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SERVICE TAX
2019-TIOL-1355-CESTAT-HYD
ESPI Industries and Chemicals Pvt Ltd Vs CC, CE & ST
ST - Appellant manufacturing pharmaceutical products on their own count as well as on job work basis - appellant is conducting tests before releasing the goods into the market - However, they are getting paid separately for this testing and analysis and separately for job work - As long as the pharmaceuticals were not under MRP based valuation, excise duty was paid by the appellant reckoning the processing charges including the testing and analysis charges - Since, the pharmaceuticals w.e.f 01.07.2005 were under MRP based valuation, the amounts which they received under the two heads is irrelevant - The question is whether because of change of the valuation under Central Excise to MRP based valuation, the activity of testing and analysis which was hitherto considered by the appellant as a part of their manufacturing costs and which has not been disputed by the department becomes a distinct service rendered to their principals.
Held: Testing and analysis is not a distinct separate service being offered by the appellant to their principals but it is a part and parcel of the manufacturing process - Unless such testing including stability tests and validation tests are conducted, the product cannot be marketed at all - Therefore, no service tax can be leviable separately on this component of the processing charges which they received - impugned order set aside and appeal allowed: CESTAT [para 5, 6]
- Appeal allowed : HYDERABAD CESTAT
2019-TIOL-1353-CESTAT-MAD
ETA Travel Agency Pvt Ltd Vs CGST & CE
ST - ROM application seeking rectification if mistake in final order dated 19.04.2018 - 2018-TIOL-2707-CESTAT-MAD - appellant contends that there appears to be an error apparent on the face of the order inasmuch as the Tribunal has in paragraphs 1 to 3 quoted the facts of another case which was disposed on the very same day - AR agrees.
Held: Errors are patent errors which require rectification - Since the facts have been recorded wrongly in the impugned Final Order, it is better to recall the Final Order and re-hear the appeal so that the errors can be rectified in toto - ROM disposed of accordingly: CESTAT [para 7]
- Order recalled/ROM disposed of : CHENNAI CESTAT
2019-TIOL-1351-CESTAT-HYD
Lurgi India International Services Pvt Ltd Vs CCE, C & ST
ST - The assessee-company manufactures Air and Gas separation plants on Turnkey basis - It obtained technical know-how from M/s L' Air Liquide, France for which it paid royalty of 5% of domestic sales & 8% of export sales - On verification of records, the Revenue issued SCN proposing duty demand after invoking extended limitation - Such demand was proposed under IPR services & claiming that the assessee was liable to pay duty under reverse charge - On adjudication, duty demand was confirmed with interest & penalties were imposed - These were sustained by the Commr.(A) - Hence the present appeals by the assessee.
Held: The Reverse Charge Mechanism came into effect vide Section 66A of the FA 1994 from 18.04.2006 - Hence no duty demand can be raised under RCM for the period prior to 18.04.2006 - For the period post 18.04.2006, it is seen that the Revenue raised the demand having opined that the technical knowhow was given by the foreign company in its proprietary interest & though not registered under the Indian Patents Act 1970, the service tax liability arises on the interpretation of the definition of IPR services - The issue here stands settled by the Tribunal in Reliance Industries Ltd Vs CCE & ST, LTU Mumbai wherein it was held that in order to fasten the service tax liability, the person providing the technical know-how has to be registered with the Patents Authority in India - If the IPR is registered in any foreign country but is not registered in India, the same will not attract the service tax under RCM - Hence the demands merit being quashed: CESTAT (Para 3,6,7,8)
- Assessee's appeal dismissed : HYDERABAD CESTAT
2019-TIOL-1342-CESTAT-DEL
CGST & ST Vs Commandant Cisf Unit
ST - The assessee is registered for providing security personnels to M/s BHEL, Haridwar - Upon audit, the Revenue observed that the assessee received accomodation from BHEL but the cost of the same had not been included in the taxable value of the services provided by the assessee - The Revenue opined that value of such services was includible as per Section 67 of the Finance Act r/w Rule 3 of the Service Tax (Determination of Value) Rules, 2006 - It was also alleged that the assessee had short paid the service tax liability - Hence duty demand was raised with interest & proportionate penalties - Such demands were confirmed on adjudication - On appeal, the Commr.(A) set aside the entire duty demanded - Hence the present appeal by the Revenue.
Held - A joint reading of Section 67 of the Finance Act and Rule 3 of the Service Tax (Determination of Value) Rules, 2006 clarifies that service tax is chargeable on the value of the service provided - The service provided is the security personnels by CISF to M/s BHEL & the liability qua the amount received in lieu of providing said service has admittedly been discharged by the assessee - The consideration received against provision of service as per Explanation to Section 67 includes any amount payable for taxable service provided or to be provided - It is also clear that any amount payable to CISF in respect of the accomodation being provided to the security personnel would be consideration - In such case, then only Rule 3 will come into picture - But there is no evidence on the point about any HRA being paid to the assessee - Hence the issue of notional value of free accomodation cannot form part of gross value which is taxable u/s 67 of the Act - Hence the O-i-A warrants no interference: CESTAT (Para 5,7)
Held - Limitation - The period of dispute is April 2009 to June 2012 while the SCN was issued in Sept 2014 - Hence the period of demand is beyond the normal one-year period - Besides, both the service provider & recipient are Government undertakings - Hence any intent to evade payment of tax cannot be attributed to either of them - The Revenue put forth no other evidence showing any positive act by the service provider which acts as mens rea to evade payment of tax - There is thus no case of suppression or mis-statement of facts on part of the assessee & there is consequently no occasion to invoke proviso to Section 73 of the Finance Act to invoke extended limitation - Hence the SCN and consequent demands are barred by limitation: CESTAT (Para 8)
- Revenue's appeal dismissed : DELHI CESTAT
CENTRAL EXCISE
2019-TIOL-1357-CESTAT-KOL
EMT Megatherm Pvt Ltd Vs CGST & CE
CX - CENVAT credit denied on the ground that the same was availed on the basis of invoices where serial number was hand-written - appeal to CESTAT.
Held: There is no dispute regarding receipt of the inputs in the factory of manufacture and there is also no dispute of Central Excise duty, which has been paid on the inputs - as held in the case of A.A. Trailers 2017-TIOL-3621-CESTAT-MUM , printed invoices is not a mandatory requirement under the Statute - impugned order set aside and appeal allowed with consequential relief: CESTAT [para 6, 7]
- Appeal allowed : KOLKATA CESTAT
2019-TIOL-1356-CESTAT-DEL
Ericsson India Pvt Ltd Vs CCE
CX - SCN dated 19.09.2014 for the period July 2009 to March 2013 - Issue has arisen due to change of opinion on the part of the Revenue but there is no suppression of facts on the part of the appellants - Extended period of limitation is not invokable - For reversal of CENVAT credit on partial writing down of value of inputs, the provision was introduced first time by amendment of Rule 3(5B) of CCR, with effect from 01.03.2011 by notification 3/2011-CE(NT) - There was also no provision prior to 01 March 2013 [notification 3/2013-CE(NT) ] for recovery of cenvat credit and interest thereon under Rule 3(5B) etc. by invoking rule 14 of CCR, 2004 - impugned order demanding CENVAT credit is not sustainable, hence set aside - appeal allowed with consequential relief: CESTAT [para 7 to 9]
- Appeal allowed : DELHI CESTAT
2019-TIOL-1354-CESTAT-MAD
Ellen Industries Vs CCE & ST
CX - CENVAT - Once a buyer of inputs receives invoices of excisable items, unless factually it is established to the contrary, it will be presumed that when payments have been made in respect of those inputs on the basis of invoices, the buyer is entitled to assume that the excise duty has been/will be paid by the supplier on the excisable inputs - Buyer will be, therefore, entitled to claim Modvat credit on the said assumption - It would be most unreasonable and unrealistic to expect the buyer of such inputs to go and verify the accounts of the supplier or to find out from the department of Central Excise whether actually duty has been paid on the inputs by the supplier - No business can be carried out like this, and the law does not expect the impossible - Impugned order denying the credit set aside and appeal allowed with consequential benefits: CESTAT [para 5, 7]
- Appeals allowed : CHENNAI CESTAT 2019-TIOL-1350-CESTAT-BANG
Apollo Tyres Ltd Vs CCT & CE
CX - Appellant received inputs from its sister concern and had taken CENVAT credit and utilized the same for payment of Central Excise Duty - it is allegation of the department that the duty paid on inputs is in excess of the actual duty liability and the said excess duty has been wrongly taken as CENVAT credit - demand confirmed along with imposition of interest but penalty proposal dropped - Commissioner(A) upheld this order, therefore, appellant before CESTAT.
Held: Apex Court in the case of MDS Switchgear = 2008-TIOL-245-SC-CX has held that recipient manufacturer is entitled to avail the benefit of duty paid and quantum of duty already determined by the jurisdictional officer of the supplier unit cannot be contested or challenged by the officer incharge of the recipient unit; that in the case of Cipla Ltd. 2011-TIOL-1238-CESTAT-MUM , the Tribunal has held that credit cannot be varied at the recipient's end on the ground that the supplier should have paid lesser duty - issue is squarely covered by these decisions in favour of assessee, therefore, impugned order is set aside and appeal is allowed: CESTAT [para 6]
- Appeal allowed : BANGALORE CESTAT
2019-TIOL-1349-CESTAT-BANG
Nsl Sugars Ltd Vs CCE, C & ST
CX - The assessee have availed CENVAT credit wrongly but the same was reversed along with interest after being pointed out by the audit party - They have shown the CENVAT credit in their ER-1 returns and the computation sheet attached with the SCN also clearly shows that the audit party detected the wrong availment from the records of assessee - Once the assessee has reversed the credit along with interest before the issuance of SCN, then as per Section 11A(2), the Department should not have issued the SCN - Further, the department has not brought any material on record to show that there was suppression of fact with intent to evade duty - In view of the Board's circular dated 18.8.2015, once the assessee has paid the duty along with interest and there is no suppression, then the proceedings shall be deemed to be concluded - The impugned order imposing penalty is not sustainable in law: CESTAT
- Appeal allowed : BANGALORE CESTAT
CUSTOMS
2019-TIOL-1348-CESTAT-AHM Neno Crystal Vs CC
Cus - The issue involved is the enhancement of value of glass chaton imported by assessee on the basis of NIDB data - Though the value of imported goods was enhanced on the basis of NIDB data but without providing documents relating to NIDB data which amounts to violation of natural justice - Accordingly, the matter is remitted back to the Adjudicating Authority - The Adjudicating Authority shall provide the necessary documents of the imports, relating to NIDB data and thereafter the matter may be decided afresh, after giving reasonable opportunity of personal hearing: CESTAT
- Matter remanded : AHMEDABAD CESTAT
2019-TIOL-1347-CESTAT-KOL
Sudip Saha Vs CC
Cus - The DRI officers intercepted two persons, namely Shri Tanmoy Saha and Shri Alekh Hossain, near kalibiscuiti at Melarmath area of Agartala alongwith their conveyances, one motor cycle and one bicycle - On enquiry, Shri Alekh Hossain took out 10 nos. gold biscuits wrapped with adhesive tapes and paper from his trouser pocket and handed over to the DRI officers - Each of the recovered gold biscuits had foreign marking as "MWG UAE 10 Tolas, 999.0 MWG Melter Assayer" - They could not produce any document showing the acquisition of gold biscuits - The investigation established the fact that gold biscuits of foreign origin were carried/smuggled by Shri Tanmoy Saha and Shri Alekh Hossain and ownership of the seized gold biscuits was claimed by Shri Sudip Saha - No reason found to interfere with the conclusion of Commissioner (A) that the seized gold biscuits are liable for confiscation under Section 111(b) and (d) of Customs Act, 1962 - The penalties imposed on three assessees under Section 112 (b)(i), are justified considering their involvement in smuggling of 10 pieces of gold biscuits of foreign origin - The penalties imposed under Section 112 (b)(i) on the three assessees for their purported smuggling on the basis of their voluntary statements only which is not corroborated with any evidence, have been rightly set aside by First Appellate Authority as no penalty can be imposed on assessee for their past acts of smuggling on presumption: CESTAT
- Appeals dismissed : KOLKATA CESTAT
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