SERVICE TAX

HDFC Bank Ltd Vs CCE

ST - The limited issue involved in present appeal for determination is; whether the assessee, who received services from overseas service providers and discharged service tax under reverse charge mechanism is eligible to utilize cenvat credit in discharging such service tax - The fulcrum of argument of Revenue is on Rule 5 of Taxation of Services Rules, 2006 - The Revenue has argued that for the purpose of discharging service tax under the said Rule, there is an embargo to utilize cenvat credit by the service recipient - This issue is is no more res integra as already been considered by Tribunal in case of USV Ltd.'s case 2019-TIOL-982-CESTAT-MUM - Similar view has been expressed by Tribunal in Welspring Universal's case and Sangam (India) Ltd.'s case - Also, the principle laid down in Kansara Modler Ltd's case has been upheld by Rajasthan High Court - In these circumstances, no reason found to deviate from the aforesaid judgments of Tribunal - Following the judgments of Tribunal on the issue which is consistent, the impugned order is set aside: CESTAT

- Appeal allowed: MUMBAI CESTAT

BSNL Cellular Mobile Services Vs Commissioner of GST & CE

ST - The assessee have opted for Centralized Registration under category of 'Telephone Cellular Mobile Services' for the provision of services in relation to cellular mobiles rendered from their seventeen Secondary Switching Areas (SSA) falling under jurisdiction of Tamil Nadu Telecom Circle - Apart from providing service to their subscribers, assessee was also providing Interconnection Service to other telecom operators - Such Interconnect Usage Charges (IUC) were brought within the ambit of service tax under category of "Telecommunication Service" w.e.f. 01.06.2007 - Assessee was paying service tax from that date on the amounts received from their telecom operators for the provision of Interconnection Services - The Department took the view that the assessee is required to pay service tax on such amounts received from the Landline segment of M/s. BSNL - The disputed services pertain to interconnectivity provided by M/s. BSNL, Cellular Mobile Telephone Services (CMTS) Division and M/s. BSNL, assessee to their own landline network - Surely, by no stretch of imagination can these two Divisions of M/s. BSNL be termed as two separate service providers for the purposes of definitions contained in aforesaid TRAI Regulations that Tribunal have just analyzed - Most, if not every, service provider extends a gamut of connectivity services like landline connectivity, connectivity on mobiles through GSM, CDMA connectivity, data and voice through optical fibre and so on - A service provider like M/s. BSNL may be providing one or more of these connectivities as may be subscribed to by their subscribers - When the CMTS Division of BSNL is providing interconnectivity to their Landline Division, the service provider BSNL is only providing service to itself - Thus, it becomes a case of service to oneself - The Tribunal in case of Precot Mills Ltd. 2006-TIOL-818-CESTAT-BANG has held that when one renders service to oneself, there is no question of leviability of service tax; that there is no client-principal relationship in transactions and service tax is not leviable - The charges levied by one Division of M/s. BSNL to another and that too by way of debit notes, is only an internal financial adjustment which cannot, by any stretch of imagination, be termed as "Interconnection Usage Charges" or as a taxable service for the purpose of levying service tax - This being so, the impugned Orders to the contrary cannot sustain: CESTAT

- Appeals allowed: CHENNAI CESTAT

CC, CE & ST Vs Peers Technologies Pvt Ltd

ST - The assessee imparts Commercial Training and Coaching Services - During the relevant period, the Revenue received intelligence that the assessee did not pay service tax properly on the services rendered - The assessee's premises were searched and several documents and records were seized, including a private notebook containing particulars of fees collected during such period - In his statements, the assessee's director also admitted to have not properly discharged tax - SCN was issued proposing recovery of duty demand with interest, along with penalties u/s 76, 77 & 78 of the Finance Act 1994 - On adjudication, these demands were sustained, although the penalty u/s 76 was quashed - On appeal, the Commr.(A) allowed partial relief to the assessee - Hence the Revenue's appeals contesting dropping of demands and the assessee's appeals contesting the imposition of penalty u/s 78.

Held - The Revenue's case is that the assessee rendered services, the value of some of which was unaccounted for and not reflected in books of accounts & no service tax was paid - In such case, the books of accounts or balance sheets will not reflect any unaccounted services - Evidence of such services can only be gathered from informal private accounts, such as the notebook in the present case - The director admitted to have collected amounts for services not reflected in books of accounts & on which no service tax was paid - Hence the notebook is sufficiently credible evidence reflecting the value of service rendered for which no tax is paid - The Commr.(A) wrongly rejected the entries in the notebook recovered ignoring the fact that this were followed by a letter hand written by the Director himself disclosing that these entries referred to the value of taxable services rendered on which no service tax was paid and also submitted cheques towards the service tax - The Commr.(A) also ignored the fact that the contents of this letter were not retracted by the assessee for about one year - Hence it was wrongly held that as there is no statement u/s 14 of the CEA, there is nothing to retract - If a handwritten letter was given explaining the figures in the notebook along with cheques for the differential Service Tax, if such a letter was given under duress, any man of ordinary prudence would retract it - In response to the SCN only did the assessee adopt the stance that the notebook was written under duress - Hence the Commr.(A) erroneously held that the contents of the letter were retracted at first opportunity, whereas the retraction was made after about a year & can only be considered to be an afterthought - Besides, the Commr.(A) confirmed that part of the demand which the assessee agreed to pay & rejected the rest - There is no rationale in confirming one part of the demand and rejecting another part of it only on the ground that the assessee agreed to pay one and not the other when the entire demand is based on the same evidence - Hence the O-i-A is quashed & the demands, interest & penalties imposed by the adjudicating authority stand restored: CESTAT

- Revenue's appeal allowed: HYDERABAD CESTAT

CENTRAL EXCISE

2019-TIOL-2334-CESTAT-MAD

Vectra Advanced Engineering Pvt Ltd Vs CCE

CX - Assessee is manufacturer of motor vehicles, namely, Dump Trucks under the brand name "HEMANG", used mainly in mines, tunnel industries - It appeared to department that assessee was purchasing parts, components and assemblies as spares for these vehicles in bulk and selling them after repacking and relabeling in retail / bulk pack from their spare parts division without payment of excise duty on MRP based assessment as required under Section 4A (2) of CEA, 1944 - Though the matter had been remanded by Tribunal on 16.11.2009 and intimation of shifting of manufacturing was made by assessee only on 13.04.2010 and acknowledged by department on 22.04.2010, the verification of activity carried out by assessee had not been caused during period of more than four months that had lapsed after the Tribunal order - Adjudicating authority has justified the non-conduct of such verification by observing that due to shifting of manufacturing there is no feasibility of conducting a study of practice followed earlier - The incontrovertible conclusion that will become a natural corollary on such facts is that there was no justifiable reason for non-conduct of verification process when the assessee's manufacturing premises were still in Hosur - Such laches will therefore not only preclude the Revenue from wriggling out of responsibility for conduct of verification process, but at the same time put a question on the stand of the department that activity of assessee only amounted to 'manufacture', which issue per se had been remanded by Tribunal for de novo verification - Even more surprising however, is the adjudicating authority's outright refusal to grant cross-examination in spite of clear remand instructions of the Tribunal - The directions of Tribunal in the earlier final order dt. 16.11.2009 has not been complied with and has only been followed in the breach - In consequence, assessee surely have been denied natural justice and opportunity to establish their credentials and case - The proceedings which have seen two rounds of litigation had commenced by way of issue of first SCN dt. 10.4.2008 - More than a decade has passed by, without any sign of resolution of the allegations raised by the department - Opportunity given for causing verification of activity of assessee was frittered away only due to quasi-judicial lethargy - The directions for granting cross examination was also not honoured - In the meantime, the factory of assessee has shifted from Hosur to Karnataka - Predictably, many of the persons whose cross examination was sought for by assessee in the first round of litigation may not be available, traceable or may have become infirm to recall events and happenings which happened ten years earlier - No purpose would serve by once again causing remand of matter to the adjudicating authority - It would lead to further agony for assessee - The impugned order cannot then sustain and is set aside: CESTAT

- Appeal allowed: CHENNAI CESTAT

Walzen Strips Pvt Ltd Vs Commissioner of CGST & CE

CX - The present application seeks condonation of 10 days delay in filing appeal before the Tribunal.

Held - The appeal had been filed beyond the statutory limitation period of 60 days, but still within the condonable period of 30 days - Therefore, it is appropriate to remit the matter to the Commr.(A) for hearing on merits: CESTAT

- Case remanded: KOLKATA CESTAT

CUSTOMS

2019-TIOL-1853-HC-MUM-CUS

Om Drishian International Ltd Vs UoI

Cus - The Petitioner seeks implementation of four orders in appeal dated 29 October 2009 passed by Commissioner (A) - It is the case of Petitioner that the implementation of said four orders would result in petitioner being entitled to the claim of refund - In spite of Petitioner's repeated requests, the process of implementing these four orders has not even been commenced - The Respondent Nos.2 and 3 have not taken any steps to process the refund applications though the Petitioner has filed those applications on 13 September 2016 - The Respondent Nos.2 and 3 are directed to process the refund applications of Petitioner within a period of four weeks: HC

- Petition disposed of : BOMBAY HIGH COURT

2019-TIOL-2332-CESTAT-MUM

Sumeet Exports India Vs CC

Cus - Both the assessees had filed bill of Entry for clearance of one consignment of disperse dyes imported by them from China on basis of invoice raised by the Chinese supplier - Duty due against the imported consignment was debited by importer against the Target Plus License - On completion of investigations, a SCN was issued to the importers alleging misdeclaration of value with intent to evade payment of duty - Rejection of declared value on Bill of Entry is a serious affair and the same could have been rejected on the basis of cogent examination of evidences and justifiable reasons - The Supreme Court has in case of Eicher Tractors 2002-TIOL-06-SC-CUS laid down very categorical view - Similar view has been expressed by Apex Court again in case of Tolin Rubbers Pvt Ltd 2004-TIOL-01-SC-CUS , South India Televisions 2007-TIOL-126-SC-CUS and Motor Industries 2008-TIOL-259-SC-CUS - Neither the adjudicating authority nor Commissioner (A), have pointed to such special circumstance warranting the rejection of the declared transaction value by assessee on Bill of Entry - From plain reading of rule 12, it is quite evident that the word "doubt" used in the rule do not refers to the doubt of a doubting Thomas, but said doubt has to be based on cogent reasons and evidences - No cogent evidence or reason has been put forth to justify the "doubt" of assessing officer - If the case of revenue was that contemporaneous imports were at higher price, could they have proceeded without referring to NIDB maintained by revenue itself - Without even referring to their own database both adjudicating authority and Commissioner (A) have rejected the declared value on the basis of certain emails which were not with the reference to imports under consideration - The approach of both the authorities below is fallacious and cannot be sustained : CESTAT

- Appeals allowed: MUMBAI CESTAT

Suncity Strips And Tubes Pvt Ltd Vs CC

Cus - The assessee is manufacturer of SS Pipes and Tubes and used SS Fold Rolls Coils of prime quality which are imported by them and also procured from domestic market - In case of 5 consignments imported by them they filed 5 bills of entries and claimed exemption from duty under Notfn 12/2012-Cus which exempts prime quality SS CR coils - Revenue alleged that the goods imported by them are not prime quality and denied the exemption and demanded differential duty besides confiscating the provisionally released goods and imposing fine in view of confiscation, penalty was also imposed - the Revenue's allegation is largely based on the fact that width of the material is less than 600 MM, weight of each coil is less than 3 MT and the fact that MTC given is not coil wise, a general MTC - There is no requirement in the Standing Order that the Mill Test Certificate (MTC) should be coil wise - The Standing Order clearly recognize the prime goods can be shipped in varying quality, thickness, width and length - It recognizes that goods of same size of same thickness are of same homogeneous dimension cannot be regarded as 'Stock Lot/Ex-stock' - It clearly states that the main criteria for identifying the goods has been that consignment should be presented in mixed variety, size and thickness, that too in small quantity supported by manufacturer, Invoice or Mill Test Certificate - The Standing Order recognizes that these goods for all practical purposes are traded or sold at par with prime goods except for price consideration - The invoice and mill test certificate has been produced and goods are uniform cross section - The Standing Order does not in any way suggests that coils weighing less than 3MT cannot be treated as prime products - Revenue has also relied on Ministry of Steel Guidelines - The said guidelines are at variance with the standing order - While the SO recognizes mixed lot at prime quality, these guidelines describe them as 'Non Standard' product - Even these guidelines do not describe these as 'Seconds and defective' - Impugned order is set aside: CESTAT

- Appeal allowed: AHMEDABAD CESTAT