SERVICE TAX

2019-TIOL-2198-CESTAT-ALL

Bajaj Infrastructure Development Company Ltd Vs CCE & ST

ST - It was alleged in the show cause notices that appellant had vivisected service portion of the works contract into 4 subheads and paid service tax treating each subhead as separate service and the same did not appear to be in accordance with the provisions of law - It was alleged in the said show cause notice that the entire contract dated 28.12.2009 was properly classifiable as 'Works Contract Service' and is to be taxed accordingly - SCNs issued invoking the extended period of limitation - demands confirmed along with penalty and interest, therefore, appeal before CESTAT.

Held: Reliance for issuance of show cause notice is placed on ST-3 returns filed by the appellant - From the show cause notice and the Order-in-Original, Bench could not come across any contention to establish that there was any observation that any information submitted in the said ST-3 return was not proper - Supreme Court in the M/s Uniworth Textiles Ltd. - 2013-TIOL-13-SC-CUS has held that the positive action with a negative intention of wilful and deliberate default is a mandatory prerequisite to conclude wilful misstatement or suppression in order to invoke extended period - ST-3 returns were regularly filed and there were no observations made in the proceedings that information was lacking in the said ST-3 returns and there was no observation that the incomplete or incorrect information was submitted through ST-3 returns, therefore, the extended period of limitation was not available to revenue - without going into merit of the case Bench holds that all the 4 show cause notices were not sustainable - Since, the extended period of limitation was not available to revenue, all the four impugned Orders-in-Original are set aside and appeals are allowed: CESTAT [para 7]

- Appeals allowed: ALLAHABAD CESTAT

Chakiat Agencies Pvt Ltd Vs CCT & CE

ST - Steamer agent service - Claim of the appellants is that the amounts were received by them in foreign exchange and for that reason the same are not taxable - Bench finds that there is some force in the argument - However, the AR submits the appellants did not produce any evidence to the effect that they receive the remuneration in foreign exchange and that the same was not repatriated - appellant submits that on this ground the matter may be remanded to the original authority to verify from the books of accounts and the evidence to be submitted by the appellants to decide so as to the eligibility of the appellants - Bench finds that this request is acceptable, moreover, the AR is also not against this plea - Matter remanded: CESTAT [para 5.2, 6]

- Matter remanded: BANGALORE CESTAT

CENTRAL EXCISE

2019-TIOL-2196-CESTAT-BANG

Essilor Manufacturing India Pvt Ltd Vs CCT

CX - The assessee had taken cenvat credit in the month of March 2014 though the invoices were issued during year 2012 because during the relevant period the restriction of one year was not there under Cenvat Credit Rules and the said restriction of one year to avail the cenvat credit came from September 2014 whereas in the present case, the credit was availed in March 2014 and refund was also filed in March 2014 itself which is falling within the one year time limit - Further, as per the provisions of Rule 5, it is clear that the time limit, if any has to be counted from the relevant period in which the credit was availed and in the period in which services were received - Therefore, the basis on which refund is rejected is not correct and not in accordance with law - The refund is claimed within the period of one year from the relevant date when the credit was availed - The assessee has filed the refund claim within one year from the date of availment of credit on those invoices and therefore, the refund is not time-barred - Consequently, the impugned order is set aside: CESTAT

- Appeal allowed: BANGALORE CESTAT

2019-TIOL-2195-CESTAT-BANG

Steel Authority Of India Ltd Vs CCE

CX - During the year 1994-95 they through their job workers M/s Wartsila Diesel India (P) Ltd, Secunderabad had assembled components and parts of D G Plant and installed a 6 MW D.G Set in their factory for captive consumption - appellants have themselves effected the clearance of the said goods as is evident from the invoice No 137 dated 1.03.2000, "Items of 6 MW DG Set" and not the DG Set as such - They have also shown the value of goods cleared as Rs.5,30,00,000/- and the classification of the goods as per the appellants themselves is under heading 8502 of the First Schedule to Central Excise Tariff Act, 1985 - When the appellants have themselves declared the goods as classifiable under Heading No. 8502 and excisable as they have paid certain excise duty on the same, they should not have any grievance with the order of Commissioner up-holding everything as declared in their invoice and clearance documents - The only error pointed by the Commissioner in his order in invoice is that duty payable has not been determined as per the applicable rate to the said heading and accordingly, Commissioner has determined the duty payable by applying the rate applicable i.e. @ 16% on the declared value and confirmed the demand to the extent made in the show cause notice - Since the differential duty in the present case became payable on determination made by Commissioner under Section 11A (2), the demand of interest is justified - As demand for payment of differential duty has been made within period of one year from the date of filing the returns i.e. 06.04.2000 for the clearance made vide invoice dated 1.3.2000, the same is not time barred - appellants had earlier approached the Committee on Dispute (COD) for seeking the clearance to pursue the appeal before the Tribunal and the said permission was declined to them by the COD - Since permission was declined, appellants had paid the entire differential duty demanded along with interest - Appeal is, therefore, dismissed: CESTAT [para 5.6 to 5.8, 6]

- Appeal dismissed: BANGALORE CESTAT

2019-TIOL-2194-CESTAT-MUM

AMCL Machinery Ltd Vs CC & CE

CX - The issue involved for determination is whether the bulkers fabricated and mounted by assessee in their factory on duty paid chassis is classifiable under CSH 87042319 and eligible to benefit of exemption under Sr.No.39 of Notfn 06/2006-CE - Undisputedly, assessee had also manufactured /fabricated bulkers fitted with tri-axle and other accessories fitted with a king pin whether be called as a semi-trailor under subheading 8716 of CETA, 1985 - The assessee heavily relied upon the Chapter Note 5 of Chapter 87 of CETA, 1985 - A plain reading of said chapter note, there cannot be any iota of doubt that building a body or fabrication or mounting or fitting of structure or equipment on the chassis falling under CH 8706 shall amount to manufacture of a motor vehicle - Thus, by the said fiction, the activity of fabrication or mounting body on the chassis falling under Chapter 8706 will deemed to be manufacture of a motor vehicle - In the present case, explaining the manufacturing process of 30 Cubic Mtrs bulkers, assessee submitted that the shells are initially fabricated and then mounted on the chassis which ultimately used for transporting cement and fly ash - Therefore, by mounting the shell on the chassis by virtue of Note 5 of Chapter 87, activity becomes manufacture and the resultant would be considered as a motor vehicle - The reasoning of Commissioner that the shell which is mounted /fabricated on the chassis through the nuts and bolts since removable which the assessee vehemently objected would be considered as a fabricated tank used for transportation of cement and fly ash devoid of merit and cannot be sustained - The assessee has rightly classified the fabricated/mounted shell on the duty paid chassis falling under CSH 87042319 of CETA, 1985 - On the issue of exemption under Notfn 06/2006-CE, assessee claimed the benefit under Sr.No.39 & Condition No.9 of Notfn 06/2006- CE - Since the assessee has not disclosed the manufacture of semi-trailor type bulkers, but considered as bulkers mounted on the chassis and claimed exemption - Therefore, extended period of limitation has been rightly applicable for recovery of duty against these semi-trailors - The assessee submitted that out of the total 109 bulkers on which the demand has been raised, 105 were mounted on the duty paid chassis and 4 are semi-trailor type - Therefore, the demand in relation to 105 mounted bulkers is set aside and the demand in relation to 4 semi-trailors classifiable under Chapter 8716 of CETA, 1985 is hereby confirmed with interest and penalty: CESTAT

- Appeal disposed of: MUMBAI CESTAT

CUSTOMS

2019-TIOL-1678-HC-P&H-CUS

SJ Woolen Mills Vs UoI

Cus - The petitioner is engaged in business of import of yarn - On the basis of investigations carried out, it was allegedly revealed that the petitioner had also imported yarn and made subsequent sale thereof in India adopting similar modus operandi of mis-declaration and under valuation - Thereafter, factory-cum-business premises of petitioner were searched by DRI and certain goods were seized - Prayer in present petition is to quash SCN; strike down the Customs (Amendment and Validation) Act, 2011 to the extent of inserting sub-section 11 to Section 28 of the Act, being invalid and bad in law; and to strike down Section 28(11) of the Act being violative of Article 14 of the Constitution - At the time of hearing, it is stated by respondents that the impugned SCN already stands adjudicated and against said order, petitioner has already availed the remedy of appeal under the provisions of Customs Act in June 2019 - The petitioners does not dispute the fact that statutory appeal before Tribunal, Chandigarh already stands filed and therefore, two parallel proceedings cannot continue: HC

- Writ petition disposed of: PUNJAB AND HARYANA HIGH COURT

TR Boopalan Vs ADDL CC

Cus - It is the case of petitioner that in the course of his business, he came to know that the respondent has passed the order interalia imposing a penalty of Rs.2,00,000/- on the writ petitioner under Section 112(a) of the Customs Act - That though the writ petitioner came to know about this order in the course of his business, a certified copy of the order was never served on the writ petitioner - A perusal of the file reveals that the despatch of said order by the office of the respondent has infact happened and it is in a window envelope - Though it is in a window envelope, the name of the writ petitioner and the postal address is handwritten by the side of the transparent window - Writ petitioner on instructions, emphatically asserted the aforesaid envelope was not refused by them - Obviously, it has been taken to another individual, who has refused it as he is not the intended recipient - In this backdrop, this Court deems it appropriate to accede to the prayer of the writ petitioner, holding that certified copy of said order has not been duly served on the writ petitioner - The respondent is directed to provide a certified copy of the said order by despatching it by Speed post with acknowledgment due to the full / complete and correct address of writ petitioner within a fortnight: HC

- Writ petition disposed of: MADRAS HIGH COURT

2019-TIOL-2192-CESTAT-MUM

JET Airways India Ltd Vs CC

Cus - Assessee is engaged in business of air transportation services on domestic and international sectors - Aviation Turbine Fuel (ATF) is fuel for operating the aircrafts - Generally fuelling of aircraft is done at the airport from where the aircraft starts its journey - Assessee was paying the duty on such remnant ATF after determining its quantity ad value as per the guidelines prescribed by Air Cargo Complex, Mumbai Air Customs - However, while determining the value, they were not adding any amounts towards freight and insurance as required in terms of Rule 10(2) of Customs Valuation Rules - A SCN was issued to assessee demanding differential duty under section 28(1) of Customs Act, 1962, interest on the duty demanded under Section 28AA - SCN also proposed for confiscation under Section 111(m) and penalty under Section 114A ibid - It is the claim of assessee that they were paying duty on remnant ATF as per the Commissioner Instruction No 06/2006 - From the perusal of instruction on the basis of which assessee have claimed to discharge the duty it is quite evident that this is an instruction issued by the Commissioner to his officers for performing their duties for determination of quantum of duty payable on the remnant ATF in the aircraft - This instruction is neither the statement of law or a circular issued by the Board clarifying the position in law - Binding value of such instructions an circulars has been finally settled by five member bench of Apex Court in case of Ratan Melting and Wire Industries - 2008-TIOL-194-SC-CX-CB - It is evident that there is no dispute in respect of levy of custom duty on the remnant fuel - The dispute is in respect of determination of value for the purpose of payment of duty - Assessee have claimed that they have paid duty on the basis of IOC sale price of ATF to Indian Airlines/ Airlines for the foreign going aircraft and hence no further duty is demandable from them - Valuation of the goods for purpose of Custom Duty is done in terms of Section 14 of Custom Act, 1962.As per the instruction issued the value of the fuel has to be the actual invoice value of the ATF purchased by the Aircraft/ Airline, and in absence or non availability of such invoice value, this invoice value shall be substituted by the sale price of IOC of ATF to Air India/ Indian Airlines, for their foreign going aircrafts - The sale price of IOC of ATF to Air India/ Indian Airlines, for the foreign going aircrafts has to be only FOB value and cannot be CIF value as claimed by assessee by terming the same as "fully loaded value" - The fallacy of argument is self evident that CIF value as determined under Section 14 of Customs Act, 1962 is inclusive of "international freight and insurance" and not the "domestic freight and insurance" - Sale price of IOC can never be inclusive of international freight insurance as these expenses are never incurred by IOC in making such sales at Indian Airports - Hence even going by the instruction of the Commissioner, sale price of IOC, will have to be further loaded with the freight and insurance charges to determine the CIF value of imported goods - Interestingly Commissioner instruction though seeks to add the insurance charges notionally is silent about the addition of freight charges - However in terms of Rule 10(2) of Customs Valuation Rules, 2007 which is pari materia with the erstwhile Rule 9(2) of CVR, 1988, value has to be added towards insurance freight and landing charges - If actual are available on the actual basis and if actual are not available the additions will have to be made on notional basis in the manner prescribed by the said rules - Assessee have claimed that actual charges towards the freight arte ascertainable as zero in their case - Tribunal is not in agreement with the said submissions - Assessee is carrying the remnant fuel as extra baggage in the aircraft and if the freight charges are to be ascertained, then they should be equal to the actual extra baggage charged by them for carriage of equivalent amount of fuel.The issue of addition of freight charges for determination of assessable value the order of Commissioner cannot be faulted with - However it has been brought to notice that tribunal has in cases of Interglobe Aviation Limited - 2017-TIOL-3169-CESTAT-DEL and Jet Airways (India ) Ltd, Interglobe Aviation, Spicejet Ltd - 2019-TIOL-421-CESTAT-MAD taken the contrary view - Since the view that Tribunal is expressing goes contrary to the view earlier taken by the coordinate benches of Tribunal, the matter referred to the President for constitution of larger bench: CESTAT

- Case deferred: MUMBAI CESTAT