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SERVICE TAX
2020-TIOL-335-HC-MAD-ST
CGST & CE Vs Hyundai Motor India Ltd
ST - Substantial question is whether the Tribunal was correct in allowing the appeal of the assessee in respect of the part of the refund claim relating to invoices for port services?
Held: The Tribunal has not discussed the relevant facts relating to grant of refund of the service tax to the Assessee with regard to service provided by M/s. Natvar Parikh Industries to the Assessee - the contention of the Revenue is that in the invoices of this Service Provider M/s. Natvar Parikh Industries, they only charged wharfage charges, which were directly payable to Chennai Port Trust and since no other services were specified for their services, which could be said to have any relation to the export of goods exported by the Assessee, the conditions in the Notification No.17/2008-ST dated 1.4.2008 were not satisfied and, therefore, the Tribunal has misapplied the decision of the Tribunal in the case of SRF Ltd. - 2015-TIOL-2241-CESTAT-DEL in which the issue was with regard to the registration of the service providers as Port Service Providers - therefore, prima facie, the Tribunal has not decided the real issue arising in the matter as is sought to be canvassed before this Court by the counsel for the Revenue - in these circumstances, this Court is left with no other option but to remand the case back to the Tribunal for deciding this issue between the parties once again - as was expected from the final fact finding body, the Tribunal ought to have discussed the relevant facts in the light of the order passed by the first appellate authority - but, this Court does not find any such discussion in Paragraph 5(i) of the order passed by the Tribunal and, therefore, this Court allows the present appeal of the Revenue, without answering the question of law at this stage, with a direction to the Tribunal to decide the said issue, after giving reasonable opportunity of hearing to both the parties once again, discussing the relevant facts in the matter - accordingly, the Civil Miscellaneous Appeal is allowed: High Court [para 4, 5, 6, 7]
- Matter remanded: MADRAS HIGH COURT
2020-TIOL-278-CESTAT-CHD
Pernod Ricard India Pvt Ltd Vs CST
ST - The assessee-company is engaged in manufacture, marketing and sale of various brands of Indian Made Foreign Liquor (IMFL)/alcoholic beverages in India - It entered into agreements with various independent bottlers who possesses the necessary licenses for manufacturing of alcoholic liquors - The bottlers retain certain fixed amount as bottling charges on which they are discharging their service tax liability and remaining amount was retained by the assessee - The assessee opined that as it is not providing any taxable service, it need not pay service tax - But, various representation made by the CBEC, seeking clarification with regard to the taxability of such transactions - The assessee obtained service tax registration and discharge service tax liability under the category of BAS under protest - Thereafter, vide Circular dated 27.10.2008 wherein it has been clarified that the taxability in respect of contract bottling arrangements, the bottlers in contract bottling arrangement render service to the brand owners and therefore such CBUs (contract bottling units) are liable to pay service tax on the income under the category of 'Business Auxiliary Service' - Thereafter, the assessee discontinued the payment of service tax - It was issued SCNs by DGCEI after investigation wherein the demand was made under the category of 'BAS on the amount of profits earned under the arrangement of appellant with the CBUs - On adjudication, the demands were sustained.
Held: Considering the mandate of CBEC Circular No. 332/17/2009 dated 30.10.2009 it is seen that the assessee being brand owner and earned the profits, the same being in nature of business profit and the same is not chargeable to service tax - The circular has not been withdrawn by the CBEC yet - Moreover, the CBUs are paying service tax under the category of BAS which means the assessee is not a service provider but is a service recipient - Also considering the findings rendered in the assessee's own case for an earlier period, no service tax liability is found to arise: CESTAT
- Assessee's appeal allowed: CHANDIGARH CESTAT
CENTRAL EXCISE
2020-TIOL-334-HC-ALL-CX
Balrampur Chini Mills Ltd Vs UoI
CX - (i) Whether the writ petition challenging the SCN dated 24.3.2017 is maintainable in exercise of the power under Article 226 of the Constitution of India (ii) Whether the Circular No.1027/15/2016-CX dated 25.4.2016 issued by the CBEC treating Bagasse to be exempted goods for the purpose of reversal of credit of input and input services in terms of Rule 6 of the Cenvat Credit Rules, 2004 [CCR] is in consonance with the amendments made in the Central Excise Act and Cenvat Credit Rules.
Held: The Supreme Court, in the case of Union of India and others vs DSCL Sugar Ltd. and others - 2015-TIOL-240-SC-CX, held that Bagasse is not a manufactured product but an agricultural waste and residue, which itself is not the result of any process - as noted by the Supreme Court, specifically in the context of Bagasse, Rule 6 applies only when there is a manufacture of final products or of exempted products, and if there is no manufacture, Rule 6 of the CCR has no application - the amendment [in the CCR] may have the effect of treating Bagasse to be an exempted good, but cannot result in Bagasse being manufactured good, as the nature of Bagasse remains that of an agricultural waste and residue and is not in effect a product - this aspect and character of Bagasse remains unaltered by insertion of Explanation 1 - in absence of Bagasse being a manufactured final product, the obligation of a reversal of cenvat credit under Rule 6 (1) of the CCR is not attracted - it has also been noticed that Bagasse has always been an "exempted goods" under Rule 2 (d) of the CCR - it has been mentioned in Central Excise tariff heading 2303 20 000 and was subjected to NIL rate of duty - it, therefore, fell within the definition of "exempted goods" as defined under Rule 2 (d) and is not a non-excisable good, as mentioned in the impugned Circular - that the Circular dated 25.4.2016 interpreting Explanation 1 to Rule 6 has provided that "consequently, Bagasse, dross and skimmings of nonferrous metal or any such byproduct of waste, which are non-excisable goods and are cleared for consideration from the factory need to be treated like exempted goods for purpose of reversal of credit of input and input services, in terms of Rule 6 of the CCR - the Circular, therefore, treating Bagasse to be a non-excisable goods, is clearly erroneous, and for this reason also the Circular dated 25.04.2016 is liable to be quashed with regard to Bagasse - in light of the above, in absence of Bagasse being a manufactured final product, the obligation of reversal of cenvat credit under Rule 6(1) of the CCR is not attracted, and the ratio laid down in the judgement of the Supreme Court in the case of DSCL Sugar Ltd. and others (supra) still holds the field - Rule 6 of the CCR would have no application for reversal of cenvat credit in relation to Bagasse - the Circular No.1027/15/2016-CX dated 25.4.2016 to the extent that it includes Bagasse under the purview of the reversal of credit of input services in terms of Rule 6 of the CCR as well as the impugned SCN dated 24.3.2017 are hereby quashed - the writ petition is accordingly allowed : HIGH COURT [para 24, 30, 31, 32, 33, 34, 35]
- Writ Petition allowed:
ALLAHABAD
HIGH COURT
CUSTOMS
2020-TIOL-333-HC-MUM-CUS
CC Vs Lynx Express Pvt Ltd
Cus - Courier Import and Export (Clearance) Regulations, 1998 [the Regulations] - Substantial questions of law are - (i) Whether the CESTAT could entertain any Appeal against an order dated 26.10.2015 of the Principal Commissioner of Customs, APSC which had already merged, after the prescribed process of representative appeal, with the Order of the Chief Commissioner of Customs Mumbai Zone III dated 14.9.2016, especially when the Appeal against such Order of the Chief Commissioner was voluntarily withdrawn by the same Appellant and no further remedy was sought against such order? (ii) Whether the CESTAT has jurisdiction to entertain any Appeal against an Order of the Principal Commissioner under regulations 14(1) of the Courier Import & Export (Clearance) Regulations, 1998, if such order has already been represented to the Chief Commissioner as prescribed under regulation 14(2) and such representation has been disposed by a speaking and reasoned Order of such prescribed Appellate Authority? (iii) Without prejudice to the above grounds, whether the CESTAT's Order is legal & proper in its conclusion that no inquiry was conducted pursuant to suspension of the registration when it is clearly detailed in the Order in Original dated 26.11.2015 that, the decision to grant no further license was being ordered with attendant forfeiture and penalty based on the inquiry/investigation conducted by issue of SCN dated 12.12.2014 as adjudicated by Order in Original dated 26.10.2015 ?
Held: As regards the first two questions of law (i) and (ii) are concerned, they seek to question the jurisdiction of the Tribunal to entertain the appeal from the O-I-O - It is the argument of the Appellant Revenue that when appeal against order of Chief Commissioner was withdrawn and no further remedy was sought, an appeal before the Tribunal from the O-I-O could not have been entertained - this submission cannot be accepted - the Tribunal has entertained the appeal against the O-I-O relying on the decision of the Division Bench of this Court in the case of Principal Commissioner of Customs vs. Bombino Express Pvt. Ltd. - 2018-TIOL-375-HC-MUM-CUS] - the Division Bench held that what is provided in the Regulation 14(2) is a representation and ultimately the remedy of appeal is available under the Customs Act, 1962 and rejection or otherwise of such representation will not take away the jurisdiction of the Tribunal to entertain the appeal from O-I-O - in the present case, the Appellant has withdrawn the appeal but if there is no merger and what is decided is only a representation, then withdrawal of the appeal will also fall within the ambit of the view taken by this Court in Bombino Express Pvt. Ltd. - in view of the dicta of the Court in the case of Bombino Express Pvt. Ltd., this Court cannot accept the argument advanced by the Appellant Revenue that the Tribunal had no jurisdiction to entertain the Appeal - as regards the third question, it takes exception to the observations of the Tribunal that procedure as contemplated under the Regulation 14 was not followed while revoking the registration of the Respondent - this submission also cannot be accepted - the operative part of the O-I-O is ambiguous - it only states that no license to operate be granted to the Respondent under Regulation 10 - there is no debate on the factual position that, after suspension of the license there was no further inquiry giving opportunity to the Respondent before passing the O-I-O - the second proviso to the Regulation 14 states that if Principal Commissioner or Commissioner of Customs is of the opinion that grounds cannot be established prima facie without an inquiry, he may conduct an inquiry and in the meanwhile may suspend the registration - if suspension of the license takes place then the proviso contemplates an inquiry - this view is taken in another decision in the case of Bombino Express Pvt. Ltd v. Chief Commissioner of Customs - therefore, after suspending the registration of the Respondent as an Authorized Courier, an inquiry had to be held giving an opportunity to the Respondent which having not been done, there is no error in the view taken by the Tribunal - in these circumstances, these questions of law do not arise for consideration - the Appeal of Revenue is, accordingly, dismissed: High Court [para 6, 7, 8]
- Appeal dismissed: BOMBAY HIGH COURT
2020-TIOL-277-CESTAT-DEL
Pradeep Kumar Vs PR CC
Cus - The assessee imported a consignment of Defatted Coconut Powder from a supplier in Vietnam and filed BoE for clearance thereof - The assessee classified the imported goods under CTH 2306 5090 and paid BCD @ 15%, SWS @ 10% and IGST @ 5% - Acting on intelligence received, the Revenue opined that the product is not de-fatted coconut powder but in fact is Desiccared Coconut which is classifiable under CTH 0801 1100 and attractd BCD @ 70%, SWS @ 10% and IGST @ 5% - The goods were examined and samples were drawn for testing by the CRCL - Subsequently, search operations were conducted at the godowns owned by an entity, whereupon the consignment of provisional goods declared as coconut powder along with other items such as Cloves, Split Casia and Shredded Coconut were found - Such items were seized along with those which were imported vide the BoE filed by the assessee - Statements were taken from the proprietor of such firm, who admitted the classification of the consignmentof Defatted Coconut Powder to be mis-declared with intent to evade payment of Customs duty - The proprietor also paid duty in respect of the present and past imports - The test report from CRCL indicated that the fat contained in the goods covered under the BoE filed by the assessee, was 69.69% by mass - Hence the present appeal.
Held: The issue involved in this case is regarding the provisional release of the seized goods for the imported consignment for appropriate classification - The assessee claimed that the goods were appropriately classifiable under CTH 2306 5090 against the Revenue's claim for classification under CTH 0801 1100 - The Revenue drew samples and obtained the test report for the live consignment vide the BoE - The same has not been made available to the assessee - Regarding the test report of the other consignment, the same has not been mentioned in the provisional release order - It is seen that the conditions imposed for provisional release are excessively harsh and are not in conformity with findings rendered in various case laws - Considering the sum already deposited by the assessee, the same is sufficient to secure provisional release of the goods - Hence the same are directed to be released: CESTAT
- Assessee's appeal allowed: DELHI CESTAT
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