| SERVICE TAX
2019-TIOL-2642-CESTAT-MUM
Sai Life Science Ltd Vs CCE
ST - The assessee is registered for providing taxable services under category of "Scientific or Technical Consultancy Services" - Acting on intelligence that the services provided by assessee to their overseas recipients in respect of Drug Metabolism and Pharmacokinetics standalone services (DMPK) under Contract Research Agreements do not qualify as "Export of Services", investigations were undertaken and SCN was issued to assessee, demanding service tax short/not paid - Demand for interest and penalties were also proposed - Assessee have conducted DMPK Studies in respect of NCE's provided to them by the overseas client - Rule 4 do not put any conditions in respect of alteration or alternation of goods provided by the service recipient - Reading anything beyond what has been provided in the rules/ statue cannot be proper interpretation put to rules - Both the decisions in case of Sai Life Sciences 2016-TIOL-433-CESTAT-MUM and Advinus Therapeutic 2016-TIOL-3138-CESTAT-MUM have proceeded mainly on the principle that taxes should not be exported - The taxes are to be determined as per the taxing statue and it is for legislator and tax policy makers to determine as to what should be taxed and what should not be taxed - In case something falls within the scheme of taxation, the same cannot be exempted till specifically exempted by a proper notification - The activities undertaken by assessee in terms of DMPK studies squarely fall within the scheme of Rule 4 of POPS Rules, and hence the location of service provider shall be place of provision of service which is in India and hence cannot be treated as export of service in terms of Rule 6A of Service Tax Rules, 1994 - It is settled principle in law that in case, when certain taxes have been short paid or not paid by the due date then they are to be paid along with the interest - By not paying the service tax on due date assessee have made themselves liable to penalty under section 76 of FA, 1994 for the period of delay in the payment of the taxes - By not furnishing the correct information as required on ST-3, assessee have made themselves liable to penalty under Section 77(2) read with Section 70 of the Act - Hence, the penalties imposed upon by the adjudicating authority are upheld - No merits found in the claim of the assessee for waiver of penalty under Section 80: CESTAT
- Appeal dismissed: MUMBAI CESTAT
2019-TIOL-2641-CESTAT-AHM
Lucy Electric India Pvt Ltd Vs CCE & ST
ST - The assessee is receiving reimbursement toward the services of Manpower and other Miscellaneous cost incurred on behalf of Overseas Group Companies in connection with the supply of goods by Indian Companies to their group companies - The case of department is that the reimbursement received by assessee from their group companies is towards the service of Man Power supply by overseas to the assessee, therefore, the same is taxable under Section 66A of FA, 1994 and Rules made thereunder on Reverse Charge Mechanism - Accordingly, the demand of service tax was confirmed - There is no dispute that the assessee have received reimbursement towards salary and other miscellaneous expenses from their group companies located outside - This reimbursement was received in connection with some support service provided by assessee, in connection with supply of goods by Indian supplier to their overseas group companies - In this transaction, it is the assessee who is providing the service to overseas group companies - Since the assessee is not receiving any service, on the contrary, they are providing services to overseas group companies, the provision of Section 66A and Rule made there under is absolutely not applicable, therefore, the demand is also not maintainable - The similar issue has been considered by Tribunal in case of BMW India Pvt. Ltd wherein the demand in the identical issue has been set aside - The demand is not sustainable, same is set aside: CESTAT
- Appeals allowed: AHMEDABAD CESTAT
CENTRAL EXCISE
2019-TIOL-2135-HC-P&H-CX
Commissioner of Central Goods and Service Tax Vs Davinder Singh
CX - Assessee is partner of M/s Davinder Export, situated at Ludhiana - The said partnership firm engaged in manufacture of knitted cloth and knitted garments of cotton and cotton polyester is registered with Central Excise Department - On the basis of investigation, it was alleged that the said firm had clandestinely cleared mufflers and T-Shirts without accounting for the same in its records and without payment of Central Excise Duty - Accordingly, a SCN was issued - In view of instructions dated 22.8.2019, the instant appeal would not be maintainable before this Court, as demand amount i.e. Rs.50,53,000/- approximately is to be recovered, which is below the monetary limit of Rs. 1 Crore - Dismissed as withdrawn: HC
- Appeal dismissed : PUNJAB AND HARYANA HIGH COURT
2019-TIOL-2134-HC-MUM-CX
CCE Vs Patil Steel Wires
CX - The revenue is aggrieved by the reduction of penalty amount from Rs.5,00,000/- to Rs.1,00,000/- by Tribunal - The assessee is aggrieved by confirmation of demand and imposition of penalty - There is substantial material on record to suggest that the issue of limitation as prescribed under Section 11A of Central Excise Act was not only raised but was also argued by assessee before Tribunal - However, from the perusal of impugned order, it is found that there is no consideration, much less, any sufficient consideration of this crucial issue which is undoubtedly a jurisdictional issue in a matter of this nature - The records indicate that even after the impugned order was filed, assessee immediately applied for rectification pointing out that the issue of limitation was not even adverted to by Tribunal - This rectification application was dismissed by observing that if there was no consideration of issue of jurisdiction, then the same may amount to an error apparent on the face of record and it will be open for assessee to institute a review petition or a petition for recall of Tribunal's order - The assessee, did institute a petition for recall which was again dismissed on the ground that the scope of a recall application is very limited - In fact the record bears out that the jurisdictional issue of limitation in terms of Section 11 A was not considered by Tribunal at all - Such consideration would require the Tribunal to reconcile the observations made in impugned order, where at one place, the Tribunal has held that the assessee fraudulently availed inadmissible credit and in another place, the Tribunal held that this was not a case where the assessee utilized the credit - The Tribunal will also have to advert to the correspondences if any, in which the assessee claims to have posted the Excise Department of procedure which it was following - This is relevant because the proviso to Section 11 A will apply in case of willful suppression of relevant facts by assessee - The matter had to be considered by Tribunal while disposing of two appeals instituted by assessee - Since the crucial jurisdictional issue has not been considered, the impugned order of Tribunal will have to be set aside and the matter restored before the Tribunal for fresh adjudication in accordance with law and its own merits - In so far as the appeal instituted by revenue is concerned, the same, will also have to be technically allowed, in the sense that the impugned judgment and order will have to be set aside even on the ground of reduction of penalty amount - The issue of penalty will also be have to be considered by Tribunal depending upon its findings on the grounds raised by assessee on the question of limitation and merits of adjudication order: HC
- Matter remanded : BOMBAY HIGH COURT
2019-TIOL-2640-CESTAT-AHM
IMP Powers Ltd Vs CCE & ST
CX - The assessee is manufacturer of transformers and has entered into separate contracts for supply of transformer and erection of transformers - They supplied the transformer on payment of duty and thereafter erected and commissioned the transformer and charged service tax on such services under Works Contract Services - They were issued SCN alleging that the supply and erection and commissioning cannot be vivisected and they are not eligible to avail cenvat credit on inputs used in manufacturing of transformers as they have discharged service tax liability under the Works Contract Composition Scheme thereby making them ineligible from availing cenvat - The assessee has supplied transformer under separate contract on payment of central excise duty and the erection, commissioning of transformer was under separate contract - When the value of both the activity is separately shown, both the activities cannot be clubbed to make it taxable under the Works contract composition scheme - The revenue has nowhere disputed the payment of central excise duty on transformer and therefore once excise duty payment is made on the transformer, the assessee is eligible for availing credit of cenvat charged on the inputs used in manufacture of Transformers - The inputs used for manufacture of transformer are not inputs for execution of works contract - There is no allegation that the assessee has taken cenvat credit of duty paid on Transformer which was erected/ commissioned by them - Hence, the demand of cenvat against the assessee is absolutely illegal - Further, transformer was not used in execution of works contract but it itself was installed/ commissioned and hence there is no meaning of including the value of transformer in value of works contract service - The value of any material which is being used in providing the services can be included - The transformer is not used/ consumed in providing service so as to include its value in assessable value of Works contract - Further even assuming so, prior to 06.07.2009, for the Works Contract Rules, 2007, there was no requirement of including the value of free issue of material used for carrying out the works contract - These views are also based upon the CBEC Circular 150/1/2012 – ST and Tribunal's order in case of Essar projects (India) Ltd. 2013-TIOL-1951-CESTAT-AHM - The impugned order is not sustainable: CESTAT
- Appeals allowed: AHMEDABAD CESTAT
2019-TIOL-2639-CESTAT-BANG
Schmetz India Pvt Ltd Vs CCT
CX - The assessee, a 100% EOU is engaged in manufacture of export of Industrial Sewing Machine Needles - They are availing CENVAT credit of duty paid on inputs, capital goods and input services as per CCR, 2004 - During audit, the Department observed that the assessee have irregularly availed CENVAT credit on debit notes for the period from June 2007 to January 2011 - The Department during the pendency of appeal before the Commissioner against O-I-O has appropriated the amount which was liable to be paid in cash to the assessee under Rule 5 of CCR, 2004 - Finally the O-I-O was set aside by Commissioner (A) and the matter is remanded to original authority to verify the facts and the original authority in remand proceedings has allowed the CENVAT credit availed on debit notes - Once the demand has been set aside, the amount appropriated by Department is liable to be refunded to the assessee and there is no justification for retaining the said amount by Department - When unlawful demand has been set aside, the Department does not have any authority to retain the amount appropriated towards the said unlawful demand - The decision of Tribunal in the case of Ispat Traders 2011-TIOL-34-CESTAT-AHM is very much applicable in the present case wherein the Tribunal has held that appropriation of the amount out of the refund amount payable in cash towards the demand confirmed in the said O-I-O is only a pre-deposit and once the said O-I-O has been set aside by the first Appellate Authority, the adjudicating authority in all fairness ought to have sanctioned the refund of the amount appropriated - This decision of the Tribunal has been upheld by Gujarat High Court - The impugned order refusing to refund the amount is not sustainable in law and therefore the same is set aside: CESTAT
- Appeal allowed: BANGALORE CESTAT
CUSTOMS
2019-TIOL-2136-HC-P&H-CUS
Century Knitters India Ltd Vs UoI
Cus - Petitioner nos.1 & 2 are two sister concerns and engaged in manufacture and export of Textile Garments, namely, Knitted Gents Shirts and Knitted Track Suits - Both the petitioners in April 2012 brought their consignments for export at Inland Container Depot (ICD) Tuglaqabad, New Delhi and filed different shipping bills claiming the benefit of Duty Drawback - The DRI on the basis of samples conducted a market inquiry and based on the statements of different witnesses as well as Market Inquiry Report, the DRI issued SCN whereby the declared value was proposed to be rejected in terms of CVR, 2007 - There is some element of truth in the contentions of petitioners that the Market Inquiry Report dated 31.05.2012 is possibly forged, however, court do not find it appropriate to decide the issue while exercising writ jurisdiction under Article 226 of Constitution - The Tribunal consisting of two members would be quite competent to deal with all the issues raised by petitioners for proper adjudication - It is also conceded that at present the Tribunal is available at Chandigarh, therefore, there seems to be no difficulty for the petitioners to approach the Tribunal - Accordingly, the petitioners relegated to file their appeals before Tribunal, Chandigarh and if the appeals are filed within one month, the Tribunal shall preferably within next six months decide the appeals in accordance with law without going into the question of limitation: HC
- Petition disposed of : PUNJAB AND HARYANA HIGH COURT
2019-TIOL-2638-CESTAT-BANG
Trident Courier And Cargo Vs CCE, C & CE
Cus - The assessee had imported goods during the period from the beginning of their operations till October 2012 and cleared the same against Courier Bills of Entry in the name of various individuals - Thereafter, the investigation was conducted against the assessee and during investigation, statements of Shri P.S. Biju, Proprietor of assessee were recorded and after completion of investigation, a SCN was issued to assessee and after following the due process, the impugned order was passed confirming the demand - SCNs were issued to various courier agencies on the same allegation and this Tribunal in the case of RPS Global Courier Services & others has remanded the case back to the original authority for passing the fresh order - Further, in the case of M. Mohammed Reji, Prop. Of Arabian Couriers & anr., this Tribunal vide its Final Order dt. 12/02/2015 remanded the matter to the original authority for de novo adjudication - Since the issue involved in the present case is also same as involved in the earlier cases, this case also needs to be remanded back to the original authority for de novo adjudication - The ratio of the said case is applicable in this case and consequently the impugned order is set aside: CESTAT
- Matter remanded: BANGALORE CESTAT
2019-TIOL-2637-CESTAT-AHM
Panasonic Energy India Company Ltd Vs CC
Cus - The assessee had imported "Ore" and claim benefit of Notfn 4/2006-CE and Notfn 12/2012-CE for exemption from CVD - The Revenue sought to deny the benefit holding that the product imported by them is not "Ore" but "Concentrate" - The distinction between "ore" and "concentrate" has been discussed in numerous decisions - The Explanatory Notes available to HSN also shows that the distinction is largely based on the nature of processes carried out on the ores - It is fact that the goods were described as "ore" by foreign supplier and the assessee have simply followed the said description - Moreover, the entire duty demand was available as cenvat credit to the assessee themselves - There is no intention to evade payment of duty - The assessee is not contesting the issue on merit - The demand in so far as it relates to extended period is set aside - The corresponding interest also needs to be re-quantified - The redemption fine of Rs. 10 Lakhs appears excessive and the same is reduced to Rs. 10,000/- only - In view of lack of malafides, the penalty on assessee is set aside under Section 114(A) - The penalty on Sh. Sunil S. Shah and S.K. Khurana is set aside under Section 112(a) - The assessee have also undertaken not to seek refund of duty already paid as they have already claimed the cenvat credit of the same: CESTAT
- Appeal partly allowed: AHMEDABAD CESTAT | 
