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SERVICE TAX
2019-TIOL-1416-CESTAT-HYD
GMR Hyderabad International Airport Ltd Vs CCE
ST - CENVAT credit availed on service tax paid on input services by the contractor of fuel farm erection - Appellants are eligible to avail CENVAT credit as fuel farm is a part of the airport and used for providing taxable output services i.e. airport services: CESTAT [para 11]
ST - Issue of availment of CENVAT credit on various items like steel and cement and other input services which are used for construction of airport is covered by the ratio laid down by the Gujarat High Court in the case of Mundra Ports & Special Economic Zone Ltd as also by various decisions of the High Court of A.P and Karnataka - Adjudicating authority’s order of denying CENVAT credit is incorrect and unsustainable: CESTAT [para 9]
ST - Hotel is not a part of the airport and hence cannot be considered as used for rendering airport services - Credit rightly denied - Contractors who constructed the airport discharged service tax liability by availing abatement under Notification No 1/2006-ST - payment of service tax by the contractors who constructed the hotel without availing CENVAT credit is in itself indicative that the said hotel is not a part of the airport: CESTAT [para 10]
ST - Provisions of CENVAT credit Rule 2(l) clearly indicate that CENVAT credit cannot be availed of the duty paid on motor cars - In the case in hand, appellant is not entitled to avail CENVAT credit of the central excise duty paid on Volvo chassis: CESTAT [para 13]
ST - Penalty - Since Bench has disposed of the major demand of irregular availment of CENVAT credit on merits, there is no reason to sustain penalties imposed on the appellant, same are set aside: CESTAT [para 13]
- Appeal disposed of: HYDERABAD CESTAT
2019-TIOL-1413-CESTAT-BANG
Eygbs India Llp Vs CCT
ST - CENVAT - Rule 2(l) of CCR, 2004 - Air travel agency, real estate / facility management services / general insurance service are Input Services - Credit admissible - Impugned order set aside and appeal allowed: CESTAT [para 6.1, 6/2]
- Appeal allowed: BANGALORE CESTAT
2019-TIOL-1398-CESTAT-DEL
Sai Manpower Placement And HR Services Vs CCE & ST
ST - Assessee is registered with Department w.e.f. 29.09.2003 under ‘manpower recruitment and supply agency service' - They have been paying service tax on service charges/commission and not on the total amount received by them from the service recipient, they have been also regularly filing ST-3 returns - Apart from salary and wages, the service charges are shown separately in the bills raised by them - The department during scrutiny of records of assessee observed that the assessee was not paying service tax on total amount received by them for the said service and therefore the Revenue proposed to demand service tax on differential amount along with interest and imposition of equal penalty - The assessee is showing service charges and payment of salary & wages separately in bills raised to the service recipient - If that be so, then the salary and wages does not form part of ‘gross amount charged' and no service tax can be charged on said amount being in nature of pure agent - Assessee is required to pay service tax on service charges, which has been paid - Similar view has been taken by Tribunal in case of Gujarat Intelligence Security 2010-TIOL-825-CESTAT-AHM - The extended period of limitation is not available to Revenue in as much as the assessee is regularly filing ST-3 returns and all material facts are available on records of assessee i.e. balance sheet & Bills - Issue being one of interpretation of law, hence, the extended period cannot be invoked - The impugned order is set aside on merits and also on limitation: CESTAT
- Appeal allowed: DELHI CESTAT
2019-TIOL-1397-CESTAT-ALL
CCE & ST Vs Shalimar Corp Ltd
ST - The dispute relates to taxability of construction of multilevel parking by assessee in terms of agreement entered with M/s Lucknow Development Authority - The Original Adjudicating Authority has dropped the demand on two grounds; first, that the demand was raised under category of Commercial and Industrial Construction Services, whereas the same would be properly classified, if at all, under the 'works contract' category - Secondly, he has observed that construction of multi story parking for Lucknow Development Authority cannot be held to be commercial activity - Lucknow Development Authority was established under the Uttar Pradesh Urban Planning and Development Act, 1973 and is responsible for planned development of Lucknow city - It is entrusted with the responsibility of providing facilities for public amenity and providing multilevel parking is one of the duties of said authorities - Merely because a small fee is being collected from the users will not make the said activity as a commercial activity, inasmuch as, providing of public amenity cannot be for generating profit - Accordingly, he has held that the activity is not covered under the category of any commercial or profit making activity - Even though some nominal fee is being charged, the same primarily remains public facility programs and cannot be considered to be commercial or industrial uses - No infirmity in the findings of the original adjudicating authority - The multilevel parking are made for reducing traffic conditions and parkings on the road and is for betterment and development of the city - It cannot be said to be a commercial activity so as to tax the same - As such, no justifiable reasons found to interfere with the impugned order of Commissioner: CESTAT
- Appeal rejected: ALLAHABAD CESTAT
CENTRAL EXCISE
2019-TIOL-1068-HC-MUM-CX
CCE Vs Kundil Alloys Pvt Ltd
CX - Whether the omission of section 3A of CEA, 1944 by section 121 of FA, 2001 without any savings clause would affect proceedings in respect of which action had already been initiated - Both the parties are ad-idem that in so far as substantial question of law framed by this Court is concerned, the said question is concluded by judgment of this Court in case of M/s Shivam Isapat(P) Ltd and accordingly the impugned order passed by Tribunal can be set aside and appeals preferred by assessee can be restored to the file of Tribunal with a direction to dispose of these appeals on its own merits and in accordance with law: HC
- Appeals disposed of: BOMBAY HIGH COURT 2019-TIOL-1415-CESTAT-KOL
GE Power India Ltd Vs CCE
CX - Exemption under Notification 6/2002-CE as amended vide Notification No. 48/2004-CE and its successor notifications - Main reason for denial of the benefit of the exemption is that the appellant had not directly participated in the International Competitive Bidding (ICB) - Commissioner while interpreting the notification has held that the benefit will be available only for the persons who had directly entered into the bidding process - appeal to CESTAT.
Held: Notification only stipulates that the excisable goods supplied against an ICB are eligible for exemption from payment of duty - There is no condition stipulated in the notification that the person claiming benefit for the goods cleared should have been the bidder in ICB for the mega power project - So long as the goods are supplied to such contract awarded to a person who took part in the International Competitive Bidding, the benefit is not deniable - Project Authority Certificate also clearly recognized the Appellant as one of the sub-contractors for the supply of boilers and parts for the Mega Power Project viz. 1000MW Raigarh Thermal Power Project in Chhattisgarh - impugned orders set aside and appeals allowed with consequential relief: CESTAT [para 8 to 11]
- Appeals allowed: KOLKATA CESTAT
2019-TIOL-1414-CESTAT-DEL
Shri GK Tiwari Amtek Auto Ltd Vs CGST, C AND CE
CX - Appellant, a third stage dealer, mis-represented himself as second stage dealer and forwarded credit to manufacturers who reversed the same upon being pointed out by Revenue - Penalty imposed of Rs.5000/- each on the appellant(s) by the adjudicating authority was enhanced, in Revenue appeal, by Commissioner(A) to Rs.5 lakhs and Rs.25,000/- - appeal before CESTAT.
Held: In the absence of any doubt of duty paid character of the goods and actual supply of the goods by the third stage dealer by mis-representing as second stage dealer, penalty imposable in terms of the Rule 27 of the CER is Rs. 5,000/- - order-in-original is restored - appeal disposed of: CESTAT [para 5]
- Appeal disposed of: DELHI CESTAT
2019-TIOL-1412-CESTAT-CHD
Fresenius Kabi Oncology Ltd Vs CCE & ST
CX - Rule 9(2) of CCR, 2004 - CENVAT credit is admissible on the strength of certified copies of the invoices - impugned order set aside and appeal allowed with consequential relief: CESTAT [para 3, 4]
- Appeal allowed: CHANDIGARH CESTAT
2019-TIOL-1399-CESTAT-HYD
Nizam Sugars Ltd Vs CC, CE & ST
CX - The assessee is a Government of Andhra Pradesh undertaking engaged in manufacture of sugar - Sugar factories were given an incentive scheme by Ministry of Food and Civil Supplies - During period, there were two types of clearances of sugar - Levy sugar to be cleared at a lower rate fixed by Government and free sale sugar which could be sold at a higher market determined price - The excise duty amount so retained was to be used for payment of term loans Corresponding exemption notifications were issued for basic excise duty vide notfn 14/89 and for additional excise duty as per notfn 103/89 - The assessee was collecting Rs.71 per quintal from their customers on free sale sugar and were paying only Rs.38 per quintal to the excise department - The provisions of Sec.11D were introduced in 1991 and for the period in question viz., September, 1991 to August, 1993, the department issued a SCN on 27.02.1996 demanding that the amounts collected from their customers as excise duty and by them may be remitted to the Government as per Sec.11D - In the earlier round of litigation, Tribunal remanded the matter to adjudicating authority only to wait for introduction of a recovery mechanism under Sec.11D - In a similar case of New Holland Tractors India Pvt Ltd 2016-TIOL-3236-HC-ALL-CX, High Court of Allahabad held that the differential amount need not be deposited under Sec.11D - On this exact scheme of sugar factories both the High Court of Bombay in case of Jalna Sahakari Sakhar Karkhana Ltd 2017-TIOL-1919-HC-MUM-CX and the High Court of Allahabad in case of K. Sahakari Ch. Mills held that the assessee is liable to deposit the entire sum collected from the purchasers and cannot be permitted to retain the differential amount of duty - The period in question is September, 1991 to August, 1993 and the SCN was issued on 27.02.1996 - Thus, it cannot be said that there is inordinate delay in issuing the demand - There certainly was delay in deciding the case in the remand proceedings after the provisions of Sec.11D were amended retrospectively from 1991 - Delays in adjudication either in original or in the remand proceedings itself will not amount to delay in issuing the demand - There is no time limit prescribing within which an adjudication, after denovo proceedings has to be completed - Similarly, there is no time limit within which the appeals have to be disposed of - Such delays are certainly highly undesirable but they do not vitiate the proceedings of adjudication nor do they override the statutory provisions of Sec.11D - Therefore, Tribunal is unable to accept the contentions of assessee that delay in taking up the adjudication proceedings denovo would vitiate the demand under Sec.11D - The demand under Sec.11D in impugned order is liable to be upheld: CESTAT
- Appeal rejected: HYDERABAD CESTAT
CUSTOMS
NOTIFICATIONS
cnt37_2019
CBIC notifies Customs exchange rates w.e.f May 17, 2019
cscaadri20-2019
Appointment of CAA by Pr. DGRI
cscaadri21-2019
Appointment of CAA by Pr. DGRI
dgft_trade_notice_15_2019 Claim of MEIS benefits for exports made to countries in the OFAC List such as Iran and for Vostro payments
dgft_trade_notice_14_2019
Three months time window for applying for MEIS for Shipping bills with HS Codes which were harmonized and notified under MEIS Appendix 3B, Table 2 after a delay
CASE LAW
2019-TIOL-1396-CESTAT-HYD
Uttam Galva Metallics Ltd Vs CCE, C & ST
Cus - The assessee is engaged in manufacture of pig iron using coal, iron ore, lime stone and dolomite as raw materials - The issue to be decided is whether the assessee is entitled to benefit of Sl. No. 68 of Notfn 21/2002-Cus for the coal imported by them which was declared as coking coal by them and which the department, relying upon the test report of CRCL argues is not coking coal - During subsequent periods, the principal selling index has been tested as a parameter and for some time CSN '1' and at other item CSN '2' was prescribed - The department's contention is based on report of CRCL which reported the CSN as 1.5% and ash content of 8% but declared that the imported coal is not coking coal - The reason as to why this coal has been called non-coking coal by CRCL, is not evident from test report - The CSN of '1' or more can also be considered as coking coal as the subsequent amendments to the notification indicate - There is overwhelming evidence that the coal in question was imported and used as coking coal and it has a CSN of '4' or 1.5 - At any rate, this cannot be held to be not coking coal - In case of JSW Steel Limited 2013-TIOL-110-CESTAT-MAD it was held that the importer is entitled to benefit of exemption notfn 21/2002-Cus - No reason found to deviate from the decision of Coordinate Bench and respectfully follow the same - Accordingly, assessee is entitled to benefit of Exemption Notfn 21/2002-Cus in respect of the coking coal imported by them - Therefore, the demand of duty vide impugned order needs to be set aside - As the demand has been set aside, the question of interest or penalty also do not arise.
As far as Department's appeal is concerned, it is on two grounds that no interest has been confirmed by Commissioner and that no redemption fine has been imposed by Commissioner under section 125 of Customs Act, after having confiscated the goods under section 111 (m) of Customs Act, 1962 - As far as interest element is concerned, since the demand is set aside, the question of interest does not arise - As far as imposition of redemption fine is concerned, once the goods are confiscated under section 111, adjudicating authority has to decide whether an option needs to be given to pay fine in lieu of confiscation of goods under section 125 - This option has to be given in respect of all confiscated goods other than prohibited goods and may be given in respect of prohibited goods - Therefore the Commissioner had the option to either absolutely confiscate the goods or releasing them on payment of redemption fine - There is no scope of confiscating the goods and not taking possession of same and releasing them without imposing any redemption fine under section 125 - There is no allegation that the goods are prohibited - Since the goods which were imported are classifiable as coking coal and are entitled to the benefit of the exemption notification, the confiscation itself needs to be set aside - Therefore, the question of imposing redemption fine does not arise.
The assessee's appeal is allowed and the Revenue's appeal is rejected: CESTAT
- Assessee's appeal allowed: HYDERABAD CESTAT
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