SERVICE TAX

2019-TIOL-2177-CESTAT-MUM

Millennium Beer Industries Ltd Vs CCE

ST - Appellants, during the period 23.09.2009 to 15.11.2011, on the basis of an Agreement/Contract dt.01.04.2005 entered with M/s United Beverages Ltd (UBL) manufactured and sold alcoholic beverages to the customers/indenters of UBL as per the instruction of UBL - Alleging that the said activity is classifiable under Business Auxiliary Service, as amended w.e.f 01.9.2009, service tax demand of Rs.21,92,03,724/- was raised and confirmed with interest and penalty - appeal before CESTAT.

Held: After the amendment to the definition of Business Auxiliary Service with effect from 1/9/2009, the activity of manufacture of non-excisable goods, that is alcoholic beverages, would fall within the scope of Business Auxiliary Service - It is the contention of the Appellant that in any service, consideration flows from the service receiver to the service provider, whereas in the present case, the appellants paid Rs.5/- per case to M/s UBL, and M/s UBL paid service tax under the category of IPR service on the said amount, hence, it is not a service - The reason for not discharging service tax under Business Auxiliary Services as the amount paid by the Appellant to M/s UBL suffered service tax in the hands of M/s UBL cannot be a valid ground - It is the agreement/arrangement that determines the liability - it is not a simple provision of service agreement, whereunder, the service flows from appellant to M/s UBL and the consideration is received against the service rendered - It is the argument advanced on behalf of the revenue that the service charges are adjusted against the sale price, and the balance amount returned to the service receiver out of the sale proceeds of manufactured branded beer for and on behalf M/s UBL - Thus, in determining the taxable value, in the present circumstances, Notification 39/2009 ST dt. 23.9.2009 has been issued, allowing deductions on the value of inputs used in the manufacture/processing of alcoholic beverages, subject to the conditions laid down thereunder - Adjudicating authority has erred in adopting the sale price of the Appellant - Following the judgment of Supreme Court in Marshall Sons & Co. Ltd.'s case (1997) 2 SCC 302 , it is held that the date of amalgamation would be the 'appointed date' presented in the scheme - therefore, the 'appointed date' i.e. as on 01.4.2010 be taken as the date of amalgamation/merger of the Appellant Unit with M/s UBL as sanctioned by the BIFR and not the effective date when the certificate of incorporation was issued by the Registrar of Companies i.e. 16.11.2011 - the arrangement between the Appellant and M/s UBL for manufacture of branded beer on behalf of M/s UBL has been disclosed and within the knowledge of the Department and in these circumstances, the allegation of suppression cannot be sustained against the Appellant - Therefore, the demand is barred by limitation - impugned order is set aside and the appeal is allowed: CESTAT [para 16, 27, 28, 35, 40, 41, 42, 43, 44]

- Appeal allowed: MUMBAI CESTAT

2019-TIOL-2176-CESTAT-MUM

Rajdeep Buildcon Pvt Ltd Vs CCE

ST - In view of Section 97 of the Finance Act, 1994, as inserted by Finance Act (23 of 2012), dated 28.5.2012 it is categorically clear that no service tax shall be levied or collected in respect of management, maintenance or repair of roads, during the period from 16.6.2005 to 26.7.2009 (both days inclusive) - The period involved in the present appeal is also 16.6.2005 to 26.7.2009 - It seems that the Commissioner rejected the refund of service tax on the ground of unjust enrichment because it has been recorded in the impugned order that the appellants have failed to produce the letter from NHAI that they have not paid the service tax to the Appellant - From the Chartered Accountant's certificate dated 19.3.2013 as well as the Affidavit dated 6.1.2014 of the General Manager of the Appellant in which it has been categorically mentioned that the appellants have not received any amount against service tax from NHAI and that they have paid the service tax amount of Rs.6,19,766/- out of their own pocket under the category of 'Management Maintenance and Repair' service for the period 2005-06 to 2009-10, the same is sufficient evidence to establish that the service tax has not been passed on to the customer i.e. NHAI by the Appellants - since the assessee is not liable to pay any Service Tax on the management and maintenance or repair of roads between 16.6.2005 to 26.7.2009, both dates inclusive, any Service Tax, if paid, should be refunded - impugned order is set aside and the appeal is allowed with consequential relief: CESTAT [para 5, 6, 8]

ST - Penalty - Only because the appellants did not challenge the imposition of penalty and deposited the same without challenging it, cannot be a ground to deny the refund of penalty because without demanding service tax, penalty cannot be imposed - Once service tax is set aside or refunded, penalty cannot survive - same also has to be refunded: CESTAT [para 7]

- Appeal allowed: MUMBAI CESTAT

CENTRAL EXCISE

2019-TIOL-2180-CESTAT-MUM

Globe Plastics Vs CCE

CX - Undervaluation - Conclusions in the impugned order make it apparent that there has been no examination of the charges or the evidences that are claimed to support the charges - In these circumstances, the impugned order fails to have sanctity in the eyes of law and must be set aside - The matter is remanded back to the original authority for fresh consideration of the documents and evidences available and, if these do not suffice for the purpose of ascertainment, to reconsider the plea of the appellant herein for cross- examination of such witness who were not co-noticees in the show cause notice - Appeal disposed of: CESTAT [para 5]

- Matter remanded: MUMBAI CESTAT

2019-TIOL-2179-CESTAT-MUM

Maharashtra Seamless Ltd Vs CCE

CX - Issue pertains to denial of CENVAT credit of tax paid on 'goods transport agency service' utilized by assessee for outward transportation for the period prior to 1st April 2008 - original authority had denied the entitlement to, and consequently ordered recovery of, Rs 1,66,87,116/- on the ground that freight had been shown separately without inclusion in the assessable value for such goods that were cleared to the domestic market and that, in relation to exports, the port could not be accepted as 'place of removal'.

Held: It is held in the case of India Japan Lighting Pvt Ltd - 2007-TIOL-1755-CESTAT-MAD that credit is not to be automatically disallowed in those cases where the freight cost does not form part of the transaction value - Supreme Court in Ultra Tech Cement Ltd - 2018-TIOL-42-SC-CX has also equally made clear that the law as settled by decision of the Larger Bench in ABB Ltd - 2009-TIOL-830-CESTAT-BANG-LB would hold for the period prior to 1st April 2008 - impugned order set aside and appeal allowed: CESTAT [para 4 to 6]

- Appeal allowed: MUMBAI ITAT

2019-TIOL-2178-CESTAT-MUM

Malu Sleepers Maharashtra Pvt Ltd Vs CCE & C

CX - Escalation clause in contract with Indian Railways - appellant discharged duty liability suo motu upon escalation in price - jurisdictional authorities demanding interest of Rs 19,12,888/- and Rs 1,57,195/- respectively on the additional amount of Rs 37,30,036/- and Rs 9,62,420/- paid as duty on 11th March 2006 and 30th October 2007 on goods cleared between February 2001 to November 2005 and November 2005 to June 2007 to the Indian Railways.

Held: Bench notes that the show cause notice, pertaining to the orders impugned, makes no reference to recovery arising from additional consideration, but is limited to appropriation of duty paid voluntarily, along with interest under section 11AB of Central Excise Act, 1944, on the goods described as 'the principle reflected in voluntary payment of duty' by the adjudicating authority - There is no dispute that the Tribunal in TVS Whirlpool Ltd has held that the time-limit provided for in section 28 of the Customs Act, 1962 would also apply in such provisions of the statute that do not mandate a time-limit - show cause notice issued in March 2006 and August 2007 for clearance effected between February 2001 and February 2005 is barred by limitation - following the Tribunal decision in appellant's own case - 2015-TIOL-2849-CESTAT-MUM, impugned orders set aside and appeals allowed: CESTAT [para 4, 5, 8]

- Appeals allowed: MUMBAI CESTAT

CUSTOMS

NOTIFICATION

cnt55_2019

Customs exchange rates for export and import notified

cnt54_2019

CBIC notifies Sea Cargo Manifest & Transhipment Regulations 2019

cuscir23_2019

Clarifications regarding Refunds of IGST paid on import in case of specialized agencies

CASE LAW

2019-TIOL-2175-CESTAT-DEL

RP Cargo Handling Services Vs CC

Cus - Assessee is in appeal against impugned order wherein the Custom Broking License has been revoked by Commissioner of Customs - On going through the Regulation 20 of CBLR, 2013, the Commissioner of Customs shall issue a notice in writing to the Custom Broker within 90 days from the date of receipt of an offence report which means that the Commissioner of Customs is required to issue notice in writing to the Custom Broker which does not mean that if he has issued the notice and kept it in his file, so, he has complied with the provisions of Regulation 20 of CBLR, 2013 - In fact, it is to be issued to the Custom Broker which means it should be received by Custom Broker - Therefore, the notice was required to be received by Custom Broker within 90 days of the receipt of the offence report - Admittedly, as per the impugned order itself, the notice was received by Custom Broker only on 28 August, 2018 which is the period beyond the 90 days prescribed in the said Regulation - Therefore, the SCN issued to the Custom Broker is barred by limitation - Consequently, the impugned order is not sustainable in the eyes of law: CESTAT

- Appeal allowed: DELHI CESTAT