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SERVICE TAX
2019-TIOL-1381-HC-KERALA-ST
Prakash Koshy Benjamin Vs CCE, C & ST
ST - Assailing an order of Commissioner dated 10-04-2013, fixing service tax liability on assessee for the period from 01-04-2007 to 30-06- 2010 along with penalty under Section 77 & 78 of FA, 1994, assessee approached the Commissioner (A) - The appellate authority had modified the order to the extent of limiting the period of demand from 01-04-2007 to 01-06-2007 and also setting aside the penalty imposed under Section 78 of the Act - The assessee submitted before Tribunal that the delay was occurred only because of some communication gap between the assessee and the consultant, who was handling the case earlier - As contended by assessee, the Tribunal had failed in considering the question with a liberal approach - The Tribunal had failed in applying the settled legal principle of law in the matter of granting condonation of delay - Taking note of the larger interest involved and on the basis of the settled legal principle, the delay caused ought to have been condoned by compensating the respondent in terms of cost - The impugned order of the Tribunal is hereby set aside - The application filed by assessee before the Tribunal seeking condonation of delay is hereby allowed, subject to condition of payment of cost of Rs.15,000/- to the respondent - The cost ordered shall be paid/remitted by assessee within three weeks - The Tribunal on noticing such payment shall restore the appeal and shall dispose of the same on merits: HC
-Appeal allowed : KERALA HIGH COURT
2019-TIOL-1380-HC-PATNA-ST
Deepak Kumar Vs UoI
ST - While it is the case of petitioner that as a contractor appointed by BSNL for execution of certain contracts as per the agreement, whatever was the liability towards service Tax has been discharged by petitioner, the position is contested by BSNL by filing a counter affidavit and registering appearance through Mr. Singh who while espousing the cause of BSNL shifts the liability on the petitioner - It is this inter party dispute which led to the issuance of summons by competent authority which has been impugned in writ petition and the sole ground that is raised by Mr. Shahi to question the summons is that it is premeditated because it is preceded by a letter of the same authority imputing short deposit of service tax payable by the petitioner - The submissions present at the counter affidavit initially filed as well as in the pleadings present in the rejoinder to supplementary affidavit, subsequently filed, in no manner indicates a pre-judgment to the issue in contest rather counter affidavit very clearly explains that notice has been issued to the two contesting parties i.e. the petitioner and BSNL for producing their documents in support of their respective claims but the petitioner instead of responding to the summons and producing documents for vindicating its stand, has rushed to this Court - Both the petitioner as well as BSNL are directed to register their appearance before the Superintendent, Central Excise and Service Tax Division, Muaffarpur on or before 25th of June, 2019, whereafter he shall proceed to dispose of the matter in accordance with law - Any default either by petitioner or the BSNL would entitle the Superintendent to dispose of the matter on the basis of materials on record: HC
-Writ petition disposed of : PATNA HIGH COURT 2019-TIOL-1876-CESTAT-BANG
Shaji Thomas Vs CCE
ST - Assessee, a proprietorship concern is engaged in providing services to their clients like M/s. Bharat Distilleries and M/s. Allied Domecq Spirits and Wine India Pvt. Ltd. in respect of supply of IMFL to CSD canteens - Revenue contended that assessee is liable to pay service tax under the head BAS and accordingly, issued a SCN - The concern being reasonably big, assessee claim that they are proprietorship concern and not a commercial concern, does not find favour with Tribunal - Therefore, the activity undertaken by assessee are certainly not on a small scale to be held to be a proprietorship concern in understanding of a common man - The agreements are entered into by assessee as the proprietor of MBC - The Commissioner has rightly observed that the service rendered by assessee is as a commercial concern - Another issue is that the assessee claims themselves to be a commission agent of their customers - The fact that the payments received by assessee are on the basis of quantum of sales effected by clients to the CSD canteens does not itself make them a commission agent - There is no express provision in contracts making them as commission agents - Therefore the arguments of assessee, that they are eligible for benefit of Notfn 13/2003 or 14/2004 are not acceptable - The assessee have also contended that SCN is not specific as regards to exact nature of service to fall under BAS - Looking into the exhaustive and inclusive nature of services listed under BAS, the services rendered by assessee are within the ambit of BAS - The period involved in SCN is 1.3.2003 to 31.3.2006 and SCN is issued on 1.3.2007 - Assessee was under bona fide belief that the services by them are not taxable to service tax - Therefore, though demand upheld on merits, extended period cannot be invoked - For the computation of duty payable during the normal period, the issue remanded to the original authority - Coming to the penalties imposed, Commissioner has imposed penalty under Section 76 and Section 78 simultaneously, which is not permissible during the relevant period - Moreover, Commissioner has imposed penalty under Section 78 equivalent to twice the duty demanded - Therefore, penalty imposed under Section 78 is set aside - However, penalty under Section 77 and Section 76 would continue: CESTAT
-Appeal partly allowed: BANGALORE CESTAT
2019-TIOL-1875-CESTAT-MAD
SVV Transports Vs Commissioner of GST & CE
ST - Intent of section 73(3) of FA, 1994 is to reduce litigation and also to encourage the appellant to pay up the tax as and when pointed out by the department or coming to notice of the assessee - It is only intended for voluntary and easy compliance on the part of the assessee - as appellant have discharged service tax along with interest immediately on being pointed out by the officers, penalty imposed under section 78 is unwarranted - appeal filed for setting aside the penalty is allowed with consequential relief: CESTAT [para 5]
-Appeal allowed: CHENNAI CESTAT
2019-TIOL-1874-CESTAT-HYD
CC & CE Vs Oil Country Tubular Ltd
ST - The assessee is registered with service tax department for providing maintenance and repair services and have been paying service tax and filing returns - During period 10.09.2004 to 31.07.2005 they received an amount of Rs.13,90,938/- from M/s Saw Pipes Ltd, M/s Time N Tune Industries, M/s Fujiyama Tool Tech Pvt Ltd, M/s Mishra Dhatu Nigam Ltd. and M/s Sri Sai Krupa Engineering Works for the job work activities undertaken - They also received an amount of Rs.3,43,04,996/- from M/s Indian Seamless Metal Tubes Ltd. for job work undertaken by them - A SCN was issued demanding service tax from assessee under 'BAS' on the ground that job work undertaken by them amounts to production of goods as per Sec.65 (105) (zzb) of FA, 1994 - It is not in dispute that definition of BAS prior to 16.06.2005 included "production of goods on behalf of the clients" - This definition has been revised and it became "production or processing of goods for, or on behalf of the clients" on 16.06.2005 - In the instant case all the services were rendered for the client and not on behalf of them to some other party - Further, assessee only did some processing of the goods and had not produced any goods - No infirmity found in the findings of lower authorities that the services were not exigible to service tax during the relevant period - No infirmity found in the impugned order, same is upheld: CESTAT
-Appeal rejected: HYDERABAD CESTAT
CENTRAL EXCISE
2019-TIOL-1382-HC-MUM-CX
Subray Catal Chem Pvt Ltd Vs UoI
CX - The two Full Benches have in fact held that even in a petition under Article 226/227 of Constitution of India, High Court, should not condone the delay beyond period of 90 days in instituting the appeal before Appellate Authority - Accordingly, there is absolutely no merit in challenge as to the orders dated 20th April, 2016 and 6th October, 2017 - The contention as raised, cannot be regarded as a contention within the scope of judicial review explained by Full Bench of Gujarat High Court in Panoli Intermediate (India) Pvt. Ltd. 2015-TIOL-1556-HC-AHM-CX-LB - At the highest, as the ground raised, may have warranted some examination the exercise of appellate jurisdiction, but not in exercise of powers of judicial review - In this case, the petitioner, delayed the institution of appeal and therefore, cannot expect that the this Court converts itself into an appeal court whilst exercising powers of judicial review under Article 226 of Constitution of India - The contention as raised would require reevaluation and re-appreciation of factual position - Such an exercise cannot be undertaken in exercise of limited jurisdiction of judicial review - Besides, the impugned order was made on 24th July, 2015 - Even the final order by Tribunal was made on 6th October, 2017 - This petition was however, instituted only on 29th September 2018 - There is absolutely no explanation for inordinate delay in institution of the petition - The averment in petition is that there is no delay or laches in instituting this petition - Therefore, the petitioner, far from acknowledging the delay and explaining the same, does not even admit that there is any delay or laches - This is an additional ground for dismissing this petition: HC
-Petition dismissed : BOMBAY HIGH COURT 2019-TIOL-1873-CESTAT-HYD
Inox Air Products Pvt Ltd Vs CCT
CX - The assessee-company was served SCN proposing duty demand u/r 6 of CCR 2004 along with interest being amount equal to 6% of the total value of Dissolved Acetylene Gas cleared by it under Notfn No 82/84-CE without payment of duty - The assessee claimed that the Dissolved Acetylene Gas is neither chargeable to nil rate of duty - The same product is in fact sold to several customers on payment of Excise duty - In respect of goods supplied to M/s Hindustan Shipyard Limited, the assessee avail benefit under Notfn No 82/84-CE after following the procedure as per Chapter X - It was stated that goods cleared under Chapter X procedure are neither chargeable to nil rate of duty nor are fully exempted from duty - The assessee also claimed to have remitted duty on these goods & so in respect of such clearances, no reversal of Cenvat credit u/r 6 or payment of an amount under this rule is necessary - Nonetheless, duty demands were raised upon adjudication - Hence the present appeals.
Held: Presently, Excise duty is leviable on all excisable goods manufactured or produced at the rates set out in the Schedule to the Section in the CETA 1985 r/w any exemption Notfn - The exemption Notifications provide for full or partial exemption, conditional or unconditional & it applies to all persons and all clearances - If conditional, it applies to such persons and clearances as may meet the conditions - A person entitled for exemption may choose not to fulfil the conditions and not to claim the exemption notification also - It is also possible that the same person may clear the same goods, some claiming a conditional exemption and others without conditional exemption & payment of duty - It is immaterial what the conditions of the exemption notification are - To the extent the goods are cleared availing the benefit of this exemption, they are fully exempted and not otherwise - Presently, remission of duty is confined to remission of duty on goods found deficient in quantity due to natural causes u/s 5 - Remission under Chapter X does not exist - It follows from the decision of the Gujarat High Court in Micro Melt Pvt. Ltd that when there is an exemption notification, the issue of remission does not arise - The Chapter X procedure did not exist in the rule book in the relevant period and is non-existent in the present day - Hence the issue of remission under Chapter X or it being a distinct genus than the exemption does not apply - Thus the assessee having cleared the goods on claiming full exemption from payment of duty is not entitled to Cenvat credit & must reverse the same or pay an amount equivalent to Rule 6 of CCR 2004 - Hence the O-i-O does not warrant interference with: CESTAT
-Assessee's appeal dismissed: HYDERABAD CESTAT
2019-TIOL-1872-CESTAT-ALL
Hindalco Industries Ltd Vs CCE
CX - During the relevant period, the Revenue passed orders denying Cenvat credit to the assessee in respect of inputs such as Alumina Hydrate - The grounds for such denial of credit were that whereas the goods in respect of which credit was being claimed as per the invoices were described as Alumina Hydrate but the records mentioned the same as Calcined Alumina and quantity of Calcined Alumina was mentioned against the Alumina Hydrate mentioned in the invoices - Hence it was alleged that the description and the quantities mentioned did not match in the invoice as well as in the Cenvat credit a/c - Two SCNs were issued to the assessee & the proposals in both were subsequently affirmed - Hence the present appeal.
Held: The Chartered Engineer's certificate clarifies that Hydrated Alumina is used as seed material for processing Bauxite to Calcined Alumina - In any plant producing the metal, certain production documents such as Mill charge report is prepared showing the quantum of various inputs or ingredients charged or any other production record which can establish the issuance of inputs or ingredients for the production of output goods can be a verifiable document - Credit should not have been denied if the assessee produced documents establishing actual charging of these goods or their use in the production process - Hence the matter warrants remand: CESTAT
-Case remanded: ALLAHABAD CESTAT
2019-TIOL-1871-CESTAT-DEL
CCE & CGST Vs Chambal Fertilizers And Chemicals Ltd
CX - The assessee-company manufactures Urea, which is a fertillizer falling under Chapter 31 of the First Schedule to the CETA 1985 - It paid Excise duty @ 1% ad valorem as per Notfn No 01/2011 - During the relevant period, an Audit objection was raised alleging that the asssessee short paid Excise duty by not including commission amounts received for two separate periods - It was noted that the assessee paid Excise duty only on the transaction value which was MRP minus the commission of the dealer - The Revenue issued SCN relying upon Circular dated July 10, 2014 mentioning that no duty had been paid on commission paid to various dealers against clearance of Urea - On adjudication, the duty demands were confirmed with penalty - On appeal, the Commr.(A) provided relief to the assessee, holding that Urea was sold to dealers who were independent entities & so the transaction value had to be determined as per Section 4 - Hence the Revenue's appeal.
Held: It is undisputed that the Urea was sold by the assessee at a price determined after deducting the commission of the dealer from the MRP - It is this price on which Urea is actually sold to the dealer - This also becomes the transaction value u/s 4 of the Act on which the assessee is liable to pay duty - The clarification which was issued by the Government through the relevant Circular was regarding the subsidy provided by the Government to make up the loss caused to the manufacturer because MRP was lower than the cost of production & profit margin - The Circular did not pertain to dealings between the manufacturer and a dealer - As the Urea is sold by the assessee to dealers after deducting the commission of the dealer from the MRP, it cannot be contended that even if a manufacturer sells Urea at a price after deducting the commission of the dealer from the MRP, the duty of Excise would be paid by the manufacturer on MRP - The Excise duty must be calculated as per Section 4 of the Act which require payment of Excise Duty on transaction value in a case where the assessee & the buyer of goods are unrelated & price is sole consideration for sale - Hence the O-i-A does not warrant interference with: CESTAT
-Assessee's appeals partly allowed: NEW DELHI CESTAT
2019-TIOL-1870-CESTAT-MUM
Exide Industries Ltd Vs CCE
CX - The assessee-company manufactures battery & cells which are also supplied to the Indian Navy, whereupon the assessee avails nil rate of duty as per Sr No 12 of the Notfn No 64/95-CE - Such benefit is permissible upon furnishing of certificate issued by competent Naval authority to the effect that goods were to be used for the fittings to Submarine vessel including a Torpedo and Chariot of Indian Navy and shall be so used - In case of Submarines, each set of battery comprises of 460 cells, of which 452 are despatched to the Navy - The remaining 8 are kept with the Quality Assurance Officer stationed at the factory premises of the assessee & are used as test cells - The Revenue raised dispute in respect of test cells cleared to the Navy for the relevant period, on grounds that the same were not used for fitment in the Submarines - Duty demand was raised with interest & penalty u/s 11A of the CEA r/w Rule 25 - On appeal, the Commr.(A) confirmed the duty, while quashing the penalty - Hence the assessee's appeal.
Held: Considering the test of the exemption Notfn, furnishing of certificate before removal was mandatory requirement for availing benefit under the Notfn - Non-fulfilment of the conditions available in the content of the certificate issued by the competent Naval Officer cannot be stated to be within the scrutinising range of the assessee - The cells kept for testing purpose with Quality Assurance Officer of the Navy stationed within the factory premises, cannot be said to be within the control & activity of the assessee - It is immaterial as to whether or not the goods were removed from the factory - The original authority lost sight of the fact that the condition as per the Notfn is confined to the certificate issued by the competent Naval Officer, containing the requirement in which it shall be used - Hence the O-i-A in question is quashed: CESTAT
-Assessee's appeal allowed: MUMBAI CESTAT
CUSTOMS
2019-TIOL-1379-HC-MAD-CUS
Umar Syed Vs CC
Cus - The petitioner arrived at Hyderabad airport from Dubai and dutiable goods being gold/gold jewellery were seized from the petitioner - It is the case of petitioner that they approached the respondent for redemption and the respondents vide communication dated 22.04.2019 informed the petitioner that the consignment seized from petitioner has since been sold and an amount of Rs.2,48,21,820/- has been realized - Therefore, the redemption option stands foreclosed - What remains now is refund of the value realized - Fourth respondent is directed to pay to the petitioner money realized by selling the consignment seized from the writ petitioner after deducting the penalty imposed vide order dated 15.02.2019 - For the purpose of clarity, it is made clear that the amount realized by Department by selling the consignment seized from the petitioner is Rs.2,48,28,820/- and the penalty is Rs.20,00,000/- - Refund in the aforesaid manner i.e. after deducting penalty shall be made - The petitioner shall make an application for refund in tune with this order of this Court within a fortnight from the date of receipt of a copy of this order in accordance with the prevailing applicable Rules - Fourth respondent shall make refund in accordance with this order of this Court within four weeks: HC
-Writ petition disposed of : MADRAS HIGH COURT 2019-TIOL-1869-CESTAT-MUM
VIC Industries Vs CC
Cus - Assessee is in appeal against order of adjudicating authority in imposing duty liability along with interest and penalty on assessee for alleged diversion of phenol involving a duty of Rs. 1,42,099/- from imported duty free phenol that resulted in confirmation of duty liability on sale of 2.86 MT of phenol along with penalty - The sole dispute revolves round sale of phenol by assessee which the department claims to be imported duty free phenol brought through advance authorisation for manufacturing purpose and allegedly sold by assessee and there is confessional statement available to its credit to substantiate the same stand - However, going by stock register extract copy containing seal of DRI, on the day of sale of 2860 Kg of phenol, the closing balance of phenol available with assessee industry was 12.387 MT, as reveals from the said stock register extract and quantity of duty free stock, as pointed out by them to be of 12.350 MT, has been reflected in the said register that has not been disputed by department - Therefore, it can safely be concluded that balance stock available with assessee was more than the duty free stock imported by it - A close scrutiny of order of Commissioner would reveal that on the same ground, duty demand of first sale of 3.8 MT on 01.06.2007 was waived off and the second sale was held to be dutiable on the ground that assessee had admitted the sale to have been made out of duty free stock - This being the sole justification found in O-I-O, apart from use of allegedly invalid licence which was not agitated by licence issuing authorities i.e. DGFT, no other course available to give a finding on the issue except placing reliance on the documentary evidence that surpasses the oral evidence as per the principle contained in Section 58 of Indian Evidence Act - At the time of second sale also, assessee had sufficient stock of duty free phenol available at its disposal: CESTAT
-Appeal allowed: MUMBAI CESTAT
2019-TIOL-1868-CESTAT-HYD
Jagadish Timber Mart Vs CCT
Cus - The assessee imported logs classifiable under CTH 440399 under three Bills of Entry and paid customs duty thereon - All assessments were done finally and there was no provisional assessment in any case - Subsequently, assessee learnt that additional duty was not payable on the logs which they imported as it was exempted unconditionally vide Notfn 21/2012 - Accordingly, importer filed refund claims for additional duty - After examining the refund application, it is found that the assessments in bills of entry in question were final and the importer has not challenged the assessment order - The exemption Notfn 21/2012 at serial no. 56 exempts goods falling under chapter heading 4403990 from the whole of additional duty of customs without any conditions - Bills of entry in question have all classified the goods in question under chapter heading 4403990 and therefore no additional duty of customs was payable on them - However, this notification was not mentioned by assessee and therefore no exemption was given to them - This is a clerical error in the bills of entry but not by the officer but by the assessee themselves - In case of processing of bill of entry in customs EDI where the bill of entry which was sent to the officer for assessment, the officer can re-assess or correct the bills of entry - In such a case the officer should have corrected the bills of entry by giving the benefit of an unconditional exemption notification otherwise applicable to the Bill of Entry in question - If such was not the case, then the clerical error of not extending the benefit of an exemption notification can be corrected under Section 154 by the successor of the officer - As far as the two Bills of Entry where no assessment at all was done by the officer but the goods were cleared from the customs EDI systems automatically under the Risk Management System there is no assessment order at all of the officer and therefore there is no need for re-assessment of such an order - This is the position held by High Court of Delhi in case of Aman Medical Products - 2009-TIOL-566-HC-DEL-CUS - Under these circumstances, refund can be examined and sanctioned on merit after considering the eligibility of assessee to the exemption notification in respect of bills of entry - The matter is accordingly remanded back to the original authority to consider the eligibility of assessee to exemption notification and decide the refund application accordingly: CESTAT
-Matter remanded: HYDERABAD CESTAT |
