SERVICE TAX

2019-TIOL-1802-CESTAT-DEL

Panacea Biotec Ltd Vs CCE

ST - The assessee is registered with ST department for providing taxable services as that of Scientific or Technical Consultancy Services, Technical Inspection and Certification Services, Intellectual Property Services other than Copyright, Renting of Immovable Property Services, Advertising Agency Services, Business Auxiliary Services, Legal Consultancy Services, Management Consultancy Services, Sponsorship Service and Transport of Goods by Road Services - Whether assessee being the ISD is entitled to avail cenvat credit on invoices addressed to assessee - The only lacuna on invoices issued by service provider is that the address of assessee is actually the address of the unit at which the service is provided - Once there is no dispute with regard to service tax paid the insufficient particulars in invoice cannot be the ground to deny the credit - Otherwise also, the law has been settled that a substantive benefit cannot be denied due to procedural/ technical infirmity - Support drawn from the decision of High Court in case of MK Jokai Agri Plantations Pvt. Ltd. - Assessee is entitled for cenvat credit distributing it to the units as received on the basis of invoices issued in the name of assessee but addressed to the unit to which services were provided - As regards to reversal of amount of cenvat credit in respect of trading activity, it is apparent on record that 100% cenvat credit on service tax paid on input services has been availed by assessee despite that they were involved into trading activity as well - The statute did not have the definition of trading as service for period before 01.04.2011 - The period involved is also prior 2011 - Since it was not an exempted service for the impugned period question of applicability of Rule 6 of CCR, 2004 i.e. about maintaining a separate accounts for providing taxable service alongwith the trading activity exempted service were not required nor was required any option to be exercised by assessee for the said period - The reversal of cenvat credit as confirmed is therefore held to be a wrong decision and thus is liable to be set aside - Assessee has deposited the proportionate amount of cenvat credit, hence, is entitled for the refund thereof.

As regards to Cenvat credit in respect of outward freights, assessee paid service tax on transportation charges from Mandoli godown to distributors/ dealers and took the cenvat credit of service tax so paid on the transportation charges - It has been denied by adjudicating authority below - Though the godown is the part of definition of place of removal but the place of distributor/dealer is not included in said definition hence the GTA service only be to the Mandoli godown is now service eligible for credit GTA beyond godown is inadmissible for credit - Therefore, Commissioner (A) has rightly denied the cenvat credit in respect of outward freight - Findings to this issue are therefore sustained - The Department was not entitled to invoke the extended period of limitation - Resultantly, the SCN as such is held to be barred by time - The question of sustainability of any demand or interest or penalty upon assessee does not at all arises - Therefore, irrespective that assessee is held liable for reversing credit towards GTS Servcie to the place of dealers/ distributors and also towards demand for R&D Income but nothing is held recoverable for the reason of impugned SCN being barred by time - Order under challenge is therefore set aside: CESTAT

- Appeal allowed :DELHI CESTAT

2019-TIOL-1801-CESTAT-DEL

Punj Lloyd Ltd Vs CST

ST - The assessee was appointed as a contractor for preservation and maintenance of properties of Dhabol Power Company (DPC) under orders of a Court Receiver appointed by High Court as the DPC had stopped its activities of power production - The investigations were conducted against the assessee considering that the said activity of assessee described as 'Preservation and Maintenance' of properties of DPC covered the power plant phase I & II, LNG Terminal, Jetty, Naphtha, Single Point Mooring and housing complex amounted to a taxable service of "maintenance or repair" covered in terms of Section 65(64) of FA, 1994 r/w Section 65 (105) (zzg) of FA, 1994 and the assessee was liable to service tax w.e.f. 01/07/2003 to December 2005 - Both the issues have been decided in a non-speaking and very cryptic manner - No justifiable arguments have been given to decide the taxability on both the issues - It has been summarily held that the assessee has provided the services of maintenance of preservation of power plants, LNG Terminal which are goods and equipment without any discussion or examination whether the maintenance or repair services have been provided with respect to immovable property or with respect to "goods and equipment" - Whereas the impugned services to Power Plant/ LNG terminal are with respect to immovable property but Tribunal refrain to pass any order in this respect as the party had initially voluntarily deposited the service tax amount after owning their liability towards this service and even raised revised taxable invoices to their customers - Hence, the issue may be examined in totality and a well reasoned order be passed after providing opportunity to the assessee to justify their claim that the said services were in respect of immovable property or not - Even on the issue of acceptance of invoices/Chartered Accountants Certificate whereas it has been accepted that such invoices/ CA certificate tallies with the quantification in SCN but the claim has been merely rejected on the basis that in the revised invoices the assessee has not mentioned the item/material sold/utilized to DPC and also not mentioned about the VAT/Sales Tax in the said Revised invoices - This was no ground to dismiss the claim of assessee and in the case of any apparent mis-match the assessee should have been provided opportunity to clarify the mis-match or provide the revised details of value of consumed raw material/ parts - This value was required to be abated under provisions of Notfn 12/2003-ST when documentary proof specifically indicating the value of said sold goods and materials used in the course of providing contractual service were produced - This abatement would have been available even if the same was not separately shown in invoices if verifiable documentary proof was otherwise produced as there was no such condition as to show the value of same separately in invoices, as per the relevant notification - Matter is remanded back to the Original Adjudicating Authority: CESTAT

- Matter remanded :DELHI CESTAT

CENTRAL EXCISE

2019-TIOL-1800-CESTAT-DEL

CCE Vs Lupin Ltd

CX - The grounds of appeal do not dispute the factual position - The grounds of appeal are beyond the scope of SCN - The grounds of appeal are without any merit - Hence, the appeals filed by the Revenue are liable to be rejected and consequential refund should be allowed to the Respondent - No suppression of facts can be alleged against the Respondent - The Respondent has paid the duties in respect of the stock as on cut-off date - The SCN merely disputes the mode of discharge of duty i.e. whether Excise duty on Customs duty ought to be paid - Hence, it cannot be said that the Respondent indulged in any collusion, willful misstatement or suppression of facts with intent to evade duty - There is no material to suggest that the Respondent had made any deliberate mis-statement or suppression to defraud the Government of its due revenue - No evidence has been produced by Revenue on record - There is no such whisper in the present appeal as well - Hence, there exists no circumstances to invoke the larger period of limitation under proviso to Section 28(1)/Section 28 (4) of Customs Act and Section 11 A of the Excise Act - Even on merits, there is no case made out by department - The only case made out by department in SCN was that the nature of duty payable on the goods, which were procured indigenously, cleared by EOU to DTA is customs duty and not central excise duty - The SCN alleged that the goods cleared by EOU to DTA are to be treated as imported goods as EOU cannot be considered as located in India - The case is devoid of any merit as the department itself, in grounds of appeal at Para 2.6(Prill) &Para 2.3 (Oral), has contended that on de-bonding the respondent is liable to pay customs duty on imported goods and excise duty on the indigenously procured goods and finished goods - Therefore, on this count alone, the entire proceedings go - As per Rule 17 of CER, 2002, in case where goods are removed from EOU to DTA, such removal shall be made under invoice and the duty leviable on such goods may be paid by utilizing the available cenvat credit or in cash - Thus, an EOU is permitted to utilize cenvat credit for discharging excise duty on removal of goods from EOU to DTA - It is well settled that central excise duty is payable on 'excisable goods' as defined under section 2(e) of Central Excise Act - No central excise duty is payable at intermediate stage - No goods are manufactured or produced at that stage - Appendix 14-I-L of FTP Handbook of Procedures Vol. 1 outlines the exit from the EOU Scheme - The said appendix lays down the applicable customs and excise duties payable by the unit on imported and indigenous capital goods, raw materials, components, consumables, spares and finished goods - It does not provide for payment of duties on WIP - Therefore, no duties of customs are payable on WIP at the time of debonding - This view has been taken by Tribunal in Tirumala Seung Han Textile Limited - 2008-TIOL-2272-CESTAT-BANG - The department appeals are dismissed: CESTAT

- Appeals dismissed :DELHI CESTAT

2019-TIOL-1799-CESTAT-MAD

JSW Steel Ltd Vs CCE

CX - The assessee is engaged in manufacture of iron and steel products - On the basis of intelligence gathered that assessee is irregularly availing cenvat credit on inputs/input services - It was noticed that the manufacturing process of Metallurgical Coke involves conversion of Anthracite coal into metallurgical coke in coke oven - The metallurgical coke so manufactured is used in the manufacture of steel - The department was of the view that assessee had not exercised option to pay proportionate credit on inputs/input services used in manufacture of exempted goods and therefore is liable to pay an amount which is equal to 10% or 5% on the value of metallurgical coke which is the exempted product manufactured by assessee - When the manufacturer is not maintaining separate accounts for common inputs used for manufacture of exempted as well as dutiable products, they have to comply with the provisions under sub-rule 3 (i) or (ii) of Rule 6 of CCR, 2004 - Thus, if the assessee is intending to pay an amount equivalent to cenvat credit attributable to inputs and input services as per the Explanation I in said rule, they have to exercise the option and such option will be applicable to all the exempted goods/services of the assessee - The moot question is whether the said option is procedural or mandatory - The Tribunal in case of Mercedes Benz India (P) Ltd. - 2015-TIOL-1550-CESTAT-MUM had occasion to analyse the similar facts and held that the said requirement of exercising the option is only a procedural one - Assessee have informed vide their letter that they intend to reverse cenvat credit on monthly basis on inputs/input services used for production of electricity that is wheeled out to TNEB - As per the Explanation I of said rule, the said option once exercised would be applicable to all the exempted goods manufactured by assessee - On such score, the letter given by assessee would be sufficient intimation to department that they intend to avail the option stated in sub-rule 3 (ii) of Rule 6 of CCR, 2004 - The SCN has been issued much later after two years on 22.5.2013 only - When the assessee has reversed the credit and intimated the department, the allegation that assessee has suppressed the facts with intention to evade payment of duty/tax is unjustified - The SCN is time-barred - Appeal succeeds on limitation also: CESTAT

- Appeal allowed : CHENNAI CESTAT

2019-TIOL-1798-CESTAT-MAD

TVS Electronics Ltd Vs CGST & CE

CX - Refund, Valuation - Adjudicating authority had gone into the question as to whether the appellant had adopted a higher value at the factory gate than the value of goods cleared at the Kit Stores (depots) - After perusing the invoices, the said issue was found to be in favour of the appellant - Issue of unjust enrichment was also examined by the adjudicating authority - After complying with the remand direction, the adjudicating authority had sanctioned the refund of Rs.13,23,279/-, hence, the conclusion arrived by the Commissioner (Appeals) in the impugned Order that the adjudicating authority had not examined the aspect of Rule 7 of the Central Excise Valuation Rules, 2000, etc., is beyond the scope of remand - appellant informs that the refund has been sanctioned to the appellant and they have availed Credit of the said amount; that there has been no Show Cause Notice issued till now by the Department for recovery of the alleged erroneous refund and hence the entire exercise of analysing by a further remand, as requested AR, is futile - sanction of refund by the adjudicating authority is right and proper - Order passed by the Commissioner (Appeals) rejecting the sanction of the refund cannot sustain in the eyes of law - same is set aside and appeal is allowed with consequential relief: CESTAT [para 8 to 12]

- Appeal allowed : CHENNAI CESTAT

CUSTOMS

2019-TIOL-1797-CESTAT-MUM

Maharaja Whiteline Industries Ltd Vs CC

Cus - Assessee had filed B/E for clearance of imported goods declared as "Component of Injection Moulding Machine" shipped from China by M/s Tederic Machinery Manufacturing (Co) Ltd. - The imported goods were examined with Assistance of representatives of chartered Engineers M/s Intertek Testing Services India Pvt Ltd and it was found that the goods were essentially six sets of Injection Moulding Machine without clamping units and they have been imported in SKD condition - Since mere absence of clamping unit would not effect the classification of the goods, which are in SKD condition, by application of Rule 2(a) of the General Rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975, for the purpose of assessment the goods were treated to be complete machine classifiable under heading 8477.10.00 of Customs tariff - As per notfn 39/2010-Cus, anti dumping duty is leviable on injection moulding machine classifiable under CTH 8477.10.00 imported from China and having clamping force between 40 tons to 1000 tons - As per S No 6 of the said Notification, anti dumping duty @ 68% of CIF value is imposed on injection moulding machines imported from M/s Hangzhou Tederic Machinery Co Ltd - As per the manufacturers catalogue and also admitted by importer the three models imported were having clamping force of 320 Tons, 500 Tons and 650 Tons - Since assessee is not pressing any point taken in appeal and do not wish to claim the goods, Tribunal do not pass order on the merits - The goods covered by B/E have been confiscated and assessee have been allowed the option to redeem on payment of redemption fine - The impugned order is upheld: CESTAT

- Appeal dismissed : MUMBAI CESTAT

Dalumi Hongkong Ltd Vs CC

Cus - Whether the diamonds in question are liable to be confiscated under Section 113(d) of Customs Act, 1962 - Admittedly the diamonds were not presented to the proper officer and were found in the office of the courier company at Andheri by DRI and this itself shows that the formalities as per Regulation 6 ibid were not completed - The courier company did not follow the procedure prescribed under Courier Imports and Exports (Clearance) Regulations, 1998 while receiving the goods for export from the Perez Hender Valmore - If the assessee has done any act towards the exportation, namely, taking of the goods out of India and if the act or acts could be fitted in the course of such movement of the goods, or, in other words, the act could fall in the course of progress towards the actual physical taking of the goods out of India, the mischief of section 113(d) of the Customs Act would be attracted - The goods were booked for export by Perez Hender Valmore - It is not the case of DRI that the said Perez Hender Valmore has any link or relation or concern with the assessee - There must be an act or acts, by assessee, done towards the actual physical movement of the goods with intention to take them out of India - That alone would constitute an attempt to export the goods - 'Attempt' must also have relevance to the taking of the goods out of India - Tribunal is not concerned with actual completion of exportation and only concerned with the attempt - According to DRI also, the said Shri Perez Hender Valmore and not the assessee, attempted to export 1641 pieces of cut and polished diamonds illegally by concealing the same in the courier packet by mis-declaring the contents and concealing the aforesaid diamonds in grey & black coloured sports jacket of Nike brand and the said Perez Hander Valmore has no link with the assessee - Section 113(d) ibid has no application on the facts of the present case - Therefore the goods/diamonds in question cannot be confiscated and are liable to be released unconditionally to the assessee: CESTAT

- Appeal allowed : MUMBAI CESTAT