SERVICE TAX

2019-TIOL-2856-CESTAT-MAD

Nippon Express India Pvt Ltd Vs CST

ST - The assessee have filed two applications seeking rectification of mistake in respect of Final Order in - 2019-TIOL-1655-CESTAT-MAD - Assessee's appeals had emanated against the adjudicating authority's confirmation of service tax demands on CHA services in respect of reimbursable expenses relating to EDI charges, Bank commission and Loading and Unloading charges and demand of Rs.9,45,841/- on GTA services - Against the same O-I-O, the Revenue had also filed Appeals against the dropping of demand by the adjudicating authority to the extent of Rs.1,60,68,619/- on reimbursable expenses - With respect to assessee's appeals, in respect of confirmation of service tax demand on GTA services claimed to be used for transportation of goods to SEZ units, amounting to Rs.9,45,841/- vide impugned Final Order, the Tribunal had ordered remand of the issue back to the file of the adjudicating authority "to pass a denovo adjudication order, after offering reasonable opportunity to the assessee and after considering all such supporting documents placed/to be placed by the assessee - At the same time, with regard to Department's appeals against the dropping of demand by the adjudicating authority in respect of reimbursable expenses, the Tribunal relied upon the judgment of Apex Court in Intercontinental Consultants and Technocrafts Pvt. Ltd. - 2018-TIOL-76-SC-ST - The Tribunal agreed that the demand in respect of reimbursable expenses cannot sustain and allowed the assessee's appeals in that regard - In these circumstances, the Revenue's appeals should have been correctly dismissed and the assessee's appeals should have been partly allowed in respect of service tax demand of Rs.98,238/- relating to reimbursable expenses and partly remanded in respect of service tax demand of Rs.9,45,841/- on GTA services - Viewed in this light, merit found in these ROM applications - There indeed is an inadvertent apparent error in para 8 (a) of Tribunal's Final Order that "Revenue's appeals No. ST/142-143/2011 are treated as allowed by way of remand": CESTAT

- ROM application allowed: CHENNAI CESTAT

2019-TIOL-2855-CESTAT-DEL

National Engineering Industries Ltd Vs CCE & C

ST - The issue in this appeal is whether the assessee is entitled to interest under Section 11 BB - Sofar as the amount of interest under Section 11 BB is concerned, assessee states that Section 11 BB provides for grant of interest at the notified rate when refund is not granted within three months, from the date of application by the Department and such interest on refund has to be calculated from the date immediately after expiry of three months from the date of receipt of such application, till the date of refund of such duty - The Explanation to Section 11 BB further provides that where the refund is made by appellate court, against an order of adjudicating authority under sub-Section 2 of Section 11B, the order of the appellate authority, as the case may be, shall be deemed to be an order passed under sub-section (2) of section 11 B for the purpose of this section - Thus, interest on refund has to be calculated from the expiry of three months from the date of original application - The issue of 'initial date' for calculation of interest, was considered by Supreme Court in case of Ranbaxy Laboratories Ltd - 2011-TIOL-105-SC-CX - Accordingly, in view of the law explained by Supreme Court, it appeared that even where the refund is granted by appellate authority, interest under Section 11 BB shall be payable w.e.f. expiry of three months from the date of original application - Accordingly, this ground is allowed in favour of assessee - The adjudicating Authority is directed to pay interest w.e.f. three months from the date of expiry of the date of original refund application, being 29.01.2007 - Sofar as the second ground is concerned as regard the adjustment made out of sanctioned refund, the adjudicated dues have not been stayed by appellate court before which the appeal is pending - Further, Adjudicating Authority is empowered under Section 11 of the Act read with Section 142 of Customs Act, to make adjustment of outstanding adjudicated dues, out of any refund payable to an assessee, where such adjudicated dues have not been stayed by appellate court - However, it is desirable on the part of the adjudicating authority granting refund, to give an opportunity of hearing, before making such adjustment: CESTAT

- Appeal partly allowed: DELHI CESTAT

2019-TIOL-2854-CESTAT-AHM

Nova Petrochemicals Ltd Vs CST

ST - Proceedings that were initiated against assessee, arising from their trading activities, culminated in order for recovery of tax liability of Rs. 2,76,10,000 on consideration of Rs. 372.76 lakhs received as 'commission agent' that had not been included for tax under section 65(105)(zb) of FA, 1994 - While the definition of 'commission agent' is of particular relevance to sale or purchase of goods on behalf of another person, the exemption is not restricted to specific enumeration therein but to every activity of a 'commission agent' - It would, therefore, appear, from a harmonious construction of definition and the exemption notification, including the eligibility, that any 'commission agent', who deals in goods is not required to pay tax on any of the activities enumerated under section 65(19) of FA, 1994 - The impugned order has sought to deny the entire consideration from the benefit of the tax exemption - The interpretation by adjudicating authority would have been acceptable had 'business auxiliary service' provided as a 'commission agent' was contained in the notification instead of 'by a commission agent' - This not being so, the alternative, as interpreted, is the only harmonious construction - The impugned order is set aside: CESTAT

- Appeal allowed: AHMEDABAD CESTAT

CENTRAL EXCISE

2019-TIOL-2853-CESTAT-MUM

NSL Sugars Pvt Ltd Vs CCE & ST

CX - The assessee had availed CENVAT Credit paid on service tax on various input services used in fabrication of structures in their factory premises - Alleging that such input services are not eligible to credit since the same fall under the exclusion clause after amendment to the definition of 'input service' prescribed at Rule 2(l) of CCR, 2004 after 01.04.2011, demand notice was issued to recover CENVAT Credit availed during the period September 2011 to June 2012 - Since the evidences could not be placed before Commissioner (A), no findings in this regard could be recorded, analysing the documents/evidence by him - As submitted by both sides, matter remanded to the Adjudicating authority to examine all the evidences now placed before this Tribunal in the de-novo adjudication: CESTAT

- Matter remanded: MUMBAI CESTAT

2019-TIOL-2852-CESTAT-AHM

Rishi Cast Pvt Ltd Vs CCE & ST

CX - The issue is being contested only on limitation - The assessee argued that they were not sure of classification and they had doubt which resulted in non-payment of duty - It is apparent that in 1999, in registration certificate itself, they had sought classification as CI Casting under heading 7325.10 and CI Sanitary Fittings under 7324 - The assessee classifying the product in the year 2000 under heading 7325.10 as apparent from Invoice No. 148 and subsequently they changed the classification - There was a conscious decision to change classification after 2000 - In invoice/ declaration prior to 01.04.2000, they have correctly classified and alter they have changed the classification - Thus, it is apparent that assessee had no bonafide belief otherwise - Consequently, the extended period of limitation has rightly been invoked - Since the assessee is contesting the issue only on limitation, appeal filed by assessee is rejected and the impugned order is upheld: CESTAT

- Appeal rejected: AHMEDABAD CESTAT

Mangalore Refinery And Petrochemicals Ltd Vs CCE & ST

CX - The assessee-company is engaged in manufacturing and clearance of Petroleum products - It refined crude oil and produced petrochemical products such as Motor Spirit (MS), HSD, Special Kerosene Oil & ATF - Among these, Superior Kerosene Oil (SKO) meant for ultimate sale through PSD is cleared to M/s HPCL without payment of duty under exemption notification - The assessee has exclusive tanks for the various products which are connected to five section lines - One M/s Petronet MHB Lts is responsible for transporting petroleum products adter clearance from refinery to the OMCs - After clearance from refinery, M/s Petronet transfers all products through a single pipeline in a particular sequence in batches - The liquid forming between batches is called transmix and essentially is an intermix of adjacent products of different viscosity moving through the same pipeline - SKO is used as intermediary to separate both products, namely HSD & MS - On receipt, HPCL takes MS-SKO interface and HSD-SKO interface into different takes and then sells them as MS or HSD, with interface of SKO being 0-2% of the total volume - The Revenue claimed that a portion of the SKO was not used for the intended clearance for previous system and as such, exemption under Notfn No 12/2012 is inapplicable, as per mandate of Circular No. 636/27/2002-CE dated 22.04.2002 - Also, duty on this portion of the SKO should be as per the higher of the duties payable for MS or HSD - Hence, four SCNs were issued & were confirmed on adjudication to impose penalties on the assessee u/r 26 of the CER 2002 along with personal penalty on officials - Hence the present appeals.

Held - Limitation - The assessee contended that extended period cannot be invoked as the entire activity is known to the Revenue - The Revenue alleged that the assessee chose not to pay the duty despite knowledge of the Circular & that ER-1 and other returns per se insufficient to gain knowledge of the assessee's activities so as to raise demand - It was contended that only after investigation, did the misuse of the notification come to light - The assessee claimed there to be no suppression or wilful mis-statement on its part so as to invoke extended limitation - The circular was issued in 2002 and the Revenue was free to make any enquires based upon it - The assessee claimed to be under bona fide belief of not being required to pay duty - Therefore, there are sufficient reasons to belief that there was some bona fide belief on part of the assessee - Hence extended limitation cannot be invoked - Besides, the assessee is a subsidiary of ONCG, which is a PSU & so no intent to evade duty can be alleged against a Govt undertaking - The assessee's contentions are acceptable - The SCN is based on a Circular issued in 2002 and was issued in 2014, which is 12 years later - Nothing prevented the Revenue from conducting requisite enquiries to issue the SCN in time - No evidence points towards suppression of facts with intent to evade paument of duty - Hence extended limitation is not invokable - Knowledge & belief that goods were not cleared on payment of duty, with intent to evade the same, cannot be attributed to an organization, more so which is a PSU - Hence penalty u/s 11AC or u/r 25 of CER 2002 is not imposable - The personal penalty must be quashed too as no evidence points to the official having been responsible for clearance goods without payment of duty: CESTAT

- Assessees' appeals allowed: BANGALORE CESTAT

CUSTOMS

2019-TIOL-2327-HC-DEL-CUS

CC Vs Kshitiz Impex Pvt Ltd

Cus - The Revenue's grievance is that the Tribunal remanded the issue for reconsideration by concerned Commissioner in view of previous judgment of this Court in Mangli Impex Limited - 2016-TIOL-877-HC-DEL-CUS - This was on account of a dichotomy of judicial opinion with respect to the competence and jurisdiction under the amended Section 28 of Customs Act, 1962, one view holding that no jurisdiction laid with DRI and the other view endorsed in a subsequent judgment of this Court in Vipul Overseas Pvt. Ltd. - 2017-TIOL-2478-HC-DEL-CUS - An identical approach is necessary in this case - Accordingly, following the order in Forech India, this appeal is allowed and the CESTAT would independently apply its mind to the question of jurisdiction and also decide the appeal on merits including the aspect of imposition of penalty if any: HC

- Appeal allowed: DELHI HIGH COURT

CC Vs Disha Overseas Pvt Ltd

Cus - The Revenue's grievance is that the Tribunal remanded the issue for reconsideration by concerned Commissioner in view of previous judgment of this Court in Mangli Impex Limited - 2016-TIOL-877-HC-DEL-CUS - This was on account of a dichotomy of judicial opinion with respect to the competence and jurisdiction under the amended Section 28 of Customs Act, 1962, one view holding that no jurisdiction laid with DRI and the other view endorsed in a subsequent judgment of this Court in Vipul Overseas Pvt. Ltd. - 2017-TIOL-2478-HC-DEL-CUS - An identical approach is necessary in this case - Accordingly, following the order in Forech India, this appeal is allowed and the CESTAT would independently apply its mind to the question of jurisdiction and also decide the appeal on merits including the aspect of imposition of penalty if any: HC

- Appeal allowed: DELHI HIGH COURT