ST - The Excise records of the assessee-company were audited during the relevant period, whereupon it was noted that the assessee made payments towards tanker hire charges to various foreign suppliers, in foreign currency for hiring ISO tanker used for export activities - The Department claimed that the ISO tank owned in such a case did not transfer the right of possession and that no VAT or Sales Tax had been paid and so the transaction was classifiable under SOTG service and that the assessee is liable is liable to pay tax under reverse charge mechanism on the rent paid for the ISO tank obtained on lease from the foreign owners - SCN was issued for recovery of unpaid service tax and interest was demanded as well - Penalties were also imposed - Such demands were confirmed upon adjudication - Such O-i-O was upheld by the Commr.(A) - Hence the present appeal.

Held - The adjudicating authority as well as the appellate authority held that the renting of ISO tank fell under the category of SOTG service, based solely on the reasoning that there was no transfer of right of possession and effective control in respect of the leased ISO tank - However, no proper reasoning was given as to how there is no transfer of right to possession and effective control - Considering the submissions of the assessee that after supply of the ISO tank, the same was under its control and was operated by it with its own employees and repair work was also carried out by the assessee, it appears that the right to use and effective control was with the assessee - Both the lower authorities did not go through the contract and did not give reasoning on why there is no transfer of right and effective control by the foreign supplier to the assessee - Therefore, the matter needs to be reconsidered by the lower authorities - There may be cases where even though there is a deemed sale, but the particular transaction may not attract sales tax or VAT - Therefore, even if the VAT payment is not there, only on that basis it cannot be said that it is not a deemed sale - This aspect also needs to be considered - As the matter is very old, such exercise be completed within three months from date of this order: CESTAT

- Case remanded: AHMEDABAD CESTAT

TM Tyres Ltd Vs CCE, C & ST

CX - Appellant is engaged in manufacture of Butyl rubber inner tubes and discharges CE duty liability by determining assessable value in terms of s.4 of the CEA, 1944 - notifcation 2/2006-CX(NT) issued u/s 4A of CEA, 1944 was amended by 11/2006-CX(NT) by inserting a new entry "Parts, components and assemblies of automobiles” to which the provisions of s.4A (MRP valuation) would apply - Department alleged that the goods manufactured by the appellant would, therefore, be required to be assessed u/s 4A of CEA, 1944 and sought recovery of differential CE duty of Rs.78,64,344/- - demand confirmed along with imposition of penalty and interest - aggrieved, assessee is in appeal before CESTAT.

Held: It is an admitted fact on record that the appellant is engaged in the manufacture of Butyl rubber inner tubes and such product, by itself, is separately identifiable and is a distinct Marketable product - It cannot be said that the product manufactured by the appellant is exclusively meant for the automobile industries for use as parts and components and are not capable for use for other purposes - Since the goods manufactured by the appellant are meant for use by other manufacturers also, in the opinion of the Bench, such manufactured goods cannot be subjected to levy of central excise duty under Section 4A of the Central Excise Act, 1944 - impugned order is, therefore, set aside and appeal is allowed: CESTAT [para 6, 7]

- Appeal allowed: HYDERABAD CESTAT

Texmaco Ltd Vs CCE

CX - The assessee is manufacturing excisable goods such as structural materials, Pressure Vessels, parts of Sugar Mills machinery and railway wagons - They have imported wheel sets for use in the manufacture of railway wagons - Scrutiny of the records of assessee by department revealed that while they availed CENVAT Credit on both the CVD and SAD they have reversed only the CVD and they have not reversed the credit of SAD availed by them - Therefore, a SCN was issued to assessee - Against the same Bills of Entry, some wheel sets were cleared on payment of duties and some were cleared under DEEC without payment of duty and it is not possible to separate duty paid goods from the goods cleared under DEEC - Therefore, the only way to decide whether the goods which were transferred to the sister unit were duty paid or duty free is based on the records of the assessee and how they treated the transferred goods - It is not in dispute that the assessee has treated the transferred goods as duty paid and also reversed some portion of CENVAT Credit so availed - The amount of CENVAT Credit so reversed has been taken as credit by the sister unit - Once the Assessee has reckoned the goods as a duty paid, they must reverse the entire amount of CENVAT Credit availed on them - They must reverse the CENVAT Credit availed on SAD in respect of transferred goods - Since they have not done so, the demand, along with the interest on this ground has been correctly confirmed by original authority - However, their sister unit gets credit of the amount of CENVAT Credit reversed by assessee and therefore no malafide can be attributed to them - Extended period of limitation under Section 11 (A) cannot be invoked - For the same reason, the imposition of penalty under Rule 15 (2) of CCR, 2004 r/w Section 11 A C of CEA, 1944 is set aside - So far as the appeal of revenue is concerned, penalty under Rule 15 (1) of CCR 2004 is imposable only when any person takes or utilizes CENVAT Credit wrongly - There is no such allegation at all in the SCN - Therefore, revenues appeal is rejected: CESTAT

- Revenue's appeal dismissed : KOLKATA CESTAT

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