2019-TIOL-NEWS-107, Dated: Tuesday, May 07, 2019

2019-TIOL-1284-CESTAT-BANG

Peeci Associates Vs CCE & ST

ST - The appellant company is engaged in the construction of residential apartments and flats - It identifies land, purchases it, obtains designs and drawings from architects, engages contractors for construction, obtains necessary permissions, engages in agreements with buyers & then receives advance and handovers the property - The assessee constructed three complexes - The Revenue alleged that the assessee rendered services covered u/s 65(30a) of the Finance Act 1994 as Construction of Complex Service - The Revenue issued SCN proposing duty demand with EC along with interest & penalties - On adjudication, the same were confirmed - On appeal, the Commr.(A) confirmed the demand with penalty u/s 78 of the Finance Act 1994, while setting aside the other demands - Hence the assessee's appeal.

Held: The issue to be decided is whether the assessee's activities were taxable during the relevant time - It was confirmed in the O-i-O that such work came under composite contracts - The appellants enter into contracts with individual buyers for sale of undivided interest in land & apartment - Such prospective buyers did not enter into individual itemized contracts with the assessee or with others for construction work, labor or material - The value of such individual items is not mentioned in the agreements - In such circumstances, it is fair to consider such contracts to be composite works contracts - Consequently, the decision of the Apex Court in CCE Vs Larsen & Toubro - 2015-TIOL-187-SC-ST is applicable here, wherein it was held that works contract is taxable only w.e.f. 01.06.2007 - Now as the demand in the present case pertains to the period between 2005-2006, the decision in Larsen & Toubro is squarely applicable - The demands & penalty merit being quashed: CESTAT

- Assessee's appeal allowed : BANGALORE CESTAT

2019-TIOL-1283-CESTAT-AHM

Battenfield Extrusionchnik Vs CCE & ST

ST - The appellant company located in Germany provided technical know-how for manufacturing plastic extrusion machinery to one M/s Kabra Extrusiontechnik located in India - The Revenue opined that such activity was taxable as Consulting Engineer Service - Duty demand was raised - On appeal, the Commr.(A) upheld the same - Hence the present appeal.

Held: The matter must be decided on the point as to whether or not the appellant, being a corporate, would be covered under the definition of Consulting Engineer Service & so be liable to pay service tax - Considering the Tribunal's decision in Korpan Ltd it is seen that the term 'corporate' was inserted in the definition of Consulting Engineer from 2006 onwards - The period of dispute in the present case is 1999-2002 - Thus during the period of dispute, the corporate was not taxable as consulting engineer - Hence the appellant is not liable to pay service tax under Consulting Engineer Service: CESTAT (Para 1,4,5)

- Assessee's appeal allowed : AHMEDABAD CESTAT

CX - The assessee has availed CENVAT credit on MS channels, angles and plates joists which were used by them in their factory for maintenance of capital goods - A SCN was issued seeking to deny CENVAT credit on the ground that these were not inputs or capital goods - The first question to be decided is whether the assessee is entitled to credit on MS angles, channels and sheets which were used in manufacture/fabrication/maintenance of capital goods in their factory - This issue is no longer resintegra and has already been decided in favour of assessee in their own case - The second question to be decided is whether the materials in question have been used in or in relation to fabrication/maintenance of capital goods - The documents in the form of sheets produced by Finance Department of factory give invoice details of where the materials were used - From the practical stand point, it will be difficult for manager-in-charge of works to show which sheet of metal or which angle that came from which supplier under the cover of which invoice has gone into the repair of which part of which machinery - The Finance Department can show that the materials were received in their factory and they have been allotted to different divisions - Once these were allotted and sent to various divisions of repair and maintenance, it will be difficult to point out as to which angle used in repair and in particular which has come from stock received from which invoice - Such one to one co-relation is difficult except where the factory has sophisticated inventory management system to track each sheet of metal and each angle - Assessee has satisfactorily shown that the materials in question were used in their factory for maintenance/repair of capital goods - Assessee is entitled to CENVAT credit and impugned order is set aside: CESTAT

CX - Assessee is engaged in manufacture of Plastic items for which they are using Blow Moulding, Injection Moulding process - For manufacture of goods, they require moulds which they purchase on their own - They are selling goods manufactured by them on principal to principal basis to various buyers - The assessee, after using mould for a reasonable amount of period, stopped getting order from M/s. Gulf Oil Corporation Ltd and M/s Penzoil Quaker State (I) Ltd. as the buyers opted to get the products manufactured from others - Revenue argued that the moulds were sold at the price at which they were purchased - He argued that it was the simple arrangement between the buyers and the assessee to avoid inclusion of value of moulds - It is not under dispute that the moulds were originally purchased by assessee - The entire case of Revenue is based on the assumption that the moulds actually belonged to the buyer and it was arrangement made between the parties to avoid payment of Excise duty - No evidence in respect of such assertion has been produced - The said allegation is solely based on the fact that the prices at which the moulds were sold by assessee was same as the purchase price years ago - It is not sufficient ground to hold that the ownership of moulds was always with the buyers - Revenue has not been able to establish that the moulds belonged to the buyer of the material - In absence of this evidence, the value of moulds cannot be separately included in the assessable value of the goods - The appellants have been able to show that the moulds were purchased by them years ago and the same were used to manufacture and clear the goods to the buyers for a considerable period of time - In this circumstances, Tribunal is unable to uphold the allegation made by Revenue regarding inclusion of price recovered in the sale of moulds in assessable value - However, in so far as the use of moulds by assessee in case of Penzoil Quaker State, after the sale of the said moulds is concerned, assessee have already admitted the liability and have paid the duty - Appeal allowed to the extent that the price of moulds recovered from the buyers cannot be included in the assessable value of the goods already cleared by them before sale of the said moulds - Demand on that count is set aside - No merit found in imposition of penalty, same is therefore, set aside: CESTAT

Processing of applications received in response to Trade Notice No. 06/2019-20 dated 16th April, 2019 for import of Peas and Pulses for the fiscal year 2019-20

Cus - Notification 21/2002-Cus - Respondent has described in the BE the goods imported as ‘Electronic Sensor Paver Vogele - Model Super 1800-2 with AB 600-2 TV screen for laying bituminous pavement up to 9 meter width' whereas on examination the same was found that the machine is capable of laying bituminous pavement of 3 meters only; that only with addition of bolt-in extensions the machine could be capable of laying bituminous pavement of 7 meters and above - Issue has been considered by Larger Bench of Tribunal in the case of Ramky Infrastructure Ltd. - 2014-TIOL-1020-CESTAT-MUM-LB and where it is held that the machine is complete in itself without any accessories and, therefore, the machines do not qualify for exemption under notification 21/2002-Cus - following the said precedent and the apex court ruling in Dilip Kumar - 2018-TIOL-302-SC-CUS-CB observing that exemption notification should be interpreted strictly, the impugned order of Commissioner(A) extending the benefit of notification 21/2002-Cus is not tenable, hence set aside - Revenue appeal allowed: CESTAT [para 6 to 8]