| SERVICE TAX
ST - The assessee deals in nutritional products in India - In order to increase its market share they had incurred certain operating expenses like advertisement for products traded by it and hiring marketing executives to manage its existing sales - However, they incurred losses as the price at which they had imported the goods from M/s Abbott Logistics B V Netherland (ALOG) and the operating expenses incurred by them was higher than the price at which the goods were sold by them - The recoveries were made by them from ALOG in accordance with and to comply with Indian Transfer Pricing Code and OECD Transfer Pricing Guidelines for the respective years - These amounts were not received by them against provision of any service/ supply/ grant of right or any other arrangement between them and their foreign subsidiary - The Revenue alleged that, on the amounts received, service tax is payable and accordingly issued demand notice for recovery of service tax - On adjudication, the Commissioner dropped the proceedings and hence the Department has filed an appeal before the CESTAT - The main contention of the Revenue before the Tribunal was that by establishing the case for export of service on the basis of some analogy drawn by them in respect of export of goods - The Revenue also relied on Article 286(1)(b) to define exports - The Revenue claimed that the issue be decided based on these and not on the basis of Export of Service Rules 2005 - The Tribunal rejected such argument on grounds that the Revenue was deviating from the rules framed mere to levy tax on some activities - The Tribunal held that the provisions of Article 286 were inapplicable in respect of export of services and that the Revenue were attempting to compare tangible goods with intangible ones - The Tribunal proceeded to uphold the findings of the Commissioner - It also held that for the period post 01.07.2012, the Revenue did not establish as to how the assessee acted as an intermediary in the manner as per Rule 2(f) of the POPS 2012, between the service receiver and service provider - Hence it was held that the Commissioner correctly determined the place of provision of service by application of Rule 3 as the location of the service recipient.
Held - Notice issued - Matter be tagged with C.A. No.8045-8046/2018: SC
- Notice issued :SUPREME COURT OF INDIA 2020-TIOL-820-CESTAT-MAD
Human Resources Syndicate Vs CCE & ST ST - Both the lower authorities have not considered the plea of reimbursable expenses only because necessary documentary evidence has not been produced - This being so and also considering the request of the appellant, in the interest of justice, matter is remanded back for de novo consideration - appellant is directed to produce all the documentary evidence before the original authority who shall also give them sufficient opportunity to present their case - since issue concerning reimbursable expenses was very much in dispute during the impugned period, there is a case for invocation of section 80 of the Finance Act, 1994 and, therefore, penalty is not imposable – Matter remanded: CESTAT [para 4, 5] - Matter remanded:CHENNAI CESTAT
CENTRAL EXCISE
CX - The assessee-company manufactures excisable goods such as chewing tobacco and perfumery compounds, using packing machines installed in its factory - The goods manufactured by it were notified goods u/s 3A(1) of the CEA 1944 - When the Chewing Tobacco and unmanufactured Tobacco Packing Machine (Capacity Determination and Collection of Duty) Rules, 2010 came into force, the manufacturer of notified goods was required to file declaration in Form 1, declaring the number of packing machines installed, so as to calculate duty for a particular month in respect of such operating packing machines and to pay the duty on monthly basis - As the assessee manufactured such notified goods, it filed declarations as per Rule and declared the product as Chewing Tobacco falling under CETH 2403 99 10 - The Revenue opined that the correct classification of the product is Jarda Scented Tobacco, falling under CTH 2403 99 30 - Demand for differential amount of duty was raised on account of the change in classification - Such classification adopted by the adjudicating authority as well as the duty demand raised were sustained by the Commr.(A) - On appeal, the Tribunal held that a cumulative reading of Rule 6 of Chewing Tobacco and unmanufactured Tobacco Packing Machine (Capacity Determination and Collection of Duty) Rules, 2010 and the language used therein led to conclusion that the declarations in the rule were for determining correct annual production capacity of a particular unit - While passing orders in terms of these Rules, by approving the declarations, the correct classification of the product being manufactured, is required to be examined - Without determining the correctness of the description of goods declared by the party, it is impractical to determine production capacity and duty liability - Further, the Tribunal also held that the assessee's final product declared by them as Chewing Tobacco is essentially Jarda Scented Tobacco and stands correctly classified under Tariff Items No 2403 99 30 - Hence the Tribunal upheld the findings of the Commissioner on all counts.
Held - Notice issued - Matter be tagged with Civil Appeal Diary No.3492/2020: SC
- Notice issued :SUPREME COURT OF INDIA 2020-TIOL-815-CESTAT-DEL
Sidharth Polysacks Pvt Ltd Vs CCE & ST
CX - The issue is regarding the valuation of excisable goods at the hand of job worker of assessee - During the processing of excisable goods at the hand of job worker, some amount on waste/ scrap also arises - The Revenue entertained the view that since this waste & scrap, arising during the process of manufacture is also excisable, and is having value, therefore, the same should be considered for arriving at the transaction value of the goods sold by the job worker - The issue at hand is squarely covered by decision of Tribunal in M/s Lawkin Pvt Ltd. 2007-TIOL-739-CESTAT-MUM - Tribunal have also considered the decision of Supreme Court in case of General Engineering works - There the issue was that the agreement did not have the clause regarding the inclusion of price of the scrap arising out of processing of the raw material, also it is not there in the agreement that scrap will be returned to principal - But since in the identical issue in PR Rolling Mills Pvt. Ltd., this Tribunal held that scrap/ waste are intermediate goods not liable to duty, thus its value cannot be considered in hands of job worker, has been confirmed by Supreme Court - Following the said decision, issue is no more res-integera and impugned order is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2020-TIOL-814-CESTAT-HYD
Binjrajka Steel Tubes Ltd Vs CC, CE & ST
CX - Appellant is a job worker for M/s Ravi Organics Ltd (ROL), Hyderabad and has manufactured excisable goods out of raw material supplied by ROL and after processing, returned the same to ROL - Only allegation in the show cause notice is that since M/s ROL has no factory, they could not have used the goods for further manufacture of final products and also could not have removed the goods for home consumption from their factory - The show cause notice proposed to fasten the liability upon the appellant by denying them the benefit of exemption notification 214/86-CX for the aforesaid reason - demand confirmed by lower authorities, hence appeal.
Held: The only allegation in the show cause notice is that supplier of raw material M/s ROL does not have factory of their own although the Central Excise department has issued them registration - The basis for such an allegation is that the supplier ROL has no factory on their own as per the statement before Commercial Tax department etc. - It is the case of the department that since M/s ROL has no factory of manufacture, he could not have used the material supplied by manufacturer for further manufacture of products and cleared the same from factory for home consumption on payment of duty or for export - There is no allegation that ROL have not fulfilled responsibilities given in their undertaking or that there is any loss of revenue on that count - When the Central Excise department themselves have given registration as manufacturers to M/s ROL and by citing such registration number, issued an undertaking to the jurisdictional Asst. Commissioner of appellant, the appellant could not have been expected to take any further precautions to ensure that notification 214/86-CX has been correctly availed - Under these circumstances, the demand of duty as well as proposition to impose penalties upon appellant are not sustainable and they need to be set aside - appeal allowed: CESTAT [para 8, 9]
- Appeal allowed: HYDERABAD CESTAT
CUSTOMS
2020-TIOL-813-CESTAT-BANG
Global Calcium Pvt Ltd Vs CC
Cus - The assessee contended inter alia that on earlier occasions, this Bench had twice remanded the matter back to the file of Original Authority with directions but however, the lower authority has once again passed the same order without adhering to the directions of this Bench - The authority has narrowed down the scope and directions of this Bench in its earlier order and in the impugned order, he has only considered the applicability of paragraph 4 of Circular 36/2010 - There was a direction to consider other relevant guidelines given in said Circular - In any case, the same having not been done, the impugned order cannot sustain as the same is not a speaking order - Further, since there are no discussions on 'other relevant guidelines given in the said Circular', the Adjudicating Authority shall pass a de novo adjudication order after giving reasonable opportunities to the assessee to put forth their case and thereafter, meeting all the arguments of the assessee : CESTAT
- Matter remanded: BANGLORE CESTAT |
