SERVICE TAX

2019-TIOL-2056-HC-MAD-ST

ST - The petitioner is an assessee to service tax - However, the admitted liability of a sum of Rs.53,93,359/- has not been remitted - Thus the second respondent has called upon the petitioner to remit the admitted service tax along with appropriate interest, penalty and late fee under the threat of coercive action - There is no dispute on the fact that the said amount is admitted as service tax as per the returns filed by petitioner - The only quarrel raised is that the impugned communication refers to Certificate No.1 of 2013 issued under Section 11 of CEA, 1944, which is inapplicable in present case, since the provision does not stand incorporated into the provisions of FA, 1994, in terms of which service tax is levied - Thus, the provisions of FA, 1994 are adequate to support the action taken for recovery - No doubt, the Certificate referred to in impugned communication states at the top 'Section 11 Certificate No.1/2012' - However, mere reference to Section 11 would not vitiate the Certificate itself - Clearly, the provisions of Section 87 (D) provide for drawing-up of a certificate for tax arrears and that is what has been done in the present case - The objections raised by petitioner are seem to hyper-technical and rejected as such: HC

-Writ petition dismissed : MADRAS HIGH COURT

2019-TIOL-2055-HC-P&H-ST

ST - The assessee had exported majority of its services outside India and hence was not in a position to utilise the entire Cenvat Credit for discharging Service Tax liability towards its domestic tax liability as a result of which it had unutilized accumulated Cenvat Credit - Accordingly, they filed the refund claim which was granted by lower authority - The revenue by citing letter dated 5.9.2018 written by Assistant Commissioner (Legal) CGST Gurugram, seeks permission to writhdraw the present appeal, as the revenue involved is 22.22 lakhs which is below the thresh hold limit prescribed by the Central Board of Indirect Tax and Customs - Appeal dismissed as withdrawn: HC

-Appeal dismissed : PUNJAB & HARYANA HIGH COURT

2019-TIOL-2541-CESTAT-AHM

ST - The assessee supplies natural gas through pipes to the Industrial, Commercial or Domestic customers and for this purpose installs an equipment called 'SKID' at the customer's site to regulate the supply of natural gas supplied through pipes and to record the quantity consumed by customers for the purpose of billing - The gas pipeline from the nearest distribution point is laid and maintained by assessee at the cost of customer and the measuring equipment is also supplied, installed and maintained by assessee at the cost of customer - The terms of agreement leave no manner of doubt that the purpose of equipment is to measure the amount of gas supplied to the customer for the purpose of billing - They are, therefore, for the use of assessee and are not for use by the customers - The finding to the contrary recorded by Adjudicating Authority is, therefore, not correct - The view so taken finds support from the decision of Tribunal in Ecru Cab Co. Pvt. Limited. 2015-TIOL-2408-CESTAT-MUM - The dispute that arose was as to whether by providing taxi to an individual driver for use, the assessee had rendered any service which could be considered as "Supply of Tangible Goods" - The Division Bench of the Tribunal, after perusing the agreement found that though the driver was in possession of the vehicle but the agreement did not indicate that the driver was having possession of the vehicle for his "use" which was the most important aspect to be covered under category of 'Supply of Tangible Goods' - The Adjudicating Authority was, therefore, not justified in confirming the demand of duty on the collection charges under the taxable service-Supply of Tangible Goods - The impugned orders confirming the demand of Service Tax have been set aside: CESTAT

- Appeal allowed: AHMEDABAD CESTAT

2019-TIOL-2540-CESTAT-BANG

ST - The assessee had filed a refund claim for the quarter July-September 2016 being the Service Tax paid towards specified services received by them for authorized operations in SEZ as per Notfn 12/2013-ST - Same was rejected on the ground that the input services are commonly used for both SEZ and DTA operations - Assessee has submitted that in their own case for the period January to March 2015, Deputy Commissioner, Mangalore has allowed the refund claim on identical facts and the same has not been challenged by Revenue and has attained finality - The assessee does not have any DTA unit, they are only making supply to a DTA unit whereas the conditions of Para 3(III)(a) would be applicable only when the assessee has units in both SEZ and DTA whereas in the present case, the assessee has unit only in SEZ and make supply from SEZ to DTA unit and therefore the said condition of Para 3(III)(a) is not applicable in the present case - Further, the ratio of Adani Powers India Pvt. Ltd. 2016-TIOL-1133-CESTAT-AHM is also applicable to the facts of the present case because if the rationale of said case is applied then it is found that there is a marked difference between operation out of a DTA unit and making a supply to DTA, therefore denial of refund to the assessee is not sustainable in law - With regard to eligibility of Rs.2,33,325, this issue is squarely covered in favour of assessee in their own case by Tribunal - With regard to refund of Rs.8,008/- and Rs.3,237/-, same has been wrongly rejected on the ground that the said services are commonly used for SEZ and DTA operations whereas in view of finding of issue no. 1, the assessee does not have DTA, they have only made supply to a DTA unit and therefore there is no violation of the conditions of the Notification and therefore the rejection of refund claim on these two services is wrong and not sustainable in law - The impugned order in its entirety is not sustainable in law and therefore, same is set aside: CESTAT

- Appeal alowed: BANGALORE CESTAT

CENTRAL EXCISE

2019-TIOL-2539-CESTAT-MUM

CX - The assessee is engaged in manufacture of excisable goods - During the relevant period, they have transferred excisable goods to their depots on payment of appropriate excise duty however, alleging that the assessable value of the transferred goods were not determined correctly during the period July 2000 to February 2001 as they have not included the cost of transportation from factory to depot; duty was short paid to the extent of Rs 17,03,456/- - Consequently, SCN was issued for recovery of said duty with interest and penalty - Undisputedly the definition of 'place of removal' has undergone change during the relevant period in dispute - Taking into consideration the definition of place of removal as was in force during the relevant period, this Tribunal following the principles of law laid down in Ispat Industries Ltd.'s 2015-TIOL-238-SC-CX observed that since during the period in question depot was not considered as a place of removal, hence the transportation cost between the factory gate and depot cannot be added to the assessable value - Similar view was also expressed by Tribunal in Emerson Network Power (I) Pvt. Ltd. 2017-TIOL-1069-CESTAT-MUM - Following the aforesaid precedent, no merit found in the impugned order, the same is set aside: CESTAT

- Appeal allowed: MUMBAI CESTAT

2019-TIOL-2538-CESTAT-MAD

CX - The assessee was availing Cenvat credit on duty paid on inputs, capital goods and service tax paid on input services under CCR, 2004 - On verification, it was found that the assessee had received input service credit through ISD invoices passed on by their head office for the period May 2012 to January 2014 - It was alleged by department that those ISD invoices used for passing on input service tax credit related to credit of service tax paid on construction service, which has been specifically excluded from the definition of input service in terms of Rule 2 (l) of CCR and hence the department concluded that the credit so availed was ineligible - The period involved is May 2012 to January 2014 and the SCN is dated 17.11.2016 - From the documents placed on record, it is observed that there have been queries and replies by the assessee and one of the earliest queries by Revenue is dated 20.09.2013 - There were also replies filed on various dates and one of such replies is dated 10.06.2014 wherein, the details have been explained very clearly covering all the points in dispute - These points clearly show that the Revenue was infact aware of the activities of assessee - The stand of Revenue as to suppression is, therefore, only on imaginations, which is not supported by any documentary evidence, which cannot sustain - The Revenue has miserably failed to justify invoking larger period of limitation and therefore, the impugned order cannot sustain - Hence the same is set aside: CESTAT

- Appeal allowed: CHENNAI CESTAT

2019-TIOL-2537-CESTAT-HYD

CX - Whether the freight incurred for transporting goods to the buyers' premises by assessee when the goods are sold for delivery at the buyers premises is includable in assessable value under section 4 of CEA, 1944 - The issue of including the freight from seller's premises to the buyer's premises when the sale is for delivery at the buyer's premises, has been settled at the hands of Apex Court and has reached finality - It is true that the case of Ispat Industries Limited 2015-TIOL-238-SC-CX was in the context of unamended Section 4 which did not have clause (iii) of Section 4(4)(b) - The case of Roofit Industries Limited 2015-TIOL-87-SC-CX pertain to the amended Section 4 wherein Apex Court held that freight up to the buyers premises is includable in the assessable value where the sale is for delivery at the buyer's premises because that is where the ownership changes in terms of Sale of Goods Act - In the case of Ispat Industries Limited , it was held that the buyers premises can never ever be a place of removal - Although the case pertained to the period before the amendment to Section 4, the Apex Court has discussed the issue both prior to its amendment and after it, in its judgment - It has been held that if intention was to cover the expenses up to the place where the goods have been sold, the Section would have said so but the expression is "goods are to be sold" - Therefore, the place of removal is before the goods are sold, not when the goods have been sold - Further, there is no removal of the goods at the buyer's premises because the place of removal requires the goods to be removed from that place - Thirdly, the description of 'place of removal' are the depot, consignment agent which can only be referred to the seller and not to the buyer - It also made it clear that this fact was not brought to the attention of the Court when the earlier orders were passed - It is now well settled that the buyers' premises can never be the place of removal, therefore the freight from the factory/depot/consignment agent up to the buyers' premises cannot be included in the assessable value, even if the goods are sold or delivered at the buyer's premises - The settled legal position is in favour of assessee and against the Revenue and the demands are unsustainable on merits - Since the decision is taken on the merits of the case, the issue of limitation becomes irrelevant - The impugned orders are set aside: CESTAT

- Appeals allowed: HYDERABAD CESTAT

CUSTOMS

2019-TIOL-2059-HC-MUM-CUS

Cus - The petitioner is seeking directions similar to the one issued by Apex Court in Vijay Sajnani and Anr. and permit the petitioner to have an advocate at visible but not audible distance during his interrogation by Officers of DRI - In Birendra Kumar Pandey & Anr. , the petitioners were served with notice under Section 108 of Customs Act, 1961, to appear before the customs authority for interrogation in connection with certain matters and they were apprehensive that coercive attempts may be used to extort confessions from them and therefore, they prayed for the interrogation in presence of lawyer within a visible but beyond hearing distance - The Apex Court, after making reference to the Three judges Bench in case of Poolpandi and Others 2002-TIOL-625-SC-CX-LB and the subsequent judgment in case of Jugal Kishore Samra 2011-TIOL-58-SC-NDPS , observed that this Bench and other Benches of this Court had occasion to deal with similar matters and have passed similar orders to the extent that the petitioners' counsel would be allowed to be present at the time of interrogation within visible distance, though beyond hearing distance - The relief that was sought for, therefore, came to be granted in favour of petitioners - The revenue has also placed reliance on Rajasthan High Court judgment in case of Bhag Singh - The said judgment is delivered in light of the facts and circumstances when the apprehension expressed by petitioner of being subjected to third degree torture of violence was itself found to be unjustified - In any contingency, the court is bound by judgment/orders passed by Apex Court and in light of said binding orders, court is inclined to grant relief to limited extent as prayed by petitioner - The petitioner would be interrogated in presence of an advocate at a visible, but not audible distance in relation to the interrogation, by the Officers of DRI in accordance with the directions given by Supreme Court in Vijay Sajnani: HC

-Writ petition allowed : BOMBAY HIGH COURT

2019-TIOL-2058-HC-P&H-CUS

Cus - The petitioner prays for grant of anticipatory bail in a case registered under Section 135 of Customs Act, 1962 - As per investigation, it has come on record that on more than 04 occasions, the accused persons in conspiracy with each other has brought the gold in an illegal manner and the market value of same is more than Rs.1 crore making the offence as non-bailable - The allegations against petitioner is that he is the main king-pin of racket and is the Financer, who has provided 33000 U.S. Dollars to the co-accused for purchase of 01 Kg. gold and the same was brought from Dubai to Amritsar where it was seized - The investigation further show that even on 03 earlier occasion in a similar manner, the gold was smuggled in the country, for which the authorities need deep probe and thus, the custodial investigation/interrogation of the petitioner is required - Considering the serious allegations against the petitioner, no ground found to grant anticipatory bail to the petitioner: HC

-Petition dismissed : PUNJAB & HARYANA HIGH COURT

2019-TIOL-2057-HC-P&H-CUS

Cus - The petitioner is a proprietorship concern engaged in manufacture and export of textile garments - The petition was filed being aggrieved with the action of Department in not releasing the drawback incentives based on export of goods vide shipping bills - The prayer was also for direction to de-freeze their bank account - It is not in dispute that the export proceeds qua the aforesaid consignment stood released on 30.11.2018 under intimation through on line communication to DGFT - At the time of previous hearing on 19.7.2018, the DRI informed the Court that the account of petitioner stood de-freezed on 27.11.2018 and the amount of drawback incentives would be released on furnishing Bank Realization Certificate (BRC) - The petitioner has handed over copies of BRCs for the aforesaid five shipping bills although the same were already available to the Department of Customs on the website of DGFT - The Department would be bound to release the due amounts of drawback incentives to the petitioner within a period of four weeks, failing which the petitioner would be entitled to interest @ 9% on the total amount due from the date of accrual till the date of realization and the Department would be free to recover the amount of interest from the competent authority/ sanctioning authority concerned: HC

-Writ petition disposed of : PUNJAB & HARYANA HIGH COURT

2019-TIOL-2536-CESTAT-DEL

Cus - The assessee have effected import of certain goods without payment of customs duty on the strength of Advance Authorization Licence issued to them by DGFT - The basic ground on which the customs duty has been confirmed and ordered for recovery, is that the assessee have failed to adduce the evidence of fulfillment of their export obligation under advance authorization dated 10 January 2013 - The other basis for demanding customs duty was that DGFT has also issued a SCN to assessee for the same reason i.e. non-fulfillment of export obligation vide their SCN dated 21 June 2016 - The claim of assessee that they have fulfilled the export obligation with regard to advance authorization dated 10 January 2013 and, therefore, there is no cause for demanding customs duty against the duty free imports effected by them under the above-mentioned advance authorization - It will be proper if original Adjudicating Authority considers the claim made by assessee regarding fulfillment of export obligation and decide the matter afresh - The appeal is allowed by way of remand: CESTAT

- Matter remanded: DELHI CESTAT

2019-TIOL-2535-CESTAT-MUM

Cus - The assessee has imported goods from M/s. Metal One Corporation, Japan - The Original Authority enquired into valuation and has come to the conclusion that the buyer and seller are related and therefore the transaction value requires to be rejected and assessable value requires to be loaded by 7% in terms of Rule 8 of CVR, 2007 - The lower authority has held that the foreign supplier and assessee are related parties in view of Rule 2(2) (ii), which states that persons shall be deemed to be related only if "they are legally recognised partners in business" - The foreign suppliers and assessee are partners of the Joint Venture; as per the agreement the importers and suppliers are partners in business; two employees of the suppliers, that is Metal One Corporation, are nominated as directors of MSSCL - Therefore, as found by original authority the foreign suppliers and the assessee are related - However, adjudicating authority and appellate authority have sought to load the value of imported goods at a flat 8% of profit margin - The original authority has stated to rely on Arcelor Mittal - However, no details have been furnished - As submitted by assessee, the goods dealt by Arcelor Mittal and the supplier of assessee are not same - Under the circumstances loading of 8% is arbitrary - It is on records that for one year the profit margin of supplier of assessee was recorded to be 2.4% - The reasons given by Original Authority for not accepting the same are not satisfactory, as it was not established to the supplier company and had posted higher profit percentage, if any - Without providing any such data, simple rejection of declared profit margin is not acceptable - The Tribunal in case of Google India Pvt. Ltd. 2014-TIOL-2028-CESTAT-MAD held that nominal profit element was required to be added and not 10% profit margin - Moreover department has not adduced any evidence of any contemporaneous imports so as to indicate under valuation by assessee - The circumstances of both the cases are similar and the ratio is applicable - Therefore, loading of value by 1% in respect of imported capital goods i.e. slitting line, which is already included in value declared is sufficient - The impugned order requires to be modified to that extent: CESTAT

- Appeal allowed: MUMBAI CESTAT