SERVICE TAX

2019-TIOL-1829-CESTAT-MUM

Milroc Good Earth Property And Developers Ltd Vs CCE & ST

ST - Appellants constructed a Hotel and availed CENVAT credit in respect of inputs and input services exclusively used in the construction of said Hotel & Spa Project at Milroc Kadamba - Contention of Revenue is that such availment of credit is illegal since the Appellant has not provided any output service in relation to construction of the hotel building to another person - appeal before CESTAT against confirmation of demand and imposition of penalty/interest.

Held: Hotel construction is not the end activity of the appellants - Rather their end activities are providing various taxable services like accommodation, restaurant services, spa services and other related services in the said Hotel and they have availed credit in respect of services primarily of advisory nature and of consultancy service which are other than construction service - They have, therefore, fulfilled the conditions specified in Rule 2(l) of CCR and thus the appellant is entitled to the credit of the same under the provision of Rule 3(1) ibid - Argument of Revenue that the services in issue have been utilized for construction of the Hotel which is not excisable and, therefore, credit is not admissible, is unfounded and Bench does not agree with the same - Since the credit in issue has been availed on input services which have been used for providing the output services, the reasoning by the lower Authorities is devoid of any merit - impugned order set aside and appeal allowed: CESTAT [para 9, 10]

- Appeal allowed: MUMBAI CESTAT

CENTRAL EXCISE

2019-TIOL-1340-HC-MUM-CX

CX - The assessee is engaged in manufacture of cosmetic shampoo - The Revenue was of the view that the cosmetic shampoo have to be assessed to duty under the MRP based assessment under Section 4A of the Act - It is an undisputed position that the refund has to be granted under Section 11BB of the Act within a period of 3 months from the date of the application for refund, if the refund is not paid during the stipulated 3 months period, the interest start running - In terms of Section 11BB of the Act, the Revenue was obliged to give interest along with principal amount in terms of Section 11BB of the Act - The fact that the principal amount of Rs.49.17 lakhs was refunded to assessee is in appeal before Supreme Court would not detract from the obligation of Revenue to comply with the provisions of Section 11BB of the Act in the absence of any stay to the order dated 24th March, 2011 of Gujarat High Court by Apex Court - The liability of interest commences after 3 months of refund application, if the refund is not made within 3 months from the date of application for refund - Thus, it runs along with the principal amount - Mere pendency of the appeal before the Apex Court would not justify the Revenue ignoring the statutory provisions of the Act namely Section 11BB of the Act - The view taken by Tribunal cannot be found fault with - It is self-evident position on reading of Section 11BB of the Act that the interest has to be granted if refund is not made within a period of 3 months from the date of application for refund: HC

- Appeal dismissed: BOMBAY HIGH COURT

2019-TIOL-1832-CESTAT-MUM

Maharashtra Seamless Ltd Vs CCE

CX - Clearances of seamless pipes were made by appellant to M/s Hydril Jindal International Pvt. (M/s HJIPL) without payment of duty by availing exemption Notification No.6/2006-C.E., dt.1.3.2006 - Alleging that the Appellant is not eligible to the benefit of Notification No.6/2006- C.E. since the goods were not supplied directly to the contractor, duty amounting to Rs.11,18,208/- was demanded with interest and penalty - demand confirmed and upheld along with penalty etc., therefore, appeal before CESTAT.

Held: There is no dispute of the fact that the main contractor M/s HJIPL has supplied the goods against international competitive bidding to M/s Jubilant Oil & Gas Ltd in respect of oil exploration of Cauveri block - The project authority certificate was issued in the name of M/s HJIPL, who in turn, procured the material from the Appellant, on the strength of the said project authority certificate - The quantity and quality of seamless pipes mentioned in the said project authority certificate has been undisputedly supplied by the Appellant to M/s HJIPL - Supply of the goods to the project in the present circumstances cannot disentitle them from the benefit of notification in view of Tribunal decision in Toshniwal Industries Pvt. Ltd. - 2017-TIOL-1670-CESTAT-DEL involving similar facts and circumstances - in absence of any contrary evidence to the fact that the pipes in question had not been supplied to the project and used in the project, impugned order is set aside and appeal is allowed: CESTAT [para 5 to 7]

- Appeal allowed: MUMBAI CESTAT

2019-TIOL-1831-CESTAT-MUM

Rashtriya Chemicals And Fertilizers Ltd Vs CCE

CX - Appellant had procured naphtha from M/s HPCL under the International Competitive Bidding for manufacture of fertilizers - The supplier M/s HPCL had claimed duty exemption for supplying the said goods to the appellant in terms of Notification No. 6/2002-CE - During the course of investigation, the department had observed that naphtha procured at nil rate of duty was not entirely used for manufacture of fertiliser by the appellant - it was, therefore, contended by the department that the appellant is required to discharge Central Excise duty liability on pro-rata basis on the naphtha utilised in production of goods, other than fertiliser and ammonia - CE duty demand of Rs.1,77,16,104/- was confirmed along with interest and equal amount of penalty - appeal to CESTAT.

Held: Appellant is not a manufacturer of naphtha and had procured the said goods for manufacture of fertilizers - The benefit of Notification No. 6/2002-CX, 21/20002-Cus was claimed by M/s HPCL for supplying the subject goods to the appellant - pertinently, the said notifications and the Rules, 1996 viz. Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 have not fixed any responsibility on the purchaser of naphtha for complying with any conditions - since the appellant is not a manufacturer of naphtha, the provisions of Section 11A of the Central Excise Act, 1944 cannot be invoked for recovery of the central excise duty demand in respect of the said goods allegedly diverted by the appellant - from the statement submitted by the appellant that apart from using the naphtha procured from M/s HPCL for the intended purpose, the appellant had also used natural gas for generation of steam, used for manufacture of fertilizer - Thus, under the circumstances of the case, it cannot be said that the appellant had diverted the duty free naphtha for use in the activities, other than for manufacture of the fertilizers and products thereof - no merits in the impugned order, hence same is set aside and appeal is allowed: CESTAT [para 7 to 9]

- Appeal allowed: MUMBAI CESTAT

2019-TIOL-1830-CESTAT-MUM

Sanwarmal Durgadutt Vs CCE

CX - Appellants are engaged in the manufacture of Aluminium and Zinc Castings and articles thereof, which they classified under CSH 7907.90 and 7616.90, whereas the Department proposed to classify the same under CSH 8708.00 as Motor vehicle parts - Tribunal had observed that since the castings manufactured by the appellant requires further process like machining, grinding and drilling the surface, which can be verified only after visiting the factory premises of the appellant, and since this plea was not taken up before the authorities below, hence, remanded the matter back to the adjudicating authority for fresh consideration - adjudicating authority visited the factory premises of the appellant and examined the process undertaken by the manufacturer and passed an order which was annulled by the Commissioner(A) observing that the order of the Tribunal was not followed in letter and spirit - another order was passed by the adjudicating authority without making any visit to the factory and wherein the demand was confirmed by observing that the goods were motor vehicle parts - this order was upheld by the Commissioner(A), hence assessee is again before the CESTAT.

Held: Initially the Asstt. Commissioner has visited the appellants factory and did not find any facility for machining, grinding etc. - Even though, the adjudicating authority subsequently did not visit the factory but on assumption and presumption confirmed the demand without considering the end-use certificates issued by their customers pursuant to the direction of this Tribunal - Bench has carefully considered the end-use certificates issued by the respective customers - In the said certificate, it is clearly indicated that the castings, which had been supplied to the customers were subjected to further process of machining, grinding and drilling etc.; only thereafter the finished products emerges - Considering the facts that the appellant did not have the facility of machining, grinding, finishing etc. in their factory premises as found by the officers of the department and also end-use certificate produced by them that such processing are being carried out after being cleared from the premises of the appellant at the premises of the customer, no merit is found in the impugned order in classifying the product as motor vehicle parts, which is classifiable as casting under respective sub-headings as claimed by the Appellant - Consequently, impugned order is set aside the and the appeals are allowed with consequential relief: CESTAT [para 7]

- Appeals allowed: MUMBAI CESTAT

CUSTOMS

2019-TIOL-1341-HC-MUM-CUS

Cus - This application seeks condonation of 484 days delay in filing an appeal from the order passed by Tribunal - The impugned order of Tribunal was received on 22nd May, 2017 - There is no attempt even made to explain the delay from 13th June, 2017 when Principal Commissioner of Customs sought information of likelihood of success in appeal along with grounds of appeal till 5th September, 2018 when the file was again put up before Principal Commissioner of Customs - This inaction shows negligence on the part of Revenue in challenging the order dated 18th April, 2017 of Tribunal in time - On being asked whether any responsibility has been fixed for the delay, court was informed that it is a separate issue - The reliance placed by Revenue upon the decision of this Court in Unison Clearing Pvt. Ltd. 2018-TIOL-1826-HC-MUM-CUS was a decision which was rendered on 19th April, 2018 while the present appeal has been filed from an order dated 18th April, 2017 - The non-taking of any action from 13th June, 2018 to 5th September, 2019 shows negligence - The application was moved to act only after the decision of this Court in Unison Clearing Pvt. Ltd. - It appears that the appeal has been filed only in view of decision of this Court in Unison Clearing Pvt. Ltd. - This cannot be the basis for condoning such long delay - It shows complete negligence on the part of the Officers of the Department to challenge the impugned order of the Tribunal dated 18th April, 2017 - Thus, no sufficient cause has been made out for condonation of delay: HC

- Notice of Motion dismissed: BOMBAY HIGH COURT

2019-TIOL-1828-CESTAT-MUM

Disha Impex Vs CC

Cus - The assessee have imported knitted polyester fabrics and filed Bill of Entry - Goods were tested and found to be 100% polyester except for some goods, which were found to be of 83.6% of polyester and 6% polyurethane - The department alleged that the goods were under valued and therefore enhanced the value and released the goods provisionally on bond and Bank Guarantee - The principles of natural justice have been violated in case in as much as the copy of the test report was not supplied to assessee - Moreover, the survey report does not indicate that the fabrics which were referred in survey were same as the impugned goods - Therefore the findings of market survey becomes questionable and the reliance on the same is rendered unsubstantiated - It is also on record that the proprietor on being questioned did not confirm the under valuation - Moreover, the Commissioner (A) has set aside the redemption fine and personal penalty: CESTAT

- Appeal allowed: MUMBAI CESTAT