SERVICE TAX

2019-TIOL-2666-CESTAT-DEL

JET Lite India Ltd Vs CST

ST - The assessee is inter-alia engaged in providing service of 'transportation of passengers by air' - For providing said output service, the assessee inter-alia receives services from Computer Reservation System (CRS), also known as Global Distribution Companies (GDS) which provide Online Computer System, which enables exchange of comprehensive information (on real time basis) between the airline/ assessee and the Air Travel Agents - Issue arises is, whether the service received by Airlines/ assessee are covered under tax entry 'Online database access and retrieval service' under Section 65(75) read with Section 65 (105) (zh) of FA, 1994 - The assessee submits that the issue in the present case with respect to classification of services received from CRS Companies by assessee has been settled by Supreme Court in case of Jet Airways (India) Ltd. wherein the appeal filed by assessee was dismissed - The CESTAT, Mumbai in the Jet Airways Order held in favour of assessee on the ground of revenue neutrality and limitation, and accordingly, set aside the entire demand alonwith interest and penalty - However, on merits, this Tribunal held that the activities of CRS Companies are correctly classifiable under the taxing entry of OLIDAR Services - Accordingly, on merits the classification of services received by assessee from the CRS Companies is settled to be OLIDAR Services - Admittedly the impugned O-I-O arose from the subsequent SCN dated 23.10.2013 and admittedly an earlier SCN was issued dated 22.04.2009 - Thus, the Revenue was aware of the facts of the assessee case - Thus, there is no justification for invocation of extended period as held by Supreme Court in case of Nizam Sugar Factory 2006-TIOL-56-SC-CX - Secondly, the issue is wholly Revenue neutral as the said input service was directly relatable to rendering of output service by assessee - It is admitted fact that the assessee has discharged service liability on output service - Thus, there is no case of any constumuous conduct or malafide on the part of assessee - Assessee has filed their ST-3 returns from time to time and have maintained proper record of their transaction in the ordinary course of business - Thus, assessee has made out the case both on the question of Revenue neutrality and also as to non-applicability of extended period of limitation - Accordingly, the impugned order is set aside: CESTAT

- Appeal allowed: DELHI CESTAT

CGST & CE Vs Ascendas It Sez Chennai Pvt Ltd

ST - Appeal is filed by the department against the order passed by Commissioner (Appeals), who set aside the findings of the original authority with regard to the merits of the case but had upheld the rejection of refund claim on the ground of time bar alone - Revenue in appeal.

Held: Vide impugned order, it was held that the issue with regard to mis-description of services in the invoices cannot sustain - in the final order dated 1.11.2018 - 2019-TIOL-686-CESTAT-MAD, the Tribunal, in the appeal filed by the respondent herein, had considered the issue of mis-description of services as well as the issue of time bar and both the issues were held in favour of the respondent - the very same issue is challenged in the present appeal - the issue having attained finality, it is not necessary to go into any discussion - the appeal filed by the department is, therefore, dismissed : CESTAT [para 6, 7]

- Appeal dismissed: CHENNAI CESTAT

CENTRAL EXCISE

2019-TIOL-2159-HC-MAD-CX

CX - The petitioner had claimed abatement towards the sale value of medicaments, that had been rejected by order dated 27.09.2003 - The 1st appellate authority had set aside the O-I-O, pursuant to which the petitioner sought refund - Though the refund was sanctioned, the assessing authority transferred the amount to Consumer Welfare Fund on the ground that the petitioner had unjustly enriched itself - An appeal was filed before 1st appellate authority who rejected the same by order dated 23.01.2007 on the ground of insufficiency of evidence - In 2nd appeal, the Tribunal by order dated 15.01.2010 remanded the matter to the original authority for decision afresh - In the light of the admitted position that the order of the CESTAT has attained finality, nothing further remains in the matter except to issue a mandamus directing the 3rd respondent to refund the amount of Rs.29,860/- along with interest in terms of Section 11B of Central Excise Act within a period of four weeks: HC

-Writ petition allowed : MADRAS HIGH COURT

2019-TIOL-2664-CESTAT-BANG

Wadpack Pvt Ltd Vs CCT

CX - The assessee-company manufactures corrugated boxes and plates & availed Cenvat credit on input goods & services - Upon audit, it was noted that credit had been availed of service tax paid on security charges, rent, labor contract related to its dealer's premises as well as their unregistered godown - The credit had been availed based on ISD invoices issued by the assessee's head office - The Revenue alleged that the assessee wrongly availed credit during the relevant period & that the assessee violated the provisions of Rule 7(c) of CCR 2004 wherein the ISD distributed all credit only to the manufacturing unit whereas Rule 7(c) prescibes that credit of Service Tax attributable to a service used wholly by a unit shall be distributed only to that unit - Two SCNs were issued proposing duty demand with interest & proposing to appropriate amount already paid & also proposing penalties u/r 15(1) & 15(2) of CCR 2004 by invoking extended period limitation alleging suppression of facts with intent to evade duty - On adjudication, such demands with interest & penalty were confirmed - Such findings were upheld by the Commr.(A), who also reduced the quantum of the penalty - Hence the present appeal.

Held - The head office is situated in the manufacturing facility & is registered as ISD - It distributed credit of service tax on input services relating to security service, rent, labour contract services relating to dealer premises and unregistered godown and the said distribution of credit done solely to the manufacturing unit on ISD invoices - Besides, the Commr.(A) rightly held that the assessee violated Rule 7(c) of 2004 - The Commr.(A) rightly held that credit on input services pertaining to dealer premises & unregistered premises cannot be said to be in relation to manufacture of final product & Cenvat credit is not available to the assessee as per Rule 2(l) of CCR 2004 - The Commr.(A) rightly reduced the penalty since no suppression can be alleged - Hence the O-i-A in challenge does not merit any interference with: CESTAT

- Assessee's appeal dismissed: BANGALORE CESTAT

CC & CE Vs Lal Mahal Ltd

CX -Appellant,a manufacturer of PP woven sacks, availed cenvat credit of Special CVD (SAD) debited against the import licence under Target Plus Scheme in terms of notification 32/2005-Cus dated 8.4.2005 - SCN issued proposing denial of the said cenvat credit availed by them being 4% of Additional Duty of Customs - proposal confirmed - on appeal, Commissioner (A) allowed the appeal - revenue before CESTAT.

Held: Issue as to whether the appellant was entitled to avail cenvat credit merely on the basis of debit in the pass book is no more res integra - Larger Bench of the Tribunal in the case of Essar Steel Ltd. [ 2004-TIOL-807-CESTAT-DEL-LB] has already held that mere debit in the pass book is not sufficient for the eligibility of modvat credit - following the adjudications in the cases of Essar Steel Ltd., Mohan Breweries & Distilleries Ltd. [ 2015-TIOL-2231-HC-MAD-CX] and Precision Pipes and Profiles Co. Ltd. [2014 (302) ELT 184 (All.)], it is held that Commissioner (Appeals) had taken the wrong view while permitting the availment of cenvat credit on the basis of mere entry in DEPB book - the order is, therefore, held unsustainable and is accordingly set aside - the appeal stands allowed : CESTAT [para5, 7, 8]

- Appeal of Revenue allowed: HYDERABAD CESTAT

Ultratech Cements Ltd Vs CCT

CX - Whether the appellant is entitled to the cenvat credit on Goods Transport Agency Services availed for transport of cement from their factory to the buyer's premises after the amendment to rule 2(l) of Cenvat Credit Rules, 2004 w.e.f. 1.3.2008 when the credit has been restricted to the services availed for transportation up to the place of removal.

HELD: Facts of the case in the present appeal being identical to the case of Ultratech Cement [2018-TIOL-42-SC-CX], inasmuch as the credit being claimed is on the Goods Transport Agency services availed to transport cement from the factory gate to the buyer's premises, on the ground that the sale being on FOR basis, the place of removal shifts to the buyer's premises and, therefore, cenvat credit is admissible, the Bench is legally bound to follow the ratio of the judgment of the Apex Court which held against the assessee that no cenvat credit is admissible - this position was also reviewed by the Apex Court and reaffirmed in the review petition - in view of the above, the appeal is rejected : CESTAT [para13, 14]

- Appeal rejected: HYDERABAD CESTAT

CUSTOMS

2019-TIOL-2160-HC-MAD-CUS

Cus - The documents relied upon by adjudicating authority in SCN have been furnished to petitioner in January 2008 - Thereafter, a notice of hearing has been issued fixing the adjudication/personal hearing on 10.06.2008 - The counsel engaged in the matter filed a request dated 05.06.2008, for adjournment, on the ground that the senior counsel engaged in the matter was proceeding abroad on vacation - The petitioner has also filed a communication dated 10.06.2008, bringing to the notice of Assessing Officer that the venue of hearing fixed on 10.06.2008, was changed from one office to another and intimation in this regard dated 04.06.2008, was itself received by the petitioner only on the date of hearing - The counter filed by the respondent only states that, in the opinion of the respondent, an opportunity for either cross-examination, as sought for by the assessee, or for a hearing, is not mandatory - The court is unable to accept this contention, as a personal hearing during the conduct of adjudication, particularly when specifically sought for, is in line with the principles of natural justice, and ought to have been granted - There has been a breach of principle of natural justice in the matter and thus, have no hesitation in setting aside the impugned order - The petitioner will appear before the 4th respondent/Assessing Officer on 18.09.2019 at 10.30 A.M. along with all documents in support of its stand: HC

-Writ petition allowed : MADRAS HIGH COURT

2019-TIOL-2661-CESTAT-HYD

Hindustan Petroleum Corporation Ltd Vs CC & ST

Cus- Appellant filed B/E dated 18.1.2017 for clearance of goods under CTH 38159000 and paid appropriate amount of duty - thereafter, they realized that they were entitled to the benefit of exemption notification 12/2012-Cus whereby the BCD is reduced to 7.5% - appellant filed refund application within the period of limitation - refund sanctioned - on appeal by Revenue, on the ground that once an order of assessment is issued and is not challenged, no refund can be claimed because it would amount to modifying the order of assessment by the officer sanctioning the refund,Commissioner (A) set aside the order of the lower authority - appeal to CESTAT.

HELD: Issue has been settled by the High Court of Delhi in the case of  Micro Max Informatics Ltd. [2016 (375) ELT 446 - Del]   and High Court of Madras in the case of  Micro Max Informatics Ltd. [2017-TIOL-1302-HC-MAD-CUS ] - t he present case is also pertaining to post 2011 and the ratio of these judgments applies -even if the judgments of Priya Blue Industries Ltd. [2004-TIOL-78-SC-CUS] and Flock India Pvt. Ltd. [2002-TIOL-208-SC-CX ] are considered, they only require an order of assessment to be challenged if it exists, and payment was done in pursuance of it and a refund is claimed -in this case, there is no order of assessment and, therefore, the application for refund is in consonance with these case laws - in view of the above, it is found that the order of the First Appellate Authority is in violation of the ratio laid down by the High Court of Madras and the High Court of Delhi in respect of the period post 2011 and was passed completely ignoring the amendments to section 17 and 27 of the Customs Act by Finance Act, 2011 and, therefore, needs to be set aside - the impugned order is set aside and the appeal is allowed : CESTAT [para8, 9]

- Appeal allowed: HYDERABAD CESTAT

Manipal Health Systems Pvt Ltd Vs CC

Cus - Assessee have imported 5 sets of Aespire, 2 anesthesia workstation and 6 sets of Aestiva, falling under CTH 90192090 and claimed the benefit of exemption under Notfn 21/02-Cus as amended - The said exemption is granted to ventilators used with anesthesia equipment - The Department contended that the impugned goods were anesthesia workstation and not ventilators as claimed by assessee and hence the benefit of the Notification was not available and the assessee is required to pay a differential duty along with interest and also that the impugned goods needs to be classified under CTH 90189041 - We find that the technical opinion given by the experts in the field indicated that the impugned machines that the ventilators are inbuilt in the anesthesia station and can provide artificial ventilation - When the Notification provides exemption to ventilators, the same shall be applicable in spite of the fact that whether or not they have additional features - It is not mentioned in the Notification that exemption is available to only ventilators - Such a constrictive interpretation would defeat the purpose of the exemption given in the Notification - As it is found in the case of Datex Ohmeda India Pvt. Ltd. 2010-TIOL-146-CESTAT-BANG, that technological advancement should not become an impediment to the availment of benefit as held by Supreme Court in case of Lekhraj Jessumal & Sons - By following the ratio of this Bench decision, appeal of assessee is allowed: CESTAT

- Appeal allowed: BANGALORE CESTAT