| SERVICE TAX
ST - Petition seeking condonation of delay - Delay of about 400 days in filing appeal before Tribunal and a delay of 684 days in filing appeal before the High Court - Negligence on the part of the petitioner - petitioner blaming staff who were looking after service tax matters - no explanation for the delay - non-appearance before the adjudicating authority and thus dragging on the matter - condonation application dismissed by Tribunal and restoration application also dismissed - non-appearance before the CESTAT on both occasions.
Held: C onduct of the petitioner in the proceedings before the Tribunal clearly precludes the Bench from exercising any discretion in favour of the petitioner - no reason to condone the delay which is inordinate and unexplained - Petitions dismissed: High Court [para 5, 6]
- Petitions dismissed: MADRAS HIGH COUT
2019-TIOL-1260-CESTAT-HYD Marinetrans India Pvt Ltd Vs CST
ST - The appellant company provides construction services - Prior to 01.06.2007, it paid tax on composite contract after availing 67% abatement under Notfn No 18/2005-ST and Notfn No 01/2006-ST - For the period after 01.06.07 the appellant began exercising the option of paying 2% service tax under the Works Contract (Composition Scheme for Payment of Service Tax) Rules 2007, as provider of WCS - The Revenue initiated proceedings against the appellant for availing ineligible abatement for the earlier period and to deny the benefit of composition scheme owing to delayed intimation of exercise of option for the latter period - SCN was issued proposing recovery of duty with cess along with imposition of penalties - The Tribunal remanded the matter to determine eligibility for abatement - In a fresh O-i-O, the duty demand was re-iterated, albeit reduced in quantum, holding the assessee to have provided completion & finishing service which is ineligible for benefit under Notfn No 01/2006-ST - Further demand was raised by denying benefit of composition scheme for period till date of intimation of exercising of such option.
ST - The appellant-company is a freight forwarder & is registered as service provider under BSS - Intelligence gathered by the Excise Department revealed that the appellant purchased space from shipping lines and sold the same it to the exporters for profit - The space purchased at a lower price from the shipping lines is in turn sold at higher prices to the exporters, on account of which the appellants earn some extra income - SCN was issued seeking to levy service tax under BAS, on grounds that the appellant was promoting the services of the main shipping line and was getting paid for it - Demand was raised by invoking extended period of limitation - Interest was demanded & penalties were imposed u/s 77 & 78 Finance Act 1994 - On adjudication, the demands were confirmed with interest & penalties were imposed - Hence the present appeal.
Held - It is the appellant's case that its activity is a deal on principal-to-principal basis between them and the shipping lines and again between the exporters and them - The appellants claim to have not acted as an agent - It could purchase the space for a lower price and sell it at a higher price & so earn profit - On the other hand, if they failed to sell the space to exporters, after purchasing from the shipping lines, they may incur a loss - They appellants claimed to have not received any commission from the shipping lines or from the exporters - Besides, it is evident CBIC Circular No. 197/7/2016-ST dated 12.08.2016 that service tax is payable when one acts as an intermediary & not as a trader dealing principal-to-principal basis on their own account - In Phoenix International Freight Services Pvt Ltd - 2016-TIOL-2353-CESTAT-MUM it was held that sale of space on ships does not amount to rendering a service and so any profit arising herein is not taxable - Considering such position, the duty demands, interest & penalties warrant being quashed: CESTAT
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Assessee's appeal allowed
: HYDERABAD CESTAT
2019-TIOL-1259-CESTAT-KOL
Nitson And Amitsu Pvt Ltd Vs CST
ST - The appellant company provides construction services - Prior to 01.06.2007, it paid tax on composite contract after availing 67% abatement under Notfn No 18/2005-ST and Notfn No 01/2006-ST - For the period after 01.06.07 the appellant began exercising the option of paying 2% service tax under the Works Contract (Composition Scheme for Payment of Service Tax) Rules 2007, as provider of WCS - The Revenue initiated proceedings against the appellant for availing ineligible abatement for the earlier period and to deny the benefit of composition scheme owing to delayed intimation of exercise of option for the latter period - SCN was issued proposing recovery of duty with cess along with imposition of penalties - The Tribunal remanded the matter to determine eligibility for abatement - In a fresh O-i-O, the duty demand was re-iterated, albeit reduced in quantum, holding the assessee to have provided completion & finishing service which is ineligible for benefit under Notfn No 01/2006-ST - Further demand was raised by denying benefit of composition scheme for period till date of intimation of exercising of such option.
Held - It is amply clear that the dispute for the period after 01.06.2007 arises merely from technical lacuna - The appellant being a provider of WCS is entitled to benefit of composition scheme which seeks to limit the tax to the service component of a composite contract - The failure to intimate exercise of this option would not saddle the appellant with additional burden of duty - Hence the disallowance of the benefit under composition scheme is incorrect - Hence the differential duty for period after 01.06.2007 is not tenable - The issue stands settled by the Apex Court in Commissioner of Central Excise & Customs, Kerala v. Larsen & Toubro Ltd 2015-TIOL-187-SC-ST where it was held that the various enumerated services collectively called works contracts, even though included in section 65(105) of Finance Act, 1994 prior to that date would be taxable only if these were services simpliciter and not in composite contracts - It was also held that the legislative intent was to exclude such composite contract prior to the incorporation of WCS in the Finance Act 1994 - Hence no duty demand arises for the period prior to 01.06.07: CESTAT
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Assessee's appeal allowed
: KOLKATA CESTAT
CENTRAL EXCISE
2019-TIOL-980-HC-KOL-CUS
Cus - The goods in question have been confiscated by the customs and the appellants have been denied the option of redeeming goods by the Customs - The appellants claims to be a courier from whose possession the goods were seized - They submits that since the goods were in possession of his client at the time of their seizure by customs authority, as a matter of right, his client has the right to redeem the goods - Appellants very fairly concedes that the owner of goods is not kept secret - The customs authorities have been informed about the identity and whereabouts of the owners - This is not accepted by respondent who submits that the name and address of the owner has not been disclosed - If the owner of goods is properly identified and submits to the authority of the customs, his agent, upon proper authorization by him can be allowed to avail of and redeem the goods under Section 125 of the said Act - Such an interpretation has to be given to Section 125 of the said Act - To avail of such option, the owner must make the answer to declare and comply with the above conditions of this order within two months from date - Otherwise, the customs may take steps for dealing with the confiscated goods in accordance with law: HC
- Appeals disposed of: CALCUTTA HIGH COURT
2019-TIOL-1266-CESTAT-DEL
Akshat Enterprises Vs CCGST
CX - Allegation of clandestine clearance of goods without payment of duty by misusing SSI benefit/using brand name - demand confirmed and order upheld by Commissioner(A), hence appeal before CESTAT.
Held: Entire case is based on the statements recorded during the investigation and it is on record that the Adjudicating Authority has not permitted the cross examination of Naveen Jain, Director and others as per the provisions of Section 9D of the Central Excise Act, 1944 - Adjudicating Authority was bound to permit their cross examination - it is held in the case of Vikram Cement P. Ltd. that the evidentiary value of a sole statement of Director cannot establish the guilt of assessee - burden of proof lies on the Revenue and is required to be discharged effectively, however, the same has not been done in this case - As far as the use of the common brand name is concerned, it is on record that the same has been assigned by the assignment deed - moreover, the brand fixed were 'AKS Gold' and 'AKS Silver' and which appears to be a different brand name than 'AKS' - impugned order set aside and appeal allowed with consequential relief: CESTAT [para 11, 12, 13, 15]
- Appeals allowed: DELHI CESTAT
2019-TIOL-1265-CESTAT-MAD
Alstom T And D India Ltd And Schneider Electric Infrastructure Ltd Vs CGST & CE
CX - Appellants manufacture various types of relays and clear the same without payment of duty under notification 67/95-CX for manufacture of control panels - control panels in turn are cleared for home consumption on payment of duty to export markets under LUT as well as under exemption Notification 6/2006-CE dated 1.3.2006 (Sl. No. 91) as amended, without payment of duty - department of the view that the benefit of exemption notification 67/95-CX is not admissible - appeal to CESTAT.
Held: Issue stands covered by the Tribunal decision in Areva T&D India Ltd. - 2018-TIOL-491-CESTAT-MAD where it is held that once the assessee has complied with the provisions of Rule 6 and all the connected requirements of the Notification No. 67/1995-CX, benefit of notification is admissible - following the said decision, impugned orders are set aside and appeals are allowed: CESTAT [para 2, 3]
- Appeals allowed: CHENNAI CESTAT
2019-TIOL-1264-CESTAT-AHM
Shri Ambica Polymer Pvt Ltd Vs CCE & C
CX - Periodic demands were raised seeking to deny concessional rate benefit of Sr. No.3 to Notification No. 23/2003-CE dated 31.03.2003, on the ground that when raw materials were procured from 100% EOU / SEZ units, the same amounts to "imports" for the purpose of procurement of goods by the Appellant and hence, ineligible for such benefit - demands confirmed, hence appeal.
Held: Condition No.3 states that in order to claim benefit of concessional rate under Sr. No.3, goods should be manufactured "wholly from raw materials produced or manufactured in India" - Condition does not state "wholly from raw materials produced or manufactured in DTA", and such meaning, therefore, cannot be artificially assigned by revenue authorities - Following the ratio laid down by higher forums, since goods produced and supplied by SEZ unit to the Appellant are to be treated as produced in India only, the condition No.3 to Notification No. 23/03-CE can be said to be fulfilled in such circumstances - impugned order confirming the demands set aside and appeals allowed, except appeal No. E/12185/2018 which is remanded to the Commissioner (Appeals) since non-condonation of minor delay in filing the appeal is condoned by the Bench: CESTAT [para 5]
- Appeals disposed of: AHMEDABAD CESTAT
2019-TIOL-1263-CESTAT-KOL
Amit Metaliks Ltd Vs CCE & ST
CX - Allegation of clandestine manufacture and removal of M.S. Ingots without payment of duty - entire show cause notice is based on the stock taking report and the various statements recorded of the Authorised Representative, Transporter and Director of the appellant company - no evidence has been gathered by the Revenue about clearance or sale or transportation of any extra quantity; about receipt of price for extra quantity; about any buyer having received any extra quantity; and no extra quantity of finished goods or raw material was found at the factory or other places - allegation of clandestine removal of finished goods and the raw material are based purely on the assumption and presumption and surmises and conjecture - No corroborative evidence was adduced by the Revenue in support of alleged clandestine removal of the goods - alleged clearance of 19352.552 MT of final product is based upon the show cause notice issued to M/s SSSIL alleging the manufacture and clearance of 18501.04 MT of sponge iron to the appellant - reliance placed on another show cause notice and/or third party evidence without further corroboration is of no use - without following the procedure established under Section 9(D)(i) of the Act, statements cannot be admissible as evidence - raw material for the manufacture of the ingot by the appellant has allegedly come from the State of Orissa - No evidence on transport whatsoever has been gathered by the Revenue about the transport of the goods from one state to another state which is well documented at the check post of the two states - impugned order set aside and appeals allowed with consequential benefits: CESTAT [para 11 to 15]
- Appeals allowed: KOLKATA CESTAT
2019-TIOL-1262-CESTAT-AHM
Alkem Laboratories Ltd Vs CCE & ST
CX - Cenvat credit on Furnace Oil - whether credit can be curtailed in view of the fact that the appellant supplied steam generated in their factory to their sister unit located adjacent - in the appellant's own case, the Tribunal remanded the matter to ascertain as to whether the sister concern used the steam to clear the final product on payment of duty and if so, to extend the credit, therefore, impugned order is also set aside and matter is remanded to the adjudicating authority to decide in terms of earlier decision of Tribunal: CESTAT [para 3]
- Matter remanded: AHMEDABAD CESTAT
2019-TIOL-1261-CESTAT-DEL
Allied Chemical And Pharmaceuticals Pvt Ltd Vs CCE & ST
CX - The assessee is manufacturing 'PHENOTIL', a pharmaceutical product with a formulation of Diphenoxylate Hydrochloride with Atropine Sulphate - According to them, this formulation was covered by exemption Notfn dated 01 March, 2006 which inter alia mentions various bulk drugs, including Atropine - The view of Department was that the major constituent of 'PHENOTIL' was Diphenoxylate Hydrochloride and since this bulk drug was not mentioned in exemption Notfn, the assessee was not entitled to claim exemption from payment of excise duty - Accordingly, SCN was issued - The Department itself required the assessee to pay excise duty on drugs by not accepting the claim of assessee that it was exempted from payment of excise duty - It is not the case of the Department that payment of excise duty could not have been made by utilizing the Cenvat Credit if the goods were not exempted and this is the reason why no objection was raised by the Department when excise duty was paid by utilization of Cenvat Credit - It is, therefore, not open to Department to now contend that since the final product has been exempted from payment of excise duty by the Tribunal, Cenvat Credit could not have been utilized for payment of excise duty - When no SCN was issued by Department to assessee under Rule 14 of CCR, 2004 for denying Cenvat Credit, the claim of assessee for refund of excise duty paid through Cenvat Credit cannot be denied for the reason that Cenvat Credit could not have been availed of - In proceeding for deciding refund of excise duty, the eligibility of Cenvat Credit cannot be examined - In this connection, reference needs to be made to the decision of Allahabad High Court in M/s HCL Comnnet System & Services Ltd. - Thus, the claim of assessee for refund of excise duty paid through Cenvat Credit could not have been denied - However, this order will not prohibit the Department from issuing a notice under Rule 14 of CCR, 2004, if it is now permissible in law - Therefore, Tribunal is unable to sustain the order passed by Commissioner (A) and accordingly, set aside the same - The assessee shall be entitled to the refund of entire amount towards refund of the excise duty paid under protest with consequential benefits - It shall, however, be open to the Department to issue a notice under Rule 14 of CCR, 2004, if it is now permissible in law: CESTAT
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Appeals allowed
: DELHI CESTAT
CUSTOMS
2019-TIOL-1258-CESTAT-KOL
CC Vs Devraj Trading Corporation
Cus - In view of the reasons as explained, the delay in filing the appeals before this Tribunal, is condoned - The disputed duty involved in this case is below the monetary limit of Rs.10 lakhs which has been notified by the Government vide Circular 390/Misc./163/2010-JC and F.NO.390/Misc./116/2017-JC - Accordingly, the appeal is dismissed under National Litigation Policy - Stay Petition also gets disposed off: CESTAT
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Appeal dismissed
: KOLKATA CESTAT
2019-TIOL-1257-CESTAT-HYD
Syed Jameel Uddin Vs CC
Cus - The assessee is a customs broker originally registered as CHA under CHALR, 2004 - The DRI investigated a case pertaining to M/s Logo Trading and M/s Azomatrix Impex based in Coimbatore who misdeclared 'rejected/torn/damaged items of leather like material with negligible value' as '100% pure leather items' with a mala fide intention to claim drawback - DRI also investigated the customs brokers who processed these exports and it was found that the assessee had filed 8 shipping bills in respect of M/s Trendy Knitz, 14 shipping bills with misdeclaration of quantity and value in respect of M/s Shakthishka Exports - Therefore, it appeared that assessee had attended to customs clearance work on behalf of the alleged fraudulent exporter viz., M/s Shakthishka Exports - The first question to be decided is whether the assessee has indeed sublet his license to Shri Uma Mahesh who has filed the shipping bills in question in respect of their exporters without verifying the antecedents - This fact was revealed when Shri Uma Mahesh was questioned by officers of DRI - He recorded this in his statement - Any person who makes a statement under duress will, at the earliest opportunity, retract the same - Shri Uma Mahesh had at no point of time retracted the statement until he was crossexamined during the adjudication proceedings - This statement of Shri Uma Mahesh is corroborated by the fact that he was transferring Rs.25,000/- per month to the assessee - If Shri Uma Mahesh was indeed an employee of assessee and not one who sublet his license, then the assessee should have been paying Shri Uma Mahesh and not the other way around - The amount which is transferred to the assessee every month matches with the amount which he said was the fee he pays for subletting the license of assessee - If the exporters did not exist at the address indicated therein he should not have filed the shipping bills - Assessee had indeed sublet his license for the shipping bills in question to be filed - Tribunal give the benefit of doubt to the assessee that he had, himself, got the shipping bills filed using the services of Shri S. Uma Mahesh - If that be so, the assessee has failed in discharging his obligation under Regulation 11(a) of CBLR, 2013 in not verifying the antecedents of exporters and Regulation 17(a) in not supervising the work of his employees - For these violations, the penalty of Rs.50,000/- imposed upon the assessee under Regulation 22 of CBLR, 2013 appears sufficient - On payment of this penalty, assessee's license will stand restored and the forfeiture of the security deposit also stands set aside: CESTAT
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Appeal partly allowed
: HYDERABAD CESTAT
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