 32/99-CE, the same will be render Industrial Policy envisaged by the Government in effective: CESTAT

2019-TIOL-1154-CESTAT-BANG

United Telecoms Ltd Vs CCT

Cus - The assessee have entered into a contract with BSNL for supply of MSC based WLL CDMA equipment along with associated equipment and accessories - The purchase order given to the assessee also put a condition that the WLL equipment along with associated equipment shall be of usage technology of China - Accordingly, the assessee have imported the material from ZTE, China and filed Bills of Entry - Commissioner of Customs has confirmed the differential customs duty on the WLL CDMA equipment and customs duty on other items of import like computers, cables, printers and training model BTS and has also imposed penalty under Section 112 of Customs Act, 1962 - The assessee at the time import have not imported the impugned software separately in the form of CD or any other media - As per assessee and as per the suppliers the software was pre-loaded on the hardware - Therefore, it will be difficult to see an artificial separation between the software and hardware component of the imported goods - Therefore, the Customs Commissioner has correctly charged the applicable Customs duty on the Transaction value - Similarly, it is not the case of assessee that at the time of removal of goods from the factory to BSNL, they have separately presented the software, either the one which came along with the imported goods or the one which they have subsequently supplied at the time of manufacture - Therefore, it is to be construed that the value paid or payable for the equipment included that of software and hard ware which were inseparable at the time of clearance from the factory - Arguably, the goods need to be assessed to duty at the time of clearance, in the condition in which they are removed from the factory - Assessee's objection on the basis of use of words like 'firm ware' 'Etched ware" "Eprom" by Commissioner would in no way alter the character of the goods and the fact that the hardware is loaded with software - As held by Supreme Court in Anjaleem's case - 2006-TIOL-06-SC-CX , the Commissioner has rightly upheld the demand of duty on the goods supplied by assessee to M/s. BSNL in spite of the fact that the price was split between hardware and software in the invoices - The Customs authorities have rightly held that the splitting up of value between hardware and software was not correct and the goods must be valued as per the transaction value - Department has forwarded an Annexure-3 to the Customs authorities for import of goods at concessional rate of duty - Audit was conducted during month of November 2004 and the same were forwarded to the company vide letter dated 24.12.2004 - Further the impugned SCN was issued to the assessee on 01.12.2005 after a lapse of long time - The assessees' submissions on limitation are valid - No suppression or intent to evade duty can be inferred from the case records and circumstances - Consequently, the penalty imposed under Section 11AC is not maintainable - Therefore, same is aside: CESTAT

- Appeals partly allowed : BANGALORE CESTAT

2019-TIOL-1153-CESTAT-MAD

CC Vs Trinity Exporters

Cus - The assessee had imported one second-hand EVA linear type injection moulding machine with accessories - The goods being second-hand, were subjected to first check in presence of an approved Chartered Engineer - Post such appraisement, the goods were valued at USD 78,000 FOB equivalent to Rs. 39,02,703/-, on which basis the Original Authority re-determined the value in terms of Valuation Rules, 2007 - The Original Authority also held that the impugned goods are listed in their Anti-Dumping Notfn 47/2009 and hence held that Anti-Dumping Duty (ADD) is required to be additionally levied on 223% of assessable value - It is evident that the Anti-Dumping measures are targeted at goods which are dumped by a foreign country and as a resultant, the domestic industry is adversely affected - Obviously, the domestic industry would only be concerned about the products that it releases into the market, namely, the new items thereof and not the second-hand sales of the products that they have sold earlier - Comparison has to be of two comparables, namely, of new domestic products against new imported goods, as there cannot be a comparison between new domestic output and second-hand imported goods - Once it is recognized that the basic purpose of ADD is to serve as a price leveller to protect the domestic industry, the same intent and purpose is served even in case of second-hand machinery imports by way of re-appraisement of declared value, based on the present condition of imported item by the Chartered Engineer - The proposition of revenue is that after second-hand machinery has been re-appraised by such Chartered Engineer and its value enhanced, it should now be considered as a new machine and ADD imposed - This in one view does not make legal sense - Re-appraisement of second-hand machinery and enhancement of its value, and imposition of Anti-Dumping Duty on top of that, is nothing but double jeopardy, if not an overkill - The import of second-hand machinery cannot be subjected to imposition of Anti-Dumping Duty by the particular Notification, which evidently would only be applicable for the import of new machinery or goods listed therein - The impugned machinery in question had been manufactured in 2007 and it was first exported to South Africa from where it has made its circuitous journey back to this country - The Anti-Dumping Duty Notification which came about in 2009, cannot be back-pedalled to be imposed on goods which have been manufactured and exported in 2007 from a particular country: CESTAT

- Appeal dismissed : CHENNAI CESTAT