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SERVICE TAX
2019-TIOL-1560-CESTAT-BANG
SN Atiwadkar Vs CCT & CE
ST - Appellant is service provider to Military Engineering Services (MES) and were carrying out service of construction, repair and maintenance of civil structures meant for defense - They were exempted from payment of service tax vide Notification No.25/2012-ST but exemption was withdrawn from April 2015 and hence the appellant got registered with the department and paid service tax - Subsequently, exemption was restored vide Notification No.9/2016-ST dt. 01/06/2016 by incorporating para 12A in Notification No.25/2012-ST with retrospective effect - Therefore, they claimed refund of Rs.8,51,384/- but the same was rejected by the original authority on the ground of unjust enrichment - Commissioner(A) ordered crediting the refund amount to the Consumer Welfare Fund - appeal to CESTAT.
Held: Appellants have filed the refund claim at the instance of MES as MES is the ultimate consumer and the entire tax burden was borne by MES only and has not been passed on to any other person - appellant is claiming the refund as a representative of the MES and not on his own account and, therefore, the principle of unjust enrichment under the provisions of Section 11B of the Central Excise Act is not applicable to the present case - On identical facts, other Commissionerates are allowing the refund under the same notification which is involved in the present case - keeping in view these facts, Bench is of the view that the appellants are entitled to the refund of Rs.8,51,384/- which the appellant would pay in the account of MES as per their agreement - Appeal allowed: CESTAT [para 6]
- Appeal allowed: BANGALORE CESTAT
2019-TIOL-1559-CESTAT-MAD
SJ Balakrishnan And Company Vs CCE & ST
ST - Assessee is authorized dealer of M/s.TVS Company Ltd. and engaged in business of selling of two wheelers manufactured by TVS - They are registered under category of "Servicing of Motor Vehicles" - Department was of the view that the expenses incurred by dealers, like the assessee for providing free services during warranty period are reimbursed by manufacturer of vehicles - Therefore, it appeared that assessee while discharging the service tax liability for provision of such free services during the warranty period had paid service tax only on the labour charges portion and not paid service tax on the portion of material cost reimbursed by them from the motor vehicle manufacturers - The issue as to taxability of reimbursable expenses has finally been laid to rest by Supreme Court in case of Intercontinental Consultants and Technocrats Pvt. Ltd. 2018-TIOL-76-SC-ST where it was held that only w.e.f. 14.05.2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of value of taxable services for charging service - This Bench of Tribunal in a recent decision in case of Coimbatore Anamallais Agencies following Apex Court judgment in Intercontinental Consultants and Technocrats held the issue in favour of assessee - So also, the Tribunal in Dream Loanz 2017-TIOL-2503-CESTAT-MAD held that the reimbursable out-of-pocket expenses are not includible in gross value of taxable services, not being amounts charged by service provider for such services - Following the ratio already laid down in these decisions, the impugned order to the contrary cannot sustain: CESTAT
- Appeal allowed: CHENNAI CESTAT
CENTRAL EXCISE
NOTIFICATION
exnt19_02
CBIC appoints Pr. Commissioner/Commissioner of Customs, Nhava Sheva as CEX officer for adjudication of DRI case in r/o Tini Pharma & Ors CASE LAWS
2019-TIOL-1558-CESTAT-KOL
Dum Dum Valves And Bearings Pvt Ltd Vs CCE
CX - The assessee-company cleared its goods to M/s Garden Reach Ship Builders and Engineering Ltd during the relevant period - The assessee then availed exemption under Notfn No 70/77 & Notfn No 64/95 - The former Notfn exempts from duty all Excisable goods other than cigarettes which are supplied as stores for consumption on board a vessel of the Indian Navy - SCN was issued alleging short payment of duty - On adjudication, duty demand was raused after denying benefit of the two notifications, along with penalty being imposed u/r 173Q of CEA 1944 r/w Section 11AC of the Act - On appeal, the Commr.(A) upheld such findings, while setting aside the penalty - Hence the present appeal by the assessee.
Held - It was clarified by the relevant Board letter that the Govt intended to exempt from Excise duty all such goods which were not only meant for maintenance of vessels of the Indian Navy, but also for those goods consumed by crew members - The assessee claimed that the Naval authority concerned had issued a certificate stating that the goods supplied were for use as stores on board a vessel - The assessee also contested the demands raised on limitation - There is no element of suppression or mis-statement of facts with intent to evade payment of duty - Besides, the issue at hand also stands settled by the decision in Asian Paints (I) Ltd. Vs. CCEx, Mumbai III - Thus, the O-i-A in challenge merits being quashed: CESTAT
- Assessee's appeal allowed: KOLKATA CESTAT
2019-TIOL-1557-CESTAT-BANG
Dhruvdesh Metasteel Pvt Ltd Vs CCT & CE
CX - The assessee is engaged in manufacture of Sponge Iron - During audit, it was observed that assessee has availed CENVAT credit of output services like construction and insurance services which are excluded from definition of input services under Rule 2(l) of CCR, 2004 - Accordingly, a SCN was issued proposing to recover service tax and appropriate interest and penalty - Even the Annexure to the SCN talks of three services, construction, erection, erection & commissioning and insurance which has been denied on the ground that the same fall in excluded category of input service - On perusal of invoices, it is found that with regard to erection, erection & commissioning, even after amendment w.e.f. 01/04/2011 falls under the definition of input service whereas only a civil construction has been excluded - Assessee has paid entire service tax before the issue of SCN and therefore the demand of interest and imposition of penalty is not warranted - Further, after the amendment in definition of input service, only the civil construction which is only a part of it as per the Annexure to the SCN is only excluded whereas insurance, erection, erection & commissioning fall under the definition of input service and the assessee is entitled to take CENVAT credit of the same - CENVAT credit only on construction services is excluded and assessee is entitled to insurance, erection and erection & commissioning services - Appeal is partly allowed and the matter is remanded back to the original authority for quantification purpose only: CESTAT
- Appeal partly allowed: BANGALORE CESTAT
CUSTOMS
2019-TIOL-1161-HC-DEL-CUS
Ambika Vikas Udyog Vs DRI
Cus – Notification No.57/2000-Customs - Petitioner seeks a direction to the DRI to issue a NOC to MMTC Ltd. for release of the bank guarantee furnished by them – Petitioner has been making gold jewellery exports out of the gold procured through MMTC against security deposited with the MMTC, and over a period of time, a total security deposit of Rs.81,70,000/- has been lying with the MMTC – case of DRI is that the petitioner is one of the members of a syndicate of exporters involved in the alleged fraudulent diversion of gold jewellery meant for export - during the course of such investigation, the Petitioner was compelled to deposit custom duty to the extent of Rs. 42,50,000/- by way of three TR-6 challans dated December 2015 - In the process of investigation, a letter dated 29th October, 2015 was issued by the DRI to MMTC requesting that "security money or bond or bank guarantee deposited with your office" by a string of firms including the present Petitioner, against purchases of gold under the Exim scheme, "may be kept on hold till further communication and should not be released to these parties without the permission of DRI, Delhi Zonal Unit" - grievance of the Petitioner is that for more than three years since the above instruction, the MMTC has been constrained not to release the BG/ security furnished by the Petitioner to the extent of Rs.81,70,000/- - A SCN dated 27th November 2017 was issued to the Petitioner inter alia demanding Customs duty amounting to Rs.46,48,286/- and appropriation of the amounts deposited.
Held: Mere pendency of the proceedings in the SCN will itself not provide justification for continuing the instructions issued by the DRI to the MMTC - DRI has nowhere in its counter affidavit sought to justify the impugned instructions given to MMTC as a "seizure" under Section 110(3) of the Act - Court fails to understand as to how the instructions to MMTC by the DRI that it should not release to the Petitioner the BG/security deposited by the Petitioner with MMTC, could amount to a "seizure" - Section 110(3) of the Act cannot be invoked for such purpose and there is no other provision of the Act referred to by the DRI in its counter affidavit, as providing a legal basis for such instructions - Court finds no justification in law for continuation of the impugned instructions of the DRI to MMTC by its letters dated 29th October, 2015 and 17th December, 2015 - Instructions are hereby quashed - MMTC will proceed in the matter as if the two instructions dated 29th October, 2015 and 17th December, 2015 of the DRI are no longer operational - MMTC shall release the security/BG amount to the Petitioner, to the extent it is entitled in accordance with law, forthwith and in any event not later than 10 days - Adjudicating Officer should proceed to pass the adjudication order within three months – Petition allowed: High Court
- Petition allowed
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DELHI
HIGH COURT
2019-TIOL-1561-CESTAT-MAD
Shyam Textiles Ltd Vs CC
Cus - Issue relates to import of plastic granules of various grades under Transferred Duty Free Import Authorization (DFIA) Scheme read with Customs Notfn 40/2006-Cus.; that imports were cleared prior to 19.02.2009 - Assesesee submits that Notfn 17/2009-Cus. amended condition No.(iii) of earlier notification and introduced condition No.(iii) (a) and (iii) (b) - Further by Section 93 (1) of FA, 2009, the said amendment was given retrospective effect w.e.f. 1.5.2006 - The assessee had challenged the validity of retrospective amendment by filing writ petitions before the High Court of Madras, who vide their judgement dt. 01.11.2017 held that condition No. (iii) (a) was impossible for compliance for the period prior to issue of Notfn 19.02.2009 - Discernably, the periods of dispute in appeals are clearly before the amendment caused w.e.f. 19.02.2009 vide Notfn 17/2009-Cus. - The retrospective application of that amendment, sought to be brought about by the Government by Section 93 (1) of FA, 2009 w.e.f. 1.5.2006 has been set aside by High Court - In the circumstances, notwithstanding the protestations of revenue, judicial discipline requires to follow the ratio laid down by the High Court especially, it being the jurisdictional High Court for this Tribunal - There is also nothing brought forth by Revenue that said High Court decision has been stayed or set aside by the Apex Court - The dispute subsequent to the cut off date of 19.02.2009 will have to be necessarily debated by both sides on merits since same will not be covered by the High Court decision: CESTAT
- Appeals partly allowed: CHENNAI CESTAT |
