SERVICE TAX

2019-TIOL-3416-CESTAT-DEL

Aditya Enterprises Vs CC & CE

ST - The issues arises for consideration is; whether the assessee is liable to pay service tax under classification "supply of manpower" and whether the SCN is bad for invocation of extended period of limitation - From the perusal of copy of agreement and copy of the bills on record, it is found that the assessee has entered into an agreement for execution of various works for the principal - The payment for such work is based on the volume of work executed and not according to the number of workman deployed by assessee - Such facts have been recorded in impugned O-I-O wherein the Commissioner has taken notice of agreement and the rates for various works e.g. lifting of wood from yard and supply to R.G.P. Chipper, is at the rate of Rs.20 per M.T. - Similarly, for other work also like debarking of stacks of green wood, splitting of pulp wood, stacking of UPFC logs of all sizes and stacking of bamboo of all sizes, etc. have been provided P.M.T. basis - These facts are also confirmed from the bills raised by assessee for the relevant period, which are on the basis of quantum of work executed and not based on the number of workman deployed or allegedly supplied - The Adjudicating Authority has misconstrued the contract between the parties and has heavily relied on the payment of ESI and PF by the principal, in respect of workmen deployed by assessee - Under the relevant Labour Laws being the Employees Provident Fund Act, 1952 read with the Scheme and the Employees State Insurance Act, 1948, the liability for workers employed in a factory towards payment of P.F. and ESI contribution is on the principal employer ultimately - The principal-employer is the owner or occupier of the factory - Thus, the principal has discharged their obligation under provisions of ESI Act and EPF Act - The same does not lead to the inevitable conclusion that the assessee has supplied labourers but has entered into colourable contracts to avoid the liability of service tax - Accordingly, the SCN is not maintainable as the same is based on the presumption, having no sanctity of law - Further, no liability can be fastened on assessee for the same work, done in the past only for the reason that in the present or future point of time, the assessee under compulsion by the principal, started paying service tax - There is no case of any contumacious conduct, suppression or falsification of records on the part of assessee - Further, whatever service tax, the assessee would have paid was available to the principal as the cenvat credit, as they have discharged central excise liability for their manufactured goods - paper/paper pulp - Thus, extended period is not invokable: CESTAT

- Appeal allowed :DELHI CESTAT

2019-TIOL-3415-CESTAT-HYD

Aurobindo Pharma Ltd Vs CCT

ST - The assessee-company is registered as manufacturers of pharmaceutical products - It has 12 units, one each at Pondicherry, Tamil Nadu and the rest in Andhra Pradesh - It also has two R&D units at Hyderabad - During audit of the assessee's accounts, it was noted that the assessee availed input service credit on various services like professional and technical know-how, legal consultancy, security and business support services, which were availed in their two R&D units and distributed the credit to various other units in the capacity of Input Service Distributor - The Revenue opined that R&D activities were not integrally connected to the manufacture process of finished products - The Revenue opined that no output services were provided nor any excisable goods were produced in the R&D units - SCN was issued alleging that no output services were provided and that no goods were produced in the R&D units - Demands for interest were also raised and penalty was also imposed - On adjudication, the demands, interest and penalty was confirmed.

Held - The issue is whether the assessee is eligible for credit on the input services availed in the R&D units of the assessee and distributed by the Head Office - Such issue was discussed by the Tribunal in Jubilant Life Sciences Ltd as upheld by the Apex Court - Therein, it was held that the R&D activities help in improving the products and so are integrally connected with the manufacture process carried on by the assessee - In light of such findings, the duty demands do not merit being sustained: CESTAT

- Assessee's appeals allowed : HYDERABAD CESTAT

 

 

 

 

CENTRAL EXCISE

2019-TIOL-3414-CESTAT-ALL

Bhawani Print And Laminates Pvt Ltd Vs CCE

CX - The assessee is a Director of Shri Bhawani Print & Laminates Pvt. Ltd., engaged in manufacture of plastic printed laminated rolls/pouches/bags which are dutiable products - There was a search by Revenue and stocktaking was done which resulted in detection of some shortage in stock of finished goods/raw materials - Further there was some excess raw material found - Further the statement of assessee was also recorded wherein he stated after going through the stock that it appears that some goods have been cleared without payment of duty due to negligence of staff - Based on such facts SCN was issued proposing personal penalty under Rule 26 on assessee - It was also contended that there is no clandestine removal on the part of assessee and the company, and the whole case of Revenue is based on presumption - It was also contended that clandestine removal is a serious charge which is required to prove beyond doubt on the basis of affirmative evidence and demands be based on cogent evidences and not merely on presumptions and inferences - On the basis of some shortage/excess found in the stock there, on presumption of clandestine activity, have resulted in order of confiscation and demand along with penalty on the company - The demand on the company is based on presumptions of clandestine removal without there being any instance of clandestine activity detected and/or found - It is further held that demand based on apparent shortage and excess of goods does not lead to the inevitable conclusion of clandestine removal even though the assessee and its personnel have admitted the shortage and deposited the duty along with interest and penalty as applicable - The penalty on assessee under Rule 26 is set aside: CESTAT

- Appeal allowed : ALLAHABAD CESTAT

2019-TIOL-3413-CESTAT-AHM

Bakul Chemicals Pvt Ltd Vs CCE & ST

CX - This appeal has been filed by M/s Bakul Chemicals Pvt. Ltd. against confirmation of demand of Central Excise Duty and imposition of fine and penalties - Earlier Tribunal in the year 1995 had remanded the matter vide order dated 01.06.1995 to the Commissioner for the purpose of cross examination and considering all the evidences afresh for de novo adjudication - Consequently, hearing notices were issued on 16.11.1995 and personal hearing was affixed on 20.111995 - Since no witness was present, again hearing was fixed on 31/10/1996 - On that date again, Revenue failed to produce the witness Shri J.P. Shah as the summons could not be delivered - Thereafter, Revenue kept the case pending to await the decision of Jolly Electronics, in which the appeal of the Revenue was pending before Tribunal and since the issue of the case was similar in the case of Jolly Electricals, consequently, the proceeding in the instant case was kept in abeyance after 31/01/1996 - Thereafter, in the year 2010, the proceedings were re-initiated as the matter of M/s Jolly Electricals was remanded in the year 2007 - The Commissioner of Central Excise, Vadodara, thereafter, decided the matter in the case of M/s Jolly Electricals vide order dated 06.02.2009 and thereafter the present matter was taken up - And the O-I-O was in the present case was passed in the remand proceedings in the year 2010, after a lapse of 13 to 14 years after the matter was remanded by the Tribunal - No evidence from the buyer of transport of alleged clandestine clearance have been produced - In these circumstances, no case of clandestine clearance can be made against the assessee - Moreover, it is seen that regarding clubbing of two out of 3 units namely M/s. Bakul Chemicals Pvt. Ltd. and M/s. Pocono Chemicals was examined by Revenue in different set of proceedings and it was held that the two are distinct and different separate units - It is apparent that the Revenue was fairly aware of the status of the two units and in these circumstances invocation of extended period of limitation is totally out of place and without merit: CESTAT

- Appeal allowed : AHMEDABAD CESTAT

 

 

 

 

CUSTOMS

2019-TIOL-2660-HC-DEL-CUS

CC Vs Mahender Pal Singh

Cus - Whether the Tribunal was justified and correct in law in passing an order of remand to the original adjudicating authority to first decide the issue of jurisdiction, after decision of Supreme court in Civil Appeal preferred against the decision of Delhi High court in Mangli Impex Limited - 2016-TIOL-877-HC-DEL-CUS - Following the decision in Vipul Overseas Pvt. Ltd. - 2017-TIOL-2478-HC-DEL-CUS , the impugned order is hereby set aside and the matter is remitted to the Tribunal, which shall proceed to examine and decide the merits of the appeal - The assessee's right to contend that the SCN issued in this case was legally untenable, in view of the decision of this Court in Mangli Impex , are kept intact - The Court, at the same time, like in the other cases, expresses no opinion on the merits or procedure that the Tribunal should adopt and follow: HC

-Appeal partly allowed : DELHI HIGH COURT