SERVICE TAX

2019-TIOL-1846-CESTAT-MUM

Capita India Pvt Ltd Vs CGST

ST - The assessee-company provides taxable services & avails Cenvat credit on input services such as renovation, repair service viz. floor insulation & interior design and hotel charges incurred in respect of the visit of the employees of the Company - SCN was issued alleging incorrect availment of credit on two input services - Duty demand was confirmed upon adjudication, along with demand for interest & penalty - On appeal, the Commr.(A) allowed partial relief to the assessee - Hence the present appeal.

Held: The assessee claimed that the Commr.(A) wrongly concluded that the floor insulation work relates to civil structure and hotel stay charges are not incurred in relation to professional work rendered by the employees of the assessee-company - Hence the matter warrants remand to examine the relevant invoices & determine whether or not credit is to be allowed on these input services: CESTAT

- Case remanded : MUMBAI CESTAT

2019-TIOL-1845-CESTAT-MAD

Karur Vysya Bank Ltd Vs CCE & ST

ST - A SCN was issued alleging that the input service tax credit and capital goods cenvat credit was availed by assessee during 2005-06 to 2010-11; that while availing the above credit, the assessee had not furnished the cenvat return or abstract or details of cenvat credit availed, also had not furnished the duty paying documents; that several requests made to the assessee to furnish the duty paying documents but the assessee did not produce any such for compliance with Rule 9 of CCR, 2004; that the assessee had not filed cenvat credit return as per Form and in Rule 9(9) of CCR; that the assessee had failed to file cenvat credit return in prescribed format along with its ST-3 return for the period October, 2005 to September, 2010 as per Rule 9 (9) of CCR and Rule 5 of STR, 2002 and that therefore it appeared to Revenue that the assessee had availed irregular credit of service tax and capital g3oods credit without any valid original duty paying documents as per Rule 9 and 4 (7) of CCR - As regards to cenvat credit on e-statements of NPCI, the assessee as a Member Bank, has entered into an agreement with NPCI, wherein, NPCI has agreed to provide intermediary network switching and other support services, as may be required, for accounting and settlement of transactions made on the Automated Teller Machines (ATM) and integrating the same with the accounts of the customers, in the books of the member banks - In nutshell, the agreement provides for smooth operation of member banks regarding transaction through credit or debit cards or such other instruments, to the customers who perform transactions through ATMs for specified services - From a perusal of the statement issued by NPCI, it is a self-contained document incorporating all the mandatory requirements of proviso to Rule 4A and in any case, NPCI is not a private body just to ignore its statement; as to the nature of service, there is an agreement in place - It is not the case of Revenue that NPCI has not filed its ST-3 return or that there was any contravention by NPCI whereby a doubt is entertained as to the transactions, to deny cenvat credit availed by the assessee on its payment to NPCI - Hence, Tribunal is unable to subscribe to the views of Commissioner and hence, the same is set aside.

With regard to cenvat credit disallowed for want of bills/invoices for which only the statement given by service providers were produced, service providers include private parties which is not as per Rule 9 (2) of CCR, 2004 read with Rule 4A of STR, 1994, lacking even the minimum necessary details - There is no whisper about any agreement with the parties, but, however, considering the fact that the assessee is a banker, it found appropriate to give one more opportunity to prove its case, by producing bills/invoices and not just invoice of invoices - The assessee should co-operate with Revenue and it cannot claim any special status by filing appropriate documents - The other issue is the denial of cenvat credit for want of original invoices - The assessee has furnished the photocopies of invoices and it is the settled legal position of law that even photocopies of invoices are valid documents - Denial of cenvat credit on the photocopy of invoices is not justified and hence the same is set aside - With regard to denial of balance cenvat credit, no documents were furnished and hence Tribunal do not propose to interfere with the findings of lower authority - Appeal is therefore treated as partly allowed: CESTAT

- Appeal partly allowed : CHENNAI CESTAT

CENTRAL EXCISE

Sanjay Road Lines Vs CCE & ST

CX - Appellants are registered for manufacture of Speciality oils - SCN was issued alleging that they have availed credit on inputs without actual use in manufacture - inasmuch as upon arrival, at the factory, of the tanker containing the inputs, the same was kept standing on the roadside and then within five to ten minutes Ravi Ranjan prepared CEX invoice showing clearance of finished goods on marginal appreciation of value and depreciation of quantity merely to accord authenticity that the goods have been manufactured - Investigation revealed that the appellant had shown fictitious sale whereas no goods were despatched to customers upon whom the sales invoice had been raised; that the goods were not delivered at Silvassa factory but were transported to Pune as per instructions of Partner Surendra Agarwal - SCN, therefore, seeks recovery of CENVAT credit allegedly wrongly availed of Rs.1,62,27,443/- on the ground that the inputs shown to have been received were not actually received in the factory nor used in or in relation to manufacture of final products - demand confirmed by CCE, Vapi along with imposition of penalty and interest - appeal to CESTAT.

Held: It is not disputed that the appellant had not undertaken any manufacturing activity on the goods on which credit was availed by them, therefore, no credit is allowable to the appellant - however, at the time of the purported clearance of the final product, the appellant had paid Central Excise duty and eventually the whole situation becomes revenue neutral as the credit was used for payment of duty on the same goods - in fact, duty paid on such clearances is more than the CENVAT credit availed and even in terms of rule 16 of the CER if the activity on inputs does not amount to manufacture, then equal amount of credit is payable on such clearance - in view of the settled decisions in Fine Packaging Pvt. Ltd. - 2016-TIOL-624-CESTAT-MUM, Tata Steel Ltd. - 2017-TIOL-796-CESTAT-MUM, and apex court decisions in Narmada Chematur - 2004-TIOL-113-SC-CX-LB and Jamshedpur Beverages - 2007-TIOL-230-SC-CX, held that since appellant has paid more duty than CENVAT availed and the situation being Revenue neutral, the demand of CENVAT credit is not sustainable - consequently, penalty imposed on appellant and co-appellants is also not sustainable - impugned orders set aside and appeals allowed with consequential relief: CESTAT [para 5, 6]

2019-TIOL-1844-CESTAT-KOL

Sen And Pandit Electronics Pvt Ltd Vs CCE

CX - In respect of first SCN, it was held that appellant No. 1 was disentitled to Small Scale Industries Exemption benefits for the period October, 1999 to March, 2004 availed under notifications issued from time to time viz. Notfn 8/99-CE, 8/2000-CE and 8/2001-CE - Consequently, Central Excise duty was confirmed against appellant No. 1 along with interest and equal amount of penalty under various provisions of CEA, 1944 - On a fair appraisal of sticker/label, the words 'SEN & PANDIT' printed thereon do not qualify as Brand Name/Trade Name - The expression 'SEN & PANDIT' is the first part of appellant No. 1's full name, which also happens to be a part of full name of M/s Sen & Pandit Power Electronics Pvt. Ltd. - The said expression cannot be held as descriptive enough to indicate a connection in course of trade between the products of appellant No. 1 and its sister concern, M/s SPPEL - In fact, the said label indicates the actual manufacturer's name, name of product, model No., voltage capacity - The sticker/label produced before merely creates an impression that the product in question is manufactured by M/s Sen & Pandit Electronics Pvt. Ltd., the appellant No. 1. - No person can be penalized for using one's own name on one's products, notwithstanding that a third party may have been equally entitled to use the said name/part of name - This is especially so when the name/mark is not shown to have belonged to any particular person - Therefore, there is no denying that the appellant No.1 had neither intended to use 'SEN & PANDIT' as its Brand Name nor was the said expression capable of indicating any connection in the course of trade between the appellant No.1's products and M/s SPPEL - The mischief of using a Brand Name defined in relevant SSI Exemption notifications is not attracted - 'SEN & PANDIT' appearing on the purported labels/stickers was not descriptive enough of serving as any Brand Name - This is more so when the said purported label/sticker is considered in totality - The Revenue's entire case is based on the premise that M/s SPPEL was the owner of Brand Name used by the appellant No. 1 - The very fact that M/s SPPEL had applied for an altogether different set of Brand Names/Trade Marks has been ignored while passing the impugned Order - The lower authority seems to have been misled while concluding that M/s SPPEL was the owner of Brand Name i.e. 'SEN & PANDIT' - If that be the case then the Commissioner's observation is devoid of substance - The allegations in the first SCN, as confirmed in O-I-O, fall flat when one bears in mind the correct factual position - It would also necessarily follow that M/s SPPEL could not have been regarded as the owner, legal or otherwise, of the logo/mark 'SEN & PANDIT' - There is another aspect of the matter which deserves a brief discussion - It cannot be countenanced that simply by virtue of having applied for registration, M/s SPPEL had become the legal owner of the purported Brand Name 'SEN & PANDIT' - It had not been shown that M/s SPPEL had the exclusive right to use the afore-mentioned expression to the exclusion of others, much less the appellant no. 1 - Accordingly, issues no. I and II answered in favour of the appellants and against the Revenue - The impugned Order has also placed reliance on, inter alia, the statement dated 20.08.2002 of Sri Prabir Malakar, statement dated 21.08.2002 of Sri Gautam Das and statement dated 21.08.2002 of Sri Ashoke Kr. Dasgupta, all of whom were 'vendors' - These statements have lead the Commissioner to believe that the said vendors, as a practice, used to supply non-complete stabilizers whereas the appellant no. 1 used to apply its technical knowhow and complete the manufacturing process to make the said products functional and marketable - There are numerous inherent contradictions in aforesaid statements of the vendors, namely Shri Prabir Malakar, Sri Gautam Das and Sri Ashoke Kr. Dasgupta - Such unreliable and/or contradictory statements cannot for the sole basis of the impugned demands - The Adjudicating Authority has not conclusively established that the post-sale activities, repairing works, quality control, affixation of sticker amounted to 'manufacture' within the meaning of Section 2(f) of the Act, the confirmation of demand of Central Excise duty of Rs. 24,21,120/- is held as unsustainable in law and set aside - Issue no. 3 is, thus, answered in favour of the appellants: CESTAT

- Appeals allowed : KOLKATA CESTAT

2019-TIOL-1843-CESTAT-DEL

CGST Vs Purma Plast Pvt Ltd

CX - The assessee was engaged in manufacture of Pipes of Polyethylene - During audit, it came to light that it was selling the final product to BSNL on contract basis under purchase orders for delivering the goods at destination, but the assessee discharged duty liability only on the value of goods at factory gate without including the expenses incurred from factory gate upto the destination, which resulted in short payment of Central Excise duty - The Adjudicating Authority confirmed the payment of short paid Central Excise duty, but the Commissioner (A) set aside the same subject to the condition that the Cenvat Credit of Service Tax paid on outward GTA service upto the place of delivery of goods, if availed by assessee, should be reversed/deposited with interest - In coming to this conclusion, the Commissioner (A) relied upon the decision of Supreme Court in Ispat Industries Ltd. - 2015-TIOL-238-SC-CX - The terms & conditions of purchase order are entirely different and more akin to the terms and conditions contained in contracts before the Supreme Court in Ispat Industries - In fact, the decision of Supreme Court in Roofit Industries Ltd . - 2015-TIOL-87-SC-CX was distinguished by Supreme Court in Ispat Industries Ltd. - As the factual position that emerges in present case is similar to that of the contract before Supreme Court in Ispat Industries Ltd. , it has to be held that the place of removal of goods was the factory gate, though the place of delivery may be buyer's premises - This Tribunal in Shardha Ceramics Pvt. Ltd. , after placing reliance upon the decision of Supreme Court in Ispat Industries Ltd. also observed that the cost of transportation from the place of removal upto the place of delivery of excisable goods is excluded from the computation of excise duty provided it is charged to the buyers and separately shown in the invoices - This decision was subsequently followed by Tribunal in Tiirupati Plastomatics Pvt. Ltd. & Ors. - No infirmity found in the order passed by Commissioner (A) - The appeal filed by Revenue, therefore, deserves to be dismissed: CESTAT

- Appeal dismissed : DELHI CESTAT

2019-TIOL-1842-CESTAT-DEL

CCE & ST Vs Shivalik Printers

CX - During the relevant period, the turnover of 6 other units was clubbed with that of the assessee's so as to compute Excise duty liability in terms of Notificartion No 8/2003-CE - On adjudication, it was held that two out of the six units could not be connected with the assessee, whereas the remaining four were held to be dummy units - Hence the clearances were clubbed duty demands were raised accordingly - On appeal, the Tribunal noted that the four allegedly dummy units were not issued SCNs - It observed that their legal status could be determined only after issuing SCNs to them - It was also observed that at the SCN stage itself, it had been presumed that the four units have no existence & do not require to be served SCNs - Hence it quashed the O-i-O for contravention of principles of natural justice & remanded the matter for fresh hearing - Hence the Revenue's appeal, culminating in the second round of litigation.

Held: It is seen that the grounds raised by the Revenue in its appeal are mere repetitions of the allegations levelled in the SCN - Besides, the Tribunal had earlier found the O-i-O to be bad in law for having contravened the principles of natural justice, namely audi alteram partem - Hence the present appeal lacks merit: CESTAT

- Revenue's appeal dismissed : DELHI CESTAT

CUSTOMS

NOTIFICATIONS

cnt47_2019

CBIC hikes tariff value of Silver but lowers same for gold + RBD Palmolein & others

27/2019-Cus (NT/CAA/DRI)

Appointment of CAA by Pr. DGRI

26/2019-Cus (NT/CAA/DRI)

Appointment of CAA by Pr. DGRI

25/2019-Cus (NT/CAA/DRI)

Appointment of CAA by Pr. DGRI

24/2019-Cus (NT/CAA/DRI)

Appointment of CAA by Pr. DGRI

dgft19pn014

Extension of validity of Pre-shipment Inspection Agencies (PSIAs)

dgft_trade_notice_21_2019

Inviting suggestions on Review of the Foreign Trade Policy-regarding

CASE LAW

2019-TIOL-1841-CESTAT-MUM

Chowgule And Company Pvt Ltd Vs CC & CE

Cus - The root of the dispute is the statutory provision under Customs Act, 1962 that is liable to be invoked for levy of duty on goods recovered from a ship that was wrecked off the shores of India; the assessee contends that the demand of Rs. 98,79,542/-, as duties of customs, assessed as though the ship itself was imported for breaking, instead of recourse to section 21 of Customs Act, 1962 applicable for wrecks, has been erroneously upheld in O-I-A - The existence of a vessel is contingent upon it never entering a landmass - A vessel can be broken up only on land and once a ship has been led on its 'funeral' voyage, it ceases to exist as a conveyance and, indeed, a vessel itself - It cannot, thereafter, be classified under chapter 89 of Customs Tariff Act, 1975 - Before that emplacement on firm ground, the vessel is de-registered, its power supply switched off and its crew disbanded for evermore - The intent of importing the impugned vessel for breaking up is not on record to evince - Intent is an inextricable element of heading no. 8908 of the First Schedule to Customs Tariff Act, 1975 and, absent such qualification, the sole alternative is heading no. 8901 which cannot apply to wrecks - The impugned order has erred by considering only these two alternatives - The admittance of bills of entry to which section 21 of Customs Act, 1962 applies suffices for consideration of the third option - The disposal of articles that were landed India on salvage from the vessel would need appropriate treatment under Customs Act, 1962 - There is, obviously, no dispute that the salvaged parts of the wreck have not originated in India - Duty liability arises on presentation of goods for import; it is the parts of the vessel that were removed from wreck that were presented for import - Accordingly, the liability to duty would arise through section 21 of Customs Act, 1962 read with section 12 of Customs Act, 1962 - As the vessel that was imported originally into India was exempted from duty, there was no requirement to file bill of entry and, consequently, no breach of the provisions of the said exemption notification - In the absence of the breach of any of the conditions, penalty cannot be imposed - There is no duty liability on goods that are not sought to be cleared for home consumption - To that extent, remission on the wreck that remains has no consequence - The discharge of duty liability on the goods that were removed from the wreck and whose quantity or value is not in dispute, would be the appropriate discharge of appropriate duties - The adjudication has forayed into areas that should not have been - The impugned order is therefore set aside and remanded back to the original authority with a direction to restrict the decision to the contents of such bills of entry that were presented or such bills of entry that should have been presented under section 21 of Customs Act, 1962: CESTAT

- Matter remanded : MUMBAI CESTAT