SERVICE TAX

Coimbatore Anamallais Agencies Pvt Ltd Vs CST

ST - Appellant is engaged in the business of sale of light Motor vehicles/spares and also undertakes service/repair of LMV of TOYOTA brand at it authorised service station - during scrutiny of records, department observed that the appellant discharged service tax liability on labour charges alone and no service tax was paid on the portion of the material cost reimbursed to the appellant by the manufacturer - alleging that as per rule 5(1) of Valuation Rules, 2006, the cost of goods and materials supplied are to be considered as an integral part of gross value on which ST liability is required to be discharged, demand issued and confirmed along with interest and equal penalty - as appeal rejected by Commissioner(A), the appellant is before the CESTAT.

Held: In the appellant's own case, on identical set of facts for the earlier period, Tribunal has allowed the appeal vide order dated 13.12.2018 - 2019-TIOL-1206-CESTAT-MAD holding that cost of material reimbursed by manufacturer cannot be subject to levy of service tax u/s 67 of FA, 1994 in view of the apex court decision in Intercontinental Consultants and Technocrafts P Ltd. - 2018-TIOL-76-SC-ST - as the issue arising out of the present dispute is no more open for debate in terms of the apex court judgment, no merits in the impugned order - appeal allowed by setting aside the order of Commissioner(A): CESTAT [para 5, 6]

- Appeal allowed: CHENNAI CESTAT

2019-TIOL-2939-CESTAT-AHM

N J Devani Builders Pvt Ltd Vs CST

ST - The assessee was registered under category of construction service and no dispute was raised by them regarding classification of service - Even though the category of "Works Contract" came into effect from 01.06.2007, they applied for said category only in January, 2008 - They never contested their classification of services before authorities - They had paid service tax on GTA Services under reverse charge mechanism and also availed credit of same - The assessee's first contention that the credit was of service tax on GTA pertained to the period till Feb'2006 and the service tax was paid on "Construction Services" in March' 2006 hence both are not relatable is not correct - Whatever services of GTA were availed by them was in respect of Construction service and the exemption on value which is in excess of 33% was availed by them continuously - Obviously the tax on construction services paid by them was in respect of continuous service of Construction activity - The construction activity was not initiated and completed in March' 2006, therefore the GTA services before March'06 has clear linkage for the service tax paid on construction service in March '06 - The assessee did not contest the levy of service tax on construction services, but classified their services into "Works Contract" Service only w.e.f. Jan'2008 - Hence, prior to such period the services would remain classified under "Construction Services" - The order of Mumbai Tribunal in assessee's case will have no bearing on the present issue as the assessee has separate registration at Mumbai and is not related to present controversy - However, in case of reversal of the credit utilised by them they are eligible for benefit of exemption Notification - Matter is remanded to the adjudicating authority to ensure that the credit is reversed along with interest within four weeks subject to which the assessee shall be eligible for benefit of impugned subject notification: CESTAT

- Matter remanded: AHMEDABAD CESTAT

2019-TIOL-2938-CESTAT-KOL

Raj Coal Carriers Pvt Ltd Vs CCE, C & ST

ST - The assessee was awarded two contracts by M/s. Mahanadi Coalfields Ltd. for loading and transportation of coal from Quarry Beds/Coal Handling Plants/Surface Stock to different destinations within the mines - Under the contract, separate rates are provided for transportation and loading - Service Tax demanded for the period of 16-08-2002 to 31-03-2006 under the category of "Cargo Handling Services" - Accordingly, a SCN was issued demanding Service Tax along with interest and proposing penalty - The conclusions of Commissioner (A) that under the contract, assessee is to transport coal by Tipper for short distances within the mines including loading, hence, it is taxable under "Cargo Handling Service", cannot be countenanced - Under Sec. 65(105)(zzp) read with Sec. 65(50a) and Sec. 65(50b) of FA, 1994, the requirement of provisioning of taxable service to any person by a "GTA" in relation to transport of goods by road in a goods carriage stands satisfied in this case and transport for long or short distances is not the relevant criterion for classification under the category of "Goods Transport Services" - Case of assessee is covered by decision in Sainik Mining Allied Services Ltd. - 2008-TIOL-77-CESTAT-KOL and Final Order Dated 11-10-2018 in Sainik Mining Allied Services Ltd. wherein loading and transportation of coal within the mines was held to be not taxable under category of "Cargo Handling Services" - The Impugned Order is set aside: CESTAT

- Appeal allowed: KOLKATA CESTAT

2019-TIOL-2937-CESTAT-MUM

Sai Video Broadcast Pvt Ltd Vs CCGST

ST - The assessee is engaged in providing video tape production service - As a result of audit, it was found that the assessee deposited service tax by mentioning the wrong Service Tax Registration No. - The assessee submitted that it was an inadvertent mistake and accordingly prayed for rectifying the mistake - There is no doubt about the fact that the assessee had deposited the service tax - However, instead of depositing the same in their own Registration No., the same was, by mistake, deposited in the Registration No. of one of the Directors, obtained by him for his own Proprietary Concern - Admittedly, the said Director has given No Objection Certificate and as such the deposit made by assessee has to be treated as having been made in his own Registration No. - In the absence of any dispute to the fact of payment of service tax, further confirmation of the same by the impugned order of Commissioner (A) cannot be appreciated - Accordingly, the impugned order is set aside: CESTAT

- Appeal allowed: MUMBAI CESTAT

CENTRAL EXCISE

2019-TIOL-2936-CESTAT-BANG

Ghodawat Foods International Pvt Ltd Vs CCT & CE

CX - The assessee-company manufactures Scented Tobacco/Zarda falling under Chapter heading 24 of CETA, 1985 - It approached the jurisdictional Asst Commr. of Central Excise with request letter for transfer of Cenvat credit lying unutilized in the account of one of the assessee's unit at Manakpur - Such credit pertained to input item of Bulk Zarda purchased from one M/s Godavat Industries Pvt Ltd - Such input was used to manufacture Scented Zarda and duty was paid under the Chewing Tobacco and Unmanufactured Tobacco Packing Machine Rules, 2010 - The assessee claimed to have shifted the unit at Manakpur to Hubli and at the time of such transfer, they had credit balance of Cenvat credit and sought to transfer the same to the Hubli unit - The Asst. Commr. of Central Excise allowed transfer of credit, as per Rule 10 of CCR 2004 - Upon re-examining the entire issue, it was noted that availment & utilization of Cenvat credit by the assessee was governed by the provisions of the Chewing Tobacco Rules, 2005 and not CCR 2004 - Hence it was claimed that there was mistake apparent on records in permitting transfer of such credit - The assessee was informed of withdrawal of permission for transfer of credit - However, the assessee claimed that the credit in question had already been utilized for payment of Excise duty - Since, the assessee insisted for issuing speaking order, an SCN was issued proposing to withdraw the erroneous permission already granted - Such SCN culminated into an O-i-O, withdrawing permission granted for transfer of credit - Such findings were sustained by the Commr.(A) - Hence the present appeal.

Held - The assessee undisputedly claimed credit on duty paid bulk Zarda at its erstwhile factory at Manakpur - It also had a balance of unutilized credit at its factory at Manakpur and it emerged that the factory at Manakpur was shifted - As per Rule 16 of the Chewing Tobacco Rules, it is provided that credit can be availed and utilized by the manufacturer and there is no mention of a nut in the Rules as against the specific mention of a unit in CCR - The scheme contemplated under the Chewing Tobacco Rules is self contained and there is no bar under the Rules to transfer the credit from one unit of the manufacturer to the other unit - Though the permission was granted by the Asst Commr. after examining the entire records and the documents u/r 10 of CCR, such permission u/r 10 is not required and the assessee is entitled to transfer the credit from one unit to another unit upon informing the Department - In the present case, permission was validly given after examining the entire records, whereupon the assessee took the credit and utilized the same for payment of duty for the same month - Through a subsequent letter, the Department cannot withdraw such permission granted earlier - If at all the Revenue chose to withdraw such permission, it could not be done with retrospective effect - Hence the O-i-A is bad in law and cannot be sustained: CESTAT

- Assessee's appeal allowed: BANGALORE CESTAT

2019-TIOL-2935-CESTAT-DEL

Getex Automobiles Vs CCE

CX - The assessee was engaged in packing and labelling of spare parts of two wheeler automobiles in their own brand name GETEX - For the purpose, they were purchasing two wheeler spare parts from the various buyers in bulk condition and then were packing the same in their own brand name - It is on record that during the search operations various admissible parts of brand Hero Honda, Suzuki, Yamaha and TVS were also found - The finished goods worth Rs.46,89,247/- of GETEX brand and Rs.30,033/- of brands owned by others were seized - There is apparent admission that the brand names of the Companies like Hero Honda, TVS and Yamaha were without any permission/ agreement and the same was known to the assessee to be an illegal activity - This admission of the proprietor of assessee stands duly corroborated from the statement of assessee's accountant cum computer operator - Hence, the subsequent contention of assessee about not manufacturing the goods of other brand is not acceptable - There is no retraction of aforementioned admission/confession on the part of the proprietor of assessee, Shri Sanjay Jain - Thus, the same has rightly been considered by adjudicating authority as the basis of confirming the demand for manufacture of goods of other brands and also for denying the entitlement to SSI exemption Notification to the assessee - Though the assessee has impressed upon the majority decision in case of Radha Madhav Corporation Ltd . wherein it was held that statements alone cannot be made the basis of upholding the findings of clandestine removal without there being any corroborative evidence but there is a sufficient corroborative evidence to the admission of assessee not only in the form of the record recovered but also in the light of the fact that goods of other brands were seized from the premises of assessee - Department has committed no error while confirming the demand - The admissibility of statements admitting the noticed guilt also stands supported from another decision of Supreme Court in the case of M/s. Kalvert Foods India Pvt. Ltd. - 2011-TIOL-76-SC-CX wherein it was held that if the statements of concerned person are out of their volition and there is no allegation of threat, force, cohesion, duress or pressure, such statements can be accepted as a valid piece of evidence - As such, the confirmation of duty demand based on voluntary statements of the person responsible for the business of assessee is definitely sustainable in law - The Department was justified while invoking the extended period of limitation - The act of non registration with the malafide intention as mentioned stands corroborated from the fact that immediately after the investigation in this matter the assessee got himself registered on 23.09.2010 and had voluntarily deposited an amount of Rs.5Lakhs - Accordingly, no infirmity found in the Order while upholding the SCN as issued for the period beyond the normal period of limitation and also for ordering appropriation of this amount qua the demand confirmed - No infirmity found in the Order of Commissioner (A) - The Order under challenge is, therefore, upheld: CESTAT

- Appeal dismissed: DELHI CESTAT

2019-TIOL-2934-CESTAT-AHM

Shree Digvijay Cement Company Vs CCE & ST

CX - The assessee-company manufactures Cement & Clinker and the latter is captively used in manufacturing the former - The assessee availed exemption as per Notfn No 67/95-CE in respect of the Clinker captively consumed in manufacturing the Cement - A part of the Cement manufactured was cleared with duty exemption for earthquake relief under Notfn No 02/2001-CE and Notfn No 16/2001-CE - The Revenue issued SCN for the relevant period, raising duty demand on the part of the Clinker used in the portion of Cement which was cleared with duty exemption for earthquake relief - The assessee did not maintain separate accounts for fuel as per Rule 6(2) of CCR which requires maintenance of separate accounts except for inputs intended to be used as fuel - The Revenue issued another SCN for the relevant period, raising duty demand on that part of the Clinker which was used in course of Cement cleared at exempted rate - The SCN also sought to deny credit on that portion of the fuel as was used in manufacture of exempted cement - A third SCN was issued proposing duty demand on that part of the clinker which was used in the portion of cement cleared duty free for earthquake relief - This SCN also sought to deny credit on the portion of fuel used in the manufacture of exempted Cement - On adjudication, the proposals in the SCN were confirmed and equivalent penalties were imposed - On appeal, the Commr.(A) upheld the findings of the O-i-O, though the penalties equal to the Cenvat credit on the fuel were set aside - Hence the present appeal.

Held - The entire controversy arose as the assessee availed credit in respect of inputs such as fuel - The Revenue opined that the assessee did not discharge its obligation as per Rule 6 and so was ineligible for exemption as per Notfn No 02/2001-CE and Notfn No 16/2001-CE - Reading of the Notfn No 02/2001-CE clarifies that the goods supplied as donation for earthquake relief are exempted from duty - In the assessee's case, even though the clinker was not supplied but though the cement supplied contains clinker, therefore, it is clear that clinker is deemed to have been supplied for earthquake relief - Hence the assessee is entitled for exemption under Notfn No 02/2001-CE - In such case, even if the assessee is not entitled for Notfn No 67/95-CE, the exemption otherwise is available under Notfn No 02/2001-CE - For the subsequent period, in respect of the assessee's claim for benefit under Notfn No 16/2001-CE, the only lapse on the assessee's part is that the assessee availed and retained Cenvat credit on fuel - The Revenue claimed that though the assessee discharged obligation u/r 6(2) of CCR 2004, but by availing Cenvat credit on fuel, the obligation u/r 6(1) of CCR is not discharged - The assessee's claimed that to be prepared to reverse the credit on fuel and owing to which, it would be entitled for Notfn No 16/2001-CE - If the assessee reverses full credit attributable to goods cleared under Notfn No 16/2001-CE, it is is eligible for exemption - Hence the assessee and the adjudicating authority are directed to ensure reversal of credit on fuel attributed to the goods cleared under exemption Notfn No 02/2001-CE and 16/2001-CE - Hence O-i-A is quashed & the appeal is allowed by way of remand: CESTAT

- Case remanded: AHMEDABAD CESTAT

CUSTOMS

2019-TIOL-458-SC-CUS

UoI Vs Yasho Industries Ltd

Cus - The High Court held that "Pre-import condition" inserted by Notf. 79/2017-Cus renders Advance Authorisation scheme nugatory, hence is ultra vires, considering that what was given with one hand was being taken away on the other - It also held that while the Revenue had amended the exemption notification by deleting condition (xii), the notification No 01/2019-Cus had not been given retrospective effect - It was observed that when the FTP has a separate paragraph 4.13 which provides for "pre-import condition" in respect of specific inputs, there is no rationale for placing a condition of pre-import qua any inputs than those specified under Para 4.13.

Held - Delay condoned - Notice be issued - Counsel accepts notice and meanwhile operation of the High Court's judgment is stayed - Reply be filed within four weeks' time - Matter be tagged with SLP (C) No 23356/2019 - Matter be listed next month: SC

- Notice issued: SUPREME COURT OF INDIA

2019-TIOL-2933-CESTAT-AHM

Deep Exports Vs CC

Cus - During the relevant period, the assessee-company claimed refund - However, the same was denied by the jurisdictional Asst Commr on grounds that the requisite challans had not been produced - On appeal, such order rejecting the refund claim was sustained - Hence the present appeal.

Held - From a perusal of certain portions of the O-i-O, there is no doubt that the amount in question had been deposited by the assessee during the investigation and the payment had been received by the Revenue - While the Revenue claimed that the assessee failed to produce duty paid documents such as challans before it, it is seen that the payment was received by the DRI through bankers cheque and the same was deposited in the bank and the amount had been realized - No challan was taken by the assessee, owing to which there is no question of the assessee producing any challan - So far as the payment made by the assessee is concerned, there is no dispute that the same is made correctly - Hence the assessee is entitled for refund and the same be processed as per law: CESTAT

- Assessee's appeal allowed: AHMEDABAD CESTAT