2019-TIOL-NEWS-134, Dated: Friday, June 07, 2019

ST - The assessee is engaged in carrying out services of cleaning activities, BAS, Erection and Commissioning and Transport of Goods by Road and have been providing the services at various oil refineries, fertilizer and other chemical industries - During audit, it was noticed that the assessee have availed inadmissible credit of input services on hiring of vehicles and rent-a-cab - The Tribunal in case of Marvel Vinyls Ltd. 2016-TIOL-3071-CESTAT-DEL has considered the issue after the amendment in definition of 'input service' after 01.04.2011 - This decision has been followed in various decisions - Therefore, by following the ratio of said decision, the impugned order denying the cenvat credit on rent-a-cab service is not sustainable in law and therefore the same is set aside - As far as demand of interest is concerned, the same is confirmed as fairly conceded by assessee: CESTAT

ST- The assessee is providing services of Business Process Outsourcing under category of BAS and BSS - They filed a refund claim under Notfn 12/2013-ST and 40/2012-ST for the period January, 2013 to March, 2013 and January, 2014 to March, 2014 on 27.12.2013 and 31.12.2014 respectively - Two SCNs came to be issued covering both the periods proposing to reject refund claims for the reason that assessee had not fulfilled the conditions stipulated under Notfn 12/2013 - Clause 3 of Notfn relied on by Commissioner (A) and particularly, sub-clause (e) thereto, prescribes a period of one year for making claim for refund and this is one of the conditions in Notfn 40/2012-ST - It is found that other than the above, there is no dispute as to the assessee satisfying the other conditions of said Notfn and it is the settled position of law that a mere procedural lapse cannot take away the substantial benefit, more so, when there is no dispute as to the eligibility to the benefits of a beneficial Notfn - Nor is the case of Revenue that there has been violation to any other provision/s of the Statute or Rules - Undisputedly, there was some requirements lacking in terms of Notfns which, upon being pointed out per SCN, the assessee has complied with and hence, Tribunal donot propose to go into the arguments of assessee as to OIO/OIA going beyond SCN - The denial of refund is unsustainable, for which reason the impugned order is set aside: CESTAT

ST - Presence of Advocate cannot be recognized as he has appeared without any authorization either from the assessee or from the previous Advocate engaged by the appellant – appellants seem to be not serious in pursuing the appeal – appeal dismissed for lack of proper appearance: CESTAT [para 4]

2019-TIOL-1616-CESTAT-MAD

Raj Petro Specialities Pvt Ltd Vs PR CGST & CE

CX - The assessee is engaged in manufacture of petroleum products - The allegation of the Department is that the assessee is engaged in manufacturing as well as trading activity and that common inputs/ input services have been used for manufacturing activity as well as trading activity - Since they did not maintain proper accounts they have to follow the procedure in Rule 6(3) - The assessee have emphasized that they have not availed CENVAT Credit on any common inputs or input services in relation to such High Sea Sales transactions - There is no evidence to show that common input services have been used for such High Sea Sales - Further, possibly to buy peace with the Department, the assessee had reversed the CENVAT Credit voluntarily and is now contesting only the rejection of refund claim - The rejection is stating that they have not exercised the option - If the formula is correctly applied, the amount to be reversed by assessee would only be Rs. 2,86,785/- - Thus, it is clear that the assessee, as per the provision, reversed an excess amount of Rs. 8,38,752/- - This being so, the Department cannot reject the refund claim stating that they have not exercised any option - The second ground for rejection is that a further SCN has been issued to assessee - Assessee has submitted that the said SCN was challenged by them before High Court of Madras vide 2016-TIOL-2111-HC-MAD-CX and the Writ Petition was disposed vide Order dated 3.08.2016 - Merely because a SCN has been issued or is pending adjudication, it cannot be said that any other appeal proceedings has to be kept in abeyance by Commissioner (A) or this Tribunal - This contention of Department for rejecting the refund claim is without any legal basis: CESTAT

- Appeal allowed: CHENNAI CESTAT

2019-TIOL-1615-CESTAT-ALL

Saigal Polymers Pvt Ltd Vs CCE

CX - SSI exemption - Appellants are engaged in the manufacture of Hawai Chappal as also Micro Cellular Rubber Blocks which were classified by them under the Heading 4008 19 10 and attracting nil tariff rate - total clearance value remained less than Rs.1.5 crores on account of the above and the benefit of SSI exemption was availed - Revenue formed an opinion that Micro Cellular Rubber Blocks manufactured are actually Micro Cellular Rubber Sheets and classifiable under CH 4008 11 10 and attract @10% adv - computing the total value of clearance, the benefit of SSI exemption was denied to the appellant - appeal to CESTAT.

Held: Even if the goods are held to be sheets, as contended by the Revenue, Bench notes that the same are exempted in terms of Sr.No.39 of Notification No.3/2005-CX dated 24/02/2005 - Revenue has not produced any contrary evidence to the effect that the goods were not used as soles or heels for footwear, therefore, benefit of notification 3/2005-CX is available to the appellant - since the demand cannot be upheld, the same is set aside alongwith setting aside of penalty and confiscation of the goods - appeal allowed: CESTAT [para 8, 10]

- Appeal allowed: ALLAHABAD CESTAT

2019-TIOL-1614-CESTAT-HYD

CC & CE Vs Thermal Systems Pvt Ltd

CX - It is undisputed that after clearing the boilers from the factory premises and by assembling them at the site of customers along with bought out items, the waste heat recovery boilers become immovable - value of bought out items need not be included in the valuation of the boilers cleared by the respondent and installed at the premises of their clients - impugned order passed by Commissioner is correct and legal and does not suffer from any infirmity - same is upheld and the Revenue appeal is rejected: CESTAT [para 5 to 7]

- Appeal rejected: HYDERABAD CESTAT

NDPS - Petitioner seeks grant of regular bail - two parcels booked under Airways bill were intercepted at the office of the DHC Courier Company, New Delhi and the same were found to contain 390 grams and 325 grams of substances which upon chemical analysis at CFS were found positive for Pseudoephrdrine and Heroin respectively; investigation revealed that both the said parcels were booked by the accused petitioner with his own ID at the instance of the co-accused; further allegation is that recovery of the said narcotic substances falls under the category of ‘commercial quantity' - counsel for the petitioner submits that the petitioner is in custody since 17.02.2016 and he has been falsely implicated.

Held: There is no dispute that in this matter, the quantity involved is a commercial one and the rigours of Section 37 of the NDPS Act are applicable - It is also a fact noticed by the courts that, generally, the conspiracy is hatched in secrecy and it may be difficult, if not impossible, to obtain direct evidence to establish the same - The acts of various parties to the conspiracy will infer that they were done with reference to common intention, hence, it is held, time and again, that the conspiracy can be proved by indirect circumstantial evidence, which is of an impeccable nature - It is also not necessary that all the conspirators should know each other and also every detail of the plot, so long as they are co-participators in the main object thereof and it is also not necessary that all of them should participate from the inception of the stratagem till the end, the determinative factor, being unity of object or purpose and their participation at different stages - it has come on record that the petitioner had sent parcels on three occasions - From the perusal of the statement of the petitioner, it is revealed that he used to book the parcels pertaining to foreign nationals on his identity documents - The statement of the petitioner under Section 67 of the NDPS Act also demonstrates that before booking of the parcels, the petitioner had the knowledge about the contents of the parcels, which means that the petitioner had knowingly and intentionally booked the parcels with the knowledge that the same were concealing recovered drugs - The petitioner had full conscious knowledge about the contraband while taking the contraband into his possession for consignment - payment of an exorbitant sum of Rs.10,000/- by the consignor to the petitioner, as stated in his statement, which was received by the petitioner, without any objection or explanation, itself demonstrates, that the petitioner was having knowledge about the contents of the packets - It impliedly shows that when the petitioner received the packets, he had full knowledge about the contents of the packets and was also having knowledge that he has to receive a sum of Rs.10,000/-, hence, the petitioner was instrumental and part of the conspiracy in transportation and receiving of the contraband and all the accused persons acted hand-in-glove with each other - petitioner and the other accused have already allegedly admitted their complicity and involvement in the commission of the offence - conduct of the petitioner and the fact on record that the petitioner had earlier sent parcels on three occasions and taking into consideration the detailed order of the Trial Court as well as the status report, Court is satisfied that, at this stage, there are no reasonable grounds for believing that the petitioner is not guilty for such an offence and he is not likely to commit any offence again while on bail - Court does not find any merit in the bail application of the petitioner and the same is, accordingly, dismissed - Trial Court is directed to expedite the proceedings: High Court [para 10, 16, 18, 19, 20, 21, 22, 23]

Cus - The assessee had filed Bill of Entry for import clearance of 1778 Cartons of "Creative Toys Modelling Clay" - They claimed classification under CTH 95030090 - After examination of goods on first check basis, the assessing group was of the view that they had misdeclared the CTH as 95030090 instead of 34070010 to avoid payment of CVD @ 8% - Thus revenue was of the view because of misdeclaration of Classification to avoid CVD, the goods are liable for confiscation under Section 111(m) of Customs Act, 1962 and assessee was liable to penalty under Section 112(a) of Customs Act, 1962 - The heading 34070010 is more specific for modeling pastes which will include the clays which are used for making models for amusement of children - Since this heading is more specific, Tribunal agrees with classification as has been held by Commissioner (A) - However, assessee have in the Bill Of Entry declared the goods by describing them correctly as per the import documents - Revenue has not disputed the description/ declaration in respect of the goods - Only dispute being with reference to classification of goods - It has been held by various authorities that misclassification cannot be a reason for invoking penal provisions against the importer - The order of Commissioner (A) is upheld classifying the imported goods under heading 34070010, but the penalty imposed on importer under Section 112(a) of Customs Act, 1962 is set aside: CESTAT

Cus - The assessee filed the claim for refund of 4% SAD /CVD on imported goods under the provisions of Notfn 102/2007-CUS on the ground that they have paid VAT / CST on such imported goods - The impugned goods were imported under 10 Bill of Entries - The revenue has objected to the refund claim on the ground that the goods were imported for execution of EPC Contract and thus once used and undergone process has lost their identity and therefore did not remain as such - Also that the assessee has recovered the duty charged by them on sale of finished goods to the buyer and thus the refund is hit by clause of unjust enrichment - The revenue has relied upon the Project import Regulations that if the goods were imported as single or composite machines the assessee would not have been eligible for project import benefits - The notfn in question provides for exemption/refund of SAD if the imported goods are subsequently sold and they have suffered VAT/ CST - The provision of one statute i.e. Project Regulations cannot be imported into the provisions of Notfn 102/2007-Cus to interpret and deny the exemption/ refund of SAD - Once the assessee has paid CST/ VAT on sale of imported goods, there is no question of retaining the 4% SAD as the payment of such CST/ VAT is the only criteria for granting refund - The adjudicating and the Appellate authority have found from the records that the imported goods on which SAD was paid have been sold by assessee to their buyer on further payment of VAT/CST and in such case no reason found to deny refund on the ground that the goods were part of Project contract and has lost their identity: CESTAT