SERVICE TAX

2019-TIOL-1550-CESTAT-KOL

Flotech Consultant And Services Pvt Ltd Vs CCE

ST - The second appellant entered into agreements with M/s ONGC and M/s Oil India Ltd - Likewise, one the first appellant entered into an agreement with M/s ONGC - As per the agreement, the second appellant was to carry out workover/service operation of oil and gas oil rigs and injector oil rigs of ONGC - For such operations, the appellants would mobilize manpower having the requisite qualifications & competence & the appellants would be paid a lumpsum operating day rate per rate for 24 hours per day - On scrutiny of the contracts, the Revenue opined that the activities were taxable under Manpower Recruitment & Supply Agency service - SCNs were issued proposing to raise duty demand - Duty demand with interest & equivalent penalty was confirmed upon adjudication - Hence the present appeals.

Held: From a perusal of the contracts entered into, it becomes clear that the appellants were not only required to provide the necessary manpower, but were also contracted to complete the task assigned to them, namely that of operation & maintenance of the drilling rig - Consideration payable is not the basis for manpower supplied but on the basis of completion of work involved - The same is paid as lumpsum per day of operation - Hence the activity in question cannot fall within the ambit of Manpower Recruitment or Supply Agency service - The demands raised merit being quashed: CESTAT (Para 2.1,2.2,2.3,7,10)

- Assessees' appeal allowed : KOLKATA CESTAT

IFCI Financial Services Ltd Vs Commissioner of GST & CE

CENTRAL EXCISE

Grasim Industries Ltd Vs CCT

CX - The assessee-company manufactures Viscose Staple Fibre classifiable under CETH 55, Sodium Sulphate, Sulphuric Acid and Carbon Di-Sulphide all classifiable under CETH 28 & Wood Pulp classifiable under CETH 47 - Post verification of records, the assessee was served three SCNs alleging irregular availment of credit in respect of e-mail / internet, HRM services and insurance mediclaim services - It was alleged that such services were not directly or indirectly related to manufacture of final products - Contravention of provisions of Rule 3(1) was also alleged for availing credit of service tax on such ineligible services - On adjudication, the credit in respect of email/internet & HRM services was allowed while some amount of credit was disallowed - On appeal, the Commr.(A) partially allowed the assessee's appeal and reduced the quantum of the penalties u/r 15(1) of the CCR 2004 - On further appeal, the Tribunal remanded the matter back to the Commr.(A) to reconsider the issue afresh in respect of mediclaim insurance scheme - Later, the Commr.(A) disallowed Cenvat credit u/r 14 of CCR along with interest & penalty u/r 15(1) - In another appeal, duty demand was raised with penalty - Hence the present appeals.

Held: The assessee took one consolidated mediclaim policy for its employees and their family members and paid the premium for group mediclaim to M/s New India Assurance Company Ltd. - Option is given to the employees to include insurance cover for their family members on payment of some premium by them which will be deducted from their salary annually - The assessee paid service tax on amount recovered from the employees towards mediclaim insurance paid to family members & has taken credit of the same - The assesee is not entitled to the Cenvat credit of service tax paid: CESTAT

- Assessee's appeal dismissed : BANGALORE CESTAT

Gulf Oil Lubricants India Ltd Vs CCE & ST

CX - The issue in the matter at hand pertains to eligibility for Cenvat credit in respect of outward GTA service.

Held: The CBIC issued a Circular No. 1065/4/2018-CX dated 08.06.2018 whereupon the Tribunal passed orders in an identical issue in the case of Ultratech Cement Ltd and in Sanghi Industries Ltd - Hence for allowing the cenvat credit on GTA, certain factual aspects to be verified such as whether the sale is on FOR basis, whether the freight is integral part of the sale price, whether the excise duty paid on the value inclusive of freight amount - Hence the matter warrants remand to such end: CESTAT

- Case remanded : AHMEDABAD CESTAT

CUSTOMS

2019-TIOL-1155-HC-AHM-CUS

Prisha Overseas Enterprise Pvt Ltd Vs UoI

Cus - Export of livestock through Tuna Port of the Deendayal Port Trust - In the present case, the notification dated 14.12.2018 issued by the State Government in exercise of powers under clause (b) of sub-section (1) of section 4 of the Gujarat Essential Commodities and Cattle (Control) Act, 2005, the communication dated 14.12.2018 of the Directorate of Animal Husbandry addressed to the Commissioner of Customs, and the communication dated 14.12.2018 issued by the Under Secretary, Home Department to the Superintendent of Police, Kutch (West), Gandhidham are subject matter of challenge

HELD:

Validity of the notification dated 14.12.2018 issued under section 4(1)(b) of the Cattle Control Act

Without recording an opinion as envisaged in sub-section (1) of section 4 of the Cattle Control Act, the question of making an order regulating the maintenance of cattle does not arise - therefore, while the notification provides for regulating the maintenance of cattle, the condition precedent for making such order has not been satisfied, which renders the impugned notification unsustainable in law as not being in consonance with the statutory provision under which it has been issued - on a bare reading of sections 6 and 7 of the Prevention and Control of Infectious and Contagious Diseases in Animals Act, 2009, it is clear that in case of infectious and contagious diseases steps have to be taken under that Act and not under the Cattle Control Act - the second ground on which the notification has been issued is, therefore, not a relevant ground on which a notification under section 4(1)(b) of the Cattle Control Act can be issued even if the condition precedent for taking action under clauses (a) and (b) thereof is satisfied, inasmuch as, there is a specific enactment for taking action in that regard - in the present case, the effect of the impugned notification is that the petitioners herein are totally prevented from pursuing their ordinary avocation of life namely, exporting livestock, and there is nothing on record to show as to how such a blanket ban on entry of animals even by way of transit, as is sought to be suggested on behalf of the respondents, is consonant with the general interest of the public - the impugned notification, therefore, is also not in consonance with section 8 of the Cattle Control Act.

[para 12.11, 12.13, 12.15]

Whether the notification dated 14.12.2018 issued under section 4(1)(b) of the Cattle Control Act would be applicable to cattle in transit?

If Rule 70 of the Transport of Animals Rules, 1978, requires food and fodder to be carried during the journey, the question of cattle in transit impacting the availability of fodder in the drought affected area would not arise - for the purpose of maintaining or increasing the supply of cattle, transport of cattle in transit would have no relevance as the same has nothing to do with the maintenance or increase in the supply of cattle within the drought affected area - the contention that the impugned notification would not apply to cattle in transit, therefore, merits acceptance.

[para 13.4, 13.5]

Whether the impugned notification dated 14.12.2018 under section 4(1)(b) of the Gujarat Essential Commodities and Cattle (Control) Act, 2005 has been issued in colourable exercise of powers?

The object behind the issuance of the impugned notification as well as the impugned communications is to prevent export from Tuna Port as the State Government does not have any power to directly prevent exports, export and import being a subject falling in the Union List - so what cannot be done directly by the State Government is sought to be done indirectly under the guise of exercise of powers under section 4(1)(b) of the Act. The impugned notification, therefore, clearly has been issued in colourable exercise of powers and deserves to be struck down.

[para 14.9, 15]

Requirement of quarantine certificate for export of livestock

When there is no mandate to satisfy the quarantine requirements in case of import of livestock by the importing country, the State authorities, who otherwise have no concern with the import export policy, cannot insist on compliance thereof.

[para 16.4]

Validity of the communication dated 14.12.2018 of the Directorate of Animal Husbandry

The requirement under the rules is for providing a certificate signed by a qualified Veterinary Surgeon and it need not be a certificate provided by the Directorate of Animal Husbandry in exercise of powers as a delegate of the Central Government - however, to the extent the Director has requested the Commissioner of Customs not to allow export of live animals from Tuna, Kandla Port of Gujarat until specified facility for Animal Quarantine and Certification is established by Department of Animal Husbandry, Dairying and Fisheries, Government of India and that non-compliance of the guidelines of the Government of India in this regard can amount to disrepute to the image of the country and can adversely impact the interest of the country as a whole is concerned, the same being beyond the bounds of his authority, cannot be sustained - the impugned letter dated 14.12.2018 deserved to be set aside to that extent.

[para 17.1]

Validity of the communication dated 14.12.2018 of the Under Secretary, Home Department addressed to the Superintendent of Police, Kutch (West)

The fact that such instructions have been issued only to the Superintendent of Police Kutch (West), that too, on the same day when the Chief Minister addressed the press informing that exports from Tuna Port were being prohibited, indicates that the same has not been issued bona fide, but under the guise of compliance of the provisions of the Prevention of Cruelty to Animals Act and the Transport of Animals Act, in effect and substance, it is the export of livestock from Tuna Port which is sought to be prevented - evidently, therefore, the impugned communication has been issued in colourable exercise of powers with an oblique intention to prevent export from Tuna Port and is also discriminatory, inasmuch as it discriminates between animals being transported into and within Kutch District, and the animals being transported into and within other districts of the State and is, therefore, violative of article 14 of the Constitution of India - under the circumstances, the impugned communication dated 14.12.2018 issued by the Home Department to the Superintendent of Police, Kutch (West), cannot be sustained.

[para 18]

For the foregoing reasons, the petition succeeds and is, accordingly, allowed - the impugned notification dated 14.12.2018 issued by the State Government in exercise of powers under section 4(1)(b) of the Gujarat Essential Commodities and Cattle (Control) Act, 2005; the impugned letter dated 14.12.2018 issued by the Under Secretary, Home Department to the Superintendent of Police, Kutch (West); as well as the letter dated 14.12.2018 of the Director of Animal Husbandry addressed to the Commissioner of Customs, to the extent indicated above, are hereby quashed and set aside.

[para 19]

- Special Civil Application allowed :GUJARAT HIGH COURT

2019-TIOL-1546-CESTAT-MAD

Hitachi Home And Solutions India Ltd Vs CC

Cus - The present application seeks restoration of appeal dismissed by the Tribunal on account of non-appearance on date of hearing.

Held: The assessee's counsel claimed to have not received any notice for hearing, on account of which the non-appearance was unintentional - Such reasons appear to be genuine & so the appeal merits being restored: CESTAT

- Assessee's application allowed : CHENNAI CESTAT

Raj Ratan Impex Vs CC

Cus - The assessee-company imported certain products classified as scrap under Chapter Heading 7204 - On adjudication, the goods were re-classified under tariff heading 7220 1100 & their value as declared by the assessee was rejected and then enhanced - Such exercise was carried out as per Rule 4 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - Besides, the goods were confiscated with option of redemption fine being extended - Penalty was also imposed u/s 112A(2)(i) of the Act - Hence the present appeal contesting such an order.

Held: From the reports of the Chartered Engineers, it is seen that part of the material is serviceable - From the pictures of such material, it appears that it contains certain triangular-shaped material which could be used as such - The same can also be used as heavy melting scrap for the purpose of melting - Besides, the assessee also approached the Revenue seeking mutilation of the goods, but such request had not been considered - Hence the assessee is permitted to clear the scrap after mutilation at its own cost - Hence the order in challenge is quashed: CESTAT

- Assessee's appeal allowed : AHMEDABAD CESTAT