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SERVICE TAX
2019-TIOL-1746-CESTAT-HYD
Rayudu Vision Media Ltd Vs CCT
ST - The assessee is engaged in imparting training in various courses in the field of animation like 2D Animation, Extreme 3D, Extreme Compositing (SHAKE), Advance Training (FCP) - On gathering intelligence assessee was asked by department to register themselves with the service tax department - SCN was issued to assessee stating that the training imparted by them to the students is relating to computer software and hardware but does not relate to drawing pictures pertaining to animation and therefore they, as, computer training institute are liable to pay service tax under 'commercial training and coaching services', even though the courses offered by them were vocational by nature - The assessee's coaching is not computer animation and not any computer software or hardware - When a student passes out the course he will not become either a computer hardware or a software professional but he becomes professional in using the computer software to produce animation and animation films - This is similar to CAD software or TALLY software used by professionals in their work - The test to decide whether or not the training in question is a training related to computer hardware or software is what the trainee does at the end of his training - The trainee will not become specialist in computer software or hardware and he will also not be equipped to develop new computer animation software - All he is trained is in using the software to develop animations - Therefore, assessee is clearly not covered by the mischief of proviso and the explanation to the notfn 24/2004-ST - Therefore, on merits, assessee is not liable to pay service tax on the computer animation software training which they have provided as they are entitled to the benefit of exemption notfn 24/2004 as amended vide notfn 19/2005-ST - Insofar as the video tape production service is concerned, assessee produced animation movie and sold it for a consideration - Video tape production services as per Sec. 65(119) of FA, 1994 is any professional videography or a commercial concern engaged in business of rendering service related to video production - 'Video tape production' means the process of recording any programme, event or function on a magnetic tape or on any other media or device and includes editing thereof in any manner - The animation film produced by assessee clearly does not appear to be covered by this definition and therefore, assessee is not liable to pay service tax on this service as well - Since, issue is decided in favour of assessee on merits, it's not necessary to examine the question on limitation - The demand of service tax, interest and penalties are therefore liable to be set aside: CESTAT
- Appeal allowed: HYDERABAD CESTAT
CENTRAL EXCISE
2019-TIOL-1745-CESTAT-DEL
Pappu Construction Vs CGST, CC & CE
CX - The assessee is registered for providing services in category of mining of mineral, oil or gas services - On the basis of intelligence gathered, it was noticed that assessee is providing said services to Madhya Pradesh State Mining Corporation Ltd., however is not discharging the whole tax liability - As regards to the findings about confirming the recovery of Cenvat credit alleging the same to be wrongly availed, it is observed that the credit has been availed on the purchase of two machines vide two invoices which were to be used to execute the work order of mining between the Corporation and the assessee - There is no dispute about these machines to be the capital goods used for providing output service - The only controversy remains is as to whether the invoices bearing different address of the service provider than the one for which the credit has been availed is the violation of Rule 9 of CCR, 2004 - The service provider for both the sites is same and has been commonly registered for both the sites - The credit is rather permissible to be taken on both these machines by assessee in another unit irrespective of invoices showing the different address of assessee - Even the CBEC Circular as relied upon by assessee has clarified that where the goods are ordered by registered/head office of assessee and the invoice does not bear the consignee address, the credit ought not to be denied - As regards to the alleged lapse on part of assessee qua the alleged procedural compliance, irrespective the Rule 9 required the production of original documents with complete particulars but it is quite oblivious that if the documents are not produced in original or if lost, the claim will not to be defeated especially when the Department is not in dispute about receipt of goods, their use in providing the output service and about the duty paid character of inputs - The High Court of Madhya Pradesh in case of Kataria Wires Ltd. - 2007-TIOL-841-HC-MP-CX has held that since the duty was paid for the inputs and inputs were used in captive consumption for manufacture of final product merely because original and duplicate copy as required by Rules were lost, the claim could not be defeated - Findings of Commissioner(A) that the invoices produced by assessee are not containing correct address of assessee registered premises but are having address of their other premises has wrongly been considered as a ground to deny the availment of cenvat credit on the capital goods used by assessee for providing the output service - Similarly, the findings about absence of all the particulars as prescribed under CER, 2002/Rule 9(2) of CCR, 2004 are not sustainable - These findings are therefore set aside - Finally coming to the imposition of penalty, the onus was of the Department to prove the suppression of fact on part of assessee to evade the payment of duty but the record of matter and even the findings of appellate authority are sufficient to prove that the assessee has been paying the excess duty for some of the financial years of the period in dispute and had been adjusting the same qua short payment is sufficient to hold that there is no intent to evade the duty - In absence thereof no question arises for imposition of penalty - The Order under challenge is set aside: CESTAT
- Appeal allowed: NEW DELHI CESTAT
2019-TIOL-1744-CESTAT-CHD
T K Steel Rolling Mills Vs CCE & ST
CX - Appellant had cleared/sold ‘Rolled Products' to their Noida based buyer who directed the appellant to deliver the goods to their job worker - as the job worker found that the goods are not up to the mark, they returned the goods to the appellant under challan to Noida based buyer (principal manufacturer), who in turn issued invoices of returned goods to the appellant and who availed CENVAT credit - denial of credit on the ground that the goods have not been returned by the buyer to whom the appellant sold the goods is untenable as it is not disputed that the goods in question has not been received by the appellant - credit rightly availed - insofar as the allegation of diversion of the goods to the tune of Rs. 16,552/-, the appellant has admitted and reversed the same alongwith interest, therefore, penalty imposable is only 25% - as regards denial of credit of Rs. 28,853/-, appellant is able to show that as per the expert's opinion, the said goods can be used as inputs i.e. fuel for manufacture their final product, therefore, credit cannot be denied: CESTAT [para 6, 8]
- Appeal disposed of: CHANDIGARH CESTAT
2019-TIOL-1743-CESTAT-BANG
Ugar Sugar Works Ltd Vs CCT & CE
CX - The assessee-company manufactures Sugar & Molasses & avails Cenvat credit on input goods, services & capital goods as per provisions of CCR 2004 - Upon scrutiny of ER-1 returns for the relevant period, it was noted that the assessee had wrongly availed & utilized Cenvat credit on HR coils, MS angles, MS channels, MS plates, MS flats falling under Chapter 72 of CETA 1985, by treating the same as capital goods - These items had been used for construction of civil structures, expansion & modernization, fabrication of supporting structures for plant/machineries/equipment/appliances which are fixed/embedded to the earth with concrete foundation - Hence SCN was issued proposing reversal of wrongly availed credit with interest & penalty - On adjudication, the demands were confirmed with interest & penalty - On appeal, the Commr.(A) remanded the matter to determine actual usage of the goods in question - Hence the present appeal.
Held: The Commr.(A) admitted the admissibility of credit on various items but still remanded the case for verification of usage even after certificate from Chartered Engineer was submitted by the assessee - It is seen that most of the goods in question are covered under the definition of inputs and have been used for repair and maintenance or fabrication of capital goods - Further, some amount of credit has been availed on goods falling under Chapters 84, 85, and 90 which are specifically covered in the definition of capital goods as contained in Rule 2(a) of CCR, 2004 - Besides, the Chartered Engineer has certified the use of the disputed goods & that the material used for machinery and accessories are part & parcel of the said machines - The utilization & consumption of the material has also been certified - Certificate of usage has been given for each & every item not considered by the authorities - Hence the O-i-A in challenge is unsustainable: CESTAT
- Assessee's appeal allowed: BANGALORE CESTAT
2019-TIOL-1742-CESTAT-DEL
Trimula Industries Ltd Vs CGST, CE & CC
CX - CENVAT - Rule 2(a), 2(k) of CCR, 2004 - It is not disputed that the appellant have fabricated the plant and machinery being various machineries and the same are essential for the manufacture of dutiable finished goods - admittedly all these goods viz. Angles, Channels, Plate, Beams, Joist etc. For fabrication of Kiln Maintenance platform, products separation system, Belt Conveyor structure, Belt Conveyor Foundation Bolt, Raw material handling system, Transfer Tower, Dust settling system, After Burner Chamber (ABC), Thermolite Calcium Silicate Block, Day Bin, I-Bin, Hopper, Ground Hopper, Kiln and Cooler section, ACSR Conductor, Electrical Sub-station Equipment, etc. have been used inside the factory of manufacture of the appellant, either as capital goods or as inputs used in the fabrication of capital goods - appellant is entitled to Cenvat Credit on the amount disputed by Revenue - Impugned order set aside and appeal allowed with consequential relief: CESTAT [para 3, 5]
CX - Limitation - As there is no case of suppression, mis-declaration and/or contumacious conduct on the part of the appellant, the extended period of limitation is wrongly invoked by the Revenue - SCN is not maintainable: CESTAT [para 4]
- Appeal allowed: NEW DELHI CESTAT
CUSTOMS
NOTIFICATION
ctariffadd19_024
Seeks to levy anti dumping duty on jute sacking cloth under tariff heading 5310 originating in or exported from Bangladesh to prevent the circumvention of levy of anti dumping duty levied on jute sacking bags vide notification No. 1/2017-Customs(ADD) dated January, 05 2017 CASE LAWS
2019-TIOL-1259-HC-MAD-CUS
Global Calcium Pvt Ltd Vs ACC
Cus - The petitioner-company herein exported some goods & claimed that such exports were eligible for MEIS benefit - The petitioner claimed that at time of filing the shipping bills, it inadvertently omitted to select the 'Yes' option in the online platform and omitted to declare in the shipping bill that it intended to claim benefit under MEIS - Initially, the petitioner approached the DGFT seeking such benefit - The DGFT redirected the petitioner towards the Customs Department - The petitioner then approached the Customs, but its application was rejected - Hence the present writ.
Held - A similar issue stood resolved by the High Court in Pasha International Vs. Commissioner of Customs, Tuticorin - Following the findings laid out therein, the communication issued by Customs rejecting the application seeking MEIS benefit, stands quashed - The officers concerned are directed to permit the petitioner to make the requisite amendments - An NOC be issued within 3 weeks' time, enabling the petitioner to claim benefit under MEIS Scheme from the DGFT: HC
- Writ petition allowed : MADRAS HIGH COURT 2019-TIOL-1741-CESTAT-MUM
Lark Chemicals Pvt Ltd Vs CC
Cus - The assessee-company filed bill of entry for importing some quantity of Absorbic Acid & Roboflavin and claimed exemption under Notfn No 203/92 - The Revenue opined that the against the licenses, the importer could have imported a quantity considerably lesser than what had been imported & that the transferor of the license had inflated the unit prices of the raw materials while applying for the licenses - Hence the exemption was sought to be restricted, though the value of the imports fell within the quantity specified in the license - The Revenue also refused to clear the goods as the importer produced no clarification regarding the excess quantity imported - In writ, the High Court directed that the consignment be released subject to furnishing of bank guarantee & that SCN be issued to the assessee - SCNs were issued denying exemption for importing goods in excess of the quantity specified in the license - The SCN was confirmed upon adjudication & such O-i-O was sustained by the Commr.(A) - Hence the present appeals.
Held: Considering the mandate of Circular No 23/96-Cus dated 19.04.1996. and the decision of the Tribunal in Tata Iron & Steel Company and that of the High Court of Bombay in Pradip Polyfils P Ltd , it emerges that it is for the Customs authorities after noting the mis-match in the declared unit value on Bill of Entry and that arrived on the basis of quantity and value mentioned in Value Based Advance License to refer the matter to licensing authority and seek corrections - Without any amendments in the license, the value of the imported goods sought to be exempted by the license cannot suo motu be altered by the authorities - Hence the O-i-O & the O-i-A run contrary to the mandate of the Circular, which forms the basis for raising duty demand - Hence the Orders-In-Appeal in challenge are quashed: CESTAT
- Assessee's appeals allowed: MUMBAI CESTAT
2019-TIOL-1740-CESTAT-HYD
Maithan Ceramics Ltd Vs CCT
Cus - The assessee imported goods and cleared them using DEPB licenses which were transferred to them by the original scrip holders - Consequent upon the investigations, it was found that the exporters had fraudulently obtained DEPB scrips - Therefore, a demand was raised on assessee seeking recovery of the customs duty debited in DEPB scrips against bills of entry in cash effectively denying them the benefit of DEPB scrips - As is evident, section 129E required the assessee to deposit, pending an appeal, the entire amount of duty or interest demanded or penalty levied - In cases where the assessee files a stay application, the CESTAT often grants either complete waiver of pre-deposit or a partial waiver thereof - In case of partial waiver the assessee deposits some amount as directed by CESTAT - It is the case of first appellate authority that only when such application is made and part of the payment is made in pursuance of the stay order it can be called as pre-deposit - Where the entire amount of duty demanded is paid, it is the duty and not pre-deposit - A plain reading of section 129E does not say so - In fact, there cannot be any duty at all when the issue had not yet reached finality - Pending an appeal before CESTAT, the assessee deposited the entire amount under section 129E which is nothing but pre-deposit of the duty paid - Consequently, the interest, as applicable on pre-deposit, needs to be paid to the assessee - Therefore, the order of first appellate authority is incorrect and needs to be set aside: CESTAT
- Appeal allowed: HYDERABAD CESTAT |
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