SERVICE TAX

2019-TIOL-1765-HC-PATNA-ST

ST - This tax case was filed by invoking provisions of Section 83 of FA, 1994 read along side Section 35H of CEA, 1944 - When this Tax Case was filed in year 2010, the provisions of Section 35H stood deleted - The other aspect of the matter is that the judgment and order dated 19.02.2002 of Tribunal whereby the claim of petitioner was rejected and the complete text of which is placed on record by way of supplementary affidavit, came up for consideration before the larger bench of Tribunal in case of Larsen and Toubro Ltd. 2006-TIOL-814-CESTAT-DEL-LB , a copy of which is enclosed at Annexure-5 to the tax Case, the larger bench of Tribunal having noted the disagreement present in the two division bench of the Tribunal in so far as the opinion expressed in the case of petitioner is concerned on the interpretation of a 'Clearing and Forwarding Agent' overruled the judgment passed in case of appellant and remitted the appeals which fell for consideration before the division bench for its disposal - In view of larger bench decision, the petitioner prays for disposal of matter to enable them to take recourse to such remedy that may be available to him in law for espousing the grievance in light of the position settled by larger bench: HC

- Case disposed of: PATNA HIGH COURT

2019-TIOL-2286-CESTAT-HYD-LB

Sri Chaitanya Educational Committee Vs CC, CE & ST

ST - Issue that had arisen for consideration before the Two Benches of the Tribunal in the two Appeals was as to whether Service Tax was leviable under 'commercial training or coaching' [Section 65(26)] of [The Finance Act, 1994] the Act for the coaching provided by the Junior Colleges - In Sri Chaitanya Educational Committee it was held that Service Tax was leviable, while in ITM International Private Limited it was held that Service Tax was not leviable.

Held: Word 'commercial' before 'training or coaching' has been used to describe 'training or coaching' and not the institute - This is clear from the definition of 'commercial training or coaching' which has been defined to mean any training or coaching provided by a 'commercial training or coaching centre' and a 'commercial training or coaching centre' has been defined to mean any institute providing 'commercial training or coaching' for imparting skill - Board in the Circular 107/01/2009-ST dated 28 January, 2009 clarified that the word 'commercial' had been used with reference to the activity of training or coaching and not to the nature or to the activity of the institute providing the training or coaching - To remove all doubts, an explanation was also inserted in Section 65(105)(zzc) by Finance Act, 2010 with retrospective effect from 01 July, 2003 wherein it is provided that the expression 'commercial training or coaching centre' would include a centre or institute where training or coaching was imparted for consideration, whether or not such centre or institute was registered as a trust or society with or without profit motive - Thus, it is immaterial whether the Appellant is providing the taxable service on 'non-profit basis' - Appellant does not dispute that the Junior Colleges are not only imparting coaching to the intermediate students but also imparting coaching for preparing these students to appear at the medical and engineering entrance examinations - such Junior Colleges are affiliated to the Board under the provisions of the Intermediate Education Act - it is the Board that awards certificates to the candidates who have undergone the prescribed course and have appeared at the intermediate examination conducted by the Board and that the certificate is awarded by the Secretary of the Board of Intermediate Examination - It is signed by the Controller of Examination of the Board - Merely because the Principal of the Junior College has also signed the certificate with the stamp of the Junior College would not mean that the certificate has been issued by the Junior College run by the Appellant - Even if the Appellant is also imparting teaching for intermediate classes and the coaching part is integrated in the syllabus would not mean that the Appellant is not providing 'commercial training or coaching' to the students for which, admittedly, it receives consideration from the students - In the opinion of the Bench, for an institute to claim that it is not a 'commercial training or coaching centre', it must also be issuing certificates recognized by law for the time being in force - The Appellant does not issue the certificates - In such circumstances, it is clearly a 'commercial training or coaching centre' providing 'commercial training or coaching' - It is providing a taxable service - All decisions of the Tribunal taking a contrary view stand overruled - decision of the Tribunal in Sri Chaitanya Educational Committee lays down the correct law - reference answered: Larger Bench [para 21, 22, 23, 25, 26, 27, 28, 33, 53, 54]

- Reference answered: HYDERABAD CESTAT

2019-TIOL-2269-CESTAT-MUM

CST Vs Rabo India Finance Ltd

ST - During the course of audit, department insisted that the respondent should discharge the service tax liability on foreign remittances made by it for the period from 01.01.2004 to 17.04.2006 in respect of the taxable services received by it - Though, the respondent did not agree with such interpretation placed by the service tax department, but to avoid interest liability and further litigation, they had deposited the service tax amount of Rs. 3,12,38,690/- along with interest of Rs. 19,70,048/- into the Government Exchequer, between the period March 2006 and July 2007 - As a consequence of the judgment dated 23.03.2009 of Bombay High Court in the case of Indian National Ship Owners Association 2008-TIOL-633-HC-MUM-ST , which was subsequently confirmed by the Supreme Court in the judgment dated 14.12.2009, - 2009-TIOL-129-SC-ST holding that effective date of payment of service tax by the service recipient on foreign remittances should be from 18.04.2006, the respondent had filed the refund application in the prescribed format on 09.08.2010 before the jurisdictional service tax authorities, claiming refund of above amount of service tax along with interest paid by it - Original authority held that the refund claim was time barred and that the respondents had already availed Cenvat credit of the service tax amount paid by it - Commissioner (Appeals) allowed the appeal filed by the respondent holding that the period of limitation under Section 11B of the CEA, 1944 would not be applicable, however, Commissioner(A) remanded the matter to the original authority for ascertaining the facts, whether or not the respondent had maintained sufficient balance in the Cenvat register and had not utilized the credit for payment of service tax on the output services - Revenue is in appeal before CESTAT and has also filed an application seeking stay of the impugned order.

Held:

+ Disputed amount of service tax was paid by the respondent for the period from 01.01.2004 to 18.04.2006 under Rule 2(1)(d)(iv) of Service Tax Rules, 1994 - Bombay High Court in the case of Indian National Shipowners Association (supra) have held that recipient of service in India is not liable to pay service tax under reverse charge mechanism before 18.04.2006 - while allowing the petition, High Court has held that the Union of India is restrained from levying service tax from the members of the petitioners-association prior to the period 18.04.2006 in respect of the services received from outside India - In the said judgment, the High Court has not declared the levy or collection of service tax prior to the period 18.04.2006 as unconstitutional - Thus, under such circumstances, the refund claim of erroneous payment of service tax will not fall outside the purview of the central excise statute - Since disputed amount of service tax was paid by the respondent and collected by the authorities under the Act by placing wrong interpretation of the statutory provisions, such collection or levy will be termed as 'illegal levy' as per the judgment of Supreme Court in the case of Mafatlal Industries Ltd . - 2002-TIOL-54-SC-CX-CB - In such case, the refund claim arises under the provisions of the Central Excise Act, 1944 made applicable to service tax matters - provisions of Section 11B ibid squarely apply to the case in hand for necessary compliance by the respondent - Since, the refund application was not filed within the stipulated time frame of one year from the relevant date, the original authority had correctly rejected such claim application: CESTAT [para 10]

+ It is an admitted fact on record that being a registered service tax assessee, the respondent had discharged the tax liability under reverse charge mechanism, by depositing such tax amount into the Central Government account under proper accounting code - it cannot, therefore, be pleaded that service tax amount deposited by it should be construed as a 'mere deposit' in the hands of the Government and for grant of its refund, the provisions of Section 11B ibid would not be applicable - Since the statute clearly mandates that the refund claim has to be lodged within a period of one year from the relevant date, such prescribed time frame has to be strictly adhered to by the authorities functioning under the statute: CESTAT [para 11]

+ It is also noted that the respondents had taken the Cenvat credit of service tax paid by it in the CENVAT account - Taking of the credit in Cenvat account, is itself an authorization for making use of the said amount in the manner prescribed - The claim made now by way of refund application is for refund from credit account, which itself is permissible only in respect of export of goods/service under Rule 5 of CENVAT Credit Rules, 2004 - By availing the credit in CENVAT account, the respondent had made itself immune from any injury that would be suffered by it in case of denial of refund - It is settled principle in law that when a statute prescribes a manner for performance of act in a particular manner, then that manner is only prescribed manner and all other manners are debarred - Refund of amount from credit account in the manner claimed by the respondent and allowed by the learned Commissioner (Appeals), is definitely not a prescribed manner - In absence of any injury on account of denial of refund claim made, Bench is of the considered view that principle of restitution as per Section 72 of the Contract Act, discussed by the Apex Court in case of Mafatlal Industries Ltd. (supra) will also not be applicable and the claim has to be strictly decided as per Section 11B ibid: CESTAT [para 12]

+ No merit in the impugned order dated 16.03.2017 passed by the Commissioner (Appeals) - Accordingly, same is set aside and the Revenue appeal is allowed [para 10 to 13]

- Appeal allowed: MUMBAI CESTAT

2019-TIOL-2268-CESTAT-DEL

Verizon India Pvt Ltd Vs CST

ST - Services of the appellant to Verizon US do not merit classification under the category of 'intermediary services' - High Court has held in the appellant's own case 2017-TIOL-1863-HC-DEL-ST that the agreement between the related parties does not have any impact on the export of services - findings of the Commissioner (Appeals) that the service provided by the appellant do not qualify as export, as such services provided to the customers, have been consumed in India, is directly in conflict with the ruling of this Tribunal in the case of Paul Merchants Ltd. - 2012-TIOL-1877-CESTAT-DEL - no demand notice was issued on the appellant refusing or questioning the status of the export of service to Verizon US, as declared in their ST-3 Returns - As the services have been provided by the appellant under contract with Verizon US, who are located outside India and have raised their invoices for such services and have received the remittance in convertible foreign exchange, the appellant satisfies all the conditions, as specified under Rule 6A of Service Tax Rules, 1994, inserted w.e.f 1.7.2012 - Held that the appellants have rendered services to Verizon US as principal service provider and not as an 'intermediary' - Accordingly, appellants are entitled to refund under Rule 5 of the Cenvat Credit Rules, 2004 read with the notification 27/2012-CE (NT) - impugned orders are set aside and the appeals are allowed with consequential benefit: CESTAT [para 30 to 32]

- Appeals allowed: DELHI CESTAT

2019-TIOL-2267-CESTAT-MUM

Nagase India Pvt Ltd Vs CCGST

ST - In the 1st round, upon filing of refund application by assessee who are providing and/or rendering services of marketing as a commission Agent to the principal 'Nagase' at Japan-manufacturer - Under the agreement with the manufacturer in Japan, assessee books orders and based on such orders the principal at Japan, supplies the goods to the customers in India, and the assessee earns commission in convertible foreign exchange - The service of assessee is classifiable under BAS and being ineligible service, duly exported, they filed refund claim for period 2008 - 09 in the prescribed form - The said refund claim was allowed in part - Except as provided in agreement, assessee have not raised any invoices for after sale service - They have raised invoices for marketing services rendered, classifiable under BAS and have received commission from the manufacturer located in Japan - Accordingly in terms of the export of service rules, 2005 rule 3 (2) (a) read with Rule 3(2)(b)(ibid), the assessee have satisfied both the conditions, as the receiver of the services is located outside India and have received remittance for the services in convertible foreign exchange - The assessee have exported their services outside India - Accordingly, they are entitled to refund under Rule 5 of CCR, 2004 - Impugned order is set aside: CESTAT

- Appeal allowed: MUMBAI CESTAT

2019-TIOL-2266-CESTAT-MUM

Superior Drinks Pvt Ltd Vs CCE

ST - Assessee is engaged in bottling and marketing of beverages under trade name Coca Cola, Kinley and Sprite - They also have service tax registration in respect of taxable services under the category of GTA, manpower supply, BAS and works contract - During investigation and scrutiny of records, revenue found that assessee had received certain amounts from Coca Cola India under the head "Marketing Support Received" - Revenue has sought to subject this amount tax under category of BAS for the period upto 01.07.2012 - Examining the issue on merit of classification under category of BAS, the clause of definition which is relevant for such invocation is Promotion or marketing or sale of goods produced or provided by or belonging to the client - A plain reading of said clause will make it evident that the activities undertaken by service provider should be towards promotion or marketing or sale of goods produced or provided by the service recipient - In the present case how the Bottler Agreement or the clause 5 of the Business Protocol 2012, support such an conclusion is beyond comprehension of a rational mind - The clause 5 of Business Protocol clearly is not establishing the relationship of service provider and service recipient between the assessee and Coca Cola India - It only states what shall be the investment/expenditure undertaken by both in respect of various activities specified therein - The said expenditure could have been incurred independently or jointly by the both in terms of the said clause - This expenditure if incurred in joint manner gets shared in the ratio indicated - The conclusion drawn by revenue on the basis of said clause 5 and Bottlers Agreement do not flow from these and is a conclusion drawn to establish service provider and service recipient relationship - The conclusion drawn that these promote the sale of concentrate is also without any legal basis - Assessee use the concentrate supplied/procured from Coca Cola India, for the production/manufacture of finished products - They sell their finished products in the market as per the plan and marketing strategy finalized by them in association with the brand owners - The objective of the sale promotion activities undertaken by them is to promote the sale of Beverages of various brands owned by Coca Cola USA and bottled by them - Any further extrapolation made by revenue for drawing the conclusion is beyond the express intent of Bottler Agreement - There cannot be more convoluted application of decision of High Court and stretching the provisions in an agreement for purpose of levy of tax - If the arguments of the Commissioner were to be accepted then in that case every manufacturer/producer/supplier of goods who purchases and material/inputs is promoting the sale of his input supplier - Since as the sale of his finished goods goes up automatically consumption of inputs will go up and accordingly he promotes the sale of input manufacturer/supplier - Such an interpretation is neither logical or rational - Both input suppliers and the finished product manufacturer are independent business entity acting in the interest of their business - Hence, no merits found in the order of Commissioner for period to 01.07.2012 - Similar view has been taken by tribunal in case of similarly worded SCNs issued to the group companies - Admittedly the dispute is not in respect of declared services or negative list of services or those falling in the exclusion clause - Hence these are left out from consideration in subsequent paragraphs - The assessee was undertaking the marketing and sales promotion activity on their own account, Coca Cola India was only providing certain financial assistance in undertaking such activity - The activity undertaken were not performed by assessee for Coca Cola India, but was performed for themselves - Since no activity has been performed by assessee for Coca Cola India, mere receipt of amounts under the head "Market Support Received" will qualify them as "service" under Section 65B(44) - No merits found in the order of Commissioner for the period after 01.07.2012 also - Since the issue is decided on the merits itself and dropping the demand as not maintainable, Tribunal do not take other issues of limitation and penalty argued - No justification found for the demand of service tax raised - Consequently, the impugned order is set aside: CESTAT

- Appeal allowed: MUMBAI CESTAT

2019-TIOL-2265-CESTAT-BANG

Sai Packaging Company Vs CST

ST - The issue in dispute is the claim of abatement by assessee to the extent of 75% in terms of Notfn 32/2004 - The issue is no more res integra and stands settled in favour of assessee in the case of Lykes Line Ltd. - 2016-TIOL-2914-CESTAT-MUM, in which the Tribunal has taken the view that the condition if any imposed on the GTA cannot be practically complied by the recipient of service - As such, the Tribunal held that the benefit of abatement cannot be denied to the recipient of service - Similarly views have been taken in Venkateshwara Distributors (P) Ltd. and Sunhil Ceramics Pvt. Ltd. - 2007-TIOL-2177-CESTAT-AHM - The impugned order is set aside: CESTAT

- Appeal allowed: BANGALORE CESTAT

CENTRAL EXCISE

2019-TIOL-1763-HC-RAJ-CX

CX - Rebate - In the matter of denial of rebate of duty, petitioner had filed appeals before CESTAT and the same were dismissed as being not maintainable - however, CESTAT had permitted the petitioner to approach the authority concerned but the said authority dismissed the revision applications on the ground of delay as well as the fact that Rs.1000/- was not paid for each revision application - petitioner had before the revisionary authority relied upon the apex court decision in M.P. Steel Corporation = 2015-TIOL-89-SC-CUS to say that delay on account of approaching wrong forum needed to be condoned - however, the same was ignored by the Central government, therefore, the present petition.

Held: Bench cannot but deprecate the cavalier fashion in which the revision applications were rejected by stating that such explanation "cannot be accepted as a general rule on the basis of relying upon decision” - official could not have summarily distinguished a binding judgment of the Supreme Court - The impugned order has resulted in the lack of remedy which is otherwise statutorily guaranteed - The revision applications were also dismissed on another trivial ground to present the review petition with requisite fee - impugned order cannot be sustained, hence set aside - revisional authority is directed to hear and decide the revision applications before it, purely on the merits after satisfying itself with respect to payment of requisite fee in accordance with law - petition allowed: High Court [para 6 to 8]

- Petition allowed: RAJASTHAN HIGH COURT

2019-TIOL-2271-CESTAT-ALL

Printotech Global Ltd Vs Commissioner, Central Goods And Service Tax

CX - Duty wasdeposited by the appellant but against the oldregistration number - appellant contends that the same was a rectifiable mistake and Revenue was within their right to use their discretion - however, CE authorities startedpressurising appellant for deposit of duties with correct registration number - Revenue insisted for fresh deposit which the appellant subsequently made and sought refund of the duty already wronglydeposited - challenge is to interestquantification and imposition of penalty.

Held : Gujarat High Court in the case of Devang Paper Mills P Ltd. 2016-TIOL-37-HC-AHM-CX followed in Auro Pumps P Ltd. 2017-TIOL-1220-HC-AHM-CX has held that mere mentioning of wrong assessee code cannot result intoharsh consequence of entire payment not beingrecognised as valid and that levy of interest and penalty is notsustainable - Issue is, therefore, no more resintegra - appellant havingdeposited the dues,confirmation of interestand imposition of penalty is, therefore, not sustainable - same is set aside and appeal is allowed to that effect: CESTAT [para 3]

- Appeal allowed: ALLAHABAD HIGH COURT

2019-TIOL-2270-CESTAT-MUM

Bio Care Laboratory Vs CCE

CX - Appeals of M/s Bio Care Laboratory and M/s TVC Sky Shop Ltd pertain to the duty liability fastened on the former consequent upon denial of benefit of notification no. 8/2003-CE on clearances of 'hair removal cream' as the brand name and the logo 'TVC Sky Shop' on the product is alleged to belong to an entity that was not entitled to such exemption - goods were also held to be liable to duty at the 'retail selling price' netted for the abatement prescribed in notification issued under section 4A of Central Excise Act, 1944 - goods confiscated but permitted to be released on payment of redemption fine, duty demand confirmed along with penalty and interest - further appeal to CESTAT.

Held: The appellant-manufacturer, admittedly, produces goods which are sold to M/s TVC Sky Shop Ltd who, in turn, markets the products to their customers - It is also not in dispute that the brand name does not belong to the appellant-manufacturer and that it is the appellant-manufacturer who affixed the 'maximum retail price' on the package - The claim that such manufacture contracted with a single client is excluded from the purview of assessment under section 4A of Central Excise Act, 1944 does not stand the test of reason - There is no ground for the appellant to entertain the belief that there was an exclusion from restriction of brand name or of assessment under section 4A of Central Excise Act, 1944 - demand is not hit by limitation - no illogicality in the imposition of redemption fine or penalty, however, in the matter of penalty u/s 11AC of the CEA, 1944, the privilege of reduced payment of penalty is extended subject to fulfilment of condition laid thereunder - Appeal partly allowed: CESTAT [para 4, 6, 7, 9]

- Appeal partly allowed: MUMBAI CESTAT

2019-TIOL-2264-CESTAT-ALL

CCE Vs Superking Manufacturers (Tyre) Pvt Ltd

CX - The issue in these appeals by Revenue against the respondent company a manufacturer of tyres for auto mobiles and also against the Director Shri M.L. Dhawan is against O-I-A upholding the taking of suo-motu credit - The only ground of Revenue is that in view of ruling of Larger Bench in case of BDH Industries Ltd. - 2008-TIOL-1211-CESTAT-MUM-LB wherein this Tribunal held that all types of refunds have to be filed under Central Excise Act and Rules made thereunder and no suo-motu credit of the duty paid in excess may be taken by assessee - In BDH case, the assessee had by mistake debited an amount in excess in the PLA/Cenvat account in the month of March, 2001, and thereafter ask the permission of Department to take credit of the amount paid by mistaken - The Department however advised him to file a refund claim - The assessee have contended that the amount erroneously debited was not duty - A refund claim was filed after the year which was rejected by the Department as time barred - The Tribunal has expressed the view that amount deposited cannot be considered as duty paid on goods has to be indicated on their invoices - As the amount erroneously paid in excess does not find mention in any invoices, in that sense it should be considered as deposit and not duty and accordingly the question of time bar does not arise - The Larger Bench had taken the view with regard to the provisions of unjust enrichment as observed in their order - Whereas in the present case, there is no such dispute of unjust enrichment as assessee was allowed rebate after taking in to consideration the element of unjust enrichment - Accordingly, the facts are different and the ruling in case of BDH Industries of Larger Bench of this Tribunal is not attracted - Further, matter relates to rectification of mistake, both on the part of the assessee as well as the Department - Thus rectification has to be carried out in full - By sitting tight on the repeated request of the assessee to take back the Cenvat Credit was unjust and unfair - By way of rectification, assessee was entitled to take back the credit which they had wrongly paid and thereafter been granted rebate - Such rebate having been repaid with interest and also entailed taking back of the credit of the amount wrongly debited earlier - Thus, SCN is misconceived and an abuse of provisions of scheme of the Central Excise Act and the Rules - Accordingly, the impugned O-I-A is upheld: CESTAT

- Appeals dismissed: ALLAHABAD CESTAT

2019-TIOL-2263-CESTAT-DEL

Vee Kay Enterprises Vs CE, C & CGST

CX - During search, the Departmental officers found and seized goods bearing the brand names of 'VIKING' & 'VIZA' along with various packing materials found in 'M/s Vee Kay Enterprises' as well as 'M/s Clutch Engineers' - After conclusion of investigation, SCNs were issued to all connected parties - The allegations against two present appellants were that they have engaged in packing of M.V. parts and fixing the brand names 'VIKING' & 'VIZA' - It was alleged that these brands did not belong to either of the appellants - Even though the liability for Excise duty stands established, the same needs to be evaluated in the light of provisions of Small Scale Exemption Notfn 8/2003-CE, as amended - The notfn exempts the first clearances of specified goods up to the value of Rs. 1.5 Crore - However, such exemption will not be available if the goods are manufactured and cleared bearing the brand name of any other person - After perusal of letter issued by Deputy Registrar and Trade Mark and GI, it is seen that the brand name 'VIKING' is owned by three persons viz. Shri Vinod Kumar Dhawan, Shri Vijay Kumar Dhawan and Shri Jugal Kishore Kohli - M/s Vee Kay will be entitled to benefit of SSI Exemption in respect of goods cleared with the brand name 'VIKING', but not for goods with 'VIZA' brand - The brand name 'VIZA' is claimed to be owned by Shri Vineet Dhawan, proprietor of M/s Clutch Engineers - This fact does not appear to be in dispute - Hence the goods cleared with the brand name of 'VIZA' by M/s Clutch Engineering will be entitled to benefit of SSI Exemption, but not goods with 'VIKING' brand - The demand for Central Excise duty needs to be reworked in terms of the principle and Adjudicating Authority is directed to requantify the demand - The order for confiscation and redemption fine and penalties also needs to be proportionately modified: CESTAT

- Matter remanded: DELHI CESTAT

CUSTOMS

NOTIFICATION

ctariffadd19_032

CBIC imposes Anti Dumping Duty on Homopolymer of vinyl chloride monomer (suspension grade) imported from China PR & USA

CASE LAWS

2019-TIOL-2262-CESTAT-MUM

CC Vs Sparkling Traders Pvt Ltd

Cus - The assessee-company purchased a transferable DFIA permitting duty-free import of Corrosion Inhibitor, against export of Soda Ash from M/s Tata Chemicals Ltd. - The assessee imported Ascorbic Acid as Corrosion Inhibitor under the DFIA against export of Soda Ash - The Revenue claimed that Ascorbic Acid did not classify as Corrosion Inhibitor and that an NOC was required to import Ascorbic Acid - On adjudication, benefit under Notfn No 40/2006 was denied to the assessee - On appeal, the Commr.(A) quashed the O-i-O and directed release of goods to the assessee's factory - It was also directed that any non-pharmaceutical use of the Acid be monitored by the jurisdictional Central Excise authorities & any violation be notified to the jurisdictional Customs authority for taking appropriate action - Hence the Revenue's appeal contesting such findings.

Held: Considering the material placed on record, it is clear that Ascorbic Acid has multiple used in pharmaceutical formulations & food products while it can be used as a corrosion inhibitor in industrial operations - It is also not the Revenue's case that the assessee had not used the imported Ascorbic Acid as Corrosion Inhibitor or that it diverted the same for some other use outside its premises - Besides, as per the policy provisions, the catch word is that the imported item must be capable of being used & not necessarily be used - Hence the Revenue's contention that since Ascorbic Acid cannot be used as Corrosion Inhibitor, the assessee is not entitled to import the same under DFIA & that the assessee is ineligible for benefit under Notfn No 46/2006, is untenable - A product which is Corrosion Inhibitor and is imported under a DFIA licence, is eligible for benefit of Notfn No 40/2006 - The whole scheme of DFIA is to allow duty free imports against exports - Denial of the benefit under the scheme on unsubstantiated and technical reasons, would defeat the very purpose of the scheme and would amount to denial of substantial benefit - It must be seen only if the imported goods are capable of being used in the export product - Hence in the instant case, Ascorbic Acid is capable of being used as corrosion inhibitor in the manufacture of Soda Ash and it is irrelevant whether it is actually used or not in the export product - Thus the assessee is entitled to avail the benefit of Notfn No 40/2006-Cus - The Revenue's appeal lacks merit: CESTAT

- Revenue's appeal dismissed: MUMBAI CESTAT

2019-TIOL-2261-CESTAT-HYD

Vesuvius India Ltd Vs CC

Cus - Appeal is filed by importer assessee against the demand of differential duty invoking extended period of limitation, confiscation of imported goods, imposition of redemption fine as well as imposition of penalties under Sections 112 & 114AA - It is not in dispute that the importer has manufactured refractory bricks and that they imported aluminous cement for the purpose and classifying these products as aluminous cement under Chapter 25 - They have not changed their classification to high alumna refractory cement after the Tariff has been revised w.e.f. 2003-04 - The goods were declared by trade name and necessary documents were produced along with bills of entry by assessee - The documents which were produced show that the certificate of quality was among the documents presented which clearly indicate the alumina content - In all cases the alumina content is over 50% - The only point of allegation that can sustain in present case is that the assessee has wrongly classified the imported goods in their bills of entry - The importer assessee is not an expert in classification of products and it is always possible that they claimed wrong classification - It is open for the department to direct the importer to correct classification or issue a SCN proposing revision of classification - Merely claiming the wrong classification by itself does not amount to mis-declaration of the goods and there is nothing on record to show that the description of the goods in the Bill of entry and other documents as well as in the test report do not match - The department’s case has to fail on this ground alone for the extended period of limitation and correspondingly the penalties also set aside - The next question to be examined is, if the imported products is high alumina refractory cement classifiable under 2523 90 20, whether the exemption notfn 21/02 is still available - A plain reading of notfn shows that the exemption is available for any high alumina cement falling under chapter 25 - It does not distinguish between high alumina cement and low alumina cement - If the intention of notification was to confine it to aluminous cement falling under a specific heading of the Customs Tariff, it would have said so - There is no doubt that what was imported was aluminous cement for the purpose of manufacture of refractory bricks - Therefore, the exemption Notfn 21/2002 is fully available to assessee - Accordingly, the demand on this count even within the normal period of limitation does not sustain - As there was no mis-declaration at all and the assessee is entitled for exemption notification in any case and there is nothing to be gained by assessee by classifying their product under one heading or the other, confiscation of goods and imposition of penalties are also not sustainable - Consequently the personal penalties imposed on Shri Arun Kumar Giri and Shri Thumma Antony also set aside: CESTAT

- Appeals allowed: HYDERABAD CESTAT