| SERVICE TAX
2020-TIOL-1152-CESTAT-DEL
Punjab National Bank Vs CCGST & CE
ST - Appellant, a PSU of Government of India, engaged in providing services by way of running currency chest, wherein the money belonging to Reserve Bank of India is kept - The appellant is required to take care of the currency and accordingly for safeguarding the same, they have availed the service of Rajasthan Police, as per the guidelines of Reserve Bank of India - The Rajasthan Police Department recovered some amount, by way of cost recovery for providing the security - Revenue contention is that the appellant is required to pay service tax under 'reverse charge mechanism' in respect of service charges paid to Rajasthan Police on account of security charges - Appellant by their letter dated 13 March, 2015 informed that they have deposited the service tax amount of Rs.14,44,161/- including cess by challan dated 13 March, 2015 and by their letter dated 14 March, 2015 informing that they have deposited remaining amount of Rs. 16,13,813/- - SCN alleging suppression and demanding service tax of Rs.30,15,916/- with proposal to appropriate the amount already deposited alongwith interest and further penalty was proposed under Section 78 - issue in this appeal is whether the appellant has been rightly imposed with penalty under Section 78 by Commissioner (Appeals) being 50% of the tax, amounting to Rs.30,15,915/-.
Held: Issue involved is no longer res integra as Tribunal in several decisions has held that the Police Department is performing statutory duties of providing security to the citizen including the bank; that the amount so collected (cost recovery) is being deposited in the Government treasury – Board in Circular No. 89/7/2006-ST dated 18.12.2006 has also clarified that wherever charges collected by any sovereign public authority for carrying out any statutory function, the same is not liable to levy of service tax – resultantly, the penalty imposed u/s 78 is set aside – Appeal allowed: CESTAT [para 4, 5]
- Appeal allowed: DELHI CESTAT
2020-TIOL-1151-CESTAT-KOL
Chindit Carriers Pvt Ltd Vs CCE & ST
ST - Appellant was required to carry out loading/unloading and transportation of coal from Piparwar to Bachra Siding - The agreement makes it clear that the contract is for the work of transportation of coal - Such activity is to be classified only under the category of GTA, since it involved mere transportation of goods - opinion of the department that the said activity is liable for payment of tax under Cargo Handling service is not sustainable: CESTAT [para 9, 12]
ST - Insofar as the agreement dt. 13/01/2005 is concerned, the appellant was required to carry out the activity of extraction and transfer of coal, by deploying "Surface Miners" - From the description of the Service, it is evident that the Service provided is in the nature of mining - Mining as a separate category of service liable to Service Tax was introduced only w.e.f. 01/06/2007 - Since the demand made in this case is prior to this date, no Service Tax liability will arise on the appellant: CESTAT [para 10]
- Appeal allowed: KOLKATA CESTAT
2020-TIOL-1150-CESTAT-KOL
Uco Bank Vs CST
ST - The assessee in the course of its regular banking activities, is also engaged in carrying Government transactions on behalf of Reserved Bank of India (RBI) - As per the Reserved Bank of India Act, 1934, the RBI has the statutory obligation to under-take the receipts and payments of Central Government and to carry out the exchange remittance and other banking operations including the management of the Public Debts of the Union Government - For this purpose various banks, including UCO Bank was also appointed as agent of RBI under section 45 of RBI Act, 1934 - It has been stated that in return to the said agency services, assessee paid remuneration by RBI known as "Agency Commission" - A SCN was issued alleging that the services of carrying out Government transactions provided by assessee to the RBI tantamount to providing a taxable service under 'Banking and Other Financial Services' since the transactions are in a way of operation of bank account being one of the specified taxable activity in the definition of 'Banking and Other Financial Services' - The issue is no more res integra and is covered by the decision of larger Bench of Tribunal in case of State Bank of Patiala 2016-TIOL-2849-CESTAT-DEL-LB - The appeal filed by assessee is allowed: CESTAT
- Appeal allowed: KOLKATA CESTAT
CENTRAL EXCISE 2020-TIOL-1149-CESTAT-HYD
NCL Industries Ltd Vs CCT
CX - The issue to be decided is in a case where goods (cement) is sold by assessee to their customers on FOR destination basis, if the assessee can claim CENVAT credit on the outward transportation of goods from their premises to the buyers premises - It is the case of Revenue that the buyers' premises can never be the place of removal as has been decided by Apex Court in case of Ispat Industries 2015-TIOL-238-SC-CX - Therefore, no CENVAT credit is admissible on the outward transportation of goods from the assessee's premises to the buyer's premises even though the sale of goods is on FOR destination basis - The issue is no longer Res integra - It has been settled by Apex Court in case of Ultra Tech Cement 2018-TIOL-42-SC-CX and the issues were identical - In that case, the original adjudicating authority had denied the benefit of CENVAT credit on outward transportation of goods from the factory to the buyer's premises when the sale was on FOR destination basis - The assessee challenged the order of original authority and the Commissioner (A), relying on the Board Circular dated 23.08.2007 has held that the assessee is entitled to the benefit of CENVAT credit on the outward transportation of goods up to the buyer's premises - This order of Commissioner (A) was also upheld by CESTAT, Bangalore and High Court of Karnataka - The approach of these courts has been held to be untenable by Apex Court and it has been held that no CENVAT credit is admissible - In the original judgment, as well as in review petition, the Apex Court has laid down that where the goods are sold on FOR destination basis i.e., where the ownership of goods gets transferred only at the buyer's premises also no CENVAT credit is admissible for transportation of goods to the buyer's premises - Respectfully following the judgment of Apex Court, no CENVAT credit is admissible to the assessee: CESTAT
- Appeal rejected: HYDERABAD CESTAT
2020-TIOL-1148-CESTAT-KOL
Numaligarh Refinery Ltd Vs CCE
CX - Assessee is engaged in manufacture of petroleum products including Naphtha - The petroleum products were covered by the Warehousing provisions which allowed transfer of goods without payment of duty - However, the facility of warehousing was withdrawn w.e.f. 06/09/2004 by Notfn 17/2004-CE(N.T.) - Assessee was clearing Naphtha to M/s. NTPC as well as M/s. OCFL through BPCL whose depots were located at Mathura and Banthra - Notfn 6/2002-CE extended benefit of 'nil' rate of duty to Naphtha when cleared for use in the manufacture of ammonia and fertilizer - The dispute is consequent upon disruption which was a result of withdrawal of Warehousing provisions which was earlier extended to the manufacturers of petroleum products upto 05.09.2004 - During the Warehousing period, Naphtha was being cleared without payment of duty to customers including OCFL for use in the manufacture of fertilizers - After the withdrawal of such facility, assessee approached the Jurisdictional Authority for permission to avail the benefit of 'nil' rate of duty under Notfn 6/2002-CE - The permission was granted by Commissioner - However for the period of dispute assessee cleared Naphtha on payment of duty and have subsequently claimed the refund of such duty - The Departmental Authority has denied such refund for the initial period from 4.9.2004 to 30.09.2004 - However, for the refund claim for the subsequent period from 19.01.2005 to 30.01.2005, stands allowed and the same is challenged by Revenue - The conditions specified in Sl. No. 22 of Notfn 6/2002-CE are meant to ensure that Naphtha cleared from Refinery and received in the other factory is used in manufacture of fertilizers - Towards this purpose various conditions as prescribed in the Rules are required to be satisfied - Though the lower authorities, in the initial period have held that the conditions as per Rules have not been satisfied, there is no dispute to the fact that Naphtha received by OCFL have been utilised for the manufacture of fertilizers - The receipt of Naphtha from assessee through the depots of BPCL is evidenced by Registers maintained at the end of OCFL - The use of naphtha received in manufacture of fertilizers is evidenced from such registers - This also stands certified by Jurisdictional Superintendent after verification of such records - The correlation of supplies made by assessee, which was accompanied by invoices of BPCL, also stands established on the basis of stock statement prepared by BPCL - Since the receipt of Naphtha in OCFL and use thereof for manufacture of fertilizer are established, the benefit of Notfn 6/2002-CE cannot be denied to assessee - No infirmity found in the impugned order which is sustained: CESTAT
- Revenue's appeal rejected: KOLKATA CESTAT
2020-TIOL-1147-CESTAT-KOL
MCC PTA India Corporation Pvt Ltd Vs CCE
CX - The assessee is engaged in manufacture of Purified Terephthalic Acid (PTA) - While PTA was sold to domestic customers, in addition, they also supplied PTA to holders of Advance Authorization/license, which qualifies as a "deemed export" under provisions of Foreign Trade Policy issued from time to time - The Department was of the view that the assessee had undervalued clearances of PTA made to such deemed export category buyers - The transferred advance license, can be beneficial for the assessee for duty free inputs of raw materials required for manufacture in assessee's factory - Hence, certain benefit accrued to the assessee through the receipt of transferred advance licenses - The Supreme Court in case of IFGL Refractories Ltd. 2005-TIOL-103-SC-CX has decided the issue in favour of Revenue - The Apex Court's decision was further followed by Tribunal in case of Haldia Petrochemicals 2019-TIOL-1485-CESTAT-KOL wherein it is held that the assessee will be entitled to the benefit of time bar - The assessee will not be entitled to the benefit of revenue neutrality - The demand for differential duty is upheld on merit - However, the demand for duty beyond the normal time limit is set aside - Penalties are also set aside: CESTAT
- Appeals disposed of: KOLKATA CESTAT
CUSTOMS
2020-TIOL-1146-CESTAT-MUM
Creative Peripherals & Distribution Ltd Vs CC
Cus - Issues involved for consideration by the Tribunal are whether the imported goods namely, 'GoPro HERO5 Black' Action Camera is classifiable under CTH 8525 8020 (as claimed by the appellant), or under CTH 8525 8090 (as affirmed by Revenue) and availability of the benefit of duty exemption provided under the Notification No. 50/2017-Cus., dated 30.06.2017 for importation of such goods.
Held: The legislative intent behind the superseding notification 50/2017-Cus dated 30.06.2017 (in dispute) is manifest that the embargo created in the earlier notification 15/2012-Cus dated 17.03.2012 should not be looked into, meaning thereby that the 'Digital Still Image Video Cameras' falling under Tariff Item 8525 8020 should be eligible for the benefit of duty exemption and the criterion of quality and capacity to record images/events provided in the explanation appended to the earlier notification dated 17.03.2012 should not be insisted upon by the Customs authorities - In the present case, it is an undisputed fact that the Commissioner (Appeals) has accepted that the cameras in question imported by the appellant have functionality of both digital still cameras as well as capable of capturing videos - Thus, Bench is of the considered opinion that the duty exemption provided under notification dated 30.06.2017 for 'digital still image video camera' should be available to the appellant - No merits in the impugned orders in classifying the disputed goods under Tariff Item 8525 8090 and denying the benefit of Notification No. 50/2017 dated 30.06.2017 - Accordingly, after setting aside the same, Bench allows the appeals in favour of the appellant with consequential relief: CESTAT
- Appeals allowed: MUMBAI CESTAT
2020-TIOL-1145-CESTAT-KOL
Paul Traders Vs CC
Cus - The appellants filed the Misc. Application for denovo decision of the appeal which was rejected by Tribunal vide order dated 23.03.2018 - Denovo decision has occasioned as the High Court of Meghalaya in the order dated 06.05.2019, allowing the assessee's appeal Under Section 130 of Customs Act, 1962 and has set aside Tribunal's order dated 23.03.2018 - The purchase documents of goods finds record in SCN - It is found from the O-I-O that the suppliers have in their reply to SCN have confirmed the sale of goods under seizure to Shri Manik Ranjan Paul - They filed Affidavit before the High Court and confirmed the supply of Betel nuts to Shri Manik Ranjan Paul - The Betel nuts are not notified items under Section 123 of Customs Act, 1962, hence the onus to prove that the same was of foreign origin and too smuggled lies solely on the Revenue - Foreign origin have been admitted by appellant and have produced the supporting documents which are found to be correct - The High Court has elaborately discussed the issue while allowing the appeal of assessee - Betel nuts are not notified goods, and the onus was discharged by Appellant by producing the supporting documents - There could be no mens rea for smuggling as the duty payable was only 5% under Indo Myanmar Trade under Notfn 09/1995-Customs - Betel nut was also importable at NIL rate of duty under Notfn 96/08-Customs and 09/2009-Customs, under Scheme of Duty Free, Quota Free Import from Least Developed Country to which Myanmar belong - The High Court of Meghalaya has set aside the Tribunal's common Order dated 23.03.2018 involving owner of seized goods and seized trucks directing for denovo decision - The impugned order is set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT |
