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SERVICE TAX
2019-TIOL-1739-CESTAT-ALL
Dabur Research Foundation Vs CC, CE & ST
ST - Demand has been confirmed against the appellant under the category of 'Intellectual Property Right Services' - facts of the case are that the appellant has entered into two agreements with Alembic Ltd. and Dabur Pharma Ltd. - appeal to CESTAT - appellant submitted that issue is no more res integra and has been settled through Final Order No.70301/2018 dated 19/01/2018 in the case of Commissioner of Service Tax, Ghaziabad vs. M/s Dabur India Ltd.
Held: Facts in the present case and in the case decided through said Final Order dated 19/01/2018 are identical - It was held in the said case that if the 'Intellectual Property Right' was sold by appellant and not transferred temporarily for use then the provisions of Section 66(55b) of Finance Act, 1994 are not applicable - By following the said Final Order of this Tribunal, impugned order is not sustainable - impugned order set aside and appeal allowed: CESTAT [para 3]
-Appeal allowed : ALLAHABAD CESTAT
2019-TIOL-1738-CESTAT-ALL
Dot Com Advertising Vs CCE
ST - Demand of tax on amount of discount allowed to customers - Revenue has alleged that the appellant have not submitted any evidence such as bills, etc., to indicate that these discount pertains to customers who availed services - Revenue have not brought any evidence on record to disbelieve the books of account of the appellant - auditor of the appellant has certified that dscounts have been passed on to customers - demand cannot sustain: CESTAT [para 4]
ST - Whether service tax is payable on its turnover achieved through main contractor - It is an admitted fact that the appellant received Rs.37.12 lakhs from M/s A.D. Point, who were the principal advertiser/contractor and they have certified that they have charged service tax on such activity and services which were provided by the appellant through them, from their client/principal and that the service tax was further deposited with the Central Government - Issue decided by Patna High Court in the case of Hindustan Dorr Oliver Pvt. Ltd. vs. State of Bihar in the matter of sales tax under similar facts and circumstances of works contract, where the main contractor had claimed deduction of the turnover achieved through the sub-contractor, on the ground that the subcontractor is also registered with the Department and have paid tax on such turnover; that in the case of works contract there is one transaction, one sale and the work may be done either by the main contractor or through the subcontractor; that Service tax being the other part of the same type of transaction, there cannot be two services and/or two transfers of service - demand of service tax set aside: CESTAT [para 5]
ST - Levy of tax on the amount of credit Rs. 17,99,839/- made inadvertently in the books of account - it is evident that the said credits, which have inflated the service receipt amount, are not actually the amounts pursuant to rendering of the service and are arising from erroneous entries by the accountant - demand set aside: CESTAT [para 6]
- Appeal allowed : ALLAHABAD CESTAT
2019-TIOL-1737-CESTAT-ALL
Ds Namah Hospitality Pvt Ltd Vs CCT & ST
ST - CENVAT credit allegedly wrongly availed reversed without utilizing the same - penalty and interest cannot be imposed in view of Karnataka High Court decision in Bill Forge Pvt. Ltd. -2011-TIOL-799-HC-KAR-CX - as credit has been reversed before utilisation, question of invoking rule 6(3) of CCR and demanding 6% of the value of the exempted services is not tenable : CESTAT [para 1]
ST - CENVAT on Security and Legal Services availed before commencing the provision of output services - stand taken by Revenue is that when the credit was availed, no services were being provided, hence credit is inadmissible. Held: Upon going through the CCR, 2004, Bench could not find any such provision where it is mandatory to have output service being provided simultaneously when the input services being received - demand is unsustainable - impugned order set aside and appeal allowed with consequential relief: CESTAT [para 2]
- Appeal allowed : ALLAHABAD CESTAT
CENTRAL EXCISE
2019-TIOL-1248-HC-MUM-CX-LB
Gauri Plasticulture Pvt Ltd Vs CCE
CX - Cash refund is not permissible where an assessee is unable to utilize credit on Inputs; refund of un-utilized amount of CENVAT credit on account of the closure of the manufacturing activities is not permissible by exercising powers u/s 11B of the CEA, 1944 - Order of Supreme Court in the case of Slovak India cannot be read as a declaration of law under Article 141 of the Constitution of India: High Court Larger Bench [para 29 to 35, 40, 41]
- Reference disposed of
: MADRAS HIGH COURT
2019-TIOL-1736-CESTAT-KOL
Dharampal Satyapal Ltd Vs CCE & C
CX - Marketing and festival expenses incurred by the appellant for their customers on various occasions like Holi, Deepawali, Roza, Iftar party and other festive occasions - On such occasions, the appellant makes their customers aware of development in the cement industry and improvement in the quality of cement manufactured by them - Such gatherings are also used for education of new customers - very purpose of these activities is to promote business/sales inasmuch as the activities are in the nature of marketing/ sales promotion and is covered in the inclusive definition of input service - Credit of tax paid is admissible: CESTAT [para 3]
CX - CENVAT - Input Service - Rule 2(l) of CCR, 2004 - Appellant have hired mobile vans from the market which go from customer to customer to explain their quality of cement and result of their product to the customers and for also attending to the complaints of the customers - not hit by exclusion clause as "motor vehicles" are capital goods in view of the decision in Marvel Vinyls Ltd - 2016-TIOL-3071-CESTAT-DEL - So far the charging of interest on the amounts reversed prior to issue of SCN is concerned, under Rule 14 of CCR, the appellant shall be liable for interest only on such portion of cenvat credit which they have utilized - for computation of interest, matter remanded to adjudicating authority - penalty imposed under Rule 15 read with Section 11AC is set aside, as the issue is wholly interpretational in nature: CESTAT [para 7, 8]
- Appeal allowed : KOLKATA CESTAT
2019-TIOL-1735-CESTAT-DEL
Diamond Cements Vs CGST, CCE & CC
CX - Marketing and festival expenses incurred by the appellant for their customers on various occasions like Holi, Deepawali, Roza, Iftar party and other festive occasions - On such occasions, the appellant makes their customers aware of development in the cement industry and improvement in the quality of cement manufactured by them - Such gatherings are also used for education of new customers - very purpose of these activities is to promote business/sales inasmuch as the activities are in the nature of marketing/ sales promotion and is covered in the inclusive definition of input service - Credit of tax paid is admissible: CESTAT [para 3]
CX - CENVAT - Input Service - Rule 2(l) of CCR, 2004 - Appellant have hired mobile vans from the market which go from customer to customer to explain their quality of cement and result of their product to the customers and for also attending to the complaints of the customers - not hit by exclusion clause as "motor vehicles" are capital goods in view of the decision in Marvel Vinyls Ltd - 2016-TIOL-3071-CESTAT-DEL - So far the charging of interest on the amounts reversed prior to issue of SCN is concerned, under Rule 14 of CCR, the appellant shall be liable for interest only on such portion of cenvat credit which they have utilized - for computation of interest, matter remanded to adjudicating authority - penalty imposed under Rule 15 read with Section 11AC is set aside, as the issue is wholly interpretational in nature: CESTAT [para 7, 8]
- Appeal allowed : DELHI CESTAT
2019-TIOL-1720-CESTAT-AHM
Industrial Foundry Vs CCE
CX - This appeal has been filed by assessee against demand of Central Excise duty and imposition of penalty - The only evidence against the assessee is statement wherein, the charge of clandestine clearance through the trading firms has been admitted - The said statement has not been retracted - Revenue has not investigated further taking shelter of the letter dated 26.12.2006 wherein, the assessee after paying part liability, requested not to enquire further - The said letter has not been produced by either party so the exact content of the letter is not available - The letter is also not a relied upon document as can be seen from the SCN - The Revenue has taken shelter of the letter dated 26.12.2006 to avoid further inquiry - It is also seen that the SCN has been issued on 19.10.2007 almost 10 months after the letter dated 26.12.2006 was given to the Revenue - Moreover, the said letter has not been produced by Revenue nor relied upon in the SCN as an evidence - Charge of clandestine clearance simply on the basis of statement, though not retracted, cannot be sustained - The charge of clandestine clearance cannot be sustained for lack of evidence: CESTAT
- Appeals allowed: AHMEDABAD CESTAT
2019-TIOL-1719-CESTAT-BANG
HRG Alloys And Steels Pvt Ltd Vs CC, CE & ST
CX - The assessee is engaged in manufacture of Sponge Iron and TMT and availed credit of tax paid on profile sheets which has been installed above the machines used to manufacture the finished goods considering the same as input - The Department entertained the view that assessee is not entitled to cenvat credit on profile sheets and has wrongly taken the credit - After the amendment in definition of 'input' w.e.f. 01.04.2011, the input includes all the goods which are used in the factory of production by the manufacturer as input - The profile sheets have been used to comply with statutory requirement of Pollution Control Laws and if they are not used and the machineries are left open in the area it may cause hazardous and therefore the usage of the profile sheets cannot be regarded as having remote connection with manufacture - This itself establishes beyond doubt that the profile sheets ought to be classified as 'input' as per the main part of definition specified in Rule 2(k) of CCR, 2004 - In view of the certificate furnished by assessee showing the usage of profile sheets and also certifying that the said sheets are laid on roof and are removable and can be re- laid for another shed without damaging the sheets and the steel structure is fitted with nut bolt and can be dismantled and reused also shows that it is not the part of a civil structure - Therefore, the finding of both the authorities that it is excluded from the definition of 'input' is not tenable in law - As far as invoking the extended period of limitation alleging suppression as alleged in SCN is concerned, assessee have been filing the returns regularly and has been giving all the details of cenvat credit availed and moreover it was also verified by the audit team during the course of audit which happened in the month of July 2012 whereas SCN was issued on October 28, 2014 alleging suppression with intent to evade payment of duty - The entire demand is barred by limitation - Consequently, the impugned order is set aside by allowing the appeal of assessee on merits as well as on limitation: CESTAT
- Appeal allowed: BANGALORE CESTAT
2019-TIOL-1718-CESTAT-AHM
Computerskill Ltd Vs CCE & ST
CX - The assessee, a 100% EOU is engaged in manufacture and export of compact disc (recordable) - They were given permission for broadbanding for manufacture of CD/ CD- R for manufacture/export of stamper for CD/ CD- R and additional import of capital goods namely, CD- Mastering and Stamper subject to specific condition that they would give an undertaking to the effect that entire additional production as a result of the broadbanding shall be exported - The assessee themselves treated both types of goods i.e. Stamper (Mother DVD) and CD/ CD- R as different goods and for that reason only they have obtained the permission for clearance of 50% of stamper in DTA market vide development Commissioner's Letter dated 20.12.2002, the said permission carrying the clear condition of adjustment of facility against future entitlements - Thereafter, when the assessee could not made export of stamper the 50% of FOB value for DTA clearance was not complied with - Since the assessee could not have adjusted the facility of DTA clearance against export of CD/ CD- R they kept on taking extension for that purpose from the Development Commissioner - Therefore, the assessee themselves treated CD/ CD- R and Stamper as a different goods - Now their stand that both are similar goods is contrary to their own stand - The nature of goods i.e. stamper and the CD/ CD- R are clearly distinct - The stamper is used for making CD/ CD- R whereas CD/ CD- R is loaded CD with the media/ data, therefore, both are completely distinct products - Since there is no export of stamper there is no question of allowing 50% of the said goods for clearance under concessional rate of duty in DTA - As regard the reliance of assessee on the judgment of Kaatyayini Exports wherein it was held that since the permission was granted by Development Commissioner benefit of DTA Notfn 2/95 cannot be denied - It is an advanced DTA permission with specific conditions that the assessee will fulfil the condition of export of the similar goods and same will be adjusted in the future entitlements, therefore, in failure to comply with the said condition, the benefit of the said permission of the Development Commissioner is not available to the assessee - As regard limitation, assessee themselves opted for advanced DTA permission subject to condition that they will fulfill the condition of export in future and they themselves taken the extension for fulfilling the condition which has been extended upto 31.05.2004 by the Development Commissioner and as per letter dated 28.03.2003 the Development Commissioner allowed the two years from 06.12.2004 for adjustment of the DTA sale value - The SCN was issued on 26.06.2007 when it was found that the assessee could not comply with the condition of adjustment of value of DTA clearance since no export of stamper could be made, therefore, the SCN cannot be said to have been issued as time bar - The demand cannot become time bar - The impugned order is upheld: CESTAT
- Appeal dismissed: AHMEDABAD CESTAT
2019-TIOL-1717-CESTAT-MAD
Shree Ambika Sugars Ltd Vs Commissioner of GST & CE
CX - The assessee is engaged in manufacture of sugar and molasses - The issue is with regard to demand raised alleging wrong availment of CENVAT credit on inputs and inputs services, capital goods used for production of electricity which is sold to TNEB - The Supreme Court in case of Maruti Suzuki Ltd. 2009-TIOL-94-SC-CX has held that the credit in respect of input services which is used for electricity that is sold outside is not eligible for credit - Applying this decision, the assessee does not have a case on merits - The only allegation of suppression pointed against assessee is that they failed to reverse the credit upon delivery of judgment of Apex Court in Maruti Suzuki Ltd. - It is very much clear that the SCN has been issued after the decision rendered by Apex Court in said case - The department has no case that the assessee had not disclosed the credit availed in their ER- 1 returns - Further, assessee has reversed the entire credit on 31.1.2011 - All these would go to show that there was no intention to evade payment of duty or tax less any positive act of suppression on the part of assessee - The department has miserably failed to establish with cogent evidence that assessee is guilty of suppression of facts with intention to evade payment of duty so as to invoke the extended period of limitation - The SCN issued to assessee is time- barred - The impugned order therefore is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
CUSTOMS
CIRCULAR
cuscir16_2019
IGST refunds- mechanism to verify the IGST payments for goods exported out of India in certain cases CASE LAW
2019-TIOL-1721-CESTAT-ALL
Bharat Udyog Vs CC
Cus - The revenue's allegations and findings are to the effect that entire imported lead ingots, which were meant for utilization in manufacture of lead alloys at the assessee's factory located at Kathua, stand diverted by them in the local market - Such findings are primarily based upon the statement of one Shri Ved Nath Tripathi of M/s Grape Marketing Pvt. Ltd. - Even that statement is not specific but a general statement of clearance of lead alloys ingots from the godown of M/s Grape Marketing Pvt. Ltd. - The said deponent was neither examined by adjudicating authority nor by the assessee during adjudication and as such the reliance on said sole statement of Shri Ved Nath Tripathi is neither justified nor warranted - The revenue is not disputing the fact that assessee had exported lead alloys - Admittedly, the lead alloys can be manufactured by using the raw material - If the said imported lead ingots have not reached the assessee's factory at Kathua as alleged by revenue, Tribunal fail to understand as to how the assessee could have manufactured and exported the said quantity of lead alloys - Admittedly, lead alloys cannot be manufactured from Vacuum and the revenue has not even alleged that they have procured the lead ingots from the other source - In the absence of any evidence to show alternate source of procurement of lead ingots and in the absence of any dispute of export of final product lead alloys, the revenue's case is on weak legs and cannot be sustained - Not only the alternate source of procurement of lead ingots has not been shown by the revenue but the revenue is also silent on the alleged diversion of the lead ingots in the open market, inasmuch as, neither the names of the buyers nor the transporters stands disclosed by them - Further, there is no evidence of receipt of consideration by assessee from the so called local buyers of lead ingots - In the absence of all these evidences, the impugned order confirming the demand of duty against the assessee and imposing penalties upon various assessees is unsustainable - Inasmuch as, the assessee has accepted their liability in respect of that quantum of imported lead ingots which could not been utilized by them for export of the goods and had already discharged duty liability to the tune of Rs.40 lakhs approximately, the balance confirmation of demand would not sustain - Accordingly, the impugned order is set aside except to the extent of admitted liability by M/s Bharat Udyog and the appeals are allowed by setting aside the penalties imposed upon all the assessees: CESTAT
- Appeals disposed of: ALLAHABAD CESTAT |
